Bundling payments to hospitals and physicians for inpatient care could reduce hospital costs and unnecessary physician visits, a researcher told the Medicare Payment Advisory Commission. According to a work plan released at a MedPAC meeting, a bundled-payment system could resemble the current diagnosis-related group system and be voluntary or mandatory, although a voluntary system would have to include a penalty for nonbundled providers, MedPAC analyst Anne Mutti said. Hospitals and physicians could form organizations to receive and allocate bundled payments. The concern is that tension would arise among the hospitals and physicians over how to divide the payments, Mutti said. MedPAC commissioners said such a plan would be difficult to implement, given the complexities of the inpatient payment system. However, according to Mutti, hospitals and physicians were able to align financial incentives and reduce Medicare spending on intensive care, nursing, consulting physician visits and other areas under a bundled-payment demonstration project by the CMS during the late 1990s. MedPAC is expected to include an exploration of bundled-payment systems in its June report to Congress. -- by Jennifer Lubell
MedPAC explores bundled payments
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