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Humana launches, expands bundled payments for its Medicare Advantage members

Value-based programs are in Humana's Medicare Advantage business, where insurer had a 17 percent market share last year.

Humana is ramping up its bundled payment programs for the insurer's Medicare Advantage members.

The company is both expanding its existing episode-of-care-based model for total hip or knee joint replacement procedures, and teaming up with orthopedic and neurosurgery practices to launch an entirely new bundled payment initiative for spinal fusion surgeries.


Both programs offer the opportunity for additional payments to physicians and clinicians for improved patient health outcomes and lower costs.

The models are aimed at improving quality and outcomes across members' entire episodes of care by encouraging providers to coordinate their efforts.

For example, improvement in the new spinal fusion episode-based model is measured based on three clinical indication rates--readmissions, cervical complications and lumbar complications--as well as by average risk-adjusted episodic cost-of-care.


Thanks to eight recent agreements with orthopedic specialty groups, Humana's total joint replacement episode-based model, which began in 2016, is now offered at more than 60 medical practices in 19 states--including, for the first time, Michigan.

Meanwhile, its new spinal fusion episode-based model counts participants in Indiana, Ohio and Virginia.

Humana is among the largest Medicare Advantage insurers in the country. Plans from Humana, UnitedHealthcare and Blue Cross Blue Shield affiliates represented over half of the market in 2018, according to the Kaiser Family Foundation.  At 25 percent, UnitedHealth had the biggest chunk of MA enrollees, followed by Humana at 17 percent, BCBS plans at 13 percent, Aetna at 8 percent, Kaiser Permanente at 8 percent, Wellcare at 3 percent and Cigna at 2 percent.

The shift from fee-for-service to value-based care continues to prompt payers to offer reimbursement models that emphasize accountability for both costs and the quality of care delivered.

Indeed, the percentage of U.S. healthcare payments tied to value-based care in 2017 (the latest year for which data is available) hit 34 percent--up 23 percent from 2015.   

But while many providers favor bundled payments, not everyone is sold on the model. For example, CMS's bundled payments for care improvement advanced model (BPCI Advanced) is designed for providers with ample room to improve.

High-performing practices may seek another route because there's little room to improve and meet their financial targets. Additionally, one trial of a bundled payment model for hip and knee replacement surgeries showed a cost reduction of just 3.1 percent versus traditional means.


"Considering the prevalence of spine surgeries and, therefore, the need for a coordinated, quality patient experience, this program is a logical 'next step' for us in value-based care," said Oraida Roman, vice president of Humana's Value-Based Strategies Organization. "We're pleased to support additional orthopedic practices with robust data and analytics regarding total joint replacement procedures. Our mutual goal is to reduce readmissions and complication rates through a program designed to offer a coordinated patient experience, from diagnosis to recovery."

Mark Klimek is an independent writer and editor with 20 years' experience covering financial issues, healthcare and more.