The CMS on Thursday announced that more than 450 healthcare organizations will participate in the Bundled Payments for Care Improvement initiative, a payment model program created in the healthcare reform law to test whether bundling payments for services in a single episode of care can improve quality and lower costs.
Those selected organizations represent a wide range of healthcare providers—including not-for-profit and for-profit hospitals, academic medical centers, physician-owned facilities and post-acute providers—that were chosen by the CMS either as awardees for Model 1 starting in April, or as participants for the first phase of models 2, 3 and 4 that begins with Thursday's announcement.
Thirty-two awardees were announced for Model 1, where awardees agree to provide a standard discount to Medicare from the typical Part A hospital inpatient payments, and hospitals and providers are able to share any gains that come from their care-redesign strategies. In the weeks ahead, the CMS plans to announce a second opportunity for providers to participate in Model 1 starting in early 2014. Models 2 and 3 follow a retrospective bundled-payment arrangement where expenditures are settled against a target price for an episode of care, while Model 4 involves a prospective bundled-payment arrangement in which a provider receives a lump sum payment for the entire episode of care. In each of these three models, participants can choose up to 48 clinical episodes of care to test.