Abstract
Bundled payment or episode-based payment models are part of an effort to curb healthcare costs in the USA by combining all care-related costs into a single payment to be distributed among the hospital or facility, the treating physician or provider, post-acute care, and subsequent care including readmissions or complications. Episode groups aggregate all of the items and services involved in care for a particular patient cohort so that the total cost of the care can be assessed. Episodes are made of three consecutive steps defining an episode using a combination of logic rules and medical billing codes specific to each episode. These steps are (a) opening, (b) grouping, and (c) closing. After obtaining observed cost to expected cost ratios for the episode, risk adjustment is employed to determine the final cost for a single episode. While bundled payment models have demonstrated cost savings in several other surgical fields such as cardiac surgery, total joint arthroplasty, and colectomy, current evidence in spine surgery is insufficient to speak for its favorable effects. It is imperative that hospitals and physicians comply with the efforts to curb healthcare costs in spine surgery.
This is a preview of subscription content, log in via an institution to check access.
Access this chapter
Tax calculation will be finalised at checkout
Purchases are for personal use only
References
NHE-Fact-Sheet. 2017.; Available: https://www.cms.gov/Research-Statistics-Data-and-Systems/Statistics-Trends-and-Reports/NationalHealthExpendData/NHE-Fact-Sheet.html
Davis K, Stremikis K, Schoen C, Squires D. Mirror, mirror on the wall, 2014 update: how the US health care system compares internationally. The Commonwealth Fund. 2014;16:1–31.
Squires DA. The U.S. health system in perspective: a comparison of twelve industrialized nations. Issue Brief. 2011;16:1–14.
Bundled Payments for Care Improvement (BPCI) Initiative: General Information | Center for Medicare & Medicaid Innovation [Internet]. [cited 9 Feb 2018]. Available: https://innovation.cms.gov/initiatives/bundled-payments/
Protection P, Act AC. Patient protection and affordable care act. Public Law. 2010;111:759–62.
McIlvennan CK, Eapen ZJ, Allen LA. Hospital readmissions reduction program. Circulation. 2015;131:1796–803.
Jencks SF, Williams MV, Coleman EA. Rehospitalizations among patients in the Medicare fee-for-service program. N Engl J Med. 2009;360:1418–28.
Zhang W, Watanabe-Galloway S. Ten-year secular trends for congestive heart failure hospitalizations: an analysis of regional differences in the United States. Congest Heart Fail. 2008;14:266–71.
Krumholz HM, Merrill AR, Schone EM, Schreiner GC, Chen J, Bradley EH, et al. Patterns of hospital performance in acute myocardial infarction and heart failure 30-day mortality and readmission. Circ Cardiovasc Qual Outcomes. 2009;2:407–13.
Bueno H, Ross JS, Wang Y, Chen J, Vidán MT, Normand S-LT, et al. Trends in length of stay and short-term outcomes among Medicare patients hospitalized for heart failure, 1993–2006. JAMA. 2010;303:2141–7.
Marcoux RM, Larrat EP, Vogenberg FR. Accountable care organizations: an improvement over HMOs? P T. 2012;37:629–50.
Centers for Medicare & Medicaid Services (CMS), HHS. Medicare Program; Advancing Care Coordination Through Episode Payment Models (EPMs); Cardiac Rehabilitation Incentive Payment Model; and Changes to the Comprehensive Care for Joint Replacement Model (CJR). Final rule. Fed Regist. 2017;82:180–651.
Averill RF, Hughes JS, Goldfield NI. Paying for outcomes, not performance: lessons from the Medicare inpatient prospective payment system. Jt Comm J Qual Patient Saf. 2011;37:184–92. 145
Mok JM, Martinez M, Smith HE, Sciubba DM, Passias PG, Schoenfeld A, et al. Impact of a bundled payment system on resource utilization during spine surgery. Int J Spine Surg. 2016;10:19.
Ugiliweneza B, Kong M, Nosova K, Huang KT, Babu R, Lad SP, et al. Spinal surgery: variations in health care costs and implications for episode-based bundled payments. Spine. 2014;39:1235–42.
U.S. Department of Health USD, Services H, Others. Better, smarter, healthier: in historic announcement, HHS sets clear goals and timeline for shifting Medicare reimbursements from volume to value. Washington, DC. 2015
Centers for Medicare & Medicaid Services CFM, Others. Bundled Payments for Care Improvement (BPCI) initiative: general information. Available at https://innovation.cms.gov/initiatives/bundled-payments/View in Article. Accessed July 13, 2017, 2015.
Bundled Payments for Care Improvement (BPCI) Initiative: General Information | Center for Medicare & Medicaid Innovation [Internet]. [cited 9 Feb 2018]. Available: https://innovation.cms.gov/initiatives/bundled-payments/
Mistichelli J. Diagnosis related groups (DRGs). Bioethics Research Library, Kennedy Institute of Ethics, Georgetown University; 1984.; Available: https://repository.library.georgetown.edu/handle/10822/556896
Birkmeyer JD, Gust C, Baser O, Dimick JB, Sutherland JM, Skinner JS. Medicare payments for common inpatient procedures: implications for episode-based payment bundling. Health Serv Res. 2010;45:1783–95.
Miller HD. From volume to value: better ways to pay for health care. Health Aff. 2009;28:1418–28.
Abelson R. In bid for better care, surgery with a warranty. NY Times. 2007;17: 531–533.
