Bundled Payments for Care Improvement

Federal Office: CMMI

The Bundled Payments for Care Improvement initiative seeks to improve patient care through payment innovation that fosters improved coordination and quality through a patient-centered approach. The CMS Innovation Center is seeking applications for four broadly defined models of care. Three models involve a retrospective bundled payment arrangement, and one model would pay providers prospectively. Through the Bundled Payments initiative, providers have great flexibility in selecting conditions to bundle, developing the health care delivery structure, and determining how payments will be allocated among participating providers.

Model 1: the episode of care would be defined as the inpatient stay in the general acute care hospital. Medicare will pay the hospital a discounted amount based on the payment rates established under the Inpatient Prospective Payment System (IPPS). Medicare will pay physicians separately for their services under the Medicare Physician Fee Schedule. Hospitals and physicians will be permitted to share gains arising from better coordination of care.

Model 2-3: the episode of care would include the inpatient stay and post-acute care and would end, at the applicant’s option, either a minimum of 30 or 90 days after discharge, while in Model 3, the episode of care would begin at discharge from the inpatient stay and would end no sooner than 30 days after discharge. In both Models 2 and 3, the bundle would include physicians’ services, care by a post-acute provider, related readmissions, and other services proposed in the episode definition such as clinical laboratory services; durable medical equipment, prosthetics, orthotics and supplies (DMEPOS); and Part B drugs.

Model 4: CMS would make a single, prospectively determined bundled payment to the hospital that would encompass all services furnished during the inpatient stay by the hospital, physicians and other practitioners. Physicians and other practitioners would submit “no-pay” claims to Medicare and would be paid by the hospital out of the bundled payment."


Funds:

Not yet known.

Awardees:

The deadline for Model 1 applications was Nov. 18, 2011. The deadline for Models 2-4 is May 16, 2012 at 5:00 PM EDT.

Next Steps:

An online submission process has been adopted to handle applications for Models 2, 3, and 4. Sample application questions for Models 2-4 are now available on the Center for Medicare & Medicaid Innovation website at http://www.innovations.cms.gov/initiatives/Bundled-Payments/index.html.

For more information, visit http://www.innovations.cms.gov/initiatives/bundled-payments/index.html.