CMS Advances Trend toward Bundled Payments

On July 25th, The Centers for Medicare and Medicaid Services (CMS) released a new proposed rule which could materially change the Medicare payment model for hospitals in 98 randomly selected metropolitan statistical areas.

The proposed rule contemplates the creation of new bundled payment models for cardiac care, in addition to the extension of the existing bundled payment model for hip replacements to other hip surgeries. Additionally, CMS developed a new model to encourage the implementation of cardiac rehabilitation in hospitals. The final major component of the regulation is the Quality Payment Program, which introduces payment incentive opportunities for physicians who participate appreciably in bundled payment models. The aforementioned new episode payment models (EPMs) are serve to pay for the entirety of the course of treatment for a Medicare beneficiary, as opposed to remitting separate payments to providers and suppliers for the items and services furnished.

The proposed rule is a part of CMS’s initiative to ensure that quality of care is prioritized over quantity of patients.  CMS maintains that “bundled payments support better care coordination and ultimately better outcomes for patients.” Public comments can be submitted after the proposed rule is published on the Federal Register on August 2nd.

For further clarification regarding the above, please contact Adrienne Dresevic, Esq., at, or Carey Kalmowitz, Esq., at, or alternatively, please reach them at our offices by calling (248) 996-8510 or (212) 734-0128.

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