CHA News Article

CMS Announces Participants in Bundled Payments Initiative

The Centers for Medicare & Medicaid Services (CMS) has announced more than 500 participants, including 36 facilities in California, in the Bundled Payments for Care Improvement initiative. Through the initiative, CMS will test if bundling payments for an episode of care can improve quality and lower costs. The initiative is comprised of four broadly defined models of care, which link payments for multiple services that beneficiaries may receive during an episode of care.

Under model 1, an episode of care is defined as an acute care hospital stay, and Medicare pays the hospital a discounted amount compared to the usual Part A hospital inpatient payments. Models 2 and 3 include a retrospective bundled payment arrangement in which actual expenditures are reconciled against a target price for an episode of care. In model 2, the episode of care includes the inpatient stay in an acute care hospital and all related services during the episode, while an episode of care in model 3 begins at the initiation of post-acute care services with a participating skilled-nursing facility, inpatient rehabilitation facility, long-term care hospital or home health agency. Under Model 4, CMS makes a single, prospectively determined bundled payment to the hospital reimbursing it for all services furnished by the hospital, physicians, and other practitioners during the inpatient stay. For more information on the program, including details on the participating health care facilities and the episodes they will be testing, visit