CMS to Consider More Participants for Bundled Payment Initiative

The Centers for Medicare and Medicaid Services (CMS) May 16 announced an open period for additional organizations to be considered for participation in the first model of a new payment initiative under the Affordable Care Act. In a Federal Register notice published May 17 (78 Fed. Reg. 29, 139), CMS said organizations interested in participating in Model 1 of the Bundled Payments for Care Improvement Initiative must submit an intake form for CMS screening by July 31. The Bundled Payments for Care Improvement initiative will test how bundling Medicare payments for episodes of care can result in more coordinated care for beneficiaries and lower costs. The initiative is based around four broadly defined models of care, three of which will involve a retrospective bundled payment arrangement, with a target price (target payment amount) for a defined episode of care. Providers have flexibility to determine which episodes of care and which services will be bundled together. The initiative is administered under the Center for Medicare and Medicaid Innovation. Its goal is to align payments for services delivered across an episode of care, such as heart bypass or hip replacement, rather than paying for services separately. Bundled payments will give doctors and hospitals new incentives to coordinate care, improve care quality, and save money for Medicare, the agency has said. On Jan. 31, CMS announced the selection of 32 awardees in Model 1, which began testing bundled payments for acute-care hospital stays in April. CMS has been reviewing applications for the first model since the October 2011 submission deadline. Under Model 1, the episode of care is defined as the inpatient stay in the acute-care hospital. Medicare will pay the hospital a discounted amount based on the payment rates established under the Part A diagnosis-related groups. Medicare will continue to pay physicians separately for their services under the Part B fee schedule. Under certain circumstances, hospitals and physicians will be permitted to share gains arising from the providers’ care redesign efforts. Acute-care hospitals paid under the inpatient prospective payment system and organizations that wish to convene acute-care hospitals in a facilitator convener role are eligible to be considered for participation in Model 1, CMS said. Additional information about Model 1 is available at http://innovation.cms.gov/initiatives/BPCI-Model-1/index.html.