The Centers for Medicare & Medicaid Services (CMS) on Aug. 23 introduced the Bundled Payments for Care Improvement Initiative, developed as part of the payment bundling provision of the Affordable Care Act (ACA). CMS has invited providers to apply to help test and develop four different models of bundling payments, which allow for great flexibility in selecting conditions, developing the care delivery structure, and determining how payments will be allocated among participating providers.
SHM learned last week that the Center for Medicare & Medicaid Innovation (CMMI) will accept nonbinding letters of intent for Model 1 of the program through Oct. 6. CMMI extended the deadline, originally set for Sept. 22, to give institutions and providers more time. Once institutions submit their letters of intent, the deadline to submit a formal application is Nov. 18.
The deadline for letters of intent for Models 2-4 remains Nov. 4, according to CMMI. The application deadline for those three models is March 15, 2012.
Felix Aguirre, MD, SFHM, vice president of medical affairs for North Hollywood, Calif.-based IPC: The Hospitalist Co., says HM group leaders should continue to monitor the process, but how involved they get depends on their individual situations and their relationship with an institution. “If you’re a private group, there’s a lot of weight on you to try to convince an acute-care facility to go down this risk-bearing road,” he says.
Dr. Aguirre says CMMI’s first three models are all “retrospective,” meaning hospitals and/or providers will be paid fees for service, and once episodic care is completed, as defined by each of the models, reconciliation will be made—and there is the real risk of having to pay back funds to CMS. In Model 4, the lone “prospective” setup, there is a single bundled payment up front “and you live and die by that money,” Dr. Aguirre says. “If it costs you a lot more to provide the service, it’s a true risk arrangement where you take a loss. Of course, if you have reduced costs by providing services a little more efficiently and you’ve saved a few dollars, you get to remain with those dollars.”
Dr. Aguirre also notes that of the four current models, Model 3 is the only one available directly to individual providers or HM groups as a risk-bearing entity, and only for post-acute-care services.
CMMI is expected to introduce at least a few more models in the coming months.
For more about CMS' bundling initiatives, visit our website.