The Centers for Medicare & Medicaid Services want to test whether an approach of bundling payment for both hospital and physician services will work.
CMS last week outlined a planned demonstration project that would combine payments for both hospital and physician services for a select number of episodes of care, with the intent of seeing if such an approach will be more efficient and improve the quality of care.
The project, called the Acute Care Episode demonstration, will test whether a global payment will better align the incentives for both types of providers leading to better quality and greater efficiency.
Healthcare organizations voiced early support for the concept, which holds the promise of providing more transparent pricing for healthcare episodes. Currently, patients are often confused by receiving multiple bills from separate provider groups that provided services during a care episode.
"CMS expects to demonstrate how to not only better coordinate inpatient care, but to also achieve savings in the delivery of that care that can ultimately be shared between providers, beneficiaries, and Medicare," said Kerry Weems, acting administrator for CMS. "The ACE demonstration reflects CMS' ongoing commitment to actively pursuing the best medical care for Medicare beneficiaries through value-based purchasing."
Currently, CMS generally pays the hospital a single prospectively determined amount under the inpatient prospective payment system for all care given to an inpatient. Physicians who provide other care to the patient are paid separately the Medicare physician fee schedule for each service they perform.
Hospitals and physicians selected to participate in the Acute Care Episode demonstration would see their payments combined for 28 cardiac and 9 orthopedic inpatient surgical services. CMS said that it plans to select as many as 15 ACE sites in Colorado, New Mexico, Oklahoma and Texas for the first year of the three-year demonstration, set to begin January 1, 2009.
The select sets of procedures included in the bundled payment demonstration are 28 cardiac and 9 orthopedic inpatient surgical services. CMS said these elective procedures were selected because profit margins and volume have historically been high; there is sufficient marketplace competition to ensure interested demonstration applicants; the services are easy to specify, and quality metrics are available for them.