The Phoenix Group Assesses Impact of Bundled Fees

Canoga Park, Calif., September 4, 2009 - The Phoenix Group, a think tank comprised of leading hospitalist groups in private practice, has released a white paper on the issue of bundled fees between hospitals and physicians for inpatient acute and post-acute care. The paper, entitled "Hospitalists Assess the Impact of Bundled Fees," focuses on the bundled payment plan under active consideration by Congress as an integral part of new health care legislation.

"As we look forward to the passage of a major health care reform bill that can provide health care coverage to all U.S. citizens, we must also be cognizant that new provisions, such as bundling of services, have positive potential for the private practice of hospitalist medicine if implemented well," said Robert Young, MD, CEO, Eagle Hospital Physicians, a member of The Phoenix Group. "We encourage hospitalists to familiarize themselves with the bundling issue. Our goal is for hospitalists to closely examine the plan and think through the implications it may hold for them going forward."

The Phoenix Group fully appreciates the need for health care reform to increase efficiencies and cost-savings for inpatient care. However, a bundled payment plan will be most effective and will have the greatest chance for long-term success when it is aligned with the goals and interest of hospital medicine. The group will watch with great interest the Acute Care Episode (ACE) Demonstration project in five western cities that will test the effect of bundling Part A and B payments for episodes of care. At least one Phoenix Group member is involved in the project.

"Right now there are many unanswered questions about how bundled payments will affect the practice of hospital medicine and the working relationship between facilities and medical providers," said Adam Singer, MD, chairman and CEO of IPC The Hospitalist Company, a member of The Phoenix Group. "We urge our fellow hospitalists to promptly become more involved in the discussions on this critical issue that will likely have a tremendous effect on the security and reliability of their compensation."

As health care reform legislation progresses, The Phoenix Group recommends a more comprehensive examination of the following issues related to bundling: 

  • Explore ways to migrate the fee-for-service system to becoming more DRG-specific in a manner that promotes physician-hospital alignment. 
  • Maintain responsibility for physician payments with CMS rather than a hospital or another third-party payer. 
  • Allow the ACE project to run its course and undergo a thorough, evidence-based evaluation prior to inclusion of bundling into health care reform legislation. 
  • As soon as feasible, include post-acute care to current and future ACE demonstration sites, and evaluate their impact prior to inclusion in any building program.

The Phoenix Group concluded that as leaders of the inpatient care delivery system, hospitalists must let their voices be heard on the bundling issue if they want to have any influence on policy-makers whose decisions will determine the well-being and financial stability of their profession.

This is the fourth white paper published by the group. To view the white paper in its entirety, go to:

About The Phoenix Group

Formed as a think-tank for hospital medicine in 2007, The Phoenix Group's mission is to provide leadership and focus to key issues facing the thousands of hospitalists in private practice in the U.S. today. The Phoenix Group membership collectively represents more than 3,000 hospitalists which, according to the Society of Hospital Medicine [SHM] statistics, comprise approximately 30% of hospitalists working in some form of a private practice setting.