Physicians' Group Launches Ortho Bundling

Hospitals are usually the episode initiators for bundling, but a physician group in Durham, North Carolina, has developed a commercial bundle of orthopedic services.

This article first appeared in the December 2015 issue of HealthLeaders magazine.

Bundling of orthopedic services requires optimizing the patient experience and finding postacute care partners who will follow the protocols that make the difference between winning and losing, say healthcare leaders experienced with this increasingly common reimbursement.

Hospitals are usually the episode initiators for bundling, but a physician group in Durham, North Carolina, has developed a commercial bundle of orthopedic services. Triangle Orthopaedic Associates began discussing the idea of bundling with Blue Cross Blue Shield of North Carolina in 2011, but it took almost two years to work out the plan, says Chief Administrative Officer Chris Adkins.

The orthopedic group has 63 physicians in 23 locations covering 12 counties, including eight urgent care clinics, seven MRI locations, and numerous physical therapy facilities. Triangle began bundled payments for total knee replacement with BCBSNC in December 2012. Since then, it has added a total hip replacement and a unicompartmental knee bundle.

The bundles are prospective payment models, so Triangle has negotiated a flat rate with BCBSNC for each procedure, including any services needed for 90 days post-op. Triangle is paid the full amount and is responsible for its contracts with the hospital, anesthesia, durable medical equipment, and therapy. "We share in the risk for that patient's outcome," Adkins says.

Success key No. 1: Optimize the patient experience
Bundling puts the pressure on providers to produce a good patient outcome, and that can be difficult if patients avoid services like post-op therapy because of the cost or hassle, Adkins notes. That is why Triangle's bundling arrangement with BCBSNC improves the patient experience wherever possible.

With bundling, patients receive only one bill—from Triangle—that includes all services related to the procedure, and they know up front what their out-of-pocket costs will be. Therapy services are included in the bundle, so patients' out-of-pocket costs are lower because they do not have additional copays after the surgery, Adkins notes.

Bundling has improved patient outcomes dramatically, he says, partly because patients have more contact with the practice. Prior to bundling, patients relied on the physician and physician assistant, maybe a nurse also, to arrange the procedure and post-op care. Now each patient is assigned to a bundling case manager, always an RN, to start coordinating care as soon as the doctor determines surgery is necessary.

The bundling coordinator helps with screening patients, providing education, arranging preop testing, keeping the patient on the proper care pathway, and following up after surgery throughout the 90-day post-op period. They also follow up with patients at six months and one year post-op.

"We have found that patients who typically take about 24 weeks to reach a desired recovery level after knee replacement are able to achieve those results in 12 weeks," Adkins says. "A lot of that is from the much more rigorous physical therapy that we can put patients through because, when they don't have the obstacle of copays, they are more likely to continue with outpatient therapy."

Part of the goal with the bundled procedures is to ensure that patients receive therapy in an outpatient setting—the most productive and cost-effective setting—rather than a skilled nursing facility or in their home, he says. Eliminating obstacles to care is so important that Triangle even provides free transportation for patients to get to post-op care.

Success key No. 2: Introduce payer to patient
In addition to the bundling care coordinator at Triangle Orthopaedic Associates, the patient is matched with a special contact at BCBSNC. Amber Maxwell, senior strategic contract consultant with BCBSNC, says payer involvement can be an important tool in patient compliance because a patient receiving consistent messaging from multiple sources is more likely to comply with postdischarge instructions.

That was a key part of the agreement that Triangle worked out with BCBSNC, Adkins says.

"We wanted to make sure the patient had plenty of resources so they understood what their benefits covered," he says. "The level of communication that patients receive is much, much greater because we are invested in them having great outcomes. We don't do well if they don't have great outcomes."

Even patients who are not undergoing bundled procedures benefit from the "halo effect" resulting from a change of culture at Triangle, Adkins says. Seeing the benefits for the bundled patients, physicians are more attuned to what happens to their patients after surgery. They are more inclined to refer patients to outpatient therapy rather than a skilled nursing facility, for instance.

Triangle also participates in CMS' Bundled Payments for Care Improvement, the precursor to the Comprehensive Care for Joint Replacement Model that CMS rolled out this year that will require bundling for certain procedures at many metropolitan hospitals. BPCI bundling is a retrospective rather than prospective payment model, so all surgery participants are paid à la carte and then Triangle trues up with Medicare six to 12 months after surgery. That still leaves Triangle at risk if costs are not controlled, and the group must meet outcome standards, so bundled care for Medicare patients also is coordinated by the bundling nurses.