MACRA: MIPS & APMs. 2017.; Available: https://www.cms.gov/Medicare/Quality-Initiatives-Patient-Assessment-Instruments/Value-Based-Programs/MACRA-MIPS-and-APMs/MACRA-MIPS-and-APMs.html
Home. 2017.; Available: https://www.cms.gov
Ibrahim SA, Kim H, McConnell KJ. The CMS Comprehensive care model and racial disparity in joint replacement. JAMA. 2016;316:1258–9.
Blue Cross Blue Shield. Media Center | Blue Cross Blue Shield North Carolina [Internet]. [cited 14 Feb 2018]. Available: http://mediacenter.bcbsnc.com
Dummit LA, Kahvecioglu D, Marrufo G, Rajkumar R, Marshall J, Tan E, et al. Association between hospital participation in a Medicare bundled payment initiative and payments and quality outcomes for lower extremity joint replacement episodes. JAMA. 2016;316:1267–78.
Resnick DK, Tosteson ANA, Groman RF, Ghogawala Z. Setting the equation: establishing value in spine care. Spine. 2014;39:S43–50.
Hoy D, March L, Brooks P, Blyth F, Woolf A, Bain C, et al. The global burden of low back pain: estimates from the global burden of disease 2010 study. Ann Rheum Dis. 2014;73:968–74.
MacLellan L. The $100 billion per year back pain industry is mostly a hoax. In: Quartz [Internet]. Quartz; 26 Jun 2017 [cited 9 Feb 2018]. Available: https://qz.com/1010259/the-100-billion-per-year-back-pain-industry-is-mostly-a-hoax/
Martin BI, Deyo RA, Mirza SK, Turner JA, Comstock BA, Hollingworth W, et al. Expenditures and health status among adults with back and neck problems. JAMA. 2008;299:656–64.
Davis MA, Onega T, Weeks WB, Lurie JD. Where the United States spends its spine dollars: expenditures on different ambulatory services for the management of back and neck conditions. Spine. 2012;37:1693–701.
Chen E, Tong KB, Laouri M. Surgical treatment patterns among medicare beneficiaries newly diagnosed with lumbar spinal stenosis. Spine J. 2010;10:588–94.
Goz V, Weinreb JH, McCarthy I, Schwab F, Lafage V, Errico TJ. Perioperative complications and mortality after spinal fusions: analysis of trends and risk factors. Spine. 2013;38:1970–6.
Schoenfeld AJ, Harris MB, Liu H, Birkmeyer JD. Variations in Medicare payments for episodes of spine surgery. Spine J. 2014;14:2793–8.
Sood N, Huckfeldt PJ, Escarce JJ, Grabowski DC, Newhouse JP. Medicare’s bundled payment pilot for acute and postacute care: analysis and recommendations on where to begin. Health Aff. 2011;30:1708–17.
Miller DC, Gust C, Dimick JB, Birkmeyer N, Skinner J, Birkmeyer JD. Large variations in Medicare payments for surgery highlight savings potential from bundled payment programs. Health Aff. 2011;30:2107–15.
Cutler DM, Ghosh K. The potential for cost savings through bundled episode payments. N Engl J Med. 2012;366:1075–7.
Oren J, Hutzler LH, Hunter T, Errico T, Zuckerman J, Bosco J. Decreasing spine implant costs and inter-physician cost variation: the impact of programme of cost containment on implant expenditure in spinal surgery. Bone Joint J. 2015;97-B:1102–5.
Kazberouk A, McGuire K, Landon BE. A survey of innovative reimbursement models in spine care. Spine. 2016;41:344–52.
Sullivan R, Jarvis LD, O’Gara T, Langfitt M, Emory C. Bundled payments in total joint arthroplasty and spine surgery. Curr Rev Musculoskelet Med. 2017;10:218–23.
Deyo RA, Mirza SK, Martin BI, Kreuter W, Goodman DC, Jarvik JG. Trends, major medical complications, and charges associated with surgery for lumbar spinal stenosis in older adults. JAMA. 2010;303:1259–65.
Schoenfeld AJ, Weiner BK, Smith HE. Regional variation and spine care: an historical perspective. Spine. 2011;36:1512–7.
Bundled Care Program Failed to Reduce Fusion Surgery Costs. The Back Letter; 2018;33. https://doi.org/10.1097/01.BACK.0000529682.00072.aa, 33.
Jubelt LE, Goldfeld KS, Blecker SB, Chung W-Y, Bendo JA, Bosco JA, et al. Early lessons on bundled payment at an Academic Medical Center. J Am Acad Orthop Surg. 2017;25:654–63.
Author information
Authors and Affiliations
Corresponding author
Editor information
Editors and Affiliations
Rights and permissions
Copyright information
© 2019 Springer Nature Switzerland AG
About this chapter
Cite this chapter
Bydon, M., Elminawy, M., Alvi, M.A. (2019). Conditions of Care and Episode Groups. In: Ratliff, J., Albert, T., Cheng, J., Knightly, J. (eds) Quality Spine Care. Springer, Cham. https://doi.org/10.1007/978-3-319-97990-8_16
Download citation
DOI: https://doi.org/10.1007/978-3-319-97990-8_16
Published:
Publisher Name: Springer, Cham
Print ISBN: 978-3-319-97989-2
Online ISBN: 978-3-319-97990-8
eBook Packages: MedicineMedicine (R0)