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Background Studies of medical conditions in the Bundled Payments for Care Improvement (BPCI) initiative did not show reductions in Medicare payments for the majority of conditions, but this could mask heterogeneity. Objective To determine whether earlier enrollment and/or longer participation in BPCI were associated with performance. Design We divided BPCI hospitals into wave 1 (joined 10/1/13, 1/1/14, or 4/1/14), wave 2 (joined 7/1/14, 10/1/14, 1/1/15, or 4/1/15), and wave 3 (joined 7/1/15, 10/1/15, or 1/1/16) and compared changes in Medicare payments for acute myocardial infarction, heart failure, pneumonia, sepsis, and chronic obstructive pulmonary disease between BPCI and matched controls in 6-month increments. Subjects US hospitals. Measures Medicare payments. Results There were 120 hospital-condition pairs in wave 1, 264 in wave 2, and 300 in wave 3. Wave 1 hospitals had similar savings to controls early in the program (0-6 mo difference in differences -$10, P=0.976; 6-12 mo +$295, P=0.441; 12-18 mo -$540, P=0.218; 18-24 mo -$485, P=0.259) but had greater savings than controls at 24-30 months (difference in differences -$663, P=0.035). Wave 2 (0-6 mo +$193, P=0.524; 6-12 mo -$183, P=0.489; 12-18 mo -$162, P=0.618) and wave 3 hospitals (0-6 mo +$79, P=0.753; 6-12 mo -$32, P=0.876) did not achieve significant savings at any time interval. There were no differential changes in patient outcomes over time. Conclusions Hospitals that joined BPCI earliest began to achieve savings at roughly 2 years of participation. These findings have implications for this and other alternative payment models.

The purpose of this study is to evaluate monetary trends from 2000 to 2018 in Medicare reimbursement rates for the most common general surgery procedures.A complete understanding of financial trends in general surgery in the United States is lacking. As such, an evaluation of trends in reimbursement rates in general surgery is important for defining the specialty's current and future financial health.The Physician Fee Schedule Look-Up Tool from the Centers for Medicare and Medicaid Services was queried for each of the 20 top codes top in general surgery. The total raw percent change in Medicare reimbursement rate for each procedure from 2000 to 2018 was calculated and averaged. All data was corrected for inflation. Both average annual and total percentage change were calculated based on these adjusted trends. Compound annual growth rate was calculated using the adjusted data.After adjusting all data for inflation, the reimbursement rate for all included procedures decreased by an average of 24.4% throughout the study period. During this time, the adjusted reimbursement rate decreased by an average of 1.4% each year with an average compound annual growth rate of -1.6%.After adjusting for inflation, Medicare reimbursement rates in general surgery have steadily decreased from 2000 to 2018. It is important that these trends are understood and considered by surgeons, healthcare administrators, and policy-makers in order to develop and implement agreeable models of reimbursement while ensuring access to quality general surgery care in the United States.

In an era of mandatory bundled payments for total joint replacement, accurate analysis of the cost of procedures is essential for orthopaedic surgeons and their institutions to maintain viable practices. The purpose of this study was to compare traditional accounting and time-driven activity-based costing (TDABC) methods for estimating the total costs of total hip and knee arthroplasty care cycles.We calculated the overall costs of elective primary total hip and total knee replacement care cycles at our academic medical center using traditional and TDABC accounting methods. We compared the methods with respect to the overall costs of hip and knee replacement and the costs for each major cost category.The traditional accounting method resulted in higher cost estimates. The total cost per hip replacement was $22,076 (2014 USD) using traditional accounting and was $12,957 using TDABC. The total cost per knee replacement was $29,488 using traditional accounting and was $16,981 using TDABC. With respect to cost categories, estimates using traditional accounting were greater for hip and knee replacement, respectively, by $3,432 and $5,486 for personnel, by $3,398 and $3,664 for space and equipment, and by $2,289 and $3,357 for indirect costs. Implants and consumables were derived from the actual hospital purchase price; accordingly, both methods produced equivalent results.Substantial cost differences exist between accounting methods. The focus of TDABC only on resources used directly by the patient contrasts with the allocation of all operating costs, including all indirect costs and unused capacity, with traditional accounting. We expect that the true costs of hip and knee replacement care cycles are likely somewhere between estimates derived from traditional accounting methods and TDABC. TDABC offers patient-level granular cost information that better serves in the redesign of care pathways and may lead to more strategic resource-allocation decisions to optimize actual operating margins.

