Medicare: CMS pilots new payment scheme

July 4, 2008

To help reduce conflicting incentives and better coordinate care, hospitals and physicians participating in CMS' Acute Care Episode (ACE) demonstration will receive a single bundled payment for Part A and Part B Medicare services provided during an inpatient stay.

To help reduce conflicting incentives and better coordinate care, hospitals and physicians participating in CMS' Acute Care Episode (ACE) demonstration will receive a single bundled payment for Part A and Part B Medicare services provided during an inpatient stay. The project is limited to 28 cardiac and nine orthopedic surgical services, which CMS chose because of their historically high volume and profit margins. If the demonstration is successful, hospitals, doctors, and patients will share in the savings generated by greater efficiency and better quality care.

The pilot is limited to providers in Colorado, New Mexico, Oklahoma, and Texas. For more information, go to http://www.cms.hhs.gov/demoprojectsevalrpts/, and click on Medicare Demonstrations.