HHS reveals bundled payment initiative for Medicare providers

Doctors, hospitals and other healthcare providers, including post-acute care providers, can look forward to a new initiative aimed at bundling payments for services across an episode of care, the Department of Health and Human Services announced Tuesday.

The Bundled Payments for Care Improvement initiative will incentivize Medicare providers to coordinate care, with the expectation that care quality will improve and Medicare will save money, HHS said.

“Patients don’t get care from just one person—it takes a team, and this initiative will help ensure the team is working together,” HHS Secretary Kathleen Sebelius said in a statement.

Billed as a Centers for Medicare & Medicaid Services initiative, it will bundle care for the package of services patients receive to treat a specific medical condition during a single hospital stay and/or recovery from that stay. HHS said that bundling payments across providers for multiple services will provide a greater incentive to coordinate and ensure continuity of care across settings.

The Bundled Payments initiative is being launched by the Center for Medicare and Medicaid Innovation, which was created by the Affordable Care Act.

The Innovation Center’s request for applications outlines four potential models that providers can choose from to define an episode of care. Providers will then have flexibility to determine which episodes of care and which services will be bundled together, HHS said.

Models 2 and 3 specifically concern post-acute providers.

In Model 2, an episode of care is defined as: “Hospital, physician, post-acute provider, and other Medicare-covered services provided during the inpatient stay as well as during recovery after discharge to the home or another care setting.”

In Model 3, an episode is defined as: “Hospital, physician, post-acute provider, and other Medicare-covered services beginning with the initiation of post-acute care services after discharge from an acute inpatient stay.”

Organizations interested in applying to the Bundled Payments initiative must submit a letter of intent no later than November 4 for Models 2 and 3. A fact sheet describing the four models is available here.