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Reimbursement Feature

Spine and Joint Solution / Courtesy of UnitedHealthcare

UnitedHealthcare Bets on Ortho Bundles

Walter Eisner • Thu, December 15th, 2016

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As often happens, private payers follow Medicare's lead in reimbursement policies.

UnitedHealthcare is following the agency's lead by adopting a bundled payment model for hip, knee and spine surgeries.

Why? To save money, of course.

In a December 1, 2016 press release, Michelle Lobe, UnitedHealth's vice president of network strategy and innovation, said the main reason for developing a bundled payment program is that, "in most large companies, high spend is really associated with orthopedic procedures. For the most part, about 17% of company spend is in the orthopedic arena. Hip, knee, and spine procedures constitute about 33% of that.”

“Many companies are looking for ways to streamline payment and provide quality centers for their members to have more efficient, high-quality surgery, ” Lobe continued. “That was the birth of why we focused on centers of excellence for spine and joint surgery.”

There's one big difference in the way UnitedHealthcare will utilize the bundle from the way Medicare does it.

UnitedHealthcare is a prospective bundle whereas Medicare pays bundles on a retrospective basis.

"The facilities and the physicians that we’re working with to create the bundle, they need to have the capability to administer that. If we pay the bundle to a facility, they need to be able in turn to reimburse the anesthesiologist, the surgeon, or any other professional associated with that hospitalization” Says Lobe.

Seeking High Quality Providers

Lobe says payers should partner with high quality providers and target markets to find quality facilities. She also recommends that payers use data analytics to pick the right partners and include CMS (Centers for Medicare and Medicaid Services) health outcomes and quality data. Once the right partner is picked, then payers can begin negotiating prospective bundled payment contracts.

“Before we get into any conversation about payment methodology, we’re looking first to find the highest quality centers to target for those discussions.”

Predictability for Employers

Lobe added that bundles are a great way to provide employers with the predictability they’re looking for in pricing. “It allows members to be more satisfied in terms of their outcomes and streamlines some of the paper processes and bills. It also gives providers the opportunity to share in the risk and gain.”

The Spine and Joint Solution

The bundle initiative, called the Spine and Joint Solution, is available to employers nationwide. The program currently includes more than 40 health care facilities in 25 markets across the country, with plans to expand to more than 40 markets during 2017.

Since the program’s introduction as a pilot in 2015, the company says participating employers have recorded an average savings of $10, 000 or more per operation when compared with median costs in the same metropolitan area. Additionally, eligible employees may save more than $1, 000 in out-of-pocket costs per procedure when accessing a participating facility rather than another in-network medical facility.

Other Value-Based Arrangements

UnitedHealthcare’s reimbursements to providers that are tied to a variety of value-based care arrangements have, according to the company, nearly tripled in the last three years to nearly $50 billion annually, and are expected to reach $65 billion by the end of 2018. To date, more than 14 million people, or nearly one in every three people enrolled in UnitedHealthcare benefit plans, currently access care from providers in value-based care relationships.

For more information about the Spine and Joint Solution and Value-Based Care, visit

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