HCFA is set to announce that it will expand its coronary artery bypass graft "bundling" project beyond the current seven sites and will add other demonstration projects.
Along with the expanded CABG program, HCFA will begin soliciting hospital participation for at least two new pilot projects later this month, one for additional cardiac procedures and one for hip and knee replacements.
Under bundling plans, hospital and physician compensation for a given treatment are combined into one payment. The aim is to streamline the payment system and reduce costs.
Meanwhile, preliminary data from a recent study show that hospitals participating in the CABG program did not significantly increase their volume but did become more efficient. It's not known how much HCFA will expand the CABG pilot project, which is slated to end this year.
The new demonstration projects will seek hospitals that specialize in cardiovascular and orthopedic procedures, HCFA Administrator Bruce Vladeck said. It also will seek some hospitals to participate in both projects.
According to one source, HCFA will choose 15 to 30 hospitals for each of the two new projects.
HCFA and the General Accounting Office have said the CABG project has been a success. According to HCFA, the current project has saved Medicare more than $35 million.
For the most part, the hospitals involved in the CABG project have also given it favorable reviews. The participating hospitals didn't increase the number of procedures performed, but they did make more money on each case, according to preliminary data from a recent study completed by the national consulting firm of Ernst & Young.
"They didn't increase their market share, but the hospitals did become more efficient," said Fred Abbey, a partner with Ernst & Young.
The Clinton administration sought to steer more Medicare patients to participating hospitals by offering beneficiaries a rebate equal to 10% of the federal government's savings if a patient chose a participating hospital. It is unclear if that provision will be included in the new demonstration projects.
HCFA said it hopes to have the new projects in place by mid-summer.