Bundling Acute and Post-Acute Care Services
The federal health system reform law (Patient Protection and Affordable Care Act) allows a Medicare demonstration of innovative contracting with hospitals and physicians for costs of acute, acute and post-acute, or post-acute care. A number of Minnesota health systems recently submitted applications to participate in Model 1 of this demonstration. It is intended to reward more efficient episodes of hospital care. Models 2-4, with applications due in 2012, include post-acute care. To achieve financial savings in those models, hospitals may propose contracting with nursing homes or home health agencies to reduce hospital lengths of stay or to reduce unit cost, length or volume of post-acute services.
In Model 1, the episode of care would be defined as the inpatient stay in the general acute care hospital. Medicare will pay the hospital a discounted amount based on the payment rates established under the Inpatient Prospective Payment System (IPPS). Medicare will pay physicians separately for their services under the Medicare Physician Fee Schedule. Hospitals and physicians will be permitted to share gains arising from better coordination of care.