The statements contained in this document are solely those of the authors and do not necessarily reflect the views or policies of CMS. The authors assume responsibility for the accuracy and completeness of the information contained in this document. Background. The Bundled Payments for Care Improvement (BPCI) initiative was introduced to reduce healthcare costs while maintaining quality. We examined data from a healthcare system comprised of five hospitals that elected to participate in the BPCI Major Joint Replacement of the Lower Extremity Model 2 initiative beginning July 1, 2015. We compared one hospital that did 507 BPCI knee cases to the four other hospitals that did 566 cases. Stratifying the data by hospital volume, we sought to determine if costs decreased during the BPCI period, how the savings were achieved, and if savings resulted in financial rewards for participation. Methods. The Medicare data included the target cost for each episode (based on historical data from 2009–2012 for each hospital that was adjusted quarterly) and actual Part A and Part B spending for 90 days. Using 1,836 primary knee replacements, we analyzed the costs associated with the anchor hospitalization, inpatient rehabilitation, skilled nursing facilities, home health, outpatient physical therapy and readmission to compare the 1,073 knees done during the 16-month BPCI initiative period with the 763 knees done during the 1-year period preceding BPCI participation. Owing to the nonparametric distribution of the cost data, a Mann-Whitney U test was used to compare the higher volume hospital with the four lower volume hospitals. Results. Compared to the preceding year, the mean episode of care cost during BPCI participation decreased by 8.5% (from $20,853 to $19,087, p=0.24) at the higher volume hospital while remaining virtually unchanged (going from $20,383 to $20,380, p=0.10) at the lower volume hospitals. During the BPCI period, the mean Medicare 90-day target cost was $18,307 at the higher volume hospital and $22,287 at the lower volume hospitals (p<0.001). At the higher volume hospital, the major components of the savings included $367,290 from reduced readmission rates (5.7% versus 8.7%, p=0.11), $207,608 primarily due to a reduction in the length of stay at skilled nursing facilities (mean 15 days versus 25 days, p=0.005), and $130,894 associated with a decreased percentage of patients using inpatient rehabilitation (3.2% versus 4.9%, p=0.22). Although offset by other cost increases, the largest component of the savings at the lower volume hospitals was $262,548 due to a decrease in the percentage of patients (2.3% versus 4.8%, p=0.04) using inpatient rehabilitation. Despite its savings, the mean reconciliation penalty was $851 per case at the higher volume hospital while the lower volume hospitals received a mean reward of $2,165 per case. Conclusion. Based on the reduction in costs and decreased readmission rates, the BPCI initiative is achieving its objectives. Despite an 8.5% decrease in costs, the $18,307 target based on historical data resulted in an $851 penalty per case at the higher volume hospital. In contrast, as a result of a $3,980 higher target, the lower volume hospitals were rewarded even though they did not achieve cost savings. As structured, there is no incentive for centers with historically low costs to participate in BPCI

The statements contained in this document are solely those of the authors and do not necessarily reflect the views or policies of CMS. The authors assume responsibility for the accuracy and completeness of the information contained in this document. Background. The Bundled Payments for Care Improvement (BPCI) initiative was introduced to reduce healthcare costs while maintaining quality. We examined data from a healthcare system comprised of five hospitals that elected to participate in the BPCI Major Joint Replacement of the Lower Extremity Model 2 initiative beginning July 1, 2015. We compared one hospital that did 439 BPCI hip cases to the four other hospitals that did 459 cases. Stratifying the data by hospital volume, we sought to determine if costs decreased during the BPCI period, how the savings were achieved, and if savings resulted in financial rewards for participation. Methods. The Medicare data included the target cost for each episode (based on historical data from 2009–2012 for each hospital that was adjusted quarterly) and actual Part A and Part B spending for 90 days. Using 1,574 primary hip replacements, we analyzed the costs associated with the anchor hospitalization, inpatient rehabilitation, skilled nursing facilities, home health, outpatient physical therapy and readmission to compare the 898 hips done during the 16-month BPCI initiative period with the 676 hips done during the 1-year period preceding BPCI participation. Owing to the nonparametric distribution of the cost data, a