CMMI Announces Preliminary List of Affected MS-DRGs to Be Tested in Models 2 through 4 of the Bundled Payments for Care Improvement Initiative


On November 30, CMS’s Center for Medicare & Medicaid Innovation (CMMI) announced its preliminary list of 48 clinical episodes (and included MS-DRGs) it will test in Models 2 through 4 of its Bundled Payments for Care Improvement (BPCI) Initiative.  According to CMMI, this preliminary list was constructed based upon input including thousands of episode definitions proposed in the applications it received.  Candidates for Models 2 through 4 have been asked to choose from among the listed episodes which bundling episodes they would like to test. 

Under the BPCI Initiative, CMS will combine payment for multiple services received by a patient during a defined “episode of care.”  In exchange for agreeing to accept discounted Medicare payments for specified services, BPCI participants have the opportunity to reap the benefits of cost savings achieved through coordinated care delivery and gainsharing arrangements that realign physician incentives.  In their applications, which for Models 2 through 4 were due on June 28, 2012, providers were asked to choose among four different bundling models:

  • Model 1—payment is bundled for all inpatient hospital services, for all MS-DRGs (CMS subsequently indicated that it will not proceed with Model 1 at this time);
  • Model 2—payment is bundled for all inpatient hospital services, physician services, and post-acute care services, for agreed-upon MS-DRGs only;
  • Model 3—payment is bundled for all physician services and post-acute care services relating to an inpatient stay, for agreed-upon MS-DRGs only; and
  • Model 4— payment is bundled for all inpatient hospital services and physician services furnished during an inpatient stay, for agreed-upon MS-DRGs only.

Applicants for Models 2 through 4 were asked to propose definitions for particular “episodes of care” for which they would like to receive bundled payments.  Episodes are defined in terms of included MS-DRGs for which payment would be bundled for services furnished during the inpatient admission (for Models 2 and 4) and/or during a post-acute or post-episode period of 30 days or longer (for Models 2, 3, and 4).

CMMI’s preliminary episode list is available in the “Additional Information” section of the BPCI website, or by clicking here.

Reporter, Susan Banks, Washington, D.C., +1 202 626 2953,

DISCLAIMER: Because of the generality of this update, the information provided herein may not be applicable in all situations and should not be acted upon without specific legal advice based on particular situations.

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