August 25th, 2011

From The Hill:

Hospitals are interested in the new payment structure that Medicare announced Tuesday, but say they still need to look more closely at the program’s financial incentives.

The federal Medicare agency on Tuesday announced a new program that will “bundle” Medicare payments to various doctors and other healthcare providers. 

The idea is to refocus payments so providers are paid for each “episode of care” — for example, the whole battery of tests and treatments performed on one patient who is admitted to a hospital. Currently, every doctor bills Medicare separately. Federal officials hope more integrated payments will lead to more integrated care.

“Today, Medicare pays for care the wrong way,” Health and Human Services Secretary Kathleen Sebelius said.

She said the existing system “can punish the providers who are most successful” at keeping their patients healthy, and described the new bundled payment program as a way to realign doctors’ incentives.

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