CMS Announces Groups Participating in Bundled Payments Initiative

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On Thursday, CMS announced that more than 450 health care organizations will participate in its four bundled payments initiatives, which seek to test whether paying lump sums for episodes of care will lower health care costs without harming care, Modern Healthcare reports (Zigmond, Modern Healthcare, 1/31).

About the Initiative

The Bundled Payments for Care Improvement initiative was created by the Center for Medicare and Medicaid Innovation and is comprised of four "broadly defined" models of care that establish bundled payments for multiple services received during an episode of care (CMS fact sheet, 1/31).

The object of the initiative, which was made possible through the Affordable Care Act is "to improve the quality of health care delivery for Medicare beneficiaries, while reducing program expenditures, by aligning the financial incentives of all providers," acting CMS Administrator Marilyn Tavenner said in a statement (CMS release, 1/31). 

CMS officials last fall considered delaying the implementation of Model 1, which defines an episode of care as an inpatient stay in a general acute-care hospital and shares savings between hospitals and physicians. However, it soon became clear that providers were interested in all four models (CQ HealthBeat, 1/31).

About the Participants

The number of applicants accepted to the program is "huge" and "historic," says acting CMS Principal Deputy Administrator Jonathan Blum. He notes that Medicare and private payers have tested bundled payments projects in the past, but no previous project has neared the scale of the current initiative (CQ HealthBeat, 1/31).

According to Modern Healthcare, a wide range of health care providers—including not-for-profit hospitals, teaching hospitals, physician-owned facilities, and post-acute care providers—are participating in the initiatives (Modern Healthcare, 1/31).

Altogether, there are 109 "participants" representing 464 health care organizations (CMS fact sheet, 1/31).

Specifically, Model 1 will include three participants -- the New Jersey Hospital Association, California-based Dignity Health, and the Greater New York Hospital Association -- representing 32 organizations (CQ HealthBeat, 1/31). The Model 1 "awardees" will begin testing bundled payments for hospital stays as early as April.

Meanwhile, participants of Models 2, 3 and 4 will immediately begin receiving data about care patterns from CMS and share knowledge on care improvements. According to CMS, there are:

  • 55 participants representing 192 organizations in Model 2;
  • 14 participants representing 165 organizations in Model 3; and
  • 37 participants representing 75 organizations in Model 4.

Those participants will begin testing the bundled payments in July (CMS release, 1/31).

According to Deidre Baggot, an outside expert selected to review program applications, CMS established the six-month, "no risk" period so participants in the three models could learn the process.

AMA Weighs In

Commenting on the announcement, American Medical Association President Jeremy Lazarus commended the CMS effort.

However, he urged the agency to offer more models for bundled care, noting that the four existing models involve inpatient hospital stays (Modern Healthcare, 1/31).


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