New voluntary Medicare initiative will test bundled payment models September 3, 2011 Advocacy, CMA, Health Care Reform, Medicare, Payment CMS, Medicare payment, physician reimbursement 0 The Centers for Medicare and Medicaid Services (CMS) announced this week that it will pilot four different models for bundling payments to physicians and hospitals. Under CMS’s new Bundled Payments for Care Improvement Initiative, hospitals, physicians, and others will be able to propose discounted fees for bundled payments across a single episode of care during a hospital stay in an acute care hospital and during post-discharge recovery. CMS believes that the new payment models will motivate providers to cooperate to improve quality and lower costs. Providers would be paid under the Medicare fee-for-service system, but at a discounted, negotiated rate. Any savings achieved from holding costs below the negotiated price could be shared among participating physicians and hospitals. Current Medicare gain-sharing rules prohibit hospitals from sharing savings with physicians who help them lower costs. The bundling initiative waives these prohibitions so that hospitals, physicians and post-acute care providers can coordinate and share in savings. Three models involve a retrospective bundled payment arrangement, and one model would pay providers prospectively. Through the bundled payments initiative, providers will have great flexibility in negotiating the fees, selecting conditions to bundle, developing the health care delivery structure, and determining how payments will be allocated among participating providers. However, the bundled payment will only be made to hospitals for distribution to the other providers. Previous demonstration projects suggest tremendous savings potential. A recent heart bypass surgery bundled payment demonstration, for example, saved Medicare $42.3 million—about 10 percent of expected costs—and saved patients $7.9 million in coinsurance. More importantly, the program improved care and lowered hospital mortality. Providers interested in participating in the initiative must apply by September 22 for model 1 and by November 4 for models 2–4. More information about the various models and their requirements is available on the CMS Innovation Center website. SFMS/CMA is working to submit other California pilot proposals to the CMS Innovation Center that allow physicians in all modes of practice to participate in new physician-led delivery and payment models. Comments are closed.
