HHS Introduces the Bundled Payments Initiative to Help Providers Coordinate Patient Care

The U.S. Department of Health and Human Services (HHS) recently initiated the Bundled Payments for Care Improvement initiative (Bundled Payments initiative) in an effort to promote better patient health, better care and lower costs. Rather than paying for services separately, the Bundled Payment initiative will bundle payments for services delivered throughout an entire episode of care. Currently, health care providers bill Medicare separately for the services that a beneficiary receives. However, this new initiative seeks to bundle all of the services that a patient receives during a single hospital stay or during recovery from that stay, giving providers greater incentive to better coordinate care with other providers who treat that patient. The Centers for Medicare and Medicaid Services (CMS) believe that this enhanced coordination will reduce unnecessary duplication of services, reduce medical errors, improve patient health, and lower costs.

The new Center for Medicare and Medicaid Innovation recently released its Request for Applications which outlines four approaches to bundled payments. Providers will be afforded flexibility in determining which services will be bundled together, allowing providers of different sizes to decide which bundle payment schemes work best for them. This flexibility is expected to quicken providers’ desire to participate in the Bundled Payments initiative.

According to HHS, the initiative is based on research and successful demonstration projects, such as a Medicare heart bypass surgery demonstration that saved the program $42.3 million and saved patients $7.9 million in coinsurance. The Bundled Payments initiative is viewed as being a step forward in creating the kind of relationship that patients expect their providers to have with each other in an effort to promote better care and payment efficiency.

For more information on participating in the Bundled Payments initiative or if you have any other health law questions, please contact a Wachler & Associates attorney at 248-544-0888.

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