Can bundled payments achieve success in spine surgery?

Alan Condon -  

Value-based care has long been in the pipelines for spine surgery, but many surgeons believe they must push back against complex cases being included in value-based models such as bundled payments.

Bundled payments have achieved some success in other areas of orthopedics — such as knee and hip replacements — but bundling services for spine surgery is a different animal 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 inpatient and outpatient settings.

Spine bundled payments should be based on diagnosis-related groups, which can vary significantly, according to Alexander Vaccaro, MD, PhD, president of Rothman Orthopaedics in Philadelphia. "The average DRGs for cervical and lumbar surgical cases vary significantly, from $11,000 to over $100,000 for the same diagnosis."

These differences in costs are not reflected in current CMS bundled payment reimbursement schemes, a major drawback, Dr. Vaccaro told Becker's. Where bundles especially fall short is with spinal deformity cases, where the number of levels operated or complexity of the surgery is not factored into reimbursement.

Spine providers have made their thoughts clear on what needs to change for value-based strategies to be effective. While payers take their time rethinking current payment models, one thing almost everyone agrees on is the importance of data, which will be key for providers negotiating contracts with commercial payers.

Providers see predictive intelligence and analytics as the key to evolving their understanding of what works and what doesn't work for each patient in a particular setting. Essentially, data will be increasingly used to identify the right treatment, in the right patient, at the right time to optimize outcomes in spine surgery.

While using this data will likely lead to more predictable outcomes and improved patient care, smaller practices will be increasingly pushed toward consolidation as they compete with the resources of larger organizations.

"I have been collecting the outcomes on my patients to prepare for this in the future. However, we have to have a fair price, as there is no one-size-fits-all," Issada Thongtrangan, MD, of Scottsdale, Ariz.-based Microspine, told Becker's. "Practicing medicine is an art, not a cookbook. We have to consider each patient regarding their comorbidities. We also have to weigh what technique, implants, biologics, navigation, etc., are utilized for surgery."

One trend that many spine practices have been capitalizing on is direct-to-employer contracts — both regional and national. Many large employers are moving away from commercial payers, seeking to contract directly with ASCs for high-quality, high-value spine care.

ASCs that bundle services for spine procedures have the opportunity to approach large employers with a discount for employees in exchange for encouraging employees to choose their center.

"Given the significant cost of spine procedures, this will be very attractive to employers and will provide employees with a high-quality destination for their surgeries," according to Nader Samii, CEO of National Medical Billing Services, and Alison Kuley, senior spine coder at the company.

Richard Kube, MD,of Prairie Spine in Peoria, Ill., told Becker's more self-funded, self-insured businesses are seeking out these options, where it can be cheaper for employees to travel to an out-of-state ASC for surgery, than have that procedure in their hometown.

"Our compilation of local explanations of benefits has shown an average of $80,000 saved per each spine surgery performed for employees of self-funded, self-insured health plans," Dr. Kube said. "This is a great opportunity for those businesses struggling with rising health costs. Likewise, it is a great source of savings for local and county governments, along with many unions."

While value-based care has yet to find real success in spine, payers and providers continue to explore new avenues as the healthcare industry continues its push away from fee-for-service care.

However, it could be another decade before a well-rounded bundled payment model is cemented in spine surgery, 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 evolve

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