Medicare's voluntary test of bundled payments added new contracts in July, but about two-thirds of the hospitals, medical groups, nursing homes and other providers that had initially enrolled instead dropped out.
The announcement follows federal officials' proposal last month to require bundled payments next year for hip and knee replacement surgeries for about 800 hospitals in 75 markets. The proposal was widely seen as a signal of Medicare's intention to push ahead with new payment models to meet ambitious targets for payment reform through 2018.
The initiative, known as the Bundled Payments for Care Improvement initiative and launched under the Affordable Care Act, initially attracted nearly 7,000 providers that agreed to formally review how they could enter bundled-payment contracts with Medicare. The CMS announced on Thursday that 2,100 providers finished that review and entered contracts under which Medicare will bundle the costs of treating various conditions—heart failure, joint replacement, stroke, heart attacks—into a single payment.
The initiative is testing four different bundles, which vary by the type of services that are included. The bundles can involve any of 48 conditions, such as cardiac bypass surgery, new hips or knees, pacemaker replacements.
The CMS said 360 organizations and another 1,755 hospitals, long-term and post-acute care companies and medical groups had entered into bundled-payment contracts as of July 1. That is a sharp increase from the roughly 240 providers that had entered contracts ahead of that date, based on published federal data.
“We are excited that thousands of providers in the Bundled Payments for Care Improvement initiative have joined us in changing the healthcare system to pay for quality over quantity—spending our dollars more wisely and improving care for Medicare beneficiaries,” said Dr. Patrick Conway, CMS acting principal deputy administrator and chief medical officer.
“By focusing on outcomes for an episode of care, rather than separate procedures in care delivery, we are incentivizing hospitals, doctors and other providers to work together to provide high quality, coordinated care for patients.”
The CMS announced its mandatory orthopedic bundles last month with limited results from the earliest participants in the bundled-payments initiative.
Federal officials have targeted bundled payments, accountable care and other new payment models for rapid expansion. By the end of next year, at least 30% of Medicare payments to providers for care that isn't managed will be under such contracts, the CMS announced in January. That will increase to 50% by 2018, the administration said.
Medicare has increased the number of ACOs each year since the program launched in 2012. The results from that program, too, have been mixed, and federal officials overhauled some of its rules to ensure doctors and hospitals continue participating.