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Bundled payments in ASCs: Good business or a race to the bottom?

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ASCs play an important role in the value-based care environment and more are considering bundled payments as part of their strategy.

Christina Goodall, RN, DNP, administrator of Atlanta Orthopedic Institute, said the ability to bundle services and negotiate with payers will give surgery centers the competitive edge over the next few years.

"ASCs that have an ability to bundle their services for specific procedures, will have the opportunity to negotiate directly with self-insured employers, enabling their employees to get concierge type services at reduced rates. By doing so, employers will reduce their loss time injuries and ensure that their employees receive high quality services in a controlled environment," said Dr. Goodall.

William Rambo, MD, of Midlands Orthopaedics & Neurosurgery in Columbia, S.C., said his surgery center has eight spine surgery bundled offerings. The bundles include surgeon and assistant fees, ASC fees, implants and anesthesia for the 90-day episode of care.

"As healthcare purchasers clamor for price transparency, we expect 2021 to bring us more patients, self-funded employers and their third-party administrators who appreciate our easily accessible pricing menu," he said.

Fred Harris, MD, a spine surgeon with Twin Cities Orthopedics in Golden Valley, Minn., also said requests for bundled care in the ASC increased over the past year.

"I found that [bundled payments] have been very efficient and rewarding in ASCs with the right patient selection," he said.

Wael Barsoum, MD, president and chief transformation officer of Phoenix-based HOPCo, sees the changes in the Bundled Payments for Care Improvement Advanced and other programs considered by the federal government as a broader shift toward population health to align physicians, hospitals and payers around reducing variability and costs while improving outcomes.

"As physicians and health systems take on more financial risk, the ability to manage the entire continuum of care is imperative," he said. "Care will shift to lower-cost sites of service, such as surgery centers, and health systems must have a coordinated strategy to maintain volumes and margins in the hospital setting through more integrated value-based care programs and more intensive and effective inpatient care redesign."

But not all surgeons agree. Michael Gordon, MD, of Hoag Orthopedic Institute in Orange County, Calif., told Becker's he thinks the CMS bundled payment system isn't good for spine and needs modifications.

"Payment should be risk-adjusted and the site of care should be irrelevant so surgeons are paid properly for risk and expertise and to avoid gaming the system on where to do surgery and how long to keep patients in the hospital," he said.

Frank Phillips, MD, a spine surgeon and partner with Chicago-based Midwest Orthopaedics at Rush, initially thought bundled payments were the future, and his practice began collecting key metrics to prepare for bundles. However, the bundles never panned out in the spine field.

"We have tried within our group to be part of Medicare bundles and accept different types of care, and that has been difficult to do in spine," he said. "It hasn't really taken off like it has in joints and other areas of orthopedics. I still think the principle of value based care will stay, there is no doubt, but it's a tough thing in spine to execute. Obviously payers want to move away from fee for service and we at the same time have to prove the value of what we do. But formal value based programs have been very elusive in spine."

Rothman Orthopaedics in Philadelphia participated in bundled payments for 10 years and thrived under shared savings agreements with an insurance company and hospital. However, bundled payments are no longer beneficial for the practice.

"What happens is the growth changes every year, the better you get the more difficult it is to save money, so we're now bottomed out," said Alexander Vaccaro, MD, president of Rothman Orthopaedics.

He said Rothman dropped out of multiple value-based care agreements because the group was unable to become more efficient.

"We looked at everything that we could to sort of squeeze out any inefficiencies," he said. "The next step is population-based medicine where you do per patient, per month, per member, per year arrangements."

 

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