Humana Branches Out Into Hip and Knee Bundles

The payer is leveraging grant money from CMS to create bundled payment programs with physician partners in Ohio and Tennessee.

Humana is rolling out bundled payment programs to providers in Ohio and Tennessee, and soon in other regions.

The insurer's programs closely mimic both states' existing CMS State Innovation Models Initiative programs on hip and knee replacements.

The state models are funded partly by CMS to help set up infrastructure to test models that are intended broadly to improve care, health and decrease costs.

Related: Get Comfortable With Bundles

Chip Howard, vice president with the insurer and its payment innovation leader, believes Humana and its physician partners can piggyback onto a hip and knee replacement innovation model that many physician practices and other healthcare organizations already are tasked with executing.

Humana, he says, can help physicians with data that will help meet targets under either program.

The insurer brought five leading Ohio orthopedic groups into the program in April. Four orthopedic groups from Tennessee and two more in Ohio joined in late May.

The care model is designed to improve quality, outcomes, and cost across a hip or knee replacement's entire episode of care, and it financially rewards the practices for demonstrating better outcomes.

Howard says Humana will provide the practices with the data and analytics needed to better manage all aspects of patient care, from diagnosis to recovery.

Ready or Not, Here Come Bundled Payments

Since he started in healthcare with actuarial work 16 years ago, Howard has worked for several major insurers—Kaiser Permanente, Blue Cross Blue Shield of Florida, and WellPoint—before coming to Humana in September 2014.

I recently discussed with him Humana's venture into bundled payment, and its plans for expansion and partnership with providers. The following is that conversation, lightly edited.

HealthLeaders: What's different about this initiative as opposed to other value-based efforts?

Howard: We have a baseline picture of their practice performance based on a 12-month look-back period regarding the Medicare patients they have managed for Humana.

There's also a standardized reporting package on the state innovation model work, and we are in the process of building a supplemental package for better drill-down capabilities.

We already can show them at the member level where the inpatient setting was, the costs associated with it, as well as the postacute outcomes and costs.

This is very detailed and being able to compare these statistics over time is crucial to success.

HealthLeaders: What metrics will matter the most for providers in achieving success in your bundled programs?

Howard: The beauty is that they are many of the same metrics these organizations would need to meet under CMS's program, which is mandatory in many markets. So we have duplicated [CMS's] bundling methodology.

Similarly, we're asking providers to partner with us to generate savings versus a predetermined cost threshold.

The three key levers for us to support for the practices will be quality, directing patients to the most efficient post-acute setting, and reducing readmissions and post-surgical complications.

We're producing a robust set of reporting packages to share with providers to show them where their opportunities are.

HealthLeaders: Why is Humana moving past its initial forays in value-based care that were focused mostly on primary care?

Howard: It's true that to date most of our programs have been primary care-focused.

We have a wide variety of programs where we can meet physicians at a variety of spots on the value-based journey, from our star reward and model practice designations to medical home programs to shared savings and full accountability programs.

The hope is that our first foray into bundled payment is a beginning to engage specialists, but ideally once we've developed these programs on the specialist side, we'd like to bring our primary care and specialist partners together to better move the needle on value-based care.

HealthLeaders: What are the performance periods and how will rewards be shared with your partners?

Howard: In Ohio, we have five practices with Jan. 1, 2016 effective starting dates [the two new practices in Ohio and the four in Tennessee have starting dates of April 1].

There's an annual performance period with interim reporting along the way. At the end of 2016 we'll generate a look at their performance for the year.

HealthLeaders: Relatively early success might be crucial to continuing the program. Do you think you'll be sharing significant savings with your partners?

Howard: We're confident we'll be making payments. The opportunity is for taking a well-defined episode of care and being able to show the managing physicians the opportunities for quality improvement. They're thirsty for information that will help them meet the targets.