- CMS announced that it will increase the number of providers that are candidates to test bundled payments by around 4,100 hospitals and medical groups. Currently, about 2,400 are experimenting with bundled payments for four dozen specific conditions, such as diabetes, joint replacements and pacemaker implants.
- If candidates enter into bundled payment agreements with Medicare, they must reduce costs by 2% to 3.5% in order to be rewarded. The program was launched in January of 2013. 243 providers have bundled payment contracts, active as of October and January.
- According to a statement from CMS, "Through the Bundled Payments for Care Improvement initiative, CMS is taking another step forward in identifying models that will provide better quality of care and improved health for Medicare beneficiaries, at lower costs for our nation's taxpayers."
"Bundling" payments means that CMS pays providers for multiple services connected to a single episode of care. Providers are rewarded when their spending for that episode falls below a certain target. Hospitals have four bundling options: Payment for some or all of the cost of care provided throughout a hospital stay, one to three months after the patients leave, or both.
The intent of the Bundled Payments initiative is to reduce the waste created by piecemealing costs under fee-for-service. Theoretically, the initiative reduces the incentive for providers to do more procedures whether or not the services are needed. Critics of the program say that by emphasizing cost-control, the incentive will be for providers to cut down necessary care and turn away high-cost patients.
The jury is still out of the efficacy of the program, but CMS' decision to double down in such a dramatic way bodes well for savings created under the new model.