MA moving ahead with bundled payment model

Once again proving that they aren't afraid to be first, Massachusetts officials are moving ahead with plans to create a bundled payment system for providers that would replace the existing fee-for-service model.

The proposal, which was recommended yesterday by a state panel tasked with cutting healthcare spending, would pay providers a single fee for a given contract period, such as a month or a year. (Yes, I'd spell that C-A-P-I-T-A-T-I-O-N, but it seems they aren't, at least not yet.)  The new system would be phased in over the next five years, as administrators learned to estimate costs and assess future risk.

This proposal is backed by Gov. Deval Patrick (D), as well as key state legislators. Proponents say bundled, global payments would encourage coordination between physicians, nurses, hospitals and other providers. Critics, however, say the new model could lead to unexpected problems.

As for providers, the state's medical society says that doctors would need help managing this new level of financial risk, and hospitals say they should have substantial input into how risk is defined. Basically, they're nervous, at best.

To learn more about the state's plans:
- read this Associated Press piece [1]

Related Articles:
CMS plans demo of bundled hospital-physician payments [2]
Capitation creeping into contracts [3]