Bundled payments out from under wraps at UCH

New model of payments for hip- and knee-replacement surgeries launches April 1
May 11, 2016

A bundled-payments program for hospitals providing total joint replacements for Medicare patients launched April 1. The launch date, however, was only the beginning of a story that hospitals will write in the months and years of ahead.

University of Colorado Hospital is one of 22 hospitals in the state – all in the Denver-Boulder metro area – participating in the Comprehensive Care for Joint Replacement Program. It’s an initiative by the Centers for Medicare and Medicaid Services that aims to improve the quality of care while controlling costs for some 400,000 Medicare patients who undergo total knee and hip replacement surgeries each year. The tab for those procedures ran to $7 billion in 2013.

Orthopedic surgeon Craig Hogan, MD, helps lead a steering committee that oversees the bundled-payment program at University of Colorado Hospital.

The five-year pilot program applies to patients covered by Medicare parts A and B, said Craig Hogan, MD, who performs hip- and knee-replacement surgeries at UCH. Hogan is also a member of the steering committee overseeing the hospital’s implementation of the program.

Under the bundled-payment model, hospitals receive a spending target for the procedures that is based on risk-adjusted historical cost data for their region minus a 2 percent discount, Hogan said. For that amount, they must manage a 90-day “episode of care” for each patient. The idea is to encourage hospitals to work with other caregivers to coordinate patients’ transitions to home or post-acute care facilities, such as skilled nursing facilities (SNFs). The aim is to reduce rates of hospital readmissions and complications and improve patient satisfaction.

Managing risk

The payment structure for total joint replacements doesn’t change, Hogan said. Hospitals will still be paid on a fee-for-service basis for each procedure. But bundled payments introduce a new measure of accountability. If the cost of care during the 90-day episode exceeds the spending target, hospitals will have to repay CMS. Conversely, hospitals that manage care efficiently while providing high-quality care will be eligible for incentive payments.

“CMS is looking for ways to control health care utilization while providing good care at a reasonable price,” Hogan said. “That means offloading some of its risk to health care organizations.”

The bundled concept is straightforward on the surface, but many devils lie in the implementation details. With their responsibility for care extending 90 days, hospitals will have to look more closely than ever at assessing and educating patients, managing their care throughout their inpatient stay, monitoring what happens after discharge, and building relationships with family members and community providers.

“This is a broad program and it’s not something we were taught in nursing school,” said Mary Scott, RN, director of case management and care coordination for UCH. For example, a comprehensive care program demands that the hospital get involved with patients before they are admitted to increase the chances of a good outcome, she said. That means, for example, working with home health care providers on preoperative visits for planned surgeries to evaluate a patient’s caregiver support, fall risk, and other factors that could affect recovery.

“Safety checks can help us get ahead of the game,” Scott said.

The long view

The new approach also elevates the importance of assessing, testing and evaluating patients prior to surgery. That’s a key role for the Pre-Procedure Clinic at UCH, which moved into a new space in the Anschutz Inpatient Pavilion and expanded its responsibilities late last year. The clinic has a 10-nurse staff that calls orthopedics patients and those in most other service lines for pre-anesthesia testing one to two weeks before surgery, said Nurse Manager Christine Woodman, RN, MSN.

The nurses review patients’ medical histories, update their medication lists, go over instructions for surgery, and schedule patients for lab tests and EKGs. That helps to avoid scheduling snarls, but it also helps to catch potential issues that could increase the risk of a poor surgical outcome.

Five nurse practitioners, meanwhile, identify high-risk patients – those with comorbidities, for example – for one-on-one discussions about their surgeries and what they need to do to prepare for them. Surgeons use the information to make a final decision about the timing of the procedure, Woodman said.

“It’s key to assess risk and optimize each patient’s health before surgery,” she said. “The goal is to get them in as good physical shape as possible for their procedures.”

That’s the goal afterward as well, Scott said. She said physical therapy for joint-replacement patients is part of the care plan, “starting at day zero,” with home visits “front loaded” the first three days after discharge.

“We want to give patients the motivation to continue their therapy at home or in the community,” Scott said.

The hospital is exploring forging formal relationships with skilled nursing facilities as a way of tightening patients’ transitions of care and closely monitoring their progress, Scott added, though nothing yet has been decided. But it’s preferable, whenever possible, to discharge patients to their homes, she added. Home health care nurses could play an important role in supporting the Orthopedics team in key post-discharge tasks, such as reconciling and managing medications and addressing pain issues.

Technology will also play an important role in managing patients’ health during an episode of care. Director of Orthopedics Michael Torpey, PT, said his team saw its first patient via a telehealth connection April 9. Remote consultations are important, he said, to keep patients engaged, support them in their rehabilitation, and reduce the risk of readmissions and emergency visits by catching problems like budding surgical-site infections.

Seeking standards

A year after it began work to prepare for bundled payments, the hospital continues to sharpen its strategies. Hogan said the efforts included developing “care pathways” to standardize the services each patient receives, based on evidence and experience.

“We want to make sure that everything we do has a reason and adds to the value of the care we provide, including quality, satisfaction and risk mitigation,” Hogan said.

To that end, Woodman is part of an Institute for Healthcare Quality, Safety and Efficiency project to develop a “surgical home concept” broadly known as ERAS (enhanced recovery after surgery). Developed in Europe about 15 years ago, the ERAS idea has been adopted at a handful of U.S. institutions, including the Mayo Clinic and the University of Michigan.

The ERAS approach includes a surgical clinic visit and pre-procedural assessment, following by a cluster of steps before, during and after surgery that have been shown to improve outcomes. The overall aim is to decrease infection rates and surgical complications, decrease length of stay, and increase patients’ involvement in their own care, Woodman said. She said the hospital hopes to institute a comprehensive ERAS program by January 2017.

Hogan said he anticipates that the pilot will evolve as the hospital gains experience in managing care across a longer continuum.

“As a steering committee, we will be formulating data and looking at what we can improve in terms of the quality of care, as well as the financial implications of the program,” he said.

About the author

Tyler Smith has been a health care writer, with a focus on hospitals, since 1996. He served as a writer and editor for the Marketing and Communications team at University of Colorado Hospital and UCHealth from 2007 to 2017. More recently, he has reported for and contributed stories to the University of Colorado School of Medicine, the Colorado School of Public Health and the Colorado Bioscience Association.