On August 23, 2011, the Centers for Medicare & Medicaid Services (CMS) announced it was inviting physicians, hospitals and post-acute care providers to participate in the Bundled Payments for Care Improvement Initiative. Since this announcement, there has been a growing interest in this pilot, designed to study multiple models of reimbursement based on episodes of care. As some healthcare systems have shied away from the CMS Shared Savings Program, bundled payments offer a more flexible alternative in which to participate as entities can design unique models of care to capitalize on organizational strengths. While focusing on improving quality and outcome performance, this initiative bridges current volume-based models of care with future value-based models of care. Additionally, it provides an unprecedented alignment opportunity for providers to obtain financial incentives through gainsharing opportunities, allowing these providers to administer care at a top national standard and see key indicators at all levels.
Under this initiative, participants are able to apply for four different models of bundled payments, three of which are retrospective payment models (Models 1-3) and one that is prospective in design (Model 4). Model 1 is designed for “episode of care” payments across an entire organization. Models 2 through 4 allow for the design and implementation of “episode of care” bundles as individually defined by the applying hospital or health system. Organizations interested in participating in models 2, 3 or 4 must file a Letter of Intent, Research Request Packet and a Data Use Agreement with CMS no later than November 4, 2011. The deadline for the Letter of Intent for Model 1 has passed.
CMS will provide a limited data set of 2008 and 2009 relevant claims information to applicants submitting letters of intent for Models 2, 3 and 4. This data will assist organizations in defining the “episodes of care” they wish to explore through this pilot. The defined “episodes of care” must include the following:
* Discounts provided to CMS: Minimum requirements are proposed by the applicant and differ for the Models with minimum discounts ranging from 0% to 3% for specified time frames. Participants are allowed to share the savings produced by the initiative, but must absorb all costs where participants costs per case exceed the discounted payment per case.
* Participants: These may include physician group practices, acute care hospitals, health systems, physician-hospital organizations, home health agencies and other post-acute care providers.
* Proposed Payment Models: Available models range from a fee-for-service payment in Models 2 and 3, and a prospectively established bundled payment in Model 4. All models contain the ability to share savings with providers if quality measures are attained.
* Quality Measures: For Models 2, 3 and 4, CMS will use the universe of proposed metrics to ultimately establish a standardized set of measures aligned with measures in other CMS programs.
Note that all forms (Letters of Intent, Applications, Data Use Agreements and Research Request Packet) must be submitted to CMS in a searchable PDF format. In addition, all forms must be encrypted and meet the Advanced Encryption Standard 256 guidelines.
The deadline to file the final application for Models 2, 3 and 4 is March 15, 2012.
If you would like additional information on the Bundled Payments for Care Improvement Initiative including assistance with filing the Letter of Intent, completion of application or development of “episode of care” bundles, please contact the experts listed below at PYA, (800) 270-9629.
