CHATTANOOGA, Tenn. — BlueCross BlueShield of Tennessee has reached agreements with four respected orthopedic practices for a new bundled payment system that focuses on patient care, quality and outcomes for total knee and hip replacements.

Participating practices are Vanderbilt Medical Group and Tennessee Orthopaedic Alliance in Nashville, Campbell Clinic in Memphis and the Knoxville Orthopaedic Clinic.

“This system is generally considered a new payment methodology, but make no mistake, this is a collaborative tool we can use to improve health outcomes and the patient experience,” said Dr. Tom Lundquist, vice-president of performance measurement and improvement of health care services for BlueCross. “This is a unique opportunity for our partners to help drive change in delivery systems and to move toward a sustainable program that provides the best medical value for our members.”

Working directly with these four practices, BlueCross will use its significant data resources to identify the variation patterns in delivery of care across the state and then pinpoint best practices that produce optimal care and outcomes. BlueCross’ bundled payments will provide a set payment amount for the entire episode of care for total knee and hip replacements, including the surgery, post care and physical therapy. The new payment structure is set to launch Oct. 1 for all major lines of business.

“This is the right time for innovation,” said Lundquist. “It requires real commitment to take that first step because this program is a fundamental rethinking of the entire episode of care. We’re fortunate to have these partners who recognize the long-term benefit of getting in on development from the beginning in this important quality initiative.”

According to Lundquist, as providers, businesses and insurance companies prepare for the exchange environment under the Affordable Care Act, BlueCross expects to see an increased interest from providers in participating in new payment models. As work is done to meet employer and member expectations for lower cost points and increased transparency across the health care sector, Lundquist said BlueCross will continue to invest in its patient-centered medical homes and bundled payment partnerships to lay the foundation for developing accountable care organizations.

The TriZetto Group is a critical partner in this effort and is supplying the payment bundling solution. Successful payment bundling programs require several business process changes for payers and plans. TriZetto has committed to the successful implementation of new payment and care models and is supporting a full range of program components.

About BlueCross

BlueCross BlueShield of Tennessee's mission is to provide its customers and communities with peace of mind through affordable solutions for health and healing, life and living. Founded in 1945, the Chattanooga-based company is focused on reinventing the health plan for its 3 million members in Tennessee and across the country. Through its integrated health management approach, BlueCross provides patient-centric products and services that drive health improvement and positively impact health care quality and value. BlueCross BlueShield of Tennessee Inc. is an independent licensee of the BlueCross BlueShield Association. For more information, visit the company's website at