UnitedHealthcare Champions Bundled Payments

UnitedHealthcare Services, Inc. (UHC) has implemented a bundled payment model specifically for hip, spine and knee surgeries called the Spine and Joint Solution.

The health plan under this bundled payment model is available to employers around the country and is part of a collaboration with hospitals and post-acute care facilities that have experience with spine and joint replacement surgeries and show few complications.

Michelle Lobe, vice president of Network Strategy and Innovation at UHC, told HealthPayerIntelligence.com, “The main reason for developing a bundled payment program is that, in most large companies, high spend is really associated with orthopedic procedures. For the most part, about 17 percent of company spend is in the orthopedic arena. Hip, knee, and spine procedures constitute about 33 percent of that.”

UHC is planning to expand the bundled payment program to 40 markets in 2017. It has already qualified the surgeons and facilities participating in the bundle, identified as UnitedHealthcare’s Centers of Excellence. According to the news release, UHC believes that patients who use UHC approved facilities will face a comparatively lower risk of complications when undergoing spinal fusion, spinal disc repair, knee or hip replacement surgeries.

“The first step is to go through some very specific analytics in the markets that we’re targeting to determine which the right centers of excellence might be, ” Lobe told the HealthPayerIntelligence writer. “Before we get into any conversation about payment methodology, we’re looking first to find the highest quality centers to target for those discussions. Using our own data as well as CMS [Centers for Medicare and Medicaid Services] data, we analyze centers for their outcomes and pick those partners. Once we identify in a market which Center of Excellence might be a good partner, then we start to entertain the conversation about negotiating a prospective bundle.”

Providers are reimbursed for a specific episode of care rather than the more conventional payment for every clinical service provided as is done in the fee-for-serve model. The pilot program for the bundled payment model has shown an average savings of $10, 000 or more for each episode of care as compared to overall median costs for the same procedures in the same region. Employee out-of-pocket costs also declined.

With the population aging, hip and knee replacement surgeries are expected to increase. The Health Care Cost and Utilization Project found that the number of knee replacement operations will rise by 500 percent by 2030. Bundled payment programs offer a method to better manage the costs of joint replacement surgery and spinal operations.