The U.S. Department of Health and Human Services (HHS) announced Tuesday a new program called the Medicare Bundled Payments for Care Improvement Initiative. Based on provisions in the Affordable Care Act, the initiative builds on earlier programs like the Acute Care Episode (ACE) and gainsharing demonstration programs. Instead of paying for services separately, HHS says the bundled initiative will align payments for services delivered across an episode of care, such as a heart bypass or hip replacement.

Current Medicare rules prohibit hospitals from sharing savings with physicians who help them lower costs by, for example, negotiating discounts on implantable devices. The bundling initiative waives these prohibitions so that hospitals, physicians and post-acute care providers can coordinate and share in savings from improving care and lower costs.

The NCMS believes that various payment models should be available to physicians on a voluntary basis.

If you know of physician organizations that plan to apply for one or more of the bundled payment models, please contact Melanie Phelps at [email protected] or 919-833-3836.

There are four different models in the bundling initiative. More information can be found by going to the following links, which include a news release, fact sheets and a Request for Applications.

http://www.hhs.gov/news/press/2011pres/08/20110823a.html

http://www.healthcare.gov/news/factsheets/bundling08232011a.html

http://www.innovations.cms.gov/documents/payment-care/Request_for_Applications.pdf

As explained in the documents, September 11, 2011 is the deadline for letters of intent for Model 1, and November 4, 2011 is the deadline for Models 2, 3 and 4.

Click here for additional resources on the NCMS Toward Accountable Care webpage.