Mann-Whitney U test was used to compare the higher volume hospital with the four lower volume hospitals. Results. Compared to the preceding year, the mean episode of care cost during BPCI participation decreased by 14.1% (from $21,823 to $18,755, p=0.02) at the higher volume hospital and by 13.1% (from $32,138 to $27,940, p=0.02) at the lower volume hospitals. During the BPCI period, the mean Medicare target cost was $18,490 at the higher volume hospital and $25,021 at the lower volume hospitals (p<0.001). At the higher volume hospital, the major components of the savings included $526,028 from reduced readmission rates (11.5% versus 3.0%, p<0.001), $393,757 primarily due to reduced length of stay at skilled nursing facilities (mean 33 days versus 26 days, p=0.07), and $205,459 associated with a decreased percentage of patients using inpatient rehabilitation (6.6% versus 3.2%, p=0.03). At the lower volume hospitals, the major components of the savings included $1,002,447 associated with a reduction in the length of stay at skilled nursing facilities (mean 37 days versus 27 days, p<0.001), $487,356 associated with a decrease in the percentage of patients using inpatient rehab (11.6% versus 6.5%, p=0.01), and $355,695 associated with reduced readmission costs. Despite the savings, the mean reconciliation penalty was $184 per case at the higher volume hospital and $2,309 per case at the lower volume hospitals. Stratified by the type of hip replacement, reconciliation for elective primaries resulted in a mean reward of $848 per case for the 409 hips performed at the higher volume hospital and $2,497 per case for the 266 hips done at the lower volume hospitals. For hip fracture cases, reconciliation resulted in a mean penalty of $14,248 per case among the 30 hips done at the higher volume hospital and $8,932 per case for the 193 hips done at the lower volume hospitals. Conclusions. Based on the reduction in costs and decreased readmission rates, the BPCI initiative is achieving its objectives. Although the higher and lower volume hospitals achieved savings during BPCI participation, the target costs were lower than the actual costs resulting in a reconciliation penalty that was driven by the cost of hip fractures. The reconciliation rewards associated with elective primary THAs compared to the substantial penalties associated with hip fractures support the premise that these groups should have different targets costs

Introduction. The purpose of bundled payment programs is to reduce cost via risk sharing, while still maintaining quality. If savings are achieved under a historic target price, the orthopedic surgeon will receive a monetary bonus. If costs are higher, a portion is deducted from payment to the orthopedic surgeon. The purpose of this study was to evaluate our experience with the Bundled Payments for Care Improvement Program (BPCI) when run by an orthopedic surgeon group to determine patient safety and who benefited the most financially. Methods. This program ran from January 2015 through September 2018. 3,186 Medicare total hip and knee replacements, elective (DRG 470) and for fracture (DRG 469), performed by our group were included. 90 day hospital and all postoperative expenditures were reconciled against our historic cost. All patients were medically optimized with discharge plans established preoperatively. We developed preferred skilled nursing facilities and home health care agencies with synergistic medical providers so that discharges were recommended as soon as appropriate. We hired two full-time case managers to have direct contact with patients pre-and post-operatively. Waiver assistance such as house and pet sitters were used if necessary at our expense. 35% of savings went to the convener, who acted as a liaison between our group and CMS. Expenditures for the 90-day period for all patients were calculated to determine where savings occurred and which entity benefitted financially. Results. There was an average 9.2% reduction in hospital readmissions. An estimated total savings of $5,100,000 occurred. There was a 17% reduction in hospital costs, a 12.1% reduction in admissions to skilled nursing facilities with a 34% reduction in length of stay, and a 5% reduction in admissions to inpatient rehabilitation facilities. There was a 35% reduction in home health visits, but no change in outpatient physical therapy visits. After group expenses, final bonus to the orthopedic provider was on average $262 per patient. Conclusion. The physician managed program was very successful from Medicare's standpoint, achieving significant monetary savings without reducing quality of care. However, the bonus to the providing and managing physicians was nominal. It also does not take into consideration the 50 plus hours spent in meetings to develop this program. Participation could be considered a defensive posture so as not to lose more reimbursement. However, experience was gained which will be valuable for future gain sharing programs. Physicians and physician organizations need to sit at the head of the table to manage future payment bundles and perhaps also act as the convener. We deserve this, as a result of demonstrating high safety and cost savings. For figures, tables, or references, please contact authors directly

