CMS recently announced that it is seeking applications for a new Bundled Payment for Care Improvement initiative in hopes to gather data and input from well organized health care providers to potentially overhaul the Medicare reimbursement system. Under this program, providers would propose a set price for a single episode of care and then receive a predetermined discount if the target is met along with other requirements set out in the Application process and described in the Bundled Payments Request for Application document. Each participant would be paid on a fee for service basis and then share the savings, if any. If this sounds familiar - it is. These bundled payments seem to share some of the characteristics of an ACO described in proposed regulations from CMS, without the corporate structure and other restraints.

CMS emphasized that these models are broadly defined and give flexibility to providers. This includes providing for a prospective payment in Model 4, which includes only hospital inpatient stays. In that case, a single payment is made and then divided among the physicians and hospital. It appears that CMS may expand the potential models to include up front payments in other care settings. In addition, future models may include the management of chronic care, such as diabetes and asthma, which can tax the health care system.