The Centers for Medicare and Medicaid Services (CMS) on May 16 announced a new demonstration for hospitals to test the use of a bundled payment for both hospital and physician services for a select set of episodes of care. The goal of the acute care episode (ACE) demonstration is to use a global payment to better align the incentives for both types of providers to improve quality and efficiency. The demonstration will also test the effect that transparent price and quality information has on beneficiary choice and provider referrals for select inpatient care.
The select sets of procedures included in the bundled payment demonstration are 28 cardiac and nine orthopedic inpatient surgical services. These elective procedures were selected because profit margins and volume have historically been high; there is sufficient marketplace competition to ensure interested demonstration applicants, the services are easy to specify, and quality metrics are available for them.
The ACE demonstration is open to applicants from Colorado, New Mexico, Oklahoma, and Texas. Access the CMS information page.
