Bundled Payments a Growing Practice

Bundled payments for joint replacement have come to North Carolina. According to the publication Pharmacy Choice doctors at Charlotte’s OrthoCarolina, one of the region’s largest physicians groups, have adopted a single bill with a “bundled payment” that covers pre-operative care, surgery, and follow-up appointments, 90 days of physical therapy and the services of a “patient navigator” who guides patients through the process.

OrthoCarolina is an orthopedics practice with 144 physicians working in 33 locations. The practice began working four years ago to build the system for the bundled payment plan. The practice contracted with Blue Cross and Blue Shield of North Carolina to provide joint replacement surgery for a single price for patients who agree to have their surgeries at specified medical centers.

“We get paid one price no matter how much work we do, ” said Daniel Murrey, M.D. and CEO of OrthoCarolina. “I’m projecting that by 2020, all of orthopedics will be paid this way. It aligns everybody’s incentives to be focused on the right thing, ” he said.

Blue Cross, which has several similar contracts, told the writer for Pharmacy Choice that the bundled payments range from $22, 000 to $30, 000 in North Carolina. Traditional “unbundled” prices range from $27, 500 to $47, 300 across the state, they said.

Critics have called bundled payments “just price controls by another name.” Murrey admits that complications can and still do occur, but he says that standardization leads to fewer mistakes. Doctors, he said, “get really good at it because they’re (all) doing it the same way every time. We’ve had our best patient satisfaction and our best quality outcomes that we’ve ever had.”

In addition to OrthoCarolina, Blue Cross has negotiated all-in-one prices for joint replacement with Duke University Health System and Triangle Orthopaedic Associates in Durham. About 1, 000 members have used the plans. Because of bundled payment contracts, Blue Cross reports that it has seen a decrease of about 20% in the average cost per joint replacement, said Elaine Daniels, senior contract consultant for the insurer.

“We’re seeing member satisfaction scores right out the roof. Everyone is so happy, ” she said. “They’re getting a higher quality of care at a lower cost.”