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Humana Expands Medicare Orthopedic Bundled Payment Programs

Humana is partnering with eight orthopedic specialty groups to expand bundled payment programs for Medicare beneficiaries requiring hip and knee surgery.

Humana expands bundled payemnt  programs

Source: Thinkstock

- The nation’s fourth largest healthcare payer recently announced it will be expanding its orthopedic bundled payment programs to eight new groups in Indiana and Kentucky.  The value-based care model will also offer participating providers enhanced analytics and population health management services.

Humana’s Total Joint Replacement Episode-Based Model will be focused on Humana Medicare Advantage members who need total hip or knee joint replacement procedures.  Humana is the second largest Medicare Advantage plan provider with 1.8 million members.

The Louisville, KY based payer stated the move was “designed to improve quality, outcomes and cost across a person’s entire joint replacement episode of care.”

The bundled payment process works by offering one pre-negotiated payment for all the costs associated with an entire episode of care. 

Ultimately the provider is responsible for all costs of care in the bundle in addition to being rated for the clinical outcomes of the patients.  Providers are rewarded by the payer for better outcomes at lower costs. 

“Humana’s approach is to provide orthopedic surgeons the tools they need to coordinate all aspects of their patients’ diagnosis, treatment, recovery and rehabilitation to in turn improve quality, lower cost and create a better experience for our members.” said Chip Howard, Humana’s Vice President of Payment Innovation

Humana reported that as of September 30, 2016, close to 63 percent of its Medicare Advantage members were seeing providers who were in value-based payment relationships with Humana.

In 2016 Humana released data on the efficacy of its value-based care programs.  The outcomes were based on 2015 data from 1.2 million Medicare Advantage members receiving care in a value-based program compared to 170,000 members in standard Medicare Advantage arrangements.

The data showed Humana providers in value-based care arrangements had 19 percent higher Healthcare Effectiveness Data and Information Set (HEDIS) scores versus providers in standard Medicare Advantage arrangements.

Data also pointed to better results for patients in value-based care, with 6 percent fewer ER visits.   Value-based arrangement especially yielded better care management for older adults in vulnerable populations.  

The assessment rates showed a five percent increase in pain screening, and a ten percent higher rating for medication review. 

In a 2016 interview with HealthPayerIntelligence Michael Funk, Vice President, Thought Leadership, for the Provider Development Center of Excellence at Humana, expressed how Humana is actively investing in providers who offer value-based care payment models.

“Our goal here at Humana is to continue to support those physicians and other providers to be successful in value-based relationships while, at the same time, growing new relationships with providers in value-based care.”

The response from Humana’s affiliated providers to the value-based model has been positive. “In a value-based environment, Oak Street Health is held accountable on how we can quantifiably improve health outcomes,” said Dr. Griffin Myers of Oak Street Health. “A value-based agreement drives our physicians to develop patient relationships where the goal is helping a patient reach his or her full health potential.”

“Because we have financial responsibility for the entirety of care for these patients — all primary, specialty, acute, and post-acute care — we can make substantial investments in primary care services that have a positive health (and therefore economic) return for our practice,” commented Griffin.  “The economic model thus fuels the care model.”

For Humana, the value-based care approach led to 20 percent lower costs in 2015.  This result was based on data which compared value-based care costs against standard fee-for-service Medicare costs. 

“Our integrated approach to partnering with providers enables us to improve the health care experience for consumers in multiple ways,” said Bruce D. Broussard, Humana’s President and Chief Executive Officer. “We’re able to offer more affordable health plans, help people improve their health through comprehensive, holistic engagement with them, and also drive higher physician satisfaction.” 

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