Hospitals Pay Physicians in Medicare Bundled Payment Model

August 24, 2011 — Physicians would get reimbursed by an admitting hospital instead of byMedicare for inpatient care they deliver to seniors, under 1 of 4 models of pilot projects for bundled payments that the Centers for Medicare and Medicaid Services (CMS) unveiled yesterday.

In this particular model, hospitals would receive a predetermined or prospective payment for all the services furnished during a particular kind of inpatient episode (eg, a hip replacement), and would pay physicians and other providers out of that fixed amount.

Healthcare reform legislation passed in 2010 calls for pilot projects to test the concept of bundled payments in Medicare. At this time, when a senior undergoes a course of treatment, the various providers involved are paid separately by Medicare, which, according to CMS officials, is a formula for uncoordinated, inefficient care. By letting providers divide a single payment, CMS hopes to motivate them to cooperate to improve quality and lower costs, as opposed to simply increasing the volume of services to earn more.

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