Henry Ford Health System drops out of Medicare bundled payments for joint replacement: 5 key notes

Written by Laura Dyrda | November 28, 2016 | Print  |

Henry Ford Health System in Detroit joined Medicare's bundled payment pilot in 2013, but the hospital recently announced it will no longer participate in the program, according to a Crain's Detroit Business report.

Here are five key notes:


1. Three hospitals from Henry Ford Health System participated in the first phase of the Medicare bundled payment programs, but dropped out when it became clear the financial targets were changing. Additionally, about one-third of the services for the bundle were conducted outside of the Henry Ford system.


2. The three participating hospitals — Henry Ford West Bloomfield Hospital in Bloomfield Township, Mich., Henry Ford Wyandotte (Mich.) Hospital and Clinton, Mich.-based Henry Ford Macomb Hospital — reported around 650 hip and knee replacements annually in the bundled payment program.


3. It became difficult for Henry Ford to control the cost of care provided outside the health system, and patients needing urgent care didn't always stay within the system. When care costs more than the target price, the hospital pays the difference.


4. The Kalamazoo, Mich.-based Borgess Health, Muskegon, Mich.-based Mercy Health Partners and St. Mary's Health Services in Grand Rapids, Mich., moved on to participate in the Medicare model 2 bundled payment program. Orthopedic Associates of Grand Rapids (Mich.) PC, a physician practice, also remains in the Medicare bundled payment program. After hospitals bill Medicare on a fee-for-service basis for the 90-day episode of care, Medicare reconciles the payment by comparing prices. Providers that deliver care for under the target price keep the difference.


5. During the first 21 months of the CMS Bundled Payments for Care Improvement initiatives, the hospitals participating lowered Medicare payments for lower extremity joint replacements by $1,166 more than at hospitals that didn't participate in BPCI, according to a JAMA study.


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