New Medicare Payment Program Announced Today

“This Bundled Payment initiative responds to the overwhelming calls from the hospital and physician communities for a flexible approach to patient care improvement,” said CMS Administrator Donald Berwick, M.D.  “All around the country, many of the leading health care institutions have already implemented these kinds of projects and seen positive results.”

The Bundled Payments initiative is based on research and previous demonstration projects that suggest this approach has tremendous potential. For example, a Medicare heart bypass surgery bundled payment demonstration saved the program $42.3 million, or roughly 10 percent of expected costs, and saved patients $7.9 million in coinsurance while improving care and lowering hospital mortality.

“From a patient perspective, bundled payments make sense.  You want your doctors to collaborate more closely with your physical therapist, your pharmacist and your family caregivers.  But that sort of common sense practice is hard to achieve without a payment system that supports coordination over fragmentation and fosters the kinds of relationships we expect our health care providers to have,” said Dr. Berwick.