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Archive November 2020 XXI, No. 11

Business Advisor: The Secret to Bundled Payment Success

Lean on surgeon expertise to negotiate the best terms with insurers.

Scott Anseth

Scott Anseth


EXPERT OPINION In many situations, surgeons can spot cost-saving opportunities other staff cannot.

Bundled payment models work wonders for facilities that perform predictable, repeatable surgeries such as total joint replacements. In an industry where payment terms are often so complex even the most skilled finance staff have trouble understanding how (and why) the payer came up with its reimbursement rate, a bundled payment arrangement is refreshingly straightforward: You negotiate a single fee with an insurer that encompasses every aspect of patient care from the moment the case is scheduled until a pre-determined post-op date (most commonly 90 days). For instance, we negotiated a single fee with insurers that encompasses every aspect of care from surgery, to rehabilitation and everything in-between, up to 90 days post-op. The cost is published on our website. A total knee replacement through our EXCEL program is $24,250.

Bundled payment models let you manage the entire episode of care and also offer the ability to, in a large part, dictate costs. That means you can share any financial savings that occur when you deliver a quality outcome for less than the agreed upon fee with surgeons and other providers. Of course, it also means your facility is on the hook whenever costs of care exceed the amount in the bundle.

Surgeons excel at identifying areas where clinical importance and cost savings intersect.

With so much riding on the delivery of repeatable outcomes and the mitigation of unexpected complications, you need to lean heavily on the expertise of surgeons when developing the terms of bundled payments. After all, there is no other person on the surgical or administrative team who has the training and experience to definitively assess which elements of the care package are of value to the patient and which elements add only cost. Here are a few ways surgeons can help you establish profitable bundled payments thanks to the unique perspective they bring to the negotiating table.

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