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The distribution of gainshare checks to participating Baptist Health System physicians was a 'Hallmark moment' of the CMS Acute Care Episode (ACE) pilot, recalls Michael Zucker, senior vice president and chief development officer. The ACE pilot tested bundled payments across specific episodes of care.

For organizations considering participation in the 2011 CMS Bundled Payments initiative, Case Study in Bundled Payments: The Baptist Health System Experience is essential reading before filing letters of intent and applications for CMS's new bundled payment program.

This 24-page report documents the care payment experience of Baptist Health System in the CMS ACE demonstration pilot, which aligned payment for services delivered across episodes of care or "bundled" care. ACE focused on the cardiac and orthopedic diagnosis-related group (DRGs), two of the public payor's most frequent and largest cost disease areas.

Data from the ACE demonstration helped to lay the groundwork for the CMS Bundled Payments initiative announced in August 2011.

A major player in the cardiac arena, having a little over a third of the cardiac market share, Baptist Health saw in the ACE demo an opportunity to gain market share, align providers in quality and efficiency efforts, and improve patient satisfaction. It signed on to be one of five healthcare systems in the ACE pilot.

In Case Study in Bundled Payments: The Baptist Health System Experience, Zucker outlines the San Antonio-based five-hospital system's motivation for participation, the key principles of the ACE demonstration, the challenges and benefits and success strategies and lessons learned from the ACE demonstration — as well as that 'Hallmark moment' that generated buzz in the marketplace.

Zucker provides a frank look at the challenges of structuring payments, adjusting for severity, engaging physicians and vendors, coordinating and negotiating services and preparing for transition to real-life application.

Table of Contents

• Healthcare Reimbursement: Exploring Bundled Payment Options
  • 6 Components of the CMS ACE Demonstration Project
  • Gainsharing Metrics in a Bundled Payment Model
  • Hypothetical Example of a Gainshare Payment
  • 6 Operational Challenges of the Bundled Payment Pilot
  • 17 Lessons Learned from the ACE Pilot
  • Physician Support for a New Payment Model
  • 8 Keys to Success
• Q&A: Ask the Expert
  • Distribution of Bundled Payments
  • Profiting from Bundled Payments
  • Disbursing CMS Savings
  • Motivation for Participation
  • Educating Medicare Beneficiaries About ACE
  • ACE Impact on Physician Collaboration
• Glossary
• For More Information
• About the Speaker

Like the ACE program, the upcoming Bundled Payments program is designed to align payments for services delivered across an episode of care, such as heart bypass or hip replacement, rather than paying for services separately.

The fall 2011 Bundled Payments program, greenlighted by the Patient Protection and Affordable Care Act, outlines four broad approaches to bundled payments. Providers will have flexibility to determine which episodes of care and which services will be bundled together, making it easier for providers of different sizes and readiness to participate in this initiative.

Organizations have until November 4, 2011 to declare intent for Models 2, 3 or 4.

CMS says bundled payments will give doctors and hospitals new incentives to coordinate care, improve the quality of care and save money for Medicare.