Both Bills: Would require the HHS Secretary to conduct programs to test alternative structures and payment methodologies for bundled services. The bundles could include hospital, post-acute care, and physicians’ services. Provider participation would be voluntary. Additional funding would also be provided to CMS to develop innovative provider reimbursement methodologies.
Senate
Sections: 2704, 2705, 2706, 2707, 3021, 3022, and 3023 Savings: U.S.—$4.9 billion over ten years
Medicare Payment Bundling Pilot:
Participation would be voluntary.
Would direct the HHS Secretary to implement a national pilot program for bundling payments in 2013.
CMS would select eight conditions to be included in the pilot program. The bundled service would include care delivered three days prior to hospital admission, and would extend through 30 days following discharge; and would cover:
• acute care inpatient services including readmissions;
• outpatient hospital services including emergency room;
• physician care, including services in and out of the hospital; and
• post-acute care, including home health services, skilled nursing facility, inpatient rehabilitation, and long-term care hospital services.
An entity comprised of providers including a hospital, a physician group, a skilled nursing facility, and a home health agency, could submit an application to join the pilot program. The Secretary is
House
Sections: 1152, 1301, 1730A, and 1907 Savings: U.S.—$2.7 billion over ten years
Medicare Payment Bundling Pilot:
Participation would be voluntary.
Would require the Secretary to expand, by January 1, 2011, the current Acute Care Episode (ACE) bundled payment demonstration project to include post-acute care services and additional sites, geographic areas, and conditions. The current demonstration is testing bundled payments for a limited number of procedures and includes only hospital and physician care.
The Secretary could choose to apply the ACE bundled payments to:
• hospitals and physicians;
• hospitals and post-acute care providers;
• hospitals, physicians, and post acute care providers; or
• combinations of post-acute providers.
If it is determined that the ACE demonstration has improved quality and reduced costs, the Secretary would have the authority to implement the mechanisms and reforms tested under the pilot program, on a voluntary
33 required to consult with representatives of small rural hospitals and Critical Access Hospitals regarding their participation in the pilot program.
The Secretary would develop the bundled payment rates and could test payments based on bids submitted by the entities. Annual payments under the pilot to a single entity could not exceed what would otherwise be paid for the same services under the current Medicare program(s).
The pilot program would last five years, and could be extended for providers participating at the end of the five-year period if the Secretary determines the extension would result in improving (or not reducing) the quality of patient care and reducing spending. In 2016, CMS would report on the results of the pilot program and make recommendations to Congress for its expansion.
Secretary Plan for Bundling:
No provision.
Accountable Care Organizations (ACOs):
Participation would be voluntary.
Would establish a program, beginning in 2012, to allow groups of providers to be recognized as ACOs and share in the cost savings they achieve for the Medicare program.
basis, to as large a geographic scale as practical and economical.
Secretary Plan for Bundling:
Would require the Secretary to develop a plan for bundling payments for post-acute services (defined as skilled nursing facilities, inpatient rehabilitation facilities, long-term care hospitals, hospital-based outpatient rehabilitation facilities, and home health agencies) no later than three years after the date of enactment. The plan must consider how and whether to include acute care hospitals and physicians in the bundle, the scope of the included services, and the payment methodology. It must also determine the quality measures that would be appropriate for reporting by hospitals and post-acute providers.
ACOs:
Participation would be voluntary.
Would establish a pilot program, beginning in 2012, that would allow physician practices to qualify as ACOs and share in the cost savings
34 Hospitals could take the lead in formation of an ACO and ACOs could include:
• group practice arrangements;
• networks of individual physician practices;
• partnerships or joint-venture arrangements between hospitals and practitioners; and
• hospitals employing practitioners.
To qualify, the organization must act as the primary care provider for at least 5,000 Medicare fee-for-service beneficiaries. ACO providers would agree to participate for at least three years.
Hospitals and other providers of the ACO could share in the Medicare cost savings they achieve if the ACO meets quality performance standards established by the Secretary and average per capita Medicare expenditures are below a benchmark based on the claim history and characteristics of the patients assigned to the ACO.
CMS Center for Medicare and Medicaid Innovation (CMI):
Would establish by 2011, the Center for Medicare and Medicaid Innovation (CMI) to test innovative payment and service delivery models to improve the coordination, quality, and efficiency of health care services provided to Medicare and Medicaid beneficiaries. Gives preference to models for which there is evidence that the model addresses a defined population for which there are deficits in care leading to poor clinical outcomes or potentially avoidable expenditures.
The “Secretary may, through rulemaking, expand (including implementation on a nationwide basis) the duration and the scope of a model that is being tested or a demonstration project to the extent determined appropriate by the Secretary, if the Secretary determines that such expansion is expected to reduce spending under the Medicare
Hospitals cannot take the lead in forming an ACO. Hospitals and other providers must be affiliated with the physician group to participate in the ACO.
The ACO could share in the Medicare cost savings if it meets quality performance standards and if Medicare expenditures for beneficiaries in the ACO are less than a target spending level or a target rate of growth. In addition, the Secretary is given authority to develop other ACO payment models, including partial capitation.
The pilot program could cover a multi-year period of between three and five years. The Secretary may extend the duration of the agreement for successful ACOs and could issue regulations to permanently implement one or more ACO models if such models would result in estimated Medicare expenditures below estimated Medicare spending in the absence of such expansion.
CMS CMI:
Generally the same as the Senate, but would set funding levels at $350 million for FFY 2010, $440 million for FFY 2011, $550 million for FFY 2012, and, for each subsequent year, the prior year amount adjusted for overall Medicare expenditure growth.
35 and/or Medicaid program without reducing the quality of care; or improve the quality of care and reduce spending; and the Chief Actuary of CMS certifies that such expansion would reduce the Medicare and/or Medicaid program.”
It would require the Secretary, every other year beginning in 2012, to report to Congress on the model tested under the CMI and make recommendations for legislative action to facilitate the development and expansion of successful payment models.
Funding would be set at $5 million in FFY 2010, $10 billion for the period FFY 2011 through 2019 and an additional $10 billion for each subsequent ten-year period.
Medicaid Payment Demonstrations:
The Secretary would be authorized to conduct the following Medicaid demonstration projects:
• Medicaid bundled payment demonstrations to evaluate integrated care around a hospitalization, in up to eight states;
• Medicaid global payment demonstrations for safety net hospitals in up to five states;
• Pediatric Accountable Care Organization demonstrations; and
• Medicaid emergency psychiatric demonstration projects.
Medicaid Payment Demonstrations:
The Secretary would be authorized to conduct the following Medicaid demonstration projects:
• Medical home pilot project; and
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