Orthopedics expert urges condition-based bundles to align specialists with ACOs

Dr. Carl Koenig, executive director of the Musculoskeletal Institute and division chief of orthopedic surgery at Dell Medical School, urged PTAC committee members to test voluntary, condition-based bundled payments for musculoskeletal conditions that would let specialist teams manage full episodes of care and be paid on outcomes rather than individual services.

Koenig said musculoskeletal disease affects a large share of adults—about one in two people ages 18 and about three in four people over 65—and is a major driver of specialty spending. He argued that a condition-based payment that covers the full cycle of care for a diagnosis, such as knee osteoarthritis, would give specialist-led teams the incentive and operational freedom to steer patients to evidence-based treatments and measure outcomes with patient-reported instruments.

"The patient's treatment path is not dictated by whether they have surgery or don't have surgery," Koenig said, describing a knee-osteoarthritis care pathway his team developed in Austin. "Our team takes responsibility for the outcomes of the patient, and the resources that we utilize to achieve those outcomes so that we can behave in an appropriate evidence based and high-value way."

Koenig showed outcome data his group tracks with patient-reported measures for hip and knee patients, noting average baseline scores in the 40s on a 0–100 functional scale and measurable improvement at six and 12 months for both operative and nonoperative pathways. He interpreted those results as evidence the team can identify who benefits from surgery and who can improve without it.

Panelists and committee members raised technical and programmatic concerns: small sample sizes in some ACOs can make historical pricing unstable; risk adjustment and stop-loss provisions would be needed to handle complex comorbidity; and local specialist availability and market structure would affect feasibility.

Koenig proposed design features for voluntary bundles: set an episode price covering relevant services (professional fees, imaging, therapy, follow-up), adjust for patient risk, require reporting on patient-reported outcome measures withholds tied to reporting, and allow the bundle to be nested within an ACO or subcapitation arrangement. He suggested starting with a few discrete conditions before scaling to broader musculoskeletal subcapitation.

The committee’s subsequent discussion emphasized pilots, risk-adjustment methods used in Medicare Advantage, and the importance of designing bundles so they do not simply shift costs elsewhere. Panelists urged voluntary, market-driven pilots rather than national mandates and highlighted the need for technical standardization to make outcomes comparable across providers.