Medicare Bundled Payment Initiative ? Since 2013

Posted by mgsionline on August 28th, 2014

In the hope of reducing inflating healthcare costs, the Affordable Care Act (ACA) came up with several Provider payments models, including Value-based Purchasing (VBP), patient-centered medical homes, and Accountable Care Organizations (ACO). Among these payment models, the Bundled Payment Initiative was cited as one of the best models in improving healthcare quality and efficiency. Although this initiative made the Providers to struggle through the new payment model adoption and tackling of physician billing services, it attracted many participants. The CMS (Centre for Medicare & Medicaid Services) announced that more than 500 healthcare organizations participated in the initiative as on Jan 31, 2013. Since then, the bundled payment model has been going through several developments, which are mentioned below:

Salient Features:

· Under the bundled payment model, Providers will receive a single payment for a group of services rendered during an episode of care instead of receiving separate payments for each service rendered. Initially, Providers had a hard time implementing this model into their practices as it affected the normal workflow of medical billing and collections.

· The pilot was demonstrated by CMS in the 90s under the name Medicare’s Heart Bypass Center Demonstration. It had earned Medicare a savings of up to $42 million. Even patients could save up to $8 million.

· This thoughtful payment model is classified into four categories, which have their own predetermined principles. They are as follows:

1. Retrospective Acute Care Hospital Stay Only

2. Retrospective Acute Care Hospital Stay Plus Post Acute Care

3. Retrospective Post-Acute Care Only

4. Prospective Acute Care Hospital Stay Only

Recent Developments:

· The recent buzz is that CMS is planning to expand its bundled payment circle by adding more number of healthcare facilities and providers. Approximately 4,100 Providers are expected to enroll into this payment model.

· CMS will analyze if this inclusion of 4,100 Providers to the existing 2,400 candidates will help in reducing Medicare payments by 2 to 3.5%. Only then it will come into a conclusion whether or not to enter into bundled-payment contracts.

· CMS is also trying to identify new models that offer enhanced healthcare quality at low costs through the Bundled Payments for Care Improvement initiative.

It is highly advisable that these Providers do medical billing outsourcing to manage their physician billing services.

Regardless of the new developments taking place in the bundled payment model, Providers and healthcare facilities must keep their medical billing and collections running smooth. Therefore, Providers can get help from renowned medical billing outsourcing companies like MGSI for hassle-free medical claims management.

About MGSI:
MGSI, one of the reputed medical claims management companies in the US well known for providing high-quality physician billing services to its clients. With more than 20 years of experience in the healthcare space, MGSI – a Florida based national billing company - has been helping several Providers in implementing bundled payment model while managing medical billing and collections. To learn more details, log on to

Like it? Share it!


About the Author

Joined: July 6th, 2012
Articles Posted: 76

More by this author