Orthopedic bundled payments outlook for 2021

Bundled payments in orthopedics are becoming more sophisticated as surgeons collect data and develop standards based on analytics insights.

In October, Phoenix-based Healthcare Outcomes Performance Co. acquired Stryker Performance Solutions' BPCI-A value-based care convener business and segments of the SPS health system orthopedic service line analytics subscription business. The acquisition strengthens HOPCo's bundled payments program.

DeLyle Manwaring, executive vice president of market transformation at HOPCo, discussed the transaction and big trends in bundled payments.

Question: How does HOPCo's acquisition of Stryker Performance Solutions better position the company for bundled payments?

DeLyle Manwaring: Over the last decade, HOPCo has dedicated significant time and financial resources to developing clinical support and predictive analytics to support bundles and value-based care initiatives. The tools that we acquired from Stryker only add to these capabilities of the existing suite of tools. We can now benchmark hospital service lines across the nation and help facilities quickly identify areas that need focus both from an operational and value-based care perspective.

[Our advanced bundled payment analytic engine] system can manage all of the data complexities related to commercial and government bundles easily and provides a very easy and intuitive dashboard. For health systems and practices looking to enter into bundled arrangements, our combined platform gives full access to clinical programs and protocols, analytics engine and musculoskeletal physician and administrative subject matter experts, who can quickly help them maximize savings within government and commercial bundle programs.

Q: What is your outlook for orthopedic bundled payments in 2021?

DM: For those participating in bundled programs, CMS has made numerous changes to the Bundled Payments for Care Improvement Advanced program for 2021 that will have a significant impact on those participating. The most significant of these changes is that participants are no longer able to select individual episode types, such as lower extremity, upper extremity or spinal fusion.

As of Jan. 1, CMS is requiring all participants to be at risk for all episodes they trigger within what they are calling Clinical Service Line Grouping(s). As one example, if you want to participate in a total joint bundle, you are now required to participate in fractures and upper extremity, too. This should be clearly seen as CMS pivoting to more of a population health approach, requiring more risk of providers. Having predictive outcomes analytics and evidence-based care pathways that manage the entire care continuum will be more important than ever.

Q: How do you see the industry moving forward with value-based care as BPCI-A sunsets?

DM: BPCI-A will sunset, but CMS has been clear that bundles are here to stay. In fact, they have signaled very strongly that a much broader and all-encompassing mandatory bundled payment program is next. In a recent interview, CMS Administrator Seema Verma referenced that many of the existing voluntary models only incentivize the physician to participate if they would benefit financially. To date, this has not translated into the meaningful taxpayer savings that were anticipated when these models were rolled out. This is CMS indicating that they want hospitals and physician groups to take a more comprehensive approach to managing all types of cases, not just the easy elective ones.

If mandatory participation is implemented, health systems and physicians will need the right teams, the right data and the right clinical pathways that will manage all types of patients, not just the elective ones.

As just one example, to be successful in managing hip fractures, surgeons must closely work with hospitals and other providers to optimize emergency department-to-operating room times. Another indicator of success managing total episode cost is post-op day zero ambulation which is proven to reduce complications and get patients back to normal sooner. Also, and perhaps counterintuitive to current logic, it may be better to keep a patient in the acute-care setting for a day or two longer if they can then safely discharge to home with outpatient physical therapy or even home health. This will require hospitals and physician groups to have hip fracture protocols and programs that manage the patient through the entire continuum — acute care facility, SNF and beyond.

Q: How do you anticipate the pandemic will affect the trend toward value-based care?

DM: Within musculoskeletal care, we are clearly already on the path toward value-based care, but I see the pandemic expediting that move even faster as those organizations who were already participating in value-based arrangements did relatively well this year from a financial perspective. Those organizations are stronger than ever and are now poised to be more involved in value-based care initiatives and will be able to gain even more traction and speed in moving the entire country down the path.

Q: What role do bundled payments play in transitioning to a more population health model next year?

DM: Simply said, a significant one. As mentioned previously, the changes CMS is making for BCPI-A in 2021 is a further shift toward broader risk for those providing orthopedic care, and as we all know, other payers will follow suit. The momentum of change the 2021 adjustments will create in the industry will move things further and faster than ever before.

For HOPCo, we are excited to see these changes. We see the benefit they will bring to improving the overall quality of care, reducing total cost and move the industry toward where we all know it needs to be. These are exciting times, but I understand some may be trepidatious for the future of orthopedics. But we believe there has never been a better time for providers and health systems within the orthopedic space. There will be, of course, some winners and losers, but those who prepare now will be well-positioned for decades to come.


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