CMS announces new bundled payment initiative for Medicare providers

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A new initiative under the Affordable Care Act will provide bundled payments to healthcare providers — including post-acute facilities — to improve the coordination of care of Medicare beneficiaries when they are discharged from the hospital.

The Bundled Payments initiative is being overseen by the Centers for Medicare & Medicaid Services' new Center for Medicare and Medicaid Innovation. The initiative “will align payments for services delivered across an episode of care, such as heart bypass or hip replacement, rather than paying for services separately,” according to CMS officials. The program incentivizes providers to improve the quality of care and save Medicare dollars, they added.

The Bundled Payment initiative is based on previous similar demonstration projects.

The Innovation Center has developed four models for the Bundled Payment program. According to the Innovation Center, providers must decide whether to define the episode of care as the acute care hospital stay only (Model 1), the acute care hospital stay plus post-acute care associated with the stay (Model 2), or just the post-acute care, beginning with the initiation of post-acute care services after discharge from an acute inpatient stay (Model 3). There is also a fourth model that encompasses all services. Providers need to issue a letter of intent by Sept. 22 for Model 1 and by Nov. 4 for Models 2-4.

Application information on these models are available here and here. Additional information on the program has also been posted in the Federal Register.

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