Financial

The future of orthopedics: ACOs, bundled payments, gain-sharing & the advantage in change

By Laura Dyrda

Healthcare provider payment models are shifting from fee-for-service to pay-for-performance and risk-sharing models. By next year 30 percent of Medicare payments are expected to be through alternative payment models.

By 2020 estimates show 100 percent of Medicare payments will be made through alternative payment models. Currently there are 68 million Medicare and Medicaid enrollees and many of them seek orthopedic care.

Accountable care organizations
Traditional reimbursement rates have declined 30 percent since 1992 and the pressure to lower costs continues to mount. The Centers for Medicare and Medicaid Services (CMS) initiated the accountable care organization’s (ACO)program pay-for-performance, and 11 of the 23 pioneer ACOs earned financial bonuses during the program’s second year, totaling $68 million

CMS claims savings of $817 million in spending and $445 million to physicians and hospitals in the ACO program. Third-party payers and insurers are also beginning to launch ACOs and other risk-sharing models with physicians and hospitals.

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