New HHS initiative bundles payments for “single episode of care”

August 30, 2011

The U.S. Department of Health and Human Services (HHS) announced a new program called the Bundled Payments for Care Improvement initiative. As part of the Affordable Care Act’s ongoing efforts to improve health care and lower costs, this new initiative will bundle “payment for services that patients receive across a single episode of care, such as heart bypass surgery or a hip replacement.” The program will incentivize health care providers (hospitals, doctors, clinicians, etc.) to work together to reduce costs and provide better care while patients are in the hospital as well as after they are discharged.

“Patients don’t get care from just one person – it takes a team, and this initiative will help ensure the team is working together,” said HHS Secretary Kathleen Sebelius. “The Bundled Payments initiative will encourage doctors, nurses and specialists to coordinate care. It is a key part of our efforts to give patients better health, better care, and lower costs.”

At this time, the program is voluntary and participants can choose from four broad approaches. This gives them the flexibility to decide which services and episodes of care they wish to bundle together. Participants will also propose a target price for an “episode of care.” Total payments will be compared to the target price and the providers will share in the savings.

The initiative is based on a previous CMS demonstration project that bundled payments for heart bypass surgery which saved the participating providers $42.3 million, and saved patients $7.9 million in coinsurance. It also improved patient care and lowered mortality.

According to CMS Administrator Donald Berwick, M.D. “All around the country, many of the leading health care institutions have already implemented these kinds of projects and seen positive results.” That may be true, but, even if the hospitals and other providers are interested, will the financial incentives be enough to get them to participate? I guess we’ll just have to wait and see.

For more information visit the CMS Innovation Center or donwload their Fact Sheet.

Visit Extend Health — the nation’s largest private Medicare exchange.

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2 Responses to “New HHS initiative bundles payments for “single episode of care””

  1. […] £8.24 Mouse here for Related LinksNew HHS initiative bundles payments for “single episode of care” Posted in High Blood Pressure | Tags: 8 steps to a healthy heart the complete guide to heart […]

  2. […] in August of 2011 we wrote  about a new program from the U.S. Department of Health and Human Services (HHS) called […]

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