The payer landscape for outpatient total joints from 3 surgeons

Laura Dyrda -   Print  |

The pandemic is accelerating outpatient orthopedics and total joint replacements, and payers have taken notice.

James Caillouette, MD, Chief Strategy Officer at Hoag Orthopedic Institute and immediate past president of Newport Orthopedic Institute in California; TK Miller, MD, vice president of the department of orthopedic surgery and chief of sports medicine at Carilion Clinic in Virginia; and Steven Haas, MD, chief of the knee service at Hospital for Special Surgery in New York City, discussed the payer landscape in their markets for orthopedics and total joint replacements on a panel at the Becker's Orthopedics + ASC Virtual Forum on Aug. 27.

Below is an excerpt from that discussion. Click here to view the full panel on-demand as well as access other panels and interviews from the event.

Note: responses are lightly edited for clarity.

Q: What payer trends are you seeing with orthopedics and total joint replacements in your markets?

Dr. James Caillouette: We started doing commercial bundles with all of the payers except for Blue Cross back in 2011. We have had good acceptance of a bundled payment with the commercial payers and they were site agnostic. We could do them in the ASC or at the hospital for quite a long time. I will say that Blue Cross is very close to getting on board at this point. The bundles that we use are the prospective bundle and Blue Cross has never done that in the United States. They've always done retrospective bundles. We're moving in that direction.

In California, Kaiser is a big driver of the market in terms of payment rates and in terms of lots of the different areas on how the payers act. That's a variable that you don't necessarily see in New York or at Carilion Clinic. Having said that, all of the commercial payers now are looking at efficiency and cost reduction, and there's no doubt you can do the operation for less in a freestanding ASC.

We are in discussions now with several of the pairs to create a site agnostic bundle, so that we really can just take the site of service out of the equation. There is acceptance to that. I think they're recognizing that people are going to game this for financial advantage until they get rid of that incentive.

Dr. TK Miller: We're in a different situation. We're considered fairly rural and our reimbursement rates are significantly different than larger metropolitan areas. The insurers would be perfectly happy if we did the joints in our ASC at the rates that they're offering. It seems to be an interesting dilemma because they're fine paying hospital-based rates. They've simply not been that interested in coming to a discounted but manageable price point on this.

Now our last discussion about this was in February. We've not been able to get anybody back online about this since then, other than we've got two contracts coming up for negotiation in November. I think it's going to be a fairly interesting discussion. It's hard to argue, at this point, with the push from CMS, about the site agnostic component of it. There is a push more and more to make site of service agnostic for true outpatient procedures. Why you wouldn't want to come to something that allowed you a level of efficiency and cost reduction? But it still has to make fiscal sense at the end of the day.

Dr. Haas: It's less to do with ambulatory surgery, but the big changes for reimbursement had to do with an acceptance of telemedicine during the pandemic. Prior to the pandemic, to even see a new patient or take care of patients via telemedicine, you have to be licensed in the state that you're providing care. New York is a tristate area. We are bordered by Connecticut and we're bordered by New Jersey; those are our catchment area. At the beginning of COVID, neither the payers would pay for anybody through telemedicine and we were legally not allowed to do patients who literally were as close as Queens, but they were in New Jersey, actually probably closer. The insurers all opened up to allow that.

More articles on orthopedic surgery:
$144M spine, orthopedic center breaks ground in Wisconsin
Dr. Mary O'Connor: Why patient experience should drive tech investment in orthopedics
Campbell Clinic, Camber Spine & more: 3 C-suite executives earning recognition in orthopedics

© Copyright ASC COMMUNICATIONS 2020. Interested in LINKING to or REPRINTING this content? View our policies here.

Featured Webinars

Featured Whitepapers