Value-Based Care is About Improving, Not Denying Care

Posted by Signature Care Management Team on Tuesday, February 21, 2017 in Blog

On April 1, 2016, the Centers for Medicare and Medicaid Services (CMS) launched the Comprehensive Care for Joint Replacement (CJR) Program. This program mandates bundled payment reimbursements for lower extremity joint replacements (LEJR) performed on Medicare patients at nearly 800 hospitals nation-wide. This wide-reaching program came as no surprise since CMS set the goal of shifting 50% of its fee-for-service payments to alternative payments by 2018.

Many of these alternative payments, including bundled payments, are referred to as “value-based.” Value-based care, put simply, is care that prioritizes good health outcomes. Value-based payments reward these good health outcomes, while the more prevalent fee-for-service payments, whether intentionally or not, reward volume of services performed.

When stated this plainly, one could conclude that value-based payments should lead to better outcomes for patients, and the shift to these types of payments are a good decision. But critics of value-based payments believe that when health care providers are financially rewarded for good health outcomes, they are incentivized to cherry-pick the healthy patients. Patients with complications that make outcomes unpredictable, and could therefore affect the bottom line, will be neglected or denied care.

The unintended consequence of value-based care, skeptics say, will be a segregated healthcare system where providers will send their sickest patients elsewhere. Some providers in a value-based system will probably try to avoid complicated or unhealthy patients in order to increase reimbursements, but this argument has flaws when applied to the Medicare population. Approximately 10,000 people enroll in Medicare every day and the number of Medicare beneficiaries will double within the next 20 years.

The rate of chronic disease among Medicare recipients is steadily increasing. Nearly a third of Medicare beneficiaries have more than one chronic condition, and nearly a quarter have three or four. Obesity, diabetes, end stage renal disease, depression, arthritis, and many other chronic conditions are all on the rise.

Additionally, many older adults are financially strapped, reports the Kaiser Family Foundation. In 2013, half of all Medicare beneficiaries had incomes of less than $23,500. Financial barriers can affect health outcomes by leading to the inability to afford copays, problems with medication adherence, lack of transportation to appointments, and more.

Given the ever-growing Medicare population with its chronic conditions and financial concerns, one has to wonder: if a Medicare provider wants to avoid “complicated” patients – who will be left to treat? In order for providers who treat Medicare patients to stay relevant and in business in a value-based system, they must learn how to care for patients with co-morbid chronic conditions and other complicating factors, and providers are realizing this fact. As a convener for CMS's Bundled Payment for Care Improvement (BPCI) initiative, we at Signature Medical Group are working with over 50 orthopedic groups around the country who are implementing bundled payments for lower extremity joint replacements (LEJR) performed on Medicare patients.

In this program, where providers are working hard to receive value-based repayments from the government, complicated patients are not denied care by surgeons. Instead, we are seeing many physicians institute a high level of care redesign to ensure that patients who qualify for a procedure are also physically and mentally ready for that procedure, a process referred to as “patient optimization.” If a patient is identified as “high-risk” due to an uncontrolled chronic condition, surgery might be postponed so these issues can be addressed and the patient's health can be optimized.

The act of postponing surgery is not denying care. It gives the patient a chance to lose weight, achieve a normal A1C level, address anxiety issues, or resolve other complicating health factors, increasing their chances of a successful surgery. Sometimes a procedure does not need to be delayed in order to optimize a patient for surgery.

One example of care redesign groups are implementing is the use of prehabilitation (pre-operative physical therapy) to assess a patient's level of functioning, teach them exercises they will need to know after surgery, address a patient's concerns and questions, and set expectations for recovery. Prehabilitation is an easy, low-cost protocol resulting in better surgical outcomes. If the argument is being made that value-based models incentivize the denial of care for unhealthy patients, it must be pointed out that volume-based/fee-for-service models have their own unintended consequences.

When no one is held accountable, financially or otherwise, for poor outcomes (readmissions, infections, fatalities), there is no incentive to make sure a procedure is appropriate for the patient and that the patient is optimized and ready for that procedure. That's the flip side of care being denied: care being administered to “complicated patients” without concern for those complications and what negative consequences they may yield. Before bundled payments in LEJR, there was little to prevent a surgeon from performing an elective joint replacement on someone with a BMI over 45, uncontrolled diabetes, or an untreated anxiety disorder – all factors that can lead to poor outcomes.

In our experience with the BPCI initiative, where a provider or hospital is now responsible for the 90-day post-surgical episode of care, we have seen providers incentivized to address complications, not ignore them. Care is being coordinated between surgeons, primary care physicians, other specialists and post-acute care providers. Even patients' mental health needs are being assessed and addressed.

Relationships are being built with community agencies that serve older adults. A collaborative, holistic healthcare model is emerging and we see this as a positive trend that is going to continue. Some providers may choose to leave the most complicated patients for their peers. But providers that are forward thinking, especially those that treat Medicare beneficiaries, will realize that now is the time to get ahead of the curve and begin learning how to deliver the best value for all patients.   For more information or assistance in working with bundled payments and value-based care, visit  


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