Steve Schutzer, MD, has spent more than 15 years building and studying bundled payment programs for total joint replacement. He said this work makes him confident that CMS’ new mandatory bundle, CJR-X, can succeed, but only if hospitals and surgeons can collaborate while sharing the risk equally.
In 2009, as a practicing orthopedic surgeon in Hartford, Conn., he became deeply interested in alternative payment methods as he watched patients fly to India and Malaysia for lower-cost joint replacements.
“Well, why do you have to go all the way there? We can do it right here in Hartford,” Dr. Schutzer said.
He and his team built the Connecticut Joint Replacement Institute’s bundled payment program from scratch, using Cambridge, Mass.-based Harvard University’s time-driven, activity-based costing method to price every minute of care down to the dollar. That work later led him to present his findings at a World Congress conference and help draft the language behind what would become BPCI, the federal bundled payment program CMS launched in 2013.
Dr. Schutzer said the latest CMS mandatory joint replacement program, CJR-X, should not be treated as a zero-sum game.
“It’s not we win, you lose,” Dr. Schutzer told Becker’s. “It’s we all win, a totally different mindset”.
He also said hospitals have had time to prepare for CJR-X, pointing to more than a decade of warning signs from the BPCI to the Comprehensive Care for Joint Replacement models – that CMS was moving away from fee-for-service payments.
“If they don’t [see it coming], they got their head in the sand,” he said.
Dr. Schutzer said CJR-X marks another meaningful shift away from fee-for-service care, which he called a root problem in healthcare. Under the new model, hospitals bear the risk and reward across a single bundled payment tied to a 90-day episode, rather than billing independently for each service. He said hospitals may also enter into financial arrangements with surgeons and post-acute providers to share in the gain, and potentially losses, associated with the episode. He said this structure encourages the cooperation and cross-discipline teamwork many joint programs still lack.
“To be successful, it forces collaboration across stakeholders and breaks down silos,” Dr. Schutzer said. “I don’t see any downside to it at all.”
He said rural and safety-net hospitals face certain disadvantages — including limited access to post-acute networks — necessary to succeed under this model. But he added that those hospitals also retain an edge in decision-making flexibility that larger health systems do not have.
“This is how you innovate, and win,” he said.
At the Becker’s 32nd Annual Meeting: The Business and Operations of ASCs, taking place October 29-31 in Chicago, ASC leaders, surgeons and healthcare executives will explore strategies to drive growth, enhance operational performance, navigate reimbursement challenges and prepare for the future of ambulatory surgery. Apply for complimentary registration now.
