Wednesday, August 24, 2011

Innovation Center Releases RFA

The Center for Medicare and Medicaid Innovation (Innovation Center) created by the Affordable Care Act launched the “Bundled Payments Initiative” to find new and better ways to provide and pay for healthcare for a growing population of Medicare and Medicaid beneficiaries.

Today, hospitals, physicians, and other clinicians who provide care for Medicare beneficiaries, are paid separately for their services. This new initiative will bundle care for a package of services patients receive to treat specific medical conditions during a single hospital stay and/or recovery from that stay.

By bundling payments across providers for multiple services, providers will have a greater incentive to coordinate and ensure continuity of care across settings. Better coordinated care can reduce unnecessary duplication of services, reduce preventable medical errors, help patient heal without harm and lower costs.

Released today, the Innovation Center’s “Request for Applications” (RFA) outlines four broad approaches to bundled payments. Providers will have flexibility to determine which episodes of care and which services will be bundled together.

The Bundled Payments Initiative is based on research and previous demonstration projects that suggests that this approach has 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 co-insurance while improving care and lowering hospital mortality.

Go to for more details on the Request for Applications.

Organizations interested in applying to the Bundled Payments for Care Improvement Initiative must submit a Letter of Intent by September 22, 2011 for Model 1 and November 4, 2011 for Models, 2, 3, and 4.