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Demonstrating Value Through Bundled Payments

First few Article Sentences

Bundled payment is one of several CMS pilot projects for payment reform designed to achieve clinical and financial integration between physicians and hospitals, leading to enhanced quality and reduced costs. The process of care redesign associated with managing effectively within a global payment (Part A and Part B) can be an early stepping stone to developing more comprehensive models of care integration, such as an accountable care organization (“ACO”). The initial bundled care pilot was implemented in 2009. The pilot for cardiovascular and orthopedic services will be expanded to additional hospital services in 2010 and rolled out nationally to include other clinical service lines and post acute care in 2013. Additionally, several states and health plans are already developing/implementing their own pilots in bundled payment.

There is a significant competitive advantage to providers chosen as a bundled payment pilot site, and winning the selection to participate in the expanded bundled payment process will be competitive. Pilot sites will gain competency in managing care that will be applicable for future management in an ACO environment. Also, Medicare will likely, over time, cull down its provider network, focusing attention on those entities best able to demonstrate value (i.e., enhanced quality, reduced costs). Providers who show proof of success in care management under bundling may gain “preferred” status for inclusion in future services to the Medicare population. Failure to be included in the Medicare provider network could result in a decline of 20 to 40 percent of revenue – a catastrophic event for any provider.


Dubow, MSPH, Mark, J.

Minkin, MBA, Robert, A.

The Camden Group

Provider Reimbursement

July 1, 2010

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