Medicare tests bundled payment structure in hopes of saving money

Ultimately, Medicare officials hope that bundling payments to hospitals, doctors and even post-hospital caregivers will lead to increases in cost-effective care.

NPR: Medicare Trying Bundled Payments To Save Money, Improve Care
Medicare officials have unveiled the latest initiative to spring from last year's overhaul, and it's one some health economists have been lusting after for years: Bundling payments so that hospitals, doctors, and even post-hospital caregivers all have the same financial incentive to both work together and provide cost-effective care (Rovner, 8/23).

The Hill: Medicare Tests Payment System It Hopes Will Cut Costs
Hospitals are interested in the new payment structure that Medicare announced Tuesday, but say they still need to look more closely at the program's financial incentives. The federal Medicare agency on Tuesday announced a new program that will "bundle" Medicare payments to various doctors and other health care providers. The idea is to refocus payments so providers are paid for each "episode of care" -; for example, the whole battery of tests and treatments performed on one patient who is admitted to a hospital. Currently, every doctor bills Medicare separately. Federal officials hope more integrated payments will lead to more integrated care (Baker, 8/23).

Kaiser Health News: Capsules: Medicare Is Taking A Page From Priceline
The Obama administration is offering a new pricing strategy for doctors and hospitals looking to improve care and lower costs of treating Medicare beneficiaries. It could be called 'Name Your Own Price' -; except that's already taken by a certain online travel website that has a certain Star Trek actor as its pitchman. But the principle is the same" (Galewitz, 8/23).

Modern Healthcare: CMS Asks Providers To Test Bundled Payments
The CMS expects "hundreds" of providers to "help test and develop" four versions of bundled payments unveiled Tuesday. The bundled payments initiative, authorized by the Patient Protection and Affordable Care Act, aims to encourage clinicians and hospitals to coordinate care, improve the quality of care and save money for Medicare, according to descriptions posted on the CMS website. Many providers are expected to apply to participate in the voluntary initiative, despite the risk of losing Medicare funding if spending goals are not met, because they also may qualify for additional funding, according to CMS officials (Daly, 8/23).