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5 key thoughts on ASCs navigating TJR reimbursement with commercial payers

Total joints are making their way into the outpatient setting, and ambulatory surgery centers are continually seeking strategies to negotiate reimbursement from payers. CMS, which sets the gold standard for commercial payers, only approves unicompartmental knee replacement for the ambulatory setting, although the tides may be turning.

"Payers are really all over the map right now with total joints," said Christine Maroulis, director health policy and reimbursement of DePuy Synthes. "Medicare has joint replacements on the inpatient-only list so payers are left to make this decision themselves as to how much they will pay and if they will pay. This is a great thing because it allows for a lot of discussions, dialogue and value propositions between the provider and the payer."

During a roundtable discussion at  Becker's 14th Annual Spine, Orthopedic & Pain Management-Driven ASC Conference + The Future of Spine hosted by DePuy Synthes and cosponsored by Scott Becker, publisher of Becker's Hospital Review, a panel from different ends of the healthcare spectrum discussed key strategies for surgery centers to employ when working with payers.

Here are five key thoughts:

1. Total joints are moving to the outpatient landscape. "There is a true movement from inpatient to outpatient and that is where the big savings are in this area," said Mr. Becker. "You are seeing more and more payer relationships and contracts that are conditioning savings and better reimbursement to surgeons, orthopedic groups and surgery center chains based on the actual movement and migration happening."

Technological advancements allow procedures to become less invasive, and surgeons can discharge patients within a 24-hour time frame.

The demographics of the total joint patient are changing, with patients even in their late 40s undergoing TJR procedures. Many practices, mainly larger orthopedic groups and chains, are collaborating with regional and national payers on bundled payment initiatives, with many small dominant groups also making their way into bundled payments.  

2. Providers have to take on some risk. The days when payers would fully take on the risk associated with procedures are dwindling in favor of a model in which both payers and providers take on risk.

"The amount of risk has to be meaningful," said Derek Van Amerongen, MD, MS, vice president and medical officer of Humana. "This number will evolve over time. The organizations that take both upside and downside risk will come out on top. As we move further into the value-based contracting world, provider organizations have to be willing to accept negative risk if they don't perform according to the metric the organizations agreed on."

3. The proposal has to create value to payers. Nearly 18 months ago, Buffalo, N.Y.-based Excelsior Orthopaedics launched their outpatient total joints program and recently completed their 100th TJR procedure. The 20-physician-led practice met with their three major payers in the market to discuss bundled payment arrangements so they could turn their plan into a reality.

"Once we convinced payers that outpatient total replacements were effective, efficient and saved money, the next step was to sit down with contractors and providers and talk about bundled payments," said Dave Uba, CEO of Excelsior Orthopaedics. "Healthcare is very local and depending on the payers in your market, you may have to help lead them down the path based on their knowledge around bundled payments and whether they've been involved with them yet."

If payers are not well-versed in bundled payments and the benefits such models provide, practices can delve into the specifics about how the bundled payment initiative would be mutually beneficial. When negotiating with payers on a TJR bundled payment initiative, practices should:

1. Define the episode of care.
2. Specify what the bundle includes.
3. Define how each side will manage risk.
4. Show how surgery centers can truncate costs.

4. Meeting the triple aim. The triple aim includes improving the patient experience, improving patient health and lowering healthcare costs. As healthcare transitions to value-based care, both payers and providers are striving to achieve this goal.

"Payers' medical directors want to know that procedures are safe and effective. Cost is a distant third," noted Ms. Maroulis.

Dr. Van Amerongen said the tension that once existed between payers and providers is eroding and both parties are working toward alignment. Surgery centers should establish firm relationships with payers, and invite payer representatives to visit their facility to become well-acquainted with a center's TJR program's ins and outs. Excelsior Orthopaedics had payer representatives visit their facility, review their protocols and clinic pathways and talk to the surgeons and anesthesiologists. Mr. Uba noted the representatives got "deep into the clinical component of the program," which lead to the successful partnership between the practice and its payers.  

"I am invited to go to payer board meetings to talk about what we did. They are using it as a success story," he said.

5. Data is king. When presenting value prepositions to payers, data needs to back up your claims that moving cases to the outpatient setting will benefit patients and lower costs. Dr. Van Amerongen noted payers will have an array of information prior to the meeting with surgery centers including the standard procedure's cost for a patient with an average level of risk. What surgery centers can present them with is detailed information on a specific patient's outcomes such as their rehab success, satisfaction levels and how they transition to home fared.

"As we move to MACRA and MIPS, it is mind boggling to see how we are coming up with all these metrics and how we can collect this data," Mr. Uba said. "The jury is out on whether these metrics are relevant. However, we know we need to have it, that payers are going to want to see it and patients want to know if they will get a good outcome."

Listen to the recording here. 

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