Health Information Management

Topic: CMS launches demonstration project to bundle physician and hospital services

HIM Connection, May 27, 2008

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Hospitals in Texas, Oklahoma, New Mexico, and Colorado may be able to bundle their payments with those of physicians (i.e., receive a single payment for both Part A and Part B Medicare services furnished during an inpatient stay) for a select set of episodes of care by participating in CMS’ Acute Care Episode demonstration project.
 
The project, which CMS announced May 16, includes 28 cardiac and 9 orthopedic inpatient surgical services. CMS selected these measures because profit margins and volume have historically been high; there is sufficient marketplace competition to ensure interested demonstration applicants; and the services are easy to specify and have quality metrics associated with them, according to the press release.
 
CMS stated that the project has several goals including the following:
  • Improve the quality of care delivered through Medicare fee-for-service
  • Use a global payment to better align the incentives for both types of providers
  • Test the effect that transparent price and quality information has on beneficiary choice and provider referrals for select inpatient care
“We are always looking for ways to improve the Medicare program, both in efficiency and in better care for patients, and this new demonstration promises to be a big step in that direction,” said Health and Human Services Secretary Mike Leavitt in the press release.  “It brings patients and health care providers together in an innovative cooperative effort to improve the quality of care for all.”
 
Currently, CMS generally pays the hospital a single amount under the Inpatient Prospective Payment System (IPPS), and physicians receive separate payment under the Medicare Physician Fee Schedule for each service they perform. The separate payments between two different systems can lead to conflicting incentives and may affect decisions regarding plans of care, according to CMS.
 
To view the press release, click here.
 
More information about this demonstration, click here.



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