Blue Cross Blue Shield of Tennessee has reached an agreement with four orthopedic practices across the state to use a bundled payment system for knee and hip replacements, which it hopes will help incentivize doctors to focus on quality of care.
Under the new bundled payments, which are set to launch Oct. 1, Blue Cross will pay the practices a set amount for episodes of care involving total knee and hip replacements, including the surgery, post-care and physical therapy for 90 days after the procedures, reported the Memphis Commercial Appeal.
A total knee or hip replacement typically averages between $25,000 and $35,000 but can cost upwards of $70,000 if there are complications, The Tennessean reported.
"This system is generally considered a new payment methodology, but make no mistake, this is a collaborative tool we can use to improve health outcomes and the patient experience," Tom Lundquist, vice president of performance measurement and improvement of healthcare services for Blue Cross, said in a statement. "This is a unique opportunity for our partners to help drive change in delivery systems and to move toward a sustainable program that provides the best medical value for our members."
Blue Cross will work directly with the four practices--Vanderbilt Medical Group and Tennessee Orthopaedic Alliance in Nashville, Campbell Clinic in Memphis and the Knoxville Orthopaedic Clinic--to identify different patterns among the doctors' delivery of care and determine best practices for optimal care and outcomes, Nooga.com reported.
However, some total hip and knee replacements aren't eligible for bundled payments. For example, Blue Cross would exclude a knee replacement after a severe injury that necessitates a longer hospitalization and physical therapy, The Tennessean noted.