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Strategies for navigating bundled payments [PODCAST]

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In this episode, Christine Gordon, Manager of Reimbursement, and Kate Gillespie, AVP of the Orthopedic and Spine service line, of Virtua Health System discuss their experience participating in Medicare’s BPCI program and the factors that were instrumental in their success with bundled payments to date.
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Michael Passanante:   Hi, it’s Mike Passanante and welcome back to the Hospital Finance Podcast. We’re glad you could be with us.

Today, we are joined by a few people. We have Christine Gordon who is a Manager of Reimbursement at Virtua Hospital here in the wonderful Garden State of New Jersey. We also have Kate Gillespie who is the Associate Vice President of the Orthopedic and Spine Service Line also at Virtua. And today, we’re also joined by Maria Miranda who is the Director of Emerging Payment Models at BESLER Consulting.

Welcome everyone.

Respondent:  Hi.

Respondent: Thank you.

Michael: It’s great to have you with us. And we literally just left your presentation at the New Jersey HFMA Annual Meeting.

And the reason I want to have you on to the podcast today is because you had a great topic where you talked about your experience in Medicare’s BPCI. And you shared some of your best practices, shared some other things that you’ve gone through and not only how you’re going through them now, but how you’re going to take those learnings into the future as bundled payments are really where Medicare and maybe private payers will soon be going.

Respondent: Absolutely.

Michael: With that, we’ll just jump right in. So in your presentation, you outlined some key strategies to start building a bundled payment program. Can you share with us what those strategies were?

Kate: I think that in the first slide, we really said the two key elements was first, you have your leadership to support you. If they don’t support you, you’re not going to get anywhere off the ground.

The second I think is really about your surgeons. We felt the surgeons were really the key to delivery of care. So we really needed them at the table. If we’re going to make any changes or any additions, they need to be at the table and be supportive of it as well.

If you have those two, you have a good foundation.

Michael: And you went through some lessons at the end of the presentation. I’m sure you hit several as you went through. Could you share with the audience some of the lessons that you learned as you went through the program?

Christine: Some of the lessons that I think we’ve learned is education. That’s one of them. I mean we’ve listened to every phone call, webinar, podcast we can get our hands on to make sure we’re up to date on everything that we need to do to make the program successful.

Engaging with the physicians and the leadership buy in is totally part of it.

And working with the post-acute folks, I mean that’s the biggest piece of the pie in regards to cross savings and working with those folks to manage. That piece of the pie with the post-acute physician I think is important.

Michael: Now, let me ask you about that because some of the, I guess, other providers we’ve talked to on other presentations we’ve been in, they look at that whole pie and they’re thinking in-patient. How does that differ for you? Is there a different perspective? Or is it truly just when you look at your own cost structure? Do you think it’s unique to you or do you think that’s projectable?

Christine: We actually have a consultant that works with us in regards to our data mining. And even before we started this, I mean the post-acute part of it is the biggest piece of the pie in regards to cost.

We’re looking at pre-admission testing to 30 days out. When you look at the total cost of what it costs for a person to have hip replacement or knee replacement, the post-acute is the biggest piece of that cost. So it surprises me that other folks aren’t managing that or know that because that’s the biggest piece of the cost.

Kate: I agree. And the issue around that is that’s the period of time and episode that sometimes you don’t have the control. You have control of the hospital per se, but you don’t have control when they leave that hospital.

For jumping in, it is a risky model because you now have to get your arms around the post-acute, one, making sure they’re going to the appropriate site, but two, when they’re going to that site, you have to have the buy-in from those facilities.

Maria: Exactly. Now, I have a question for you. You mentioned that with your BPCI model, your episode period is only 30 days. Once you move into CJR in the next couple of years, that goes out to 90 days. Does that change how you collaborate with those post-acute care providers?

Kate: I think it does, but if we build the foundation now, the fact of moving out 90 days will not be as dramatic a change for us because if we can really network and collaborate with our post-acute, we then, at that point, really collaborate with our primary care physicians and making sure that in the community, we have the resources to manage that patient. I think what we built today will help support the 90 days.

Maria: I think one of the biggest risks when you go from 30 to 90 days too is the whole readmission piece of it because now you’re going out…

Kate: We’re seeing remissions now in 30 days, so we take a really close look at that. And some of them, with the CMS being able to see the claims out, we can see readmissions that could have been avoidable.

