Bundled payments hits some goals for reducing cost and improving quality

Bundled payment initiatives designed to improve quality of care while reducing costs are paying off, according to a new study of three specific models being tested by providers.

The second annual evaluation report for Models 2-4 of the Centers for Medicare and Medicaid Services’ (CMS) Bundled Payments for Care Improvement initiative shows that from October 2013 through September 2014

  • 11 of 15 clinical episode groups analyzed demonstrated potential savings to Medicare
  • Orthopedic surgery under Model 2 hospitals showed savings of $864 per episode and improved quality (as indicated by beneficiary surveys)
  • While cardiovascular surgery episodes under Model 2 hospitals demonstrated no savings, quality of care was maintained

In a blog post published on Monday, Patrick Conway, MD, acting principal deputy administrator and chief medical officer for the Centers for Medicare and Medicaid Services (CMS), said, “Bundling payments for services that patients receive across a single episode of care – such as a heart bypass surgery or hip replacement – encourages better care coordination among hospitals, doctors, and other health care providers.”

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More than 1,400 providers currently are participating in bundles through the CMS Bundled Payments for Care Improvement initiative.

“Doctors, patient advocates, and health care experts across the country support these models because they have seen firsthand their potential for delivering better quality and more cost-effective care,” Conway writes. “Early results are encouraging: Orthopedic surgery bundles, in particular, have shown promising results on cost and quality in the first two years of the initiative.”

CMS proposed new bundled payment models in July that focus on heart attacks, heart bypass surgery, and hip fracture surgery. These models would reward hospitals and other providers that collaborate to avoid complications, prevent hospital readmissions, and speed recovery. The proposal came after implementation of a bundled payment model for joint replacements drew praise from providers.



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