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An inside-the-beltway look at the legislative and regulatory process.
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By Jessica Zigmond and Rich Daly

Slowly delivering the bundle

By Jessica Zigmond
2:15 pm, May. 24

The CMS offered guidance to healthcare providers interested in models 2, 3 and 4 of the Bundled Payments for Care Improvement Initiative in a document the agency posted to its website Wednesday (PDF).

Last August, the CMS laid out four models for its Medicare bundled payments initiative, including model No. 1, which relates solely to inpatient stays and allows hospitals and physicians to share gains resulting from better coordinated care. Program applications were due last fall, and the CMS Innovation Center has yet to announce the awardees. “We are completing our review of model number 1, which is a simple gain-sharing model, and will be coming forth with that information relatively soon,” Dr. Richard Gilfillan, the CMS Innovation Center director, told Modern Healthcare this week during a Center for American Progress discussion on delivery innovations.

“Relatively soon,” however, is anyone's guess. When the CMS announced the four models last summer, the agency set a March 15 application deadline for models 2, 3 and 4—which has been pushed back until June 28. Deirdre Baggot, vice president for the Camden Group, a healthcare business advisory firm, said that change was the third delay.

“It's very different from the (acute care episode) demo, where we had many long-term Medicare employees,” said Baggot, former administrator for the ACE demonstration project at St. Joseph's Hospital in Denver. Developed from the Medicare Prescription Drug Improvement and Modernization Act of 2003, the ACE demonstration project tested the bundling of Medicare parts A and B payments for episodes of care. “(The innovation center) is a whole new team and I know they weren't anticipating the level of interest—and it's wonderful that so many hospitals are stepping up to be part of the solutions.”

Baggot said the innovation center has been thorough in its application review process for model 1, conducting an “expert panel review” for applicants. According to the CMS, the agency received 74 applications representing hospitals and conducted the panel review for each applicant. Typically lasting two hours by phone, these reviews were not conducted in the ACE demo, Baggot noted.

That's why Baggot is advising her clients a) not to wait until the last minute to apply, and b) to ensure that their model of care redesign demonstrates alignment to the CMS' triple aim of better health, better care and lower costs.

Although Gilfillan and Baggot said there has been broad interest in the bundled payment initiative, others think the ACE program was sufficient to show that this reimbursement method works.

“Medicare has been running this ACE demo, the acute-care episode demonstration with unfortunately only 11 hospitals, but it covers high-margin cardiac procedures (coronary bypass, stents, pacemakers), as well as orthopedic procedures,” said Dr. Ezekiel Emmanuel, a senior fellow at the Center for American Progress. “You've got a lot of positive results in it, where you've got a lot of cost-savings and quality the same or quality better,” he added. “And it seems to me—we've got the bundle….We don't have to experiment anymore.”

Follow Jessica Zigmond on Twitter @MHJZigmond.

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