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NJ Bundled Payment Approach Better for Physicians than Mandatory Federal Program

By Christopher Cheney  
   October 19, 2015

In particular, the surgeon says, financial components of the Horizon hip and knee replacement program are more flexible than CMS' Comprehensive Care for Joint Replacement (CCJR) model, which is set to take effect Jan. 1, 2016.

A crucial consideration for physician practices is that Horizon's bundled payment contracts cushion the financial blow of cost-outlier cases, he says. In stark contrast to CCJR, the Horizon contracts also exclude complete joint replacement for the most costly acute episodes of care, such as fall-related broken hips and bundle-budget-busting "revision" knee replacements that require implants and lengthy recovery times.

"Dealing with outliers is not addressed in the Medicare model. If you don't throw out the outliers, the government wins. … The Medicare model doesn't allow for ambulatory surgery center procedures. … The Medicare population is a bunch of different patient populations," Zabinski says, noting that an active 67-year-old with no chronic conditions is a far cry from an 87-year-old with multiple chronic conditions who needs joint replacement to improve quality of life. "What one person needs is often not the same as what another person needs."

Zabinski has several other reservations over the proposed rules for CCJR:

  • Benchmarking blemishes such as a two-year historical performance standard and inadequate allowance for practices that start bundled-payment contracting at high efficiency levels. "When Medicare comes in and applies that model to me, I have nowhere to go," says Zabinski. His practice has adopted the care-redesign elements of the Horizon bundled-payment program for all patients, including preoperative patient engagement to screen patients for risk factors such as obesity and diabetes, wellness interventions to limit risk factors, and empowering physicians to quarterback care management. "Ultimately, the physician is engaged in the care of the patient more than the hospital."
  • CCJR's mandatory imposition in dozens of urban markets nationwide in January is too much too fast, he says. "I don't have much of an issue with this being a mandatory program, but I think it should be phased in. It's set to go into effect January 1, 2016, and many practices are not going to be ready for it."
  • Putting hospitals in the administrative driver's seat for bundled payments is an "egregious error" in CCJR. "There must be a hospital-physician co-management structure in place."

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

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