- Blue Cross Blue Shield of Michigan (BCBSM) is piloting a bundled payment program for knee and joint replacements with 64 surgeons at seven healthcare systems.
- The pilot will use a mix of inpatient and outpatient settings in an effort to reduce by 10% the cost of an episode of care that, according to Blue Cross data, can be anywhere from $28,000 to $55,000.
- Participating providers represent about a third of BCBSM claims for knee and hip procedures, "so it’s a good-sized test program" that the company expects will yield representative data.
BCBS Michigan's first go at a commercial-based bundled payment program signals the industry's continued interest in moving away from traditional fee-for-service models in pursuit of value-based care. The pilot launch follows a year of flux for bundled payment models. The CMS cut both the mandatory hip fracture and cardiac models in November and introduced an iteration of the voluntary Bundled Payment for Care Improvement (BPCI) program in January that removes participants' ability to choose the duration of a clinical episode.
According to the Ambulatory Surgery Center Association, moving a fourth of the country's knee and hip replacements to outpatient settings would save Medicare $714 million annually. This pilot seeks to tap into some of those savings.
Current participants include large systems and medical institutions, orthopedic clinics, nonprofit rehabilitation facilities and community hospitals across nine counties.
"The variation in cost across hospitals and geographies is significant," said Steve Anderson, vice president of provider contracting and network administration at BCBSM. "We are working with surgeons and healthcare systems to manage the cost and outcome variation of these procedures, and to consider appropriate sites for care."
BCBS' bundled payment pilot in Michigan complements a recent initiative from the company that aims to address social determinants of health. The Blue Cross Blue Shield Institute, a subsidiary with a mission to improve access to care, will target transportation, pharmacy, nutrition and fitness in certain communities through partnerships with Lyft, CVS Health and Walgreens.