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NJ Bundled Payment Approach Better for Physicians than Mandatory Federal Program

By Christopher Cheney  
   October 19, 2015

New Jersey's Blue Cross Blue Shield affiliate is taking a cooperative approach to episodes-of-care contracting with orthopedic surgeons and other medical service lines, generating care benefits for patients and sustainable financing for healthcare providers.

With Medicare making many hip and knee replacement procedures subject to mandatory bundled-payment contracting, Horizon Blue Cross Blue Shield of New Jersey has created a bundled-payment offer that is far more attractive to physicians.

"Horizon actively engaged the physicians first—before initiating the program," says Stephen Zabinski, MD, a practicing surgeon at Shore Orthopaedic University Associates and co-author of a January 2015 bundled-payments report in The Journal of Arthroplasty.


Stephen Zabinski, MD

"It's been a positive experience working with them," he told me.

Zabinski's Somers Point, NJ-based practice is one of five charter members of the bundled-payments program for hip and knee replacements that began at Horizon about five years ago, according to Lili Brillstein, Horizon's episodes of care program director. "It has changed the nature of the relationship. I've heard a lot of doctors say they have a lot of satisfaction with the Horizon program," she says.

She says Horizon has one of the widest arrays of bundled-payment models nationwide, including contracts for cardiology, colonoscopy, obstetrics, oncology, and orthopedics. Bundled payment for congestive heart failure (CHF) and oncology services are the newest models at Horizon. "They're all growth programs," Brillstein says.

In the journal report, Zabinski and co-author James Doran concluded: "We have been able to successfully decrease the cost of the [hip and knee replacement] episode of care in comparison to our historical averages prior to 2011. This cost reduction has primarily occurred through decreased length of inpatient stay, increased discharge to home rather than to a skilled nursing or inpatient rehabilitation facility, reduction in implant cost, improvement in readmission rate, and migration of cases to lower cost sites of service.

"Participation in the bundled payment program has resulted in higher practice reimbursement through shared savings payments. Our practice's total joint volume during this time has grown and patient satisfaction and functional outcomes have remained strongly positive."

Surgeon's Critique of CMS Bundled Payments

Flexibility is one of many advantages of working with Horizon as opposed to the Centers for Medicare & Medicaid Services (CMS), Zabinski says. "Horizon New Jersey is a smaller entity than the federal government, so it's much easier to work with them and request modifications of the program."

Christopher Cheney is the senior clinical care​ editor at HealthLeaders.

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