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CMS Bundled Payments For Care Improvement Initiative Introduction

On Tuesday the Centers for Medicare & Medicaid Services (CMS) released the parameters of its Bundled Payments for Care Improvement Initiative program. The program is part of a continuing CMS initiative to develop a partnership with providers to develop models for bundling Medicare payments. The Bundled Payments for Care Improvement Initiative (Bundled Payment Initiative) will be operated through the Center For Medicare and Medicaid Innovation (CMMI).

Policy Summary| August 2011

Summary
The Bundled Payment Initiative intends to link payments for multiple services which patients would typically receive during a specific episode of care. These bundled payments will compensate the entire care delivery team, providing incentives to deliver healthcare more efficiently while simultaneously improving quality. Through the Bundled Payment Initiative, providers will have flexibility to determine which episodes of care and specific services will be bundled together. CMS has outlined four separate bundling models, three of which are retrospective payment bundling, and one of which is prospective payment bundling. The four models are: Model 1: Used for inpatient stay in a general acute care hospital. Model 2: Used for inpatient stay and post-acute care, ending (at the option of applicant) a minimum of 30 or 90 days after discharge. Model 3: Begins at discharge from inpatient stay, ending no sooner than 30 days after discharge. Model 4: Single prospectively determined bundled payment to the hospital that encompasses all services furnished during the inpatient stay by physicians and other practitioners.

Application Process
Providers that are participating in an Accountable Care Organization are permitted to submit letters of intent (LOI) for the Bundled Payment Initiative. Applications are required to identify the clinical conditions they would like to bundle through MS-DRGs, define the time period for the episode of care, and identify the services included in the bundled payment, along with other various criteria. CMS will be providing historical Medicare claims data to potential applicants planning to apply Models 2-4. Applicants for Model 1 must submit a non-binding LOI by September 22, 2011, and a completed application by October 21, 2011. Applicants for Models 2-4 must submit a nonbinding LOI by November 4, 2011, with completed applications due by no later than March 15, 2012.

Additional Information
CMS Fact Sheet CMS FAQ CMS Request for Application Application Info & Materials