The Louisville-based Humana is expanding a value-based payment model into seven additional states, while the Medicare agency has yet to set a clear course for how to handle such models.
Humana announced last week it would start offering its bundled payment model for hip and knee replacements under Medicare Advantage plans to members in Alabama, Florida, Georgia, Illinois, Louisiana, Mississippi and Texas.
The bundle, which intends to reduce costly hospital readmissions, was originally launched in 2016 in Ohio and Tennessee but was expanded to Indiana, Kentucky, North Carolina, and Virginia last year. Under Humana's most recent expansion, the model will be available to more than one-quarter of the country.
Hip and knee replacements total about one million a year, according to the Journal of Bone and Joint Surgery, and the number of surgeries is projected to increase.
“We’re excited to accelerate this innovative value-based care model into additional markets, significantly growing the reach of a program specifically tailored for orthopedics,” Caraline Coats, vice president of Humana’s Provider Development Center of Excellence, said in a statement. “Humana is dedicated to building relationships with physicians and providing the support they need as we work together to create a more seamless, patient-centered experience and help members achieve their best health.”
The expansion by the private payer comes months after the Medicare agency rolled back a mandatory bundled payment expansion for hip fractures and cardiac care, which some have said would slow the industry's transition to value-based care.
The decision was announced shortly after Secretary Tom Price's resignation from the Department of Health and Human Services, and the agency has since put out a voluntary replacement model, which has its critics for not being aggressive enough in moving providers into value.
Price was a fierce opponent of mandatory bundles, but new HHS Secretary Alex Azar and Medicare head Seema Verma have indicated they are supportive of stronger pushes to get providers to adopt value-based care.
Other parts of the industry also haven't waited for Medicare to take the lead, and have expanded and grown their own outcomes-based pricing for services and devices.