Background. In surgeon controlled bundled payment and service models, the goal is to reduce cost but preserve quality. The surgeon not only takes on risk for the surgery, but all costs during 90 days after the procedure. If savings are achieved over a previous target price, the surgeon can receive a monetary bonus. The surgeon is placed in a position to optimize the patients preoperatively to minimize expensive postoperative readmissions in a high risk population. Traditionally, surgeons request that primary care providers medically clear the patient for surgery with cardiology consultation at their discretion, and without dictating specific testing. Our participation in the Bundled Payments for Care Improvement (BPCI) program for total hip and knee replacement surgeries since 1/1/15 has demonstrated a significant number of patients having costly readmissions for cardiac events. Objective. To determine the medical effectiveness and cost savings of instituting a new innovative cardiac screening program (Preventive Cardio-Orthopaedics) for total hip and knee replacement patients in the BPCI program and to compare result to those managed in the more traditional fashion. Methods. The new screening program was instituted on 11/1/17 directed by an advanced cardiac imaging cardiologist (EH). Testing included an electrocardiogram, echocardiogram, carotid and abdominal ultrasound, and coronary computed tomography angiography (CCTA). If needed, a 3 day cardiac rhythm monitor was also performed. Four of the ten physicians in our group performing hip and knee replacement surgeries participated. Charts of readmitted patients were reviewed to determine past medical history, method of cardiac clearance, length and cost of readmission. Results. 2,459 patients had total hip or knee replacement in the BPCI program between 1/1/15 and 10/31/17 prior to instituting the new program. All had complete 90 day postoperative readmission data supplied by the CMS, with 25 (1%) of these patients having readmissions for cardiac events for a total cost of readmissions of %149,686. 14 of 25 had a preoperative clearance by a cardiologist. In 19 of the 25 patients, the only preoperative cardiac screening tool performed was an electrocardiogram. Since instituting the new program, 842 additional surgeries were performed, 463 by the four surgeons involved. 126 patients were agreeable to be evaluated through the Preventive Cardio-Orthopaedics program. 4 patients of the four physicians still screened via the traditional cardiac program had a cardiac event readmission. The average readmission hospital stay was 3.33 days at a total cost of %42,321. 2 patients of the four physicians evaluated by the Preventive Cardio-Orthopaedics program had a cardiac related readmission, at an average hospital stay of 2 days, and at a total cost of %10,091. Conclusions. Risk sharing programs have forced surgeons to take a more active role in optimizing their patients medically; otherwise they will be penalized with a decreased reimbursement. Traditionally, we have abdicated this responsibility to primary care and cardiology physicians but have noted a high cardiac readmission risk. In response, we have begun using a unique cardiac screening model. Our preliminary experience predicts fewer cardiac readmissions thereby improving care, and at a lower cost

Introduction. Recent studies of novel healthcare episode payment models, such as the Bundled Payments for Care Improvement (BPCI) initiative, have demonstrated pathways for improving value. However, these models may not provide appropriate payments for patients with significant medical comorbidities or complications. The objective of this study was to identify risk factors for exceeding our institution's target payment, the so-called “bundle busters.”