CMS Invites Providers to Participate in Bundled Payment Initiative
The Centers for Medicare & Medicaid Services (CMS) announced August 23 that it is inviting physicians, hospitals and post-acute care providers to participate in a new initiative to help test and develop four different models of bundling payments. Under this initiative, CMS will link payments for care provided throughout an entire episode of care for a patient, including hospital and physician services in both acute inpatient and post-acute settings. Providers have the opportunity to apply to participate in four different models of bundled payments, three of which are retrospective payment models and one that is prospective in design.
In all three retrospective models, CMS and the participating provider will set a target payment amount for a defined episode of care. The definition of the episode of care varies from model to model and can be flexible in its design for individual applications within certain parameters outlined by CMS. Applicants will propose the target price based on a discount from historical costs of a similar episode of care. Participants will continue to be paid under a Fee-for-Service model but at a negotiated discount. Participating providers will be able to share in savings generated by providing the episode of a care at a cost less than the target price, provided that certain quality measures are achieved. Participants will have the choice of three different models, ranging from acute inpatient care only, acute inpatient care and post-acute care, and post-acute care that does not include an acute inpatient hospital stay.
Under the prospective payment model, CMS will make a single bundled payment to the hospital for the defined episode of acute inpatient care. All providers providing care throughout the defined episode would be paid by the hospital out of the bundled payment.
For all of the proposed models, participants will be at risk for repayment to CMS for healthcare expenditures over a threshold determined by CMS for both care that is delivered within the episode of care and care provided outside of the episode of care.
In all of the proposed models, gainsharing with providers is allowed, provided that participants can show that quality of care is not negatively impacted. Other important tenants of these models include the ability to show that patients continue to have freedom to choose their individual healthcare providers, including choosing providers outside of those included in the bundled payments.
Organizations that wish to participate in Model 1 (a retrospective payment model for acute inpatient care only) must submit a letter of intent to CMS by September 22, 2011, with an application deadline of October 21, 2011. Organizations wishing to participate in the remaining models must submit a letter of intent to CMS by November 4, 2011. The application deadline is March 15, 2012.
If you would like additional information on the Bundled Payment Initiative, please contact the expert listed below at PYA, (800) 270-9629.
