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HHS Announces Bundled Payment Initiative

Posted in Healthcare Services Investing

 On August 23rd, HHS anounced a new initiative to help improve care for patients while they are in the hospital and after they are discharged. Doctors, hospitals, and other health care providers can now apply to participate in a new program known as the Bundled Payments for Care Improvement initiative (Bundled Payments  Initiative).  

This new effort was authorized by the Affordable Care Act  (aka PPACA, aka the Healthcare Reform Law) and has been launched by the new Center for Medicare and Medicaid Innovation (Innovation Center). As part of the HHS announcement, HHS released a “request for applications” (RFA). The RFA outlines four models, three of which involve a retrospective bundled payment and one which would pay providers prospectively:

“Applicants for these models would also decide whether to define the episode of care as the acute care hospital stay only (Model 1), the acute care hospital stay plus post-acute care associated with the stay (Model 2), or just the post-acute care, beginning with the initiation of post-acute care services after discharge from an acute inpatient stay (Model 3). Under the fourth model, CMS would make a single, prospective bundled payment that would encompass all services furnished during an inpatient stay by the hospital, physicians and other practitioners.”

Letters of intent for model 1 are due Sept. 22, and final applications must be received by Oct. 21. Letters of intent for models 2-4 must be received by Nov. 4 and final applications are due by March 15, 2012.