Blue Cross Blue Shield of Michigan launches bundled payment model for hip, knee replacements

BCBSBlue Cross Blue Shield of Michigan is piloting a bundled payment program with 64 surgeons at seven health systems in the state.

Here are the four highlights.

  1. BCBSM aims to shave 10 percent off the average cost of non-complicated knee or joint replacements, which can total between $28,000 and $55,000, through the bundled program.
  2. The payer calculated per region cost targets were based on historical costs by geography.

          “The variation in cost across hospitals and geographies is significant. We are working with surgeons and
healthcare systems to manage the cost and outcome variation of these procedures, and to consider
appropriate sites for care,” said Vice President of Provider Contracting and Network Administration
Steve Anderson. “For example, many patients may be more comfortable and rehabilitate better at home,
versus a rehab facility.”

  1. The seven participating providers account for about one-third of BCBSM claims for hip and knee procedures. They include:
    Henry Ford Health System (Detroit)
    Huron Valley Sinai Hospital (Commerce Charter Township, Mich.)
    Michigan Orthopaedic Surgeons (Southfield, Mich.)
    Oakland Regional Hospital (Southfield)
    St. Joseph Mercy (Brighton, Mich.)
    St. Joseph Mercy (Livingston, Mich.)
    TRIARQ Health (Troy, Mich.)
  1. BCBS expects to review data after one year of pilot testing.

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