Case Management

Sneak peek: ACE demonstration improves care coordination and lowers costs

Case Management Weekly, February 10, 2010

The Medicare payment system is in need of a change.

Case managers typically complain about the lack of physician participation in measures that will help the hospital. For example, physicians have no financial incentive to reduce a patient’s LOS because CMS pays physicians for every day they see the patient.

CMS hopes to eliminate this lack of incentive with the Acute Care Episode (ACE) demonstration project. Instead of paying for hospital and physician services separately, the ACE demonstration program bundles payments for specific cardiac and orthopedic procedures into one lump sum. The ACE payment system operates much like the DRG system, in which CMS makes one payment to the hospital for the patient’s entire stay. This new system includes physician payments in the bundle. Distributing the physician’s share of the payment is the hospital’s responsibility.

The AMA expressed hesitation about this payment model in a report issued at the 2009 annual meeting. The report said the AMA will work to “ensure that bundled payments, if implemented, do not lead to hospital-controlled payments to physicians.”

Extending the DRG concept to physician services encourages physicians to work with hospitals to control costs and improve quality, according to the Medicare Payment Advisory Commission’s June 2008 Report to Congress: Reforming the Delivery System.

Check out the March 2010 issue of Case Management Monthly to learn more. You also can discover the benefits of becoming a Case Management Monthly subscriber.

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