“Bundled” payment expected to reduce overall healthcare costs

PROVIDENCE, RI (December 3, 2019) – Blue Cross & Blue Shield of Rhode Island (BCBSRI) and University Orthopedics Inc. (UOI) are collaborating on a new patient care model designed to move some joint replacement surgeries from the inpatient- and/or outpatient-hospital setting to UOI’s newly constructed Kettle Point ambulatory surgery center in East Providence, Rhode Island. The bundled payment model, available exclusively to BCBSRI commercial members, will reduce overall healthcare costs and set quality benchmarks for UOI services.

Bundled payment arrangements, also referred to as value-based reimbursement, establish a single cost for all of the services performed in a “bundle” or defined episode of care. In this case, the bundle includes:

• Surgery
• Use of UOI’s newly constructed ambulatory surgical center
• Overnight stay at the Wellness Center
• Transportation to and from the wellness center when needed
• Nurse care manager services
• Post-operative examinations
• Nursing services/wound care/home health services provided by UOI
• Initial physical therapy evaluation
• Physical and/or occupational services provided in the recovery center

Types of surgeries covered by the agreement are outpatient hip, knee and shoulder replacement/arthroplasty surgeries.

“This innovative partnership reinforces our commitment to ensuring our members receive best-in-class care while still reducing healthcare costs,” said Kevin Splaine, executive vice president, Care Integration & Management at BCBSRI. “We believe this agreement – and the shift from charging fees for every individual service to a bundled payment model – is an important step in our efforts to make healthcare more affordable for Rhode Islanders. Equally important is the commitment of both organizations to tie quality metrics to the services provided to ensure that patients are getting the best possible care.”

“The University Orthopedics’ Kettle Point location was designed with the patient experience at the forefront,” said Dr. Edward Akelman, president of University Orthopedics. “This partnership with BCBSRI allows our patients optimal access to a multitude of services while also focusing on convenience for our patients. University Orthopedics strives to provide creative ways to bring value while focusing our mission to bring the highest quality care enhanced with world class education and research to our community.”

Bundled payment models continue to become more commonplace in the healthcare industry as an effective and efficient way to improve quality and reduce costs, particularly with joint replacement procedures. The payment arrangement between BCBSRI and UOI is the first time BCBSRI has developed a bundled payment arrangement for joint replacements taking place in a non-hospital setting.  

The new bundled payment arrangement became available earlier this year for all BCBSRI commercial members who undergo joint replacement surgery at the University Orthopedics Kettle Point Ambulatory Care Center.

BCBSRI and UOI will also work to implement payment arrangements for BCBSRI’s Medicare Advantage customers when the Centers for Medicare & Medicaid Services adopts payment rule changes related to knee and hip replacements performed at an ambulatory surgery center (ASC). The two organizations also plan to collaborate on additional bundled payment arrangements for other surgeries that can be performed in the lower-cost ASC setting.