GASTONIA, NC – CaroMont Health and North Carolina's largest health insurer, Blue Cross and Blue Shield of North Carolina (BCBSNC), announced today a collaborative arrangement to offer patients a new health care delivery and reimbursement model for knee replacements.

This innovative, value-based initiative is designed to provide quality care with improved care coordination at competitive pricing.

The CaroMont Health and BCBSNC bundled payment arrangement is based on the PROMETHEUS Payment model and will cover the entire knee replacement, including the pre-surgical period of 30 days prior to hospitalization, the surgery itself, and most follow-up care within 180 days after discharge from the hospital. An early April implementation date is planned.

Betty Herbert, CaroMont Health's Director of Managed Care, described the arrangement, "This program will cover a variety of Blue Cross Blue Shield North Carolina plans and extends nationally to all Blue Card members. This allows us to offer value-based, quality care on a national level. Additionally, the initiative includes a number of features that promote care coordination. Specific quality and patient satisfaction measures are built in to the plan because we wanted the patient's needs to guide our program."

The bundled payment arrangement does not apply to federal employees covered by BCBSNC or to customers with BCBSNC Medicare plans.

This program is part of CaroMont Health's move to become an Accountable Care Organization. CaroMont Health is focused on responding to economic challenges and health reform legislation by meeting patient needs. The strategy includes partnering with local employers and payers to institute cost-effective initiatives that cover both hospital and physician services for a full episode of care.

"Collaboration with providers that eliminate fragmentation in the way care is provided and paid for – and promote better outcomes in the process – is our priority at Blue Cross," said BCBSNC President and CEO Brad Wilson. "We believe initiatives like this one at CaroMont are key to promoting health care quality, while also holding down costs."

CaroMont Health President and CEO Valinda Rutledge said that this initial program is likely to lead to other collaborative opportunities. "Our collaboration with Blue Cross and Blue Shield of North Carolina for the knee replacement bundle is paving the way for us to redesign the delivery of care for other diseases and procedures," Rutledge said. "The possibility exists to redesign entire episode of care programs for chronic diseases. We are passionate about providing quality health care at a reasonable price for our community, and this arrangement is an example of our success."

Physician practices participating in the program include Carolina Orthopaedic and Sports Medicine Center, P.A. and Gaston Anesthesia and Pain Management Associates. Dr. H.C. Thomason with Carolina Orthopaedic and Sports Medicine Center, P.A. is pleased with the collaborative spirit of the program. "As health care delivery models change, community-based physicians need to work together with hospitals and insurers around a central theme of care coordination. In this program, we have aligned ourselves by asking the question: "What is best for the patient?" We've answered that question with this arrangement."

In order to successfully launch this initiative, CaroMont Health partnered with GE Healthcare and Sg2 analytic experts to assess the cost of a full knee replacement episode of care, including the pre-surgical period, surgery and post-surgical period. This extensive analysis included observations and interviews with key members of the CaroMont Health clinical staff to redesign the care pathway and quantify the financial impact of the redesign through unique simulation modeling recently developed by GE Healthcare for this program.

"The real national excitement is in our ability to provide a price to the payer for the entire episode of care," said Jeff Moser, Vice President at Sg2. "By looking at costs across the full episode of care, we are able to demonstrate care redesign for every step of the process—pre-surgical, the surgery itself, and post-surgical. Now, with the CaroMont and BCBSNC new knee replacement bundled payment program, CaroMont will be able to include post-surgical episode costs. The goal is to ensure effective use of resources, improved clinical outcomes, cost-effective care and, ultimately, a better patient experience."