Success key No. 3: Improve data exchange
Adkins says that most healthcare billing systems are not set up to handle bundles, and neither are the traditional claims-processing systems used by insurers. That can pose a major hurdle when trying to keep a patient on the proper care pathway. Triangle's billing system had to be modified and is still being improved, he notes. With the BPCI program, Triangle has had problems with physicians leaving the group but not being unenrolled from its Medicare bundles, and Medicare has noted that this is a common problem in the program, related to a flaw in its Internet-based Provider Enrollment, Chain and Ownership System enrollment database.

"We have had to improve our credentialing system so that we're keeping a much closer watch over who is connected to our bundling program and who has left the group but might still be in the Medicare system as one of our bundling physicians," Adkins says.

Physician performance also can make or break a bundling program, so doctors must be on board with the clinical pathways that you have set for the bundle. Cold, hard data will change a physician's habits much more effectively than any amount of arguing or pleading, he says, so Triangle holds monthly meetings to share data and study outliers. If a patient does not fare well in the bundle protocol, the physicians dissect the case to determine why.

The data will be useful only if the quality metrics are clearly defined, says Maxwell. Take time to determine the clinical pathway and quality metrics in detail, with physician buy-in, before entering into an orthopedic bundle with a commercial payer, she says. Bundling is driving a more collaborative relationship between payers and providers in the commercial space, she says, with providers more involved in the development of the bundle.

"Unlike CMS, which is a standard program, we have a collaborative approach with the provider where we can have differences based on procedures, the market, and other factors," Maxwell says. "Also, data sharing is a significant part of commercial bundles. This empowers the providers to elicit behavior change in their practices."

Success key No. 4: Keep post-op partners in line
The care patients receive after surgery greatly influences the outcome, so bundling orthopedic procedures requires excellent relationships with postacute care partners. To that end, Triangle leaders met with dozens of home health agencies, skilled nursing facilities, and other partners, visiting the facilities in person. The goal was twofold: to establish a personal rapport that could improve cooperation, and to lay down the law about what Triangle expects.

"We're inspecting them and making sure they live up to our standards," Adkins says. "We're basically dictating our protocols, what our physicians have determined for the amount of therapy patients get, how long they stay in that facility, and insisting on a lot of feedback. That is a huge paradigm shift in postacute care."

Maxwell agrees, saying this type of payment model empowers providers to own the entire episode.

"Realigning incentives to facilities and providers creates an environment where providers feel empowered to think of more than their part of the procedure," she says. "They become intimately involved with the postacute care process because those services can be the most costly in the bundle."

Success key No. 5: Choose procedures wisely
Not all orthopedic procedures can be bundled easily. Knee and hip procedures are relatively simple when compared to more chronic situations, says Maxwell. Spine procedures are more complex to bundle due to the complexity of procedures as well as the number of services involved.

That was borne out by the experience of NYU Langone Medical Center, says Richard Iorio, MD, chief of the division of adult reconstructive surgery at the hospital and a professor at NYU School of Medicine in New York City. NYU Langone has participated in BPCI since 2013, with bundles for total joint replacement (diagnosis-related groups 469 and 470). Originally, Langone had bundles for spinal surgery as well but dropped out of that program after determining the bundle payments were insufficient.

"The bundle was not designed well because they put two-level fusions in the same group as eight-level fusions," Iorio explains. "The instrumentation costs so much money and there was no way to expand the reimbursement as the fusions grow in size, so the bundle didn't work very well."

Total joint replacements, however, have been a success for NYU Langone. With that bundling, the organization was successful in minimizing the number of patients discharged to postacute partners, minimized hospital costs, and standardized clinical pathways.

Noting that CCJR will result in the bundling of 25% of total joint replacements reimbursed by Medicare, Iorio says some hospitals will find that change difficult. The hospitals affected include the small and large, some with established infrastructures for care coordination and some without.

"They're all going to have to find a way to do what we did with the full support of the university," he says. "They will need surgeon buy-in to deliver high-quality care in a way that will allow the hospital to stay under the threshold set by CMS."

When collaborating with a commercial payer to determine bundles and protocols, Maxwell recommends utilizing a certified and nationally accepted algorithm (e.g., Prometheus) to determine a nationally accepted benchmark.

Success key No. 6: Partner with patients
Don't forget to include the patient as a partner in an orthopedic bundle, says Maxwell. Removing obstacles to care, such as copayments, is only part of the picture. Actively engage the patient in the concept of bundling, and many will be eager to help make it successful, she says.

Giving patients and providers tools, information, and power to make healthcare decisions creates an environment where the patient is aware of the implications of their choices and allows them to navigate the complex healthcare system with a sense of security, she explains.

"When patients understand their role in bundled payments as well as the impact of their decisions, they are moved to make these choices with those consequences in mind," Maxwell says. "This will incent the patient to make choices more wisely, reducing potentially avoidable complications and making the bundled payment more successful."

Reprint HLR1215-8