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Obama Proposes Bundled Hospital-Physician Pay


 

If President Obama sways Congress with his plans for health reform, hospitals and health providers would receive a bundled payment for care provided in the hospital and during the first 30 days after discharge.

The proposal was submitted as part of the president's budget “blueprint” in late February. A full budget plan is expected to be released some time this month. It's a long way from there to the proposal's becoming law; in some cases, proposals will require congressional action, while in others, they will be accomplished through federal rule making.

Even so, this is not the first time that bundling has been mentioned as a cost-saving mechanism for federal health programs.

The Medicare Payment Assessment Commission (MedPAC) backed bundled payment in its June 2008 report to Congress, and the Centers for Medicare and Medicaid Services (CMS) began a 3-year, five-hospital demonstration project of the concept in January.

Along with bundling payments, the Obama budget also proposed paying less to hospitals with high readmission rates during the 30-day postacute period. The combination of bundling pay and reducing payments should save “roughly $26 billion of wasted money over 10 years,” according to the budget blueprint. That money would be contributed to the $600 billion reserve fund dedicated to financing health reform.

There were few other details offered by the administration. But in December, the Congressional Budget Office analyzed a proposal to bundle payments and estimated that it would create $950 million in savings from 2010 to 2014.

In a note to clients after the blueprint release, experts at Washington Analysis Corp. who follow health policy said, “We expect Congress to consider this idea, especially since this concept has been put forward for several years by CMS, MedPAC and others.”

Washington Analysis said that it also expected to see a proposal to penalize hospitals for high readmission rates in the 2010 hospital payment rule.

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