Episode of Care Payments - Health Cost Containment

Cost Containment Strategy and Logic

Summary of Health Cost Containment and Efficiency Strategies- Brief #3- Episode-of-Care Payments

Recent Updates & Publications

• Bundled Payment in Medicare: Promise, Peril, and Practice - A new report and meeting session by the National Health Policy Forum - April 2012. The Center for Medicare & Medicaid Innovation (CMMI) in the Centers for Medicare & Medicaid Services (CMS) is currently in the process of implementing the Bundled Payments for Care Improvement (BPCI) initiative. Under this initiative, CMMI has received (and continues to receive) applications from eligible participants for four broadly defined bundled payment models that will combine payments for multiple services (depending on the model) during an episode of care. Among the  goals of the BPCI are fostering quality improvement while decreasing the cost of an episode of care, giving providers flexibility to redesign care to meet the needs of their community, and removing barriers and provide opportunity for partnerships among providers and other stakeholders. [9 pp, PDF]
• The Arkansas Innovation - New York Times Op-Ed, Sept. 6, 2012 "Mention medical innovation, and you might think of the biotech corridor around Boston, or the profusion of companies developing wireless medical technologies in San Diego. But one of the most important hotbeds of new approaches to medicine is … you didn’t guess it: Arkansas.The state has a vision for changing the way Arkansans pay for health care. It is moving toward ending “fee-for-service” payments, in which each procedure a patient undergoes for a single medical condition is billed separately. Instead, the costs of all the hospitalizations, office visits, tests and treatments will be rolled into one “episode-based” or “bundled” payment. “In three to five years,” John M. Selig, the head of Arkansas’s Department of Human Services, told me, “we aspire to have 90 to 95 percent of all our medical expenditures off fee-for-service.” Read the full article.
• Dive into Bundled Payments or Wait? Bundled payments may be the reimbursement model of the future, but many healthcare CFOs are waiting on the sidelines. A bundled payment trial by 21st Century Oncology and Humana for radiation therapy could show the way.  Article in HealthLeaders, October 15, 2012 - online at:
• Physician engagement is a central feature in any bundled payment initiative. Read this blog post link: http://ow.ly/9mRzU June 8, 2012.
• In late August 2011, the Center for Medicare and Medicaid Innovation – informally known as The Innovation Center – announced the launch of the Bundled Payments for Care Improvement Initiative offers hope in the battle against out-of-control health care costs. Doctors, hospitals, and other health care providers can apply to participate in this new initiative, which will test four different models of paying for services delivered across an “episode of care.” 
• The following description was published by Health Policy Hub, a legal advocacy organization --"The new initiative seeks to change the status quo by paying providers a fee for all the services a patient receives over the course of an “episode” of care, for example, a hip replacement, rather than paying each provider separately for every service related to the episode (e.g. inpatient stay, lab tests, post-discharge services).
• Read the PROMETHEUS Payment newsletter- #6, June 21, 2010
• The PROMETHEUS Bundled Payment Experiment: Slow Start Shows Problems In Implementing New Payment Models- Health Affairs, 11/11.