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CMS announces test sites for bundled payment program

January 31, 2013
by Pamela Tabar, Senior Editor
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More than 500 organizations will test-drive several new bundled-payment models this year to see how they might coordinate care and lower costs. The Bundled Payments for Care Improvement (BPCI) initiative is being piloted by the Centers for Medicare & Medicaid Services (CMS).

The initiative will test four models of bundling, each with a different definition of an “episode of care.” Within most models, providers can choose among 48 care episodes, including joint replacements, digestive disorders, heart bypass procedures, stroke treatment and spinal fusions.

Model 1: Bases the episode of care on the acute care inpatient stay, with the hospital and all physicians being paid separately.

Model 2: Bases the episode of care on the acute care inpatient stay and a post-acute care period of 30, 60 or 90 days.

Model 3: Bases the episode of care on the post-acute care following a hospital stay. The post-acute care can be provided by a skilled nursing facility, inpatient rehabilitation facility, long-term care hospital or home health agency for a period of 30, 60 or 90 days.

Model 4: Bases the episode of care on the acute care inpatient stay, but pays the hospital one bulk payment for all services rendered. Physicians will be paid from the bundle rather than billing Medicare separately.

The new payment models have long been touted as a way to refocus care on quality instead of quantity. Current payment models that are based on piecemeal billing for each service or segment of care can encourage partitioned care and can result in overlapping treatments and/or redundant services.

“The objective of this initiative is to improve the quality of health care delivery for Medicare beneficiaries, while reducing program expenditures, by aligning the financial incentives of all providers,” said Marilyn Tavenner, Acting Administrator, CMS, in a statement.

The model testing will begin in phases throughout the first half of 2013. The Center for Medicare & Medicaid Innovation (CMMI) website includes a list of participating providers arranged by model, by state and by episode.

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