Case Management

CMW News: CMS announces demonstration sites for bundled fee-for-service payments

Case Management Weekly, January 14, 2009

In an effort to better align the incentives for both hospitals and physicians, CMS has established a three-year demonstration called the Acute Care Episode (ACE). The ACE will test the use of combined payments for both hospital and physician services for acute care episodes within Medicare fee-for-service.

Under the current process, Medicare pays a hospital a single amount determined under the Inpatient Prospective Payment System for all the services it furnishes to the patient during an inpatient stay, and physicians are paid separately for the services they have provided to the patient while in the hospital. The demonstration, scheduled to begin early this year, will bundle both payments into one.

The sites chosen for the demonstration are:

  • Oklahoma Heart Hospital in Oklahoma City
  • Exempla Saint Joseph Hospital in Denver
  • Hillcrest Medical Center in Tulsa, OK
  • Lovelace Health System in Albuquerque, NM

The goals of ACE are to:

  • Improve quality for fee-for-service Medicare beneficiaries
  • Produce savings for providers, beneficiaries, and Medicare using market-based mechanisms
  • Improve price and quality transparency for improved decision making
  • Increase collaboration among providers

Source: Centers for Medicare & Medicaid Services

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