One-Bill Joint Surgery Growing

Is the practice of charging one inclusive payment for surgical services, sometimes called “bundled payments, ” the future of joint replacement surgery? Executives at Blue Cross Blue Shield of North Carolina (BCBSNC) and the surgeons at Triangle Orthopaedic Associates (TOA) believe that it is.

Instead of billing separately for the surgeon, hospital, physical therapist, anesthesiologist and others, the two organizations, since 2012, have cooperated to provide for one-bill replacement surgery for knees. And on November 1, 2013, they began offering the same flat fee bundled terms for hip replacements. The surgeries are performed at North Carolina Specialty Hospital in Durham.

BCBSNC spokespersons Elaine Daniels and Lew Borman told OTW that insurers are moving away from the traditional fee for service reimbursement model to one that involves paying for a service. Both said they saw this system as the wave of the future in funding joint replacement. Daniels said that when they began paying a flat fee for knee replacements, they “expected to see positive results with this. Instead”, she said, “the results have been transformative.”

Among the positive results seen in knee replacement surgery were average cost savings of more than 22%, outcomes better than national benchmarks, a reduction in avoidable complications as compared to other total knee replacements performed in North Carolina and a patient satisfaction rating of 97%.

“The cost of a hip replacement surgery and follow-up care in North Carolina can range from $22, 000 to $52, 000, and the prices of many surgeries aren’t always available to patients when surgeries are scheduled, ” said Brad Wilson, BCBSNC president and CEO. “This lack of transparency drives up health care costs more than $100 billion in the U.S. each year. Our new agreement with TOA takes the guesswork out of paying for hip replacement surgeries. The one-time payment will be 10-20% less than the average cost of hip replacements in North Carolina.”

Under the agreement between BCBSNC and TOA, customers will pay TOA a one-time fixed rate for hip replacement surgeries rather than receive multiple bills. Officials of both firms say that this approach, also known as coordinated care, improves efficiency, reduces unnecessary paperwork and ultimately lowers health care costs.

The agreement between BCBSNC and TOA covers all appointments and care occurring during the inpatient stay, including the total hip replacement surgery and care related to any complications and all related post-operative care for 90 days after surgery, including physical therapy and follow-up care received at TOA.

“We know this approach to care works from the results we’re already seeing from our knee replacement agreement, ” said Thomas A. Dimmig, M.D., president of Triangle Orthopaedic Associates. “We are pleased to work with BCBSNC again to bring another high quality, lower-cost orthopedic surgery option to BCBSNC customers.”

Blue Cross and Blue Shield of North Carolina delivers health care products, services and information to more than 3.74 million members, including approximately 1 million served on behalf of other Blue Plans. The company was recognized as one of the World’s Most Ethical Companies by Ethisphere Institute in 2012 and 2013. The company is an independent licensee of the Blue Cross and Blue Shield Association.