The Centers for Medicare and Medicaid Services (CMS) released its Final Rule on the Medicare Access and CHIP [Children's Health Insurance Program] Reauthorization Act (MACRA) in November 2016. The Rule finalizes the details of the merit-based incentive payment system (MIPS) and the alternative payment model (APM), which will now collectively be referred to as the Quality Payment Program (QPP). This article offers the orthopaedic community a summary of the alterations in healthcare policy that will affect practices nationwide.

BACKGROUND: Population-based global payment gives health care providers a spending target for the care of a defined group of patients. We examined changes in spending, utilization, and quality through 8 years of the Alternative Quality Contract (AQC) of Blue Cross Blue Shield (BCBS) of Massachusetts, a population-based payment model that includes financial rewards and penalties (two-sided risk). METHODS: Using a difference-in-differences method to analyze data from 2006 through 2016, we compared spending among enrollees whose physician organizations entered the AQC starting in 2009 with spending among privately insured enrollees in control states. We examined quantities of sentinel services using an analogous approach. We then compared process and outcome quality measures with averages in New England and the United States. RESULTS: During the 8-year post-intervention period from 2009 to 2016, the increase in the average annual medical spending on claims for the enrollees in organizations that entered the AQC in 2009 was $461 lower per enrollee than spending in the control states (P

This study assessed the financial implications of providing all forms of breast reconstruction at a single academic institution with insurance as the primary mode of reimbursement.Billing records of 152 patients who underwent postmastectomy breast reconstruction offered at the University of Michigan for the 2012 fiscal year were reviewed. Professional and facility revenue, cost, and earnings for the first stage of reconstruction were calculated by applying actual collections and charges. Similar financial data were compiled for a subset of 49 patients who went on to complete reconstruction.The professional revenue and expenses allocated to breast reconstruction were $647,437 and $591,184, respectively (8.7 percent margin). Health care system facility revenue and costs were $2,762,797 and $2,773,131, respectively (-0.4 percent margin). Physician reimbursement by surgical time was highest for delayed tissue expander placement ($3505 per operating room hour). Abdominal free flap reconstructions resulted in greater professional revenue for the first stage of reconstruction ($7801 versus $2961) and for completed reconstructions ($14,943 versus $7703) relative to implant reconstructions. The facility also did better fiscally after the first stage of abdominally based reconstruction compared with implant reconstructions (10 percent versus -10.4 percent margin).Postmastectomy breast reconstruction for this academic surgical practice remains fiscally profitable. Implant-based reconstruction compared with abdominal flap reconstruction produces greater revenue per operative hour but ultimately generates less total revenue and results in financial losses for the facility. Abdominally based perforator flap reconstruction reimbursed through standard insurance plans can be financially advantageous for the academic surgical practice and health care system.

As reimbursement transitions from a volume-based to a value-based system, innovation in health care delivery will be needed. The process of innovation begins with framing the problem that needs to be solved along with the strategic vision that has to be achieved. Similar to scientific testing, a hypothesis is generated for a new solution to a problem. Innovation requires conducting a disciplined form of experimentation and then learning from the process. This manuscript will discuss the different types of innovation, and the key steps necessary for successful innovation in the health care field.

