WASHINGTON The agency that runs Medicare and Medicaid on Tuesday established a new center it says will drive ideas on how to improve patient care in and out of hospitals, while streamlining payment systems.
The Centers for Medicare and Medicaid Services (CMS) said the new innovation center, called for by health reform legislation passed earlier this year, will serve as a testing ground for new practices.
The agency said it will look at "bundling" payment for multiple procedures and "health home" models in which patients with at least two chronic conditions can designate a provider to coordinate treatments.
About 45 million elderly and disabled Americans are enrolled in Medicare plans, which have come under fire from critics who say the government pays too much to the companies running them and that they're subject to fraud.
Medicare drew attention last week when the chairmen of a panel looking at ways to reduce the federal deficit called for sweeping changes to reduce the program's costs.
CMS Administrator Donald Berwick said on Tuesday new models for care delivery and payments will help drive down costs across the health care system.
"The Affordable Care Act created this center to provide solutions to the problems we're talking about -- a fragmented system that needs to be improved," he said on a call with reporters.
The innovation center also will look at helping providers in different fields communicate and provide coordinated care to patients, and improving community health programs. An information clearinghouse of best practices will help providers and states adopt models deemed successful, CMS said.
Berwick -- who has been a source of controversy for comments made in favor of the British publicly funded health system -- on Wednesday will try to sell lawmakers on the virtues of the new innovation center and other Medicare reforms when he testifies in front of the Senate Finance Committee.
Medicare reform is a main plank in the health reform legislation championed by President Barack Obama.
Republicans, who made big gains in recent congressional elections, have pledged to repeal the law, saying it will fail to achieve promised savings and is an overreach by government with provisions requiring all Americans to buy coverage starting in 2014 or face fines.
"I think everyone's really interested in getting better efficiency in the system," said Amy Thornton, a health policy analyst who follows CMS for Washington Research Group.
"(The center) really could be a big highlight of the health reform bill."
(Reporting by Emily Stephenson; Editing by Jerry Norton)