Back to the Future with Medicare Bundled Payments

November 9, 2011Articles Law 360

Remember the 1990s fad when managed care companies proposed to pay for physician, hospital and ancillary services in a bundled payment to be divided up by the providers? That idea never really took off on a large scale, and the few risk-sharing contracts that were offered contributed to financial problems at a number of health systems that took the plunge. Now, spurred by the Affordable Care Act (ACA) and ongoing budget pressure, the Centers for Medicare and Medicaid Services (CMS) is taking another look at the bundling concept as a way to reorient the Medicare payment system toward cost control and quality improvement and away from payment for the volume of care. Circumstances have changed since the last round of bundled payment proposals, particularly with the increased horizontal and vertical integration of health systems, so it is possible the outcome may be different this time.

This article was also published in the Allegheny County Medical Society Bulletin. Click here to read the entire article.