For almost a decade, public and private organizations have pressured hospitals to improve their patient safety records. Since 2008, the Centers for MedicareMedicaid Services has no longer been reimbursing hospitals for secondary diagnoses not reported during the point of admission. This ruling has motivated some hospitals to engage in safety-oriented programs to decrease adverse events.This study examined which hospitals may engage in patient safety solutions and whether they create these patient safety solutions within their structures or use suppliers in the market.We used a theoretical model that incorporates the key constructs of resource dependence theory and transaction cost economics theory to predict a hospital's reaction to Centers for MedicareMedicaid Services "never event" regulations. We present propositions that speculate on how forces conceptualized from the resource dependence theory may affect adoption of patient safety innovations and, when they do, whether the adopting hospitals will do so internally or externally according to the transaction cost economics theory.On the basis of forces identified by the resource dependence theory, we predict that larger, teaching, safety net, horizontally integrated, highly interdependent, and public hospitals in concentrated, high public payer presence, competitive, and resource-rich environments will be more likely to engage in patient safety innovations. Following the logic of the transaction cost economics theory, we predict that of the hospitals that react positively to the never event regulation, most will internalize their innovations in patient safety solutions rather than approach the market, a choice that helps hospitals economize on transaction costs.This study helps hospital managers in their strategic thinking and planning in relation to current and future regulations related to patient safety. For researchers and policy analysts, our propositions provide the basis for empirical testing.

BACKGROUND: Health care providers who participate as an accountable care organization (ACO) in the voluntary Medicare Shared Savings Program (MSSP) have incentives to lower spending for Medicare patients while achieving high performance on a set of quality measures. Little is known about the extent to which early savings achieved by ACOs in the program have grown and been replicated by ACOs that entered the program in later years. ACOs that are physician groups have stronger incentives to lower spending than hospital-integrated ACOs. METHODS: Using fee-for-service Medicare claims from 2009 through 2015, we performed difference-in-differences analyses to compare changes in Medicare spending for patients in ACOs before and after entry into the MSSP with concurrent changes in spending for local patients served by providers not participating in the MSSP (control group). We estimated differential changes (i.e., the between-group difference in the change from the pre-entry period) separately for hospital-integrated ACOs and physician-group ACOs that entered the MSSP in 2012, 2013, or 2014. RESULTS: MSSP participation was associated with differential spending reductions in physician-group ACOs. These reductions grew with longer participation in the program and were significantly greater than the reductions in hospital-integrated ACOs. By 2015, the mean differential change in per-patient Medicare spending was −$474 (−4.9% of the pre-entry mean, P

Negative pressure wound therapy, available in the United States through Kinetic Concepts, Incorporated, San Antonio, Texas, as Vacuum Assisted Closure (VAC) therapy, is a must in plastic surgery. VAC therapy and the VAC dressing change procedure are described. Benefits of VAC therapy as well as cost concerns are discussed.

The observed sex gap in physician salary has been the topic of much recent debate in the United States, but it has not been well-described among orthopaedic surgeons. The objective of this study was to evaluate for sex differences in Medicare claim volume and reimbursement among orthopaedic surgeons.The Medicare Provider Utilization and Payment Public Use File was used to compare claim volume and reimbursement between female and male orthopaedic surgeons in 2013. Data were extracted for each billing code per orthopaedic surgeon in the year 2013 for total claims, surgical claims, total knee arthroplasty (TKA) claims, and total hip arthroplasty (THA) claims.A total of 20,546 orthopaedic surgeons who treated traditional Medicare patients were included in the initial analysis. Claim volume and reimbursement received were approximately twofold higher for all claims and more than threefold higher for surgical claims for male surgeons when compared with female surgeons (p0.001 for all comparisons). A total of 7,013 and 3,839 surgeons performed10 TKAs and THAs, respectively, in 2013 for Medicare patients and were included in the subset analyses. Although male surgeons performed a higher mean number of TKAs than female surgeons (mean and standard deviation, 37 ± 33 compared with 26 ± 17, respectively, p0.001), the claim volume for THAs was similar (29 ± 22 compared with 24 ± 13, respectively, p = 0.080). However, there was no significant difference in mean reimbursement payments received per surgeon between men and women for TKA or THA ($1,135 ± $228 compared with $1,137 ± $184 for TKA, respectively, p = 0.380; $1,049 ± $226 compared with $1,043 ± $266 for THA, respectively, p = 0.310).Female surgeons had a lower number of total claims and reimbursements compared with male surgeons. However, among surgeons who performed10 THAs and TKAs, there were no sex differences in the mean reimbursement payment per surgeon.The number of women in orthopaedics is rising, and there is much interest in how their productivity and compensation compare with their male counterparts.

