UPDATE: CMS Innovation Center Extends Certain Deadlines for its Bundle Payment Program

The Center for Medicare and Medicaid Innovation (“Innovation Center”) has extended certain deadlines for its new bundled payment program known as the “Bundled Payments for Care Improvement” initiative (the “Bundled Payments Program”), which was first announced on August 23, 2011.

A bundled payment approach combines payment for hospital, physician, and other provider services into a single bundled payment of a predetermined amount for all services furnished to a patient during an episode of care. Under the Bundled Payment Program, the Innovation Center will offer four different bundled payment models under Medicare, each of which revolves around a hospitalization. Applicants may apply for and participate in one or more models. Each model offers the participating providers significant flexibility to define and price bundles of services for Medicare beneficiaries. Model 1 would enable providers to propose episodes of care involving the acute care hospital stay only. Model 2 would enable providers to propose episodes of care involving the acute care hospital stay plus post-acute care associated with the stay. Model 3 would enable providers to propose episodes of care involving just the post-acute care, beginning with the initiation of post-acute care services after discharge from an acute inpatient stay. Model 4 would enable providers to propose episodes of care involving all services furnished during an inpatient stay by the hospital, physicians and other practitioners.

Organizations interested in participating in the Bundled Payments Program must submit a non-binding letter of intent by a deadline established by the Innovation Center, followed by a full application due at a later date. Last week, the Innovation Center extended the deadlines associated with Model 1, although it did not change the deadlines associated with Models 2-4. The new deadlines are as follows:

Model                                 Letter of Intent Due Date                         Application Due Date

Model No. 1                       October 6, 2011                                           November 18, 2011

Model Nos. 2-4                 November 4, 2011                                       March 15, 2012

Among other things, this program is important because it is the first of a series of bundled payment programs that the Innovation Center intends to undertake. In the application materials for the Bundled Payment Program, the Innovation Center indicated that it “will undertake significant internal CMS design and operational work to prepare for a broader shift toward bundled payments for [acute care episodes], which would then be tested in future prospective payment models.” It also indicated that it is “developing a plan to extend the concepts of episode payments and gainsharing to chronic care, and plan[s] to begin design work to prepare providers and CMS for the conceptual and operational complexities associated with bundled payment for an episode of chronic care.” These initiatives are in addition to the National Pilot Program on Payment Bundling that is required under the Affordable Care Act to be implemented by CMS by January 2013.

 Reprinted with permission.  All rights reserved.