New York Health Care Providers Find Savings in Bundled Orthopedic Payments

Crain's Health Pulse
September 21, 2016

New York hospitals have saved money through Medicare's experimentation with bundled payments for certain procedures. But as the federal government considers making the new payment model mandatory for non-elective surgeries and hospitalizations, providers' jobs will become more difficult, hospital administrators said Tuesday.
Nationally, bundled payments for orthopedic surgery in the Medicare Bundled Payments for Care Improvement initiative resulted in significant savings and quality gains, while the bundles for cardiovascular surgery did not result in savings through the first two years of the program, according to an evaluation released Monday.
Hospitals participating under Model 2 are responsible for the costs incurred during a patient's hospitalization and for the services delivered in the 90 days after discharge by a home health agency or institutional post-acute-care provider, such as an inpatient rehab facility. They are also responsible for the cost of readmissions.
Participants in this model saved Medicare a statistically significant amount of $864 per episode. Patients reported more improvement in certain mobility measures 90 days after their discharge than those treated at comparison hospitals that did not participate in the pilot. Providers nationwide did not show statistically significant savings for cardiovascular surgery episodes, although they maintained quality.
Northwell Health was among the health care providers who participated, accepting bundled payments for total joint replacements, heart bypass surgery and cardiac valve replacement. Dr. Zenobia Brown, medical director for Northwell's bundled payments program, called its work "wildly successful," saying the system's participating hospitals reported savings that exceeded the nationwide rate. It was also able to cut readmissions for joint replacements at Lenox Hill Hospital from a baseline of 10% to less than 1%.
Northwell used nurses and nurse practitioners as care navigators who interviewed joint-replacement patients two weeks before surgery and followed them until 90 days after care.
"If anything went wrong, that patient had a cellphone number of a nurse practitioner, so that whatever was not going well for them could be managed right at that moment in time," Brown said.
Montefiore Medical Center was among the first entrants into the federal pilot and initially signed on for bundled programs for joint replacements, heart bypass surgery, stroke, cardiac valve replacement and congestive heart failure. After reviewing early results, the hospital decided to only continue with its joint-replacement bundle for 2015, later adding a program for hip fractures.
From January 2015 through June 2016, Montefiore saved money against its target in all but one quarter, said Dr. Neil Cobelli, the hospital's chair of orthopedic surgery.
Cobelli said Montefiore has yet to receive bonus payments it is owed from CMS for its performance. But the medical center joined the initiative to gain more experience taking responsibility for the total cost of care, including nursing home and home care services.
"No one's doing this because of the money," he said.
In July, the U.S. Department of Health and Human Services proposed extending its mandatory Medicare bundled payment programs to heart bypass and hip fracture surgeries.
The prospect of that expansion is nerve-wracking for some local facilities including Winthrop-University Hospital in Mineola, L.I., which only participated in the joint-replacement bundle under the program. Winthrop achieved savings for its orthopedic surgery patients through partnerships with rehab facilities and the use of a nurse navigator. But the path to savings will be more difficult to achieve for non-elective procedures, said Matti Hasselmann, administrative director of the departments of orthopedics and thoracic and cardiovascular surgery.
"These are patients that show up in our emergency room with a heart attack or a fracture," she said. "There's no way to prepare for them and they're much harder to manage for that 90 days."

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