. Methods. After receiving an exemption from the Institutional Review Board, we queried our institutional data warehouse for all patients (n=412) that underwent total joint arthroplasty (TJA) of the hip (n=192), knee (n=207), or ankle (n=13), and qualified for our institution's bundled payments model during the study time period (July 2015 – May 2017). Patients with medical conditions that were not well controlled or were potentially optimizable were all sent for preoperative medical optimization prior to surgery. For each 90-day episode, patient characteristics, medical comorbidities, perioperative data, and payments from the Centers for Medicare and Medicaid Services (CMS) were obtained. Episodes where Medicare payments exceeded the target payment were considered “busters”. The busters were older, and had higher comorbidity scores (all, p<0.01). Variables were summarized using descriptive statistics and risk ratios were calculated using a modified Poisson regression analysis. Results. Of the 412 patients, 123 were bundle busters (30%). There was a median institutional loss of $11,797 (IQR, $4,312 – $26,771) for the bundle busters and a median gain of $7,402 ($5,657 – $9,206) for the non-busters. Of the 32 risk factors evaluated, 11 were identified as Independent risk factors for busting the bundle (all, p<0.05). Nine of the 11 (82%) are non-modifiable risk factors and include age, disease specific diagnoses (fracture and avascular necrosis), and medical comorbidities (congestive heart failure, pulmonary circulation disorders, renal disease, cardiac arrhythmia, chronic pulmonary disease, and neurological disorder). The remaining two medical comorbidities are potentially modifiable and include diabetes with complications, and preoperative anemia. Conclusion. Though modifiable risk factors should continue to be optimized prior to TJA, as they were in this population, there are still many non-modifiable preoperative risk factors that can lead to costs exceeding the BPCI established institutional payment goal. As such, further work with payors may be needed to help fairly and appropriately consider these non-modifiable factors which result in increased costs

Background. The Bundled Payments for Care Improvement (BPCI) was developed by the US Center for Medicare and Medicaid (CMS) to evaluate a payment and service delivery model to reduce cost but preserve quality. 90 day postoperative expenditures are reconciled against a target price, allowing for a monetary bonus to the provider if savings were achieved. The surgeon is placed in a position to optimize the patients preoperatively to minimize expensive postoperative cardiovascular readmissions in a high risk population. Traditionally, surgeons request that primary care providers medically clear the patient for surgery with or without additional cardiology consultation, without dictating specific testing. Typical screening includes an EKG, occasionally an echocardiogram and nuclear stress test, and rarely a cardiac catheterization. Our participation in the BPCI program for total hip and knee replacement surgeries since 1/1/15 has demonstrated a significant number of patients having readmissions for cardiac events. Objective. To determine the medical effectiveness and cost savings of instituting a new innovative cardiac screening program (Preventive Cardio-Orthopaedics) for total hip and knee replacement patients in the BPCI program and to compare result to those managed in the more traditional fashion. Methods. The new screening program was instituted on 11/1/17 directed by an advanced cardiac imaging cardiologist (EH). Testing included an electrocardiogram, echocardiogram, carotid and abdominal ultrasound, and coronary computed tomography angiography (CCTA). If needed, a 3 day cardiac rhythm monitor was also performed. Four of the ten physicians in our group performing hip and knee replacement surgeries participated. Charts of readmitted patients were reviewed to determine past medical history, method of cardiac clearance, length and cost of readmission. Results. 1,361 patients had total hip or knee replacement in the BPCI program between 1/1/15 and 1/28/18 and all had complete 90 day postoperative readmission data supplied by the CMS, with 25 of these patients evaluated through the Preventive Cardio- Orthopaedics program. 12 (0.90%) screened via the traditional cardiac program had a cardiac event readmission. The average readmission hospital stay was 3.67 days at a total cost of $69,378. 7 of 12 had a preoperative clearance by a cardiologist. In 9 of the 12 patients, the only preoperative cardiac screening tool performed was an electrocardiogram. None of these 25 patients evaluated through the new program has been readmitted. 84 more patients have been evaluated in this program since 1/28/18, but 90 day readmission data is still incomplete. Preliminary data suggests that the highest risk in these patients is not severe coronary artery disease, but atrial fibrillation, hypertension with left ventricular hypertrophy, and cardiac plaques with ulceration. Conclusions. Risk sharing programs have forced joint replacement surgeons to take a more active role in optimizing their patients medically; otherwise they will be penalized with a decreased reimbursement. Traditionally, we have abdicated this responsibility to primary care and cardiology physicians but have noted a high readmission risk with a cardiac event. In response, we have begun using a unique cardiac screening model. Our preliminary experience predicts fewer cardiac readmissions thereby improving care, and at a lower cost