and has thrived since implementing the risk-sharing reimbursement
model. "It lends itself well to total joints, because they're predictable,
repeatable surgeries with good outcomes," says Excelsior CEO David
Uba, MBA.
Payers were responsive to Excelsior's bundled payment proposals
because the cost savings were so obvious, according to Mr. Uba. He
says the site-of-service differential, just getting the cases out of the
hospital, gave his group the ability to save local payers about 30% to
35% per episode of care.
"Bundled payments have allowed us to control the flow of not only
patient outcomes and quality, but also the opportunity to control the
dollar," explains Mr. Uba. "No longer does the insurance company
assign value along the spectrum of care. We do."
Success in managing the episode of care and ultimately profiting in
the bundled payment model demands understanding every detail that
goes into replacing joints, and guiding patients all the way through the
process to achieve optimal outcomes, says Andrei Gonzales, MD,
assistant vice president of product management and value-based pay-
ments with Change Healthcare in Nashville, Tenn. "It's different from
how you've traditionally looked at care," he adds. "It's looking at all
the services as a whole to ensure you're getting the outcome you want
at a competitive and fair price."
Managing the elements
Surgery centers currently can negotiate bundled payments for total
joints only with private and commercial payers. "Because hips and
knees are still not approved to be done in ASCs, we're not operating
under any bundled payment scenarios for Medicare patients," explains
Mr. Uba. "We've been doing outpatient joints for 5 years now and have
a body of work and outcomes data on at least 750 patients. CMS has
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