CMS has selected the sites for the Acute Care Episode (ACE) demonstration. The new hospital-based demo will test the use of a bundled payment for both hospital and physician services for a select set of inpatient episodes of care. A bundled payment is a single payment for both Part A and Part B Medicare services furnished during an inpatient stay.
Currently, CMS pays the hospital a single prospectively-determined amount under the Inpatient Prospective Payment System for all the care provided to the patient during an inpatient stay. The physicians who care for the patient during the stay are paid separately under the Medicare Physician Fee Schedule for each service they perform.
The thinking is that use of bundled payments will better align the incentives for both hospitals and physicians which should lead to better quality and greater efficiency in delivered care. The demonstration will also test the effect that transparent price and quality information has on beneficiary choices.
The demonstration was open to applicants from Texas, Oklahoma, New Mexico, and Colorado. Each site or “Value –Based Care Center’, will be actively marketed to both beneficiaries and referring physicians. The sites selected are Baptist Health System in San Antonio, Oklahoma Heart Hospital LLC in Oklahoma City, Exempla Saint Joseph Hospital in Denver, Hillcrest Medical Center in Tulsa, and Lovelace Health System in Albuquerque.
There are 28 cardiac and 9 orthopedic inpatient surgical services and procedures included in the demonstration. Lovelace Health System will be a center for orthopedic procedures, Oklahoma Heart Hospital and Exempla Saint Joseph Hospital for cardiac procedures, and Baptist Health System and Hillcrest Medical Center for both orthopedic and cardiac procedures.