August 23, 2011 / 5:00 PM / 8 years ago

U.S. encourages bundling Medicare payments

* Bundling payments meant to spur doctor partnerships

* CMS invites applications to test four models

WASHINGTON, Aug 23 (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.

The four models would give providers flexibility on how they get paid and for which services. The general aim is to try to do away with the current practice that reimburses doctors based on how much, not how well they do.

“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.”

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 both improve patient care and reduce costs.

For more about the program and the four proposed models, please see a CMS fact sheet at

The Health and Human Services Department is expected to comment on the initiative during a news call later on Tuesday.

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; editing by Andre Grenon)

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