Humana launched a new bundled-payment model for Medicare Advantage members who undergo spinal fusion surgery, the insurer announced Tuesday.
The model, which includes four independent physician practices participants, is the third bundled-payment model for the Louisville, Ky.-based insurer. Physicians enrolled in the model will receive bonuses based on their costs and quality performance on the two most common types of spinal fusion surgery: lumbar and cervical.
Oraida Roman, vice president of Humana's value-based strategies organization, called the new model "a logical next step in our episodic bundled program."
Humana declined to provide specific figures, but in recent years the insurer has seen a higher volume of spinal fusion surgeries among its Medicare Advantage population. This matches trends nationally. The number of elective lumbar fusion surgeries increased by 62.3% from 2004 to 2015, with the greatest spike among those 65 and older, according to a study.
There is also significant variation in the cost of spinal surgeries. A 2017 of commercial and Medicare claims data from January 2012 through March 2015 found the mean payment in the highest cost quintile of episodic spine surgeries was $52,767, while mean episode payment in the lowest cost quintile was $9,814.
"Any service that you look to bundle you have to have that variability in the cost and there is quite a bit of variation in spinal fusion surgeries," said Brent Stice, associate vice president of Humana's value-based strategies organization.
Humana isn't the only insurer to take on spinal fusion surgeries. United Project Japan has offered a bundled-payment model for the procedures since 2016. The insurer recently reported lower readmission rates and fewer complication rates as a result of the bundle. Additionally, CMS' Bundled Payments for Care Improvement Advanced includes spinal fusion procedures.
The new model is also a continuation of Humana's total joint replacement bundled-payment model, Stice said. Many of the provider groups that currently participate in the model also offer spinal fusion surgeries.
"It enables us to go deeper with them, introducing them to another service line," he said.
More than 60 medical practices currently participate in Humana's total joint replacement bundled-payment model, which started in 2016.
Humana's spinal fusion episode model is retrospective so savings will be based on data from the prior year. The cost targets will be determined by looking at the average costs per year for surgeries at the specific practice. Practices will be eligible for a bonus if they spend less on average. The model will also look at performance on readmissions and complication measures. Targets for the quality measures are set by average performance in the state where the physician practices.
There isn't currently any downside risk if the practices fail to meet the targets. Participants will have the option to take on downside risk in a year, Roman said.
Stice said Humana will share quarterly data with the participants showing how they are performing on the targets and discuss their progress.
This is data the practices normally wouldn't have access to. "Independent orthopedic practices are going to see not only what the surgeons did but if the patient returned home or went to a skilled-nursing facility. They are not able to have insights into a lot of that," Stice said. "When we take these reports we are showing something meaningful."