Case Study Alternative Payment Models: Episodes of Care and Bundled Payments ACHI is a nonpartisan, independent, health policy center that serves as a catalyst to improve the health of Arkansans. 1401 W Capitol Avenue, Suite 300 ●Little Rock, Arkansas 72201 ●(501) 526-2244 ●The Arkansas Health Care Payment Improvement Initiative (AHCPII) is designed to improve the quality of care, improve patient outcomes, and control or reduce growth in healthcare costs. The AHCPII involves restructuring the system to incentivize quality outcomes. The state’s Episodes of Care (EOC) model is a primary strategy of this innovation. Design and implementation of the state’s EOC efforts have been led by Arkansas Medicaid, Arkansas Blue Cross and Blue Shield (ABCBS), and QualChoice (QC). This is part of a series of case studies spotlighting provider innovation under Alternative Payment Models (APMs). For more information and access to additional case studies, visit or . Kevin Cullinan, MHA, CHI St. Vincent, worked with physicians and their teams to help the hospital succeed under new alternative payment models. CHI St. Vincent Hospital – Joint Replacement • April 2018 “Our physicians had already been operating under Arkansas’s joint-replacement episode payment model, which helped prepare us for the Medicare Bundled Payment for Care Improvement initiative. With strong physician leadership we’ve been able to succeed and take that experience and apply it to similar models.” – Kevin Cullinan, CHI St. Vincent Background on Joint Replacements Nationally, hip and knee replacements are the most common inpatient surgery for Medicare beneficiaries. In Arkansas, a substantial number of these procedures are also performed for beneficiaries of Arkansas Medicaid and private insurers. These procedures can require lengthy rehabilitation and recovery periods. While there is a high volume of these procedures, there is also a high level of variation in cost and quality outcomes across different providers. Post-operative complication rates may be higher at some facilities, while costs for all care associated with a procedure may also vary.