Academic anesthesiology departments provide clinical services for surgical procedures that have longer-than-average surgical times and correspondingly increased anesthesia times. We examined the financial impact of these longer times in three ways: 1) the estimated loss in revenue if billing were done on a flat-fee system by using industry-averaged anesthesia times; 2) the estimation of incremental operating room (OR) sites necessitated by longer anesthesia times; and 3) the estimated potential gain in billed units if the hours of productivity of current anesthesia time were applied to surgical cases of average duration. Health Care Financing Administration average times per anesthesia procedure code were used as industry averages. Billing data were collected from four academic anesthesiology departments for 1 yr. Each claim billed with ASA units was included except for obstetric anesthesia care. All clinical sites that do not bill with ASA units were excluded. Base units were determined for each anesthesia procedure code. The mean commercial conversion factor (US$45 per ASA unit) for reimbursement was used to estimate the impact in dollar amounts. In all four groups, anesthesia times exceeded the Health Care Financing Administration average. The loss per group in billed ASA units if a flat-fee billing system were used ranged from 18,194 to 31,079 units per group, representing a 5% to 15% decrease (estimated billing decrease of US$818,719 to US$1,398,536 per group). The number of excess OR sites necessitated by longer surgical and anesthesia times ranged from 1.95 to 4.57 OR sites per group. The potential gain in billed units if the hours of productivity of current anesthesia time were applied to surgical cases of average duration was estimated to be from 13,273 to 21,368 ASA units. Longer-than-average anesthesia and surgical times result in extra hours or additional OR sites to be staffed and loss of potential reimbursement for the four academic anesthesiology departments. A flat-fee system would adversely affect academic anesthesiology departments.We examined the economic impact of longer-than-average anesthesia times on four academic anesthesiology departments in three ways: the estimated loss in revenue under a flat-fee system, the excess operating room sites staffed, and the potential gain in revenue if the surgeries were of average length. These results should be considered both in productivity measurements and strategies for operating room management.

JONA's Healthcare Law, Ethics, and Regulation interviewed Attorney Mark Allen Kleiman regarding the False Claims Act. Mr. Kleiman has had much experience with this Act in both prosecution and consulting. In this interview, he provides great insight into the details and interpretations of the Act, as well as implications for healthcare providers.

This article addresses the variety of structural and legal arrangements between group practices and health plans. The continuum of relationships will be discussed, including long-term arrangements whereby in exchange for long-term commitments to provide physician capacity, providers are given a capital contribution from managed care plans; management services organizations whereby managed care plans create management companies that provide turnkey management services in exchange for capital, with a commitment by the group practices to provide physician services to the health plan over a long period of time; mixed equity relationships where physicians and managed care plans jointly own the group practice, which group practice also has an ownership interest in the managed care plan itself; and acquisition of the group practice by the managed care plan. Each of these structures will be described, along with the legal issues that may be considered in any of these relationships.

As health care reform results in fewer acute care days and cost-containment is emphasized, the role of the CNS becomes more important, although not necessarily in acute care, which has been the tradition. If the CNS role is to survive health care reform, it must expand into the community. The literature supports the effectiveness of the CNS in the community. Interviews with nurse managers also strongly support the practice of the CNS in the community to include case management, consultation to community agencies, and community-based practice.