So we’re bringing them to the surgeons—not even to the surgeons because sometimes a surgeon doesn’t even realize they’re being readmitted. If they went to a post-acute or if home care was in there and initiated the readmission and the ED docs, how can we align them to understand that not every patient that comes to ED has to be admitted?

And we don’t want to change their metrics and how they practice medicine, but more of an awareness that there are other team members following that patient. And we need to make sure that we collaborate with them.

Michael: You mentioned as part of your program, when you scoped it out, you thought about gain sharing and you really brought the surgeons in primarily really as the actor with you in the gain sharing.

And I thought during the question and answer period, there was an interesting thing that you said because you said the side effect of that was it got the surgeons in the room and really got them thinking about this program, how they conducted their procedures and really what costs meant to them. Can you talk to us a little bit about that?

Kate: It was interesting that when we brought them together, not only talking about savings on their implants or looking at their protocols, that as they started talking with each other and we talked about certain things that we could standardize, some surgeons would say, “Oh, I do that.” Other surgeons say, “Why are you doing that? That’s not current practice.”

Not that it was competitive, but I think it brought that conversation out and then we were able to move certain surgeons to more current practices, which I don’t think we could ever have done as a Virtua employee or an AVP of Orthopedics going to a surgeon, saying, “We want you to change your practice.” It came better from their own peers.

Maria: We know that physicians love data. And they are competitive by nature. Do you share quality data with them as well as part of this?

Kate: We’re very transparent. At first, we would just show them certain individual scores. Now we actually show them everyone else’s scores as well.

It was a hard transition for Virtua to do that and they started doing it in certain other departments such as colorectal and other surgeries. But now, we share the data, good or bad. And they’d still question it. And they still question it.

Christine: They’re probably very receptive to it. Yeah.

Kate: They still question it, but now we have the data behind it saying, “Your readmission rate was such and here are all your patients that were readmitted and why they were readmitted and where they came from, whether it’d be home or a skilled nursing facility.”

So we have the backing. We didn’t have that before. So it’s been really great.

Maria: That makes a difference because a lot of them think, “My patients are a lot sicker than everybody else’s patients.”

Kate: We hear that too.

Christine: We hear that too.

Maria: But when you have the data right there in front of you and then they can also compete against themselves and get better as they go.

Kate: Yeah.

Maria: That’s great.

Kate: It’s a beautiful thing.

Michael: And I think you touched on a little bit around the cost of the devices themselves. Can you expand a little bit about how or if you’ve tackled that piece yet as far as making selections around what implant surgeons could use or should use? How do you mandate that or massage that with them?

Christine: I don’t know the exact part of mandating, but the supply chain folks are definitely a part of our team and we have worked with them closely on the cost of the implants and all the supplies and standardizing and getting the physicians in the room to talk about, “I use this implant from this supplier and this one uses this and what’s our quality for this.” And we’re measuring it.

Already, we’ve seen a reduction, at least a 15% reduction in our supply cost just by our initial getting them all together to manage it.

Kate: What we did was again transparent. If five surgeons are doing the same surgery, there are preference cards. So we show them the preference cards because we’ll show them what’s their cost for that surgery and they’re like, “Well, it’s because the patient needed this and this and this.”

What we did was we showed them, each surgeon, for this surgery, these are all the elements that you used. And it gave us an opportunity because some surgeons say as well, “I never use that.” I’d say, “Well, it’s on your preference card that you do.” This is great.

It actually was a really great eye-opener for the surgeon, for us to say, “Look, this is what we see that you’re using. If you’re not using that and something is amiss, we need to correct it.”

At that point, we helped really reduce the amount of equipment needed at surgery. The other part of that is that we were able to use information to go back to our vendors and say, “These are the surgeons that use your equipment. This is a surgeon here that’s agreed that if you don’t come down to this price, we may not use your implant.”

So we were able to get the surgeons to feel comfortable with us and trust us enough to say, “We’re now going to the vendors and negotiate better prices.”

Maria: And they’re definitely feeling the pressure because they know this is coming. This is here.

Kate: Yes.

Michael: And in your presentation, just to flip gears a little bit, you mentioned that you have some pretty dramatically low inpatient stay days as it is. Do you anticipate trying to move more patients to an outpatient or home the same day kind of a situation to avoid the inpatient risks? Or is it more just a screening thing to try to figure that out ahead of time?

