Bundled payment initiative to lower healthcare costs, help coordinate care


A new program to aid and improve patient care while patients are in the hospital and after they are discharged has been announced by the U.S. department of Health and Human Services (HHS).

These initiatives will also motivate doctors, nurses and specialist to perform coordinated care and hence reduce cost. Till date, hospitals, physicians, and other clinicians who provide care for beneficiaries’ bill are paid separately for their services by Medicare. However, with this initiative they can get bundled payments to treat a patient for specific medical condition during a single hospital stay, also termed as episode of care.

Doctors, hospitals and other healthcare providers can apply to participate in this program. It offers four models:

  • Model 1:

    In this model, 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:

    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; the bundle would include physicians’ services, care by a post-acute provider, related re-admissions, and other services proposed in the episode definition such as clinical laboratory services

  • 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.

  • 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.

The final date for registration for model 1 is 21st October 2011; and for rest of the models is 15th March, 2012.

Medical Billing,Medical billers and Coders

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