{"id":27365,"date":"2022-09-21T09:18:07","date_gmt":"2022-09-21T13:18:07","guid":{"rendered":"https:\/\/avalere.com\/?p=27365"},"modified":"2022-09-21T09:58:06","modified_gmt":"2022-09-21T13:58:06","slug":"opportunities-for-savings-within-orthopedic-value-based-bundles","status":"publish","type":"post","link":"https:\/\/advisory.avalerehealth.com\/insights\/opportunities-for-savings-within-orthopedic-value-based-bundles","title":{"rendered":"Opportunities for Savings Within Orthopedic Value-Based Bundles"},"content":{"rendered":"
[vc_row][vc_column][vc_column_text]Given the success in generating savings and improving outcomes from Centers for Medicare and Medicaid Innovation Center (CMMI) models such as the Comprehensive Care for Joint Replacement<\/a> (CJR) model and surgical events in the Bundled Payments for Care Improvement Advanced<\/a> (BPCI-A) model, there is growing interest in value-based payment arrangements with private payers. Avalere worked with a large orthopedic group to develop a value-based contract (VBC) roadmap and build a flexible model to understand bundle pricing mechanisms and opportunities for savings in orthopedic VBCs with private payers.<\/p>\n

To accomplish this, Avalere gathered information on the practice\u2019s existing payer contracts, patient demographics, and market presence. Avalere identified the practice\u2019s Medicare patients who underwent total joint replacements (TJRs) using its 100% Medicare Fee-for-Service (FFS) data, which is a valuable asset for understanding commercial populations where private payer data are limited. This comprehensive data source was risk adjusted based on organization-specific patient demographics of the commercial and Medicare Advantage (MA) populations of interest to understand healthcare usage in the practice\u2019s privately insured patients. Avalere then identified related services (e.g., pre-surgery visits, imaging, anesthesia, post-acute care [PAC] services, physical therapy [PT], surgical complications) provided to these patients between 30 days before surgery and 90 days after surgery.<\/p>\n

Methodology<\/h2>\n

Under a research-focused data use agreement with the CMS, Avalere examined data from CMS\u2019s Medicare Part B FFS claims from February 2019 to March 2021 to identify beneficiaries who received a total joint replacement in the practice’s service area during that period. Avalere identified beneficiaries with the following Current Procedural Terminology codes: 27130, 27132, 27447, and 23472. Avalere used the Prometheus Episode grouper code sets for total hip replacement (THR), total knee replacement (TKR), and total shoulder replacement (TSR) to identify healthcare services associated with the total joint replacement procedures provided to these patients. Avalere emulated the Maryland Episode Quality Improvement Program<\/a> (EQIP) episode structure and identified episodes of care from 30 days before surgery and 90 days after surgery. Avalere validated episode costs identified in our model by comparing these to the existing EQIP target prices for the practice of interest.<\/p>\n

Avalere developed a sophisticated and flexible model to simulate practice profitability over 3 years in multiple commercial and MA VBC arrangements for TJRs using inputs such as membership numbers by line of business, medical inflation for future projections, site of service, patient demographics, services included in the bundle price, adjustments to account for surgical complications, and practice expenses. The resulting tool calculated bundle price changes based on the user-driven inputs to inform the practice\u2019s VBC contracting decisions. Avalere delivered the model and corresponding model orientation to the client to support its use for contracting decisions. Figure 1 is a sample of the model orientation presentation.[\/vc_column_text][\/vc_column][\/vc_row][vc_row][vc_column][vc_single_image image=”27362″ img_caption=”Figure 1. Avalere Orthopedic VBC Model Orientation Sample” css=”.vc_custom_1663702737092{margin-top: 30px !important;margin-bottom: 20px !important;}”][\/vc_column][\/vc_row][vc_row][vc_column][vc_column_text]\n

Key Considerations for Orthopedic Practices<\/h2>\n

The Avalere analysis yielded multiple key learnings about opportunities for savings in orthopedic VBCs:<\/p>\n

Shifting the site of care from the inpatient to the outpatient setting resulted in the largest TJR bundle price difference.<\/strong><\/p>\n