How Might Bundled Payments Change under the New Administration?

On March 15, 2017, Thomas C. Barber, MD, and Douglas W. Lundy, MD, MBA, answered questions from reporters at the AAOS Annual Meeting related to the future of bundled payments. Dr. Barber and Dr. Lundy are the outgoing and incoming chairs, respectively, of the AAOS Council on Advocacy and are experts on the changes to orthopaedics that are coming out of Washington, D.C.

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Thomas C. Barber, MD, and Douglas W. Lundy, MD, MBA, lead a discussion on the future of bundled payments on March 15.

Specifically, Drs. Barber and Lundy discussed Medicare’s mandatory bundled payment models, including the Comprehensive Care for Joint Replacement (CJR) model—which seeks to test bundled payment and quality measures for an episode of care associated with hip and knee replacements in 67 geographic areas—and a new surgical hip/femur fracture treatment (SHFFT) model that builds on the CJR model and is set to begin on July 1, 2017. As Drs. Barber and Lundy noted, recently confirmed Secretary of Health and Human Services (HHS) Tom Price, MD, has criticized mandatory models such as these, suggesting that the agency should limit these kinds of demonstrations so that they represent true tests rather than wholesale changes to statute.

“There has been a lot of talk about how Secretary Price might change [the mandatory nature] moving forward,” said Dr. Barber. “We expect to see some changes with those programs, though I can’t predict exactly what those changes will be. Is there a place in the future for saying that these don’t have to be mandatory, they can be voluntary? Or maybe even those other places around the country could pick it up if they decide this is something they want to do? We would like to see that happen.”

Dr. Lundy emphasized that without the mandatory requirement, there would still be significant interest in bundled payments. “We were asking for more control in the process. If we are involved in the process along the way and have more control over the bundle, we can make things happen,” he told reporters.

Regarding socioeconomic adjustment within the bundles, Dr. Barber noted that socioeconomic and risk adjustment have been shown to be important in these bundled payment models, but they haven’t yet been incorporated. Thus, if you are operating in an inner city, he explained, you will have different results than if you are operating in the suburbs. Dr. Lundy added that this kind of risk adjustment is necessary to ensure there is no “cherry picking,” where sicker patients might be somehow missed because they would not do as well as other patients.

“Hopefully Secretary Price can make some adjustments so we can see some better alignment on this issue,” said Dr. Barber.

Drs. Barber and Lundy also talked about the need to obtain data faster in order for clinicians to better gauge their effectiveness. “You have to be able to adapt at the moment and make changes,” said Dr. Barber. AAOS previously urged the Centers for Medicare & Medicaid Services (CMS) to provide real-time clinician/practice data instead of data from the lagged feedback system, commenting that access to timely data reflecting the performance scoring of clinicians is essential for the success of these programs.

Finally, Drs. Barber and Lundy mentioned some of the changes related to the Medicare Access and CHIP Reauthorization Act of 2015 (MACRA), which they emphasized was a bipartisan effort and so will not be altered by any of the present healthcare legislation. In fact, physicians will need to provide CMS with some 2017 performance data by March 31, 2018. Drs. Barber and Lundy stressed that the focus on value will continue, even under Secretary Price, although there might be additional attention paid to making it simpler and easing the regulatory burden on physicians.

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