Congress considers bundled payments for Medicare

While the idea is still in its early stages, Congress is taking a serious look at the notion of paying for an episode of care in some cases rather than permitting providers to bill for separate procedures. While critics of "bundled" payment argue that this approach still has significant flaws, supporters say that it will lead to lower costs and better quality.

The idea is not completely new. In fact, Medicare is already running a pilot project testing such an approach, which could involve paying for, say, several months of cancer treatment or implantation of an artificial hip. 

Under the terms of the pilot, which involves several hospitals, the bundled payment is split between the hospital and physicians.  Participating hospitals had submitted bids on certain procedures for the bundled payments, including heart bypass surgery, and hip and knee implants.

However, there are lots of stakeholders questioning whether bundled payments are a good idea. For one thing, physicians worry that this set-up gives too much control to hospitals. What's more, critics note that to make such a system work, payments would need to be higher for sicker patients, to discourage physicians and hospitals from picking only the healthiest ones. Also, Medicare would have to make sure that providers didn't deny care to increase their profits.

To learn more about this issue:
- read this Kaiser Daily Health Policy Report item [1]

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