Medicare has traditionally paid a separate fee for each service. Seema Verma, the administrator of the federal Centers for Medicare and Medicaid Services, said the new bundled payments were “an important step in the move away from fee-for-service and toward paying for value.”
The Obama administration tried to accelerate that shift by testing new methods of payment under the supervision of an office created by the Affordable Care Act. The Trump administration was at first skeptical. The new agency, the Center for Medicare and Medicaid Innovation, “has gotten off track,” Mr. Price said last year.
Dr. Elliott S. Fisher, the director of the Dartmouth Institute for Health Policy and Clinical Practice, said the new initiative was “very encouraging.”
“The current administration would like to reverse everything associated with the Affordable Care Act and the Obama administration,” Dr. Fisher said. “But this week’s announcement shows that there is a bipartisan consensus on the need to change the way we deliver and pay for health care.”
The goal of the new project is to save money for the government while improving care for Medicare patients. The lump sum payments encourage health care providers to work together and coordinate care.
Medicare will make bundled payments for 32 types or “episodes” of care. These include hip and knee replacement operations, heart bypass surgery and procedures to open clogged coronary arteries, as well as treatments for heart attacks, stroke, pneumonia and chronic obstructive pulmonary disease.
The lump sum payment will cover the services of doctors and hospitals, clinical laboratories, nursing homes, home health agencies and hospices, as well as reimbursement for some medical equipment like wheelchairs and certain drugs given to patients in doctors’ offices.
Dr. Patrick H. Conway, the No. 2 official at the Centers for Medicare and Medicaid Services under President Barack Obama, praised the new initiative as “a very good model.” In similar programs started in the Obama administration, “quality over all seems to be going up, and costs down,” said Dr. Conway, who is now the president of Blue Cross and Blue Shield of North Carolina.
As a member of the House, Mr. Price denounced bundled payment initiatives. In September 2016, he and 178 other House Republicans sent a letter telling the Obama administration that it had no legal authority to require doctors and hospitals to participate.
But Mr. Trump’s new nominee for health secretary, Alex M. Azar II, said Tuesday that mandatory participation might sometimes be needed.
“If, to test a hypothesis around changing our health care system, it needs to be mandatory as opposed to voluntary, to get adequate data, then so be it,” Mr. Azar said at his confirmation hearing before the Senate Finance Committee.
In unveiling the pilot project, the Trump administration said doctors and hospitals must not restrict patients’ access to “medically necessary care” as a way to reduce Medicare spending.
The Trump administration said Medicare beneficiaries could not opt out if they were receiving services in an episode of care covered by the new bundled payment program. But, it said, patients are free to choose other health care providers who do not participate in the demonstration project.
Jonathan W. Pearce, a health care consultant who closely follows Medicare policy, said the bundled payment initiatives tested in the past few years had been “positive for just about everyone,” especially the patients. They provide doctors with much more information about what happens to patients who leave the hospital, he said, and using this information, “doctors and hospitals have redesigned care in ways that significantly benefit the patient.”
For example, Mr. Pearce said, after knee replacement surgery, patients receive more physical therapy, and “the use of nursing homes has dropped like a stone.”
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