Archive December 2017 XVIII, No. 12

How We Negotiated Our Own Bundled Payments for Total Joints

These surgeons saw the coming of same-day joints and value-based payments.

Stephen Lucey

Stephen Lucey, MD


Stephen Lucey, MD and his colleagues CALLING THE SHOTS Orthopedic surgeon Stephen Lucey, MD (far left) and his colleagues own a surgery center and oversee their own total joint bundled payments.

I'm not sure which idea scared and excited us more — opening our own surgical center, performing same-day joint replacements or forming our own management company in order to create and oversee bundled payments for our total joint cases. This was in 2015, when same-day joint replacement and the movement away from fee-for-service and toward value-based payment was just starting to take hold. Creating a system where the surgeons doing the procedures are the same ones overseeing the payments? That was almost unheard of. But the 4 of us orthopedic surgeons, Frank Aluisio, MD, Frank Rowan, MD, Matt Olin, MD, and I saw these megatrends looming on the horizon, and we wanted to get out in front of them. We formed Delta Joint Management and off we went.

Since Delta opened in August, we've performed 80 total joint surgeries. We expect to do 200 next year and keep doubling it after that.

Saving a bundle
I signed up for the BPCI (Bundled Payments for Care Improvement) initiative when it was introduced a couple of years ago. The experience gave me an insight into the world of bundled payments.

The concept of BPCI is relatively simple. Medicare sets up the fixed-price payment — also known as a bundle — that includes financial and performance accountability for episodes of care. The payment, which is based on the historic spending for the surgery, covers everything from the day of surgery through 90 days post-op. Setting up your own bundled payment system lets you and your surgeons oversee and negotiate everything, including the implant cost.

Say a patient comes in for knee surgery and Medicare offers a bundled payment of $20,000. Expenses would be paid out of that bundle — including physical therapy, the implant, the cost of surgery and more. The orthopedic group hires an outside company to "convene" the bundle, which means it would keep track of all of the spending for the bundle, including any complications that occurred following the surgery.

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