From AAHKS 2016 – Dr. Richard Iorio understands bundled payments & translates the nuances with humor and ease. We talked to him about his presentation, “Bundled Payments: Top 10 Things You Need to Know,” and the role he thinks PROs plays in the equation. Full transcription follows below.

“There will be winners and losers in CJR. Financial performance is not enough, there must be a focus on quality as well to succeed.”

Dr. Brian Cunningham: All right, coming to you again live from AAKS 2016. We’re here with Dr. Iorio from NYU Langone. He’s the chief of adult reconstruction. He gave us a fantastic session early on bundled payments, CJR, what that means for most adult reconstruction practices within those geographic regions and also on patient-reported outcomes.

Let’s start with the last first. Patient-reported outcomes as a tool for both short and intermediate quantification of joint replacement patients.

Dr. Richard Iorio: Patient-reported outcome measures are excellent for research purposes. They’ve demonstrated over the years that total hip replacement is one of the most quality of life-improving operations ever devised.

Unfortunately, for short term comparison of patient outcomes, PRO scores may not be the ideal way to compare surgeons and outcomes. In my opinion, although CMS is committed to patient-reported outcomes as a portion of the quality measures that are needed for bonus payments under CJR, I think financial performance is probably the most accurate assessment of how the physician performance is judged.

Cunningham: When you say over the shorter term, what is your time frame or time horizon.

Iorio: The CJR are is measured over a 90 day episode. Most patients are going to be improved over the short term with any outcome measure. We really don’t have outcome measures that discern short term benefits. They haven’t been validated. CMS is still looking for those measures. They’re probably not going to be available in real time for this demonstration project.

We’ve been in BPCI for four years and we find the financial metrics are very accurate as to the quality provided by the physicians in the project.

Cunningham: Those specifically for quality would be readmission, re-operation, infection, what are the metrics you’re looking at?

Iorio: We use readmission, discharge to post-acute care facilities, VTD prophylaxis adherence, SSIs, and overall cost of the episode. Unfortunately, you’re essentially measuring physicians twice because they’re not going to get their reconciliation unless they meet their target price. You don’t miss the target price unless you fail on the quality metric.

It becomes almost immaterial why you’re measuring those things. Unfortunately, it’s part of the law. It’s the way it has to be.

The CMS quality metrics are: there’s a reporting requirement for PRO measures, there’s a fairly well defined VR-12, Promise-15, HOOS Jr. Then hospital-adjusted readmission, complication rates, and hospital HCAHPs. Which is ridiculous because it isn’t necessarily confined to total joint replacements.

It’s not an ideal system.

BPCI is much fairer to hospitals and the surgeons than CJR is.

Cunningham: Got it.

One of the things you mentioned in your talk was this phenomenon of cherry picking lemon dropping, which for the general audience is the idea that sicker patients may not be getting care certain places and healthier patients that may be prone to doing better are getting more care.

How do you see that dilemma being resolved as we move forward?

Iorio: I don’t think it will be resolved until CMS re-stratifies the populations. The way CJR is set up with geographic pricing within MSAs, there will be incentive, perverse incentive, not to take care of these patients.

These kind of dynamics take place in many American cities now. There are less resourced, poorer socio-economic type patient populations in certain safety net hospitals compared to well resourced hospitals where there’s not access to those patient populations. This is going to play itself out across the nation in all these MSAs and it will be unfortunately in the financial best interest of some of these more well resourced hospitals not to operate on the complicated patients.

The way CJR is set up, you’re actually incentivized not to operate on complicated patients because they’re going to have higher complication rates and end up costing you money.

Cunningham: We talked a little bit about, in your session, about the idea that these medically optimized patient may be having a lower readmission rate but nobody’s actually evaluated if all this pre-surgical optimization is actually leading to an improvement on the back end.

Can you spell that out a little?

Iorio: As an example, patients with higher BMIs, patients that smoke, patients with diabetes that’s out of control, if they’re eliminated from bundles, the readmission rates go down. The question is if a patient with a BMI of 45 comes back at 38, stops smoking, and gets there hemoglobin A1C under control, and decreases their blood sugar, does their readmission rate go back to baseline?

We don’t have that data. We know that eliminating them from your patient cohort will certainly improve your results, but when their delay is over and they optimize and they come back in, are they better?

For an example, bariatric patients. We think now, and there’s some mixed results in the literature, that after bariatric surgery they may or may not return to a baseline level for complication rates. They’re still malnourished, they still may have a higher infection rate, they still may be immuno-suppressed. The jury remains out on whether optimization is going to work. We need to study that further.

Cunningham: Interesting.

For groups that are going into bundled payments and haven’t ever really done it before, you’re one of the experts in the country on how to make this work. Any advice for maybe say a private group with 15 or 20 docs that are thinking about going into bundled payments on things to look out for before you start?

Iorio: Number one, you need real data. You need to understand your cost and then you need to understand what your complication rates are and what your performance is. When you can quantify that then I would suggest starting slow, I would suggest a private bundle with a local insurer and see what your performance is like. If you do well with that then you can get into the big pond with the big fish and try and swim with the sharks.

There are going to be winners and losers in CJR. There is no voluntary component to CJR, but in 2018 they will reopen BPCI and CJR up for physician conveners who want to take some risk.

In the next year and a half get some data, see what your performance is, see if you measure up, and then you can make a decision whether it’s in your best interest or not to participate.

Cunningham: Fantastic.

One last question again, here with Dr. Iorio from NYU Langone gave a fantastic talk early about bundled payments in CJR. How do you envision the Trump administration, been a hot topic today, Trump administration affecting some of these policy decisions down the road?

Iorio: I’m not sure that Donald Trump knows what MACRA is, you know he probably thinks it’s some kind of pasta. I think the ACA probably is history. It will be replaced by something.

You know, I think Donald Trump is actually a little bit more socially liberal in his policies than people think. I think he will make sure there’s some sort of safety net for the patients what are covered in the ACA with increasing premiums.

I think CMMI is an endangered species. I think the CMS regime will change. I think the bundles are likely to stay because they save CMS money, they improve quality, they decrease cost. I don’t know why you would get rid of them. I think the mandatory nature of some of this stuff may change.

I’m actually cautiously optimistic because I don’t think it can get any worse than it is now.

Cunningham: The unscrewable pooch, perhaps.

Dr. Bozic mentioned he thought it may even get a shift towards a more competitive, a more market driven solution with the Trump regime taking place. Is that kind of in line with your thoughts?

Iorio: I think that’s what he has verbalized but he’s never really fully articulated what it would be. He envisions taking down state barriers for insurance. I think reference based pricing becomes a conservative alternative. Let patients control the money that’s spent, find a provider with a quality profile and price that agrees with them, give them more choice, let the marketplace set where they can go.

I think the Medicare-Medicaid for all thing that Hillary was probably going to implement probably is history now. But we have to replace it with something else. There has to be some sort of safety net and no one to my knowledge has articulated what that’s going to be.

In my opinion, we need a two-tiered health system. We need to guarantee basic healthcare for everybody. All the young people need to be in to make the pool even. Then, if you’re wealthier and you want uptick and increase your choices and increase where you go and what options you have, you’d pay up for that. I think everyone would be happier with that type of system.

Cunningham: Fascinating.

Well we can talk for hours, but unfortunately we have a limited amount of time. We’d like to thank Dr. Iorio again for staying with us for a few minutes and chatting. We’ll check in with you guys again later.

Iorio: Thank you.

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Ellen Laux

Ellen Laux

Ellen is a design and marketing veteran and lives on the marketing team at CODE. She's focusing on helping surgeons and hospitals understand and LOVE PROs.