14 key thoughts on bundled payments in spine surgery


Fourteen insights on bundled payments in spine, including CMS changes in 2021 and thoughts from five prominent surgeons:

1. While bundled payments have found some success in total joint replacement, many spine surgeons are not sold on the idea due to the wide variation of surgeries, approaches and levels that may be operated on in any given diagnosis, as well as the cost differences based on in- and outpatient settings. However, many stakeholders — hospitals, consumers, payers and employers — have embraced bundles.

2. While the purpose of bundled payment programs is to cut costs, many physicians are concerned about the effects on quality and safety. An analysis of CMS' Bundled Payments for Care Improvement initiative found no change in length of stay for spinal fusion and an increase in both 90-day emergency room use and 90-day readmission rate, according to the American Academy of Orthopaedic Surgeons. Additionally, there was an increased rate of subsequent surgery at participating hospitals within the 90-day bundle period.

3. As healthcare in the U.S. continues its push from a fee-for-service model toward value-based care, physicians are expected more than ever to demonstrate the benefit of their interventions and accurately predict costs, according to University of California San Francisco  neurosurgeon Christopher Ames, MD.

"There are currently no validated predictive models of improvement that could be used to generate reliable bundle payment options for complex spine surgery," Dr. Ames said. However, UCSF, in collaboration with the International Spine Study Group, is applying accurate predictive models deemed pivotal "to prevent incentives for providers to withhold care in value-based care models."

4. A study published in The Spine Journal calculated 90-day costs for all lumbar fusions to be $31,716 ± $18,124, with individual 90-day payments being $54,607 ± $30,643 in DRG-459 — spinal fusion except cervical with major comorbidity or complication — and $30,338 ± $16,074 in DRG-460 — spinal fusion except cervical without major comorbidity or complication. Researchers called on policymakers to account for individual patient, state and procedure variation seen within diagnosis-related groups to stop the formation of financial disincentives in caring for sicker patients and performing more complex fusions.

5. A well-rounded bundled payment model for spine could be cemented within the next eight to 10 years, according to David Janiec, a financial services executive with expertise in value-based care and alternative payment models.

"Early activity in bundled programs demonstrates the development of increased use of evidenced-based medicine, a better understanding of costs, improvements in care coordination and higher quality patient care, " Mr. Janiec said. "It is extremely important not only to participate in these value-based models for educational and financial benefit, currently, but also to look with a critical eye to ensure a sustainable final model evolves."

6. CMS made several changes to the BPCI Advanced program for 2021, the most significant of which is that participants are no longer able to select individual episode types, such as lower extremity, upper extremity or spinal fusion.

7. Last year, UnitedHealthcare expanded BPCI Bundled Payments to include Medicare Advantage beneficiaries. The UnitedHealthcare Care Bundles program offers bundled payments for noncervical spinal fusions. In 2019, Humana began offering Humana Medicare Advantage members access to bundled payments for spinal fusion.

8. Two condition-specific bundle payment programs recently emerged for spine surgery as well as joint replacement and bariatric surgery, according to the American Journal of Managed Care. The Pacific Business Group on Health/Health Design Plus Employers Centers of Excellence Network created a direct-to-employer program where condition-specific bundle payment programs are created for high-volume, high-quality centers. Largely through reductions in surgical rates, the program decreased costs by about $1.2 million for joint replacement and spine surgery.

9. A study on bundled payments for lumbar spinal fusions found increased case complexity was responsible for rising costs relative to the negotiated baseline target price. Researchers analyzed two-year data of one institution participating in the BPCI program and determined that the value-based model "may discourage advancement in spine surgery due to the financial penalty associated with novel techniques and technologies."

Five surgeon insights:

10. Mark Mikhael, MD. Illinois Bone & Joint Institute (Des Plaines): [We have] been participating in bundled payments in spine surgery for several years. Lumbar, thoracic and cervical fusions are included in these bundled payment programs. The success of our program is due to a collaborative effort between IBJI and our partners in physical therapy, home health services, social services and skilled nursing facilities. We have a unified goal to provide high-quality care throughout the preoperative, perioperative and postoperative period through patient education and surgical standardization. These efforts have led to shortened postoperative hospital stays, more frequent discharge to home after surgery (with home health services), and minimized skilled nursing facility stays when necessary. Along with preoperative patient education to set expectations, the program encourages early postop mobilization, enhanced recovery after surgery protocols by anesthesia providers and minimal opioid analgesia. The success of the program would not be possible without a coordinated effort with our care partners.

11. Frank Phillips, MD. Midwest Orthopaedics at Rush (Chicago): At one point, I thought [bundled payments] was the future. We were all in to measure and get our metrics prepared for this. In spine, it has been a lot fits and starts; it hasn't really panned out. Total joints are pretty uniform; every total hip replacement looks about the same. Spine is just a different animal. A bundle for a lumbar fusion up to five levels encompasses so many different pathologies, and the economics of those are so different. We have tried within our group to be part of Medicare bundles and accept different types of care, and that has been difficult to do in spine. It hasn't really taken off like it has in joints and other areas of orthopedics. I still think the principle of value-based care will stay, there is no doubt, but it's a tough thing in spine to execute. Obviously, payers want to move away from fee-for-service, and we at the same time have to prove the value of what we do. But formal value-based programs have been very elusive in spine. I think we should collect data, and it's important that all practices do it. If you don't, you'll be in trouble. But is it going to be the way of the future that people have talked about? I'm less certain of that than I might have been three or four years ago.

12. Andrew Hecht, MD. Mount Sinai Health System (New York City): We have not participated in bundled payments for spine. After careful analysis and due to the variability of techniques, instrumentation implant cost and other variables, we found it to be a relatively high risk, low reward proposition. It would only work for the most basic of cases and not for anything else. If complications should occur, it would shift all the risk to the institution. Bundled payments are much more reliable for more straightforward problems like hip and knee arthritis. Surgeons and institutions need to be very careful with assessing the type of bundled payment arrangements they are entering into. After our careful analysis and research, we found it would be cost-effective only in a very limited number of cases and types of cases.

13. Mick Perez-Cruet, MD. Michigan Head & Spine Institute (Southfield, Mich.): We haven't participated [in bundled payments for spine], but I feel we are headed in that direction. The advantage is that it potentially promotes cost savings. However, I feel a much more effective method to reducing spine care cost is to incentivize surgeons who perform cost-effective care. These cost savings should not solely be realized by the hospital or insurance carriers as they don't ultimately decide the treatment plan, nor fully understand what is in the best interest of the patient. Those surgeons that clearly reduce cost yet provide outstanding clinical care should be rewarded for doing so. These rewards should be significant. I know in my practice that providing minimally invasive outpatient spine care has clearly reduced costs, and patients are very satisfied with their outcomes. Additionally, efforts to provide transparency in spine care cost can also be effective. Nobody goes shopping without knowing ahead of time the cost, or at least they should not. Instituting these same measures in healthcare might go a long way in reducing costs, while still providing outstanding spine care. 

14. Fred Harris, MD. Twin Cities Orthopedics (Golden Valley, Minn.): I found that [bundled payments] have been very efficient and rewarding in ASCs with the right patient selection. Patients that undergo anterior cervical spine surgery usually leave the surgery center and go to our care suites and stay overnight. Lumbar fusion patients usually stay up to two nights in the care suites prior to discharge home. My request for spine bundle care in the ASC has significantly increased over the past year.

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