Patients experience care based on episodes of illness. Why can’t providers deliver and be paid on episodes too?
stays only; hospitals offer a discount to Medicare fee-for-service rates, share in program savings and can make gainsharing arrangements with physicians. In two of the models—one covering post-acute periods only and one covering both inpatient stays and postacute periods—the CMS will perform a retrospective reconciliation of actual costs with a predetermined target price. In the fourth model, providers will receive a prospective, single bundled payment for all Medicare Part A and Part B services and 30-day readmissions.
Because examples from around the country have demonstrated that gainsharing can increase coordination and foster best practices, all four models allow participating hospitals to enter into arrangements with physician that would give them incentives to work collaboratively with the hospital to reduce internal hospital costs through quality improvement and efficiency initiatives.
For example, in the inpatient-only model, the episode of care would be defined as the inpatient stay in the general acute-care hospital. Medicare will pay the hospital a discounted amount based on the payment rates established under the inpatient prospective payment system, and will pay physicians separately for their services under the Medicare physician fee schedule. However, hospitals will share in any savings to Medicare resulting from their participation, and hospitals Valinda Rutledge, left, is director of the patientcare models group at the Center for Medicare and Medicaid Innovation Center and former president and CEO of CaroMont Health, Gastonia, N.C. Dr. Nancy Nielsen is an internist and senior adviser to the Center for Medicare and Medicaid Innovation Center and a past president of the American Medical Association.