U.S. encourages bundling Medicare payments

WASHINGTON Tue Aug 23, 2011 3:58pm EDT

Dr. Millie Marie Tolentino (R) examines patient Dora Leon at Clinica Sierra Vista's Central Bakersfield Community Health center in Bakersfield, California October 20, 2009. REUTERS/Phil McCarten

Dr. Millie Marie Tolentino (R) examines patient Dora Leon at Clinica Sierra Vista's Central Bakersfield Community Health center in Bakersfield, California October 20, 2009.

Credit: Reuters/Phil McCarten

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WASHINGTON (Reuters) - The U.S. agency that runs government health insurance is launching a program that would bundle insurance payments for multiple procedures in the hope of improving patient care while also saving money.

The Centers for Medicare and Medicaid invited providers on Tuesday to help develop four models to bundle payments.

The program is meant to encourage hospitals, doctors and other specialists to coordinate in treating a patient's specific condition during a single hospital stay and recovery.

"Today Medicare pays for care in the wrong way," Health and Human Services Secretary Kathleen Sebelius told reporters on a press call.

"Payments are based on the quantity of care, and not on the quality of that care," she said. "There is little financial incentive for the kind of care coordination that can help patients from returning to the hospital."

The four models give providers flexibility on how they get paid and for which services, as well as give them financial incentives to avoid unnecessary or duplicative procedures.

"Hospitals and other providers recognize that they have to accommodate the current (fiscal) environment," said Nancy Foster, vice president for quality at the American Hospital Association, an industry group that represents hospitals and other providers.

She said that while some hospitals or doctors may get less money overall in a bundled payment, they will still get their costs covered and perhaps earn rewards for better coordinating care.

The CMS Innovation Center, created under President Barack Obama's healthcare overhaul last year, has been looking into bundling payments as part of a larger effort to improve patient care and reduce costs.

"From a patient perspective ... you want your doctors to collaborate more closely with your physical therapist, your pharmacist and your family caregivers," CMS Administrator Donald Berwick said in a statement. "But that sort of common sense practice is hard to achieve without a payment system that supports coordination over fragmentation."

For more about the program and the four proposed models, please see a CMS fact sheet at r.reuters.com/gaf43s.

About 45 million elderly and disabled Americans are enrolled in federal Medicare plans, which have come under heightened scrutiny as Congress tries to cut the U.S. deficit ahead of a November deadline. The government's soaring healthcare bill is one of the biggest contributors to the deficit.

Further cuts to the $427 billion Medicaid program also are likely at the federal level. The insurance program for the poor is funded jointly by federal and state governments, but administered by the states with federal oversight.

(Reporting by Alina Selyukh and Anna Yukhananov; editing by Andre Grenon, Gary Hill)

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Comments (3)
LindaJoyAdams wrote:
You keep referring to federal and state officials as if they are in charge nut they haven’t been in a long time. This is all in the control of a few mega companies. And Congress has given them immunity form investigations and prosecutions if there is wrong doing and they can;t be internally audited. One major insurance company, South Carolina Blue Cross/ Blue Shield and its subsidiaries are the primary claims processor nationwide and there is documented, wide spread theft which is on going and can’t be stopped until Congress passes laws that put them back where all govt contractors used to be. Most medicaid is under the Control of Affiliated Computer services and the abuses ad missing records, and monies are grave. That’s what happens when ta dollars are given in ‘ blank checks’ and Congress won’t allow even routine internal audits by real govt officials. Those ‘ fraud lines one calls to report?” only socials security still has federal officials taking reports. Linda Joy Adams with sufficient documentation to shut this down according to authorities if Congress will just allow it. Files and monies missing in 5 agencies.

Aug 23, 2011 2:05pm EDT  --  Report as abuse
LindaJoyAdams wrote:
My sincere apologies for my typo in my comment: its But not nut. I meant no disprect to Reuters or their writers, etc. I realize that the media doesn’t have the research staffs and often its the public through blogs such as this that gets the rest of the documented facts out to the public. Its my policy to refrain from any name calling.’ The facts speak for themselves. Linda Joy Adams

Aug 23, 2011 2:17pm EDT  --  Report as abuse
USAPragmatist wrote:
@LindaJoyAdams, what you mention is a symptom of the root cause of most of our current problems in healthcare, private companies trying to make as much $$$ as possible by managing peoples care or increasing their misery factor.

@Reuters..Please give us an edit feature for our posts!!!!!!!!

Aug 23, 2011 5:47pm EDT  --  Report as abuse
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