CMS Introduces Acute Care Episode Demonstration for Orthopedics
BY LAUREN UZDIENSKI, MAY 21, 2008
Hoping to "align financial incentives" between hospitals and physicians, CMS announced plans for an Acute Care Episode (ACE) demonstration that will feature bundled payments for the treatment of certain orthopedic and cardiac patients. CMS argues that bundling, compared to paying for inpatient services on an individual basis, may incentivize physicians to provide the most efficient and cost-effective care. CMS Acting Administrator Kerry Weems added, "CMS expects to demonstrate how to not only better coordinate inpatient care, but to also achieve savings in the delivery of that care that can ultimately be shared between providers, beneficiaries, and Medicare," hinting at a gainsharing component of the program that was detailed further in a program description.
The demonstration will evaluate nine orthopedic procedures, including hip and knee replacements, and 28 cardiovascular procedures. These procedures were selected based on high patient volume and existing quality data for comparison. While CMS has been implementing bundled payments for several years, these efforts have had a minimal effect on the musculoskeletal industry, and this appears to be the first time CMS has attempted to bundle orthopedic surgical services.
This program raises a number of concerns. Device industry groups such as the MDMA have argued that bundled payments assume a one-size-fits-all approach to treating patients and may limit access to innovative treatment. Similarly, gainsharing offers a possible incentive for providers to limit the products or services used in patient treatment. CMS is attempting to counter these worries by mandating that participating sites provide data on a series of quality measures, covering clinical outcomes and costs, at six-month intervals during the demonstration.