Kate: I think with Medicare, they’re not there yet. I saw a couple of articles out that Medicare is looking at it. But right today, Medicare does not recognize same day surgery. It’s only commercial.

We’re now looking at the same day surgery for the commercial patients. And then we’re really looking at the criteria for those. So we’ll keep them in our joint replacement in the hospital setting, but they’ll stay same day. And that way, in preparation for the move, which we anticipate in probably the next three or four years, then we know this will have the criteria because the one thing you don’t want to do is have a patient have their joint done in an ambulatory center and then they’re being admitted, which is not quality.

So we really want to take a look at making sure we’d pick the right patients. It’s not going to be for everyone because we have some patients that have really high co-morbidities that should not be done in ambulatory.

They’re saying 50%. I’m not sure about that, but I would say it’s probably going to be 30% to 40% of our patients. At some point in time, we can get it done in an ambulatory center. But Medicare, they’re not quite there yet.

Maria: You mentioned commercial, so I thought I’d jump there. Do you contemplate having any contracts that mimic the CJR episodic payment with commercial?

Christine: We are working on it. Virtua, our Managed Care Department is working on it with several different payers and even companies in the area to do a bundled payment program.

Michael: Does it feel like you’re getting that feedback from the managed care payers at this point that they want that situation?

Christine: Absolutely. Yeah, they absolutely do. I mean they mimic Medicare. You guys know that so much. “Follow Medicare rules,” and that kind of thing for rates and regulations, so they’re definitely moving in that direction. It’s a little slower because they have that black hole data box.

Maria: Right. That’s the thing. You’d have to get the data from them.

Christine: Yes.

Michael: So this is more of a crystal ball type of question, but we talked a little bit about it right before we started the podcast. So you’re in BPCI, you know you’ve got a little bit of runway left for that. CJR is running a couple of years beyond BPCI. Maybe there’s this anticipation that you’ll end up in that CJR program at some point.

One of the things that Medicare laid out was that these are pilot programs, but if they go well, we reserve the right to just make it for everyone. Does it feel like that might be coming?

Kate: Oh, absolutely. I guess a year ago, when we first got into the program, CMS was doing a seminar at the New Jersey Hospital Association and they invited us to come and talk about our model two. So they had model two, model three, BPCI.

And they also did a presentation on all the pilot programs they have. And they specifically mentioned that definitely there are some they thought would go away, but they felt that the model two and the BPCI was definitely going to stay and it would morph into something else, which now we know probably, at least for the joints, would be CJR. It definitely is something that they’re going for.

And we’re anticipating again spine, cardiology is coming. So we’re creating that same model in the mentality of, “Let’s care for the episode of care. Do it now because that way, we’ll be ready.” We don’t want to be put in a position where we’re caught in saying, “Oh, we have to scramble.” I think that’s really lessons learned about the joint program.

Michael: The last question that I like to just get your thoughts on and I think it’s a good one to leave with because you’ve got hospitals in different states of flux with this. Some are ahead of the curve. Maybe they’re in BPCI. Others are having CJR forced upon them. Others haven’t had any program forced upon them yet or maybe are in BPCI. There are lots of different places.

And I think one of the first points you brought up in your presentation was how to convene the team, how you get started. And I think that’s a good point of best practice.

Could you just talk a little bit about your experience with that?

Christine: I think that’s been a key part of our success. Kate is the joint replacement person, but her and I, co-chairing the committee from a finance and Medicare perspective, from my point and her, clinical, we were able to put together a team that really works together. Everybody is on the team, medical records, case management, the PT folks. That’s the key at getting the physicians aligned, everybody together.

And we were meeting once a month. It was a little much, but once a month, we all came together and all talked about how this would work internally for Virtua to make the program successful. And I think that’s key. I would tell everybody, “Get your teams together and listen.”

We joke about all the webinars we listened to. I mean I was on the phone 24 hours a day, it seemed like, listening to bundled payment stuff. But like Kate said in there, even if you picked up one thing from every two hour call, it was worth it. We have binders full of notes and stuff, but if you pick up one piece of information, it’s so worth it in regards to how successful your program can be.

Working together with all the different departments really is key as far as somebody that hasn’t started yet I think.

Kate:  Yeah, I agree.

Michael:  Kate, Christine, Maria, it’s been a pleasure. Thank you so much. And please enjoy the rest of the conference and good luck with the rest of your program.

Christine: Thanks, Michael.

Kate: Thank you.

Maria: Thank you.

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