The Centers for Medicare & Medicaid Services (CMS) announced that more than 500 organizations will begin participating in the Bundled Payments for Care Improvement initiative. Through this new initiative, made possible by the Affordable Care Act (ACA), CMS will test how bundling payments for episodes of care can result in more coordinated care for beneficiaries and lower costs for Medicare.
“The objective of this initiative is to improve the quality of healthcare delivery for Medicare beneficiaries, while reducing program expenditures, by aligning the financial incentives of all providers,” said Acting Administrator Marilyn Tavenner.
The Bundled Payments for Care Improvement initiative includes four models of bundling payments, varying by the types of healthcare providers involved and the services included in the bundle. Depending on the model type, CMS will bundle payments for services beneficiaries receive during an episode of care, encouraging hospitals, physicians, post-acute facilities, and other providers as applicable to work together. Organizations of providers participating in the initiative will agree to provide CMS a discount from expected payments for the episode of care, and then the provider partners will work together to reduce readmissions, duplicative care, and complications to lower costs through improvement.
The four models of care and brief descriptions follow. Durable medical equipment, prosthetics, orthotics, and supplies (DMEPOS) are specifically included in both Models 2 and 3, according to the Bundled Payments for Care Improvement Initiative Fact Sheet. While not specifically mentioned, O&P care and devices will be covered under Model 4 if provided during that model’s criteria, according to a CMS spokesperson: “Model 4 includes Medicare payments for all services during an inpatient admission (which would include devices used during a surgery), Part B professional services provided during that inpatient hospitalization, and all Part A and Part B services during clinically related readmissions that may follow within 30 days of that inpatient stay.”
- Model 1: Retrospective Acute Care Hospital Stay Only. The episode of care is defined as the inpatient stay in the acute care hospital.
- Model 2: Retrospective Acute Care Hospital Stay plus Post-Acute Care. The episode of care will include the inpatient stay in the acute care hospital and all related services during the episode.
- Model 3: Retrospective Post-Acute Care Only. The episode of care will be triggered by an acute care hospital stay and will begin at initiation of post-acute care services with a participating skilled nursing facility, inpatient rehabilitation facility, long-term care hospital, or home health agency.
- Model 4: Acute Care Hospital Stay Only. CMS will make a single, prospectively determined bundled payment to the hospital that would encompass all services furnished during the inpatient stay by the hospital, physicians, and other practitioners.
The announcement includes the selection of 32 awardees in Model 1 that will begin testing bundled payments for acute-care hospital stays as early as April 2013. In the coming weeks, CMS will also announce a second opportunity for providers to participate in Model 1, with an anticipated start date of early 2014.
The announcement also marks the start of Phase 1 of Models 2, 3, and 4. In Phase 1 (January through July 2013), more than 100 participants partnering with more than 400 provider organizations, will receive new data from CMS on care patterns and engage in shared learning in how to improve care. Phase 1 participants are generally expected to become participants in Phase 2, in which approved participants opt to take on financial risk for episodes of care starting in July 2013, pending contract finalization and completion of CMS’ standard program integrity reviews.
For the list of Model 1 awardees and participants for Phase 1 of Models 2, 3, and 4, visit http://innovation.cms.gov/initiatives/bundled-payments
