Powder River Surgery Center in Gillette and Blue Cross Blue Shield of Wyoming have begun offering a single‑price option for unilateral total knee replacement – Wyoming’s first commercial bundled payment for an ambulatory surgery center (ASC).
The program, which went live on May 1, was designed to simplify billing while keeping surgical volume and revenue inside the state.
Wyoming’s rural nature and sparse population have long complicated reimbursement for outpatient surgery, Linda Bedwell, director of Powder River Surgery Center, told Ambulatory Surgery Center News.
“Here in Wyoming, we have about a 50% mix of Medicare combined with low volume,” Bedwell said. “It became quite burdensome.”
When Bedwell arrived in the state in 2019, ASC payments sat 20% less than the national average, a gap that has only recently narrowed to 2%, she said. And lower rates threatened financial viability and risked pushing privately insured patients to urban hospitals in neighboring states.
To further complicate matters, commercial payers were already steering self‑insured employers toward out‑of‑state centers, she added.
“A large percent of our commercial payers are actually leaving the state,” Bedwell said, adding that many employers send workers to Seattle or Colorado for joint and spine procedures.
Losing those cases meant a rising share of government payers and less margin to cross‑subsidize Medicare shortfalls, she said.
“That was pretty eye‑opening,” Bedwell said. “I had to figure out a way to keep the commercials here.”
Building a bundle
Bundled payment offered a way to align incentives for the center, its surgeons and Wyoming employers. But the ASC’s stakeholders had to strike a deal with Blue Cross Blue Shield of Wyoming.
“We put our little thinking caps on,” Bedwell said.
Over 18 months, Powder River collaborated with the insurer and every local outpatient provider needed for a knee episode, including anesthesiology, radiology, laboratory, physical therapy and the orthopedists themselves.
“It was a very engaged conversation with all the providers here in town,” Bedwell said.
The goal was a price each party considered palatable without driving patient costs too high, she added.
The final agreement prices a full 100‑day episode of care, 10 days before surgery through 90 days after, under one code on a single claim. Covered services include surgeon and assistant fees, surgery center facility charges, anesthesia, radiology and lab work, all pre‑ and postoperative office visits, and up to 18 physical therapy sessions.
BCBSWY members see their coinsurance or deductible calculated up front and pay it at the time of surgery, Bedwell said. Powder River then allocates payments to its partner providers according to the pre‑set distribution formula.
Powder River performed its first bundled total knee the morning of Bedwell’s interview with ASC News – June 3.
“It’s just really exciting to be able to roll this out and see the excitement come,” Bedwell said.
Care coordination
Making a bundle work operationally requires active care navigation, Bedwell said.
“We kind of want to hold the patient’s hand and make sure no balls get dropped, and make sure they’re compliant and nothing gets missed along the way,” Bedwell said.
A dedicated staff member in the business office handles all billing mechanics so that BCBSWY sees only one claim and patients avoid a stack of surprise statements, she said.
“The whole goal is for everybody to win in this model, your providers and then especially the patient,” she said.
And Bedwell is already preparing to broaden the arrangement.
“We will be expanding it to total hips and total shoulders,” she said.
And once the knee pathway proves its reliability, a self‑pay bundle is also under development for Wyomingites who lack insurance altogether.
“There are a lot of uninsured folks in Wyoming, and we all know how expensive health care is,” Bedwell said.
