D.C. Report: CMS Bundled Payment Pilot Launched, HHS to Streamline Regulatory Process, Addressing Health IT Disparities

CMS Launches Bundled Payment Pilot. CMS called for volunteers this week to join a new pilot project, called the Bundled Payments for Care Improvement Initiative. The program will seek to align payments for services delivered across an episode of care, rather than paying for services separately, officials said. CMS’s Innovation Center (CMMI) will lead the initiative and officials from CMMI released a Request for Applications (RFA) outlining four possible approaches to bundled payments. According to the RFA, The models to be tested based on applications are as follows:

• Model 1: Retrospective payment models around the acute inpatient hospital stay only.
• Model 2: Retrospective bundled payment models for hospitals, physicians, and post-acute providers for an episode of care consisting of an inpatient hospital stay followed by post-acute care.
• Model 3: Retrospective bundled payment models for post-acute care where the episode does not include the acute inpatient hospital stay.
• Model 4: Prospectively administered bundled payment models for the acute inpatient hospital stay only, such as prospective bundled payment for hospitals and physicians for an inpatient hospital stay

CMS highlighted heart bypass or hip replacement as possible episodes of care examples and they cite a demonstration project that saved the program $42.3 million, or roughly 10 percent of expected costs, and saved patients $7.9 million in coinsurance while improving care and lowering hospital mortality.

Organizations interested in applying to the Bundled Payments for Care Improvement Initiative must submit a Letter of Intent (LOI) no later than September 22, 2011 for Model 1 and November 4, 2011 for Models 2, 3, and 4.

HHS Looks to Save $4B through Regulatory Review. The Obama administration this week announced an effort to save $10 billion over the next five years by streamlining the regulatory process and taking outdated rules off the books. The Office of Information and Regulatory Affairs, which framed the approach, released its plan (.pdf) Tuesday,. “While regulations can establish clear and transparent frameworks for competition and economic activity, unnecessary and duplicative regulations can also damage the market economy by imposing unnecessary costs on the private sector and citizens,” the plan said.

Among the biggest areas of expected savings, the Department of Health and Human Services believes it can save $4 billion through regulatory reform. The HHS plan released this week builds off a preliminary plan first released in May of this year. HHS’s retrospective review plan has five principal goals, including:

• Streamline or eliminate unjustified costs and burdens;
• Increase transparency in the retrospective review process;
• Increase opportunities for public participation;
• Set clear retrospective review priorities; and
• Strengthen analysis of regulatory options

In all, HHS has 77 proposed reform items, but the bulk of the expected $4 billion in savings will come through a yet-to-be specified proposal from the Centers for Medicare and Medicaid Services. CMS says it will release a proposed rule in September that will save upwards of $3 billion over five years by undertaking a retrospective review of the conditions of participation for hospitals. Other approaches being considered include streamlining the medical device approval process and giving states more flexibility in programs managed by the Administration for Children and Families and the Substance Abuse and Mental Health Services Administration.

ONC Seeks Comments on Ways to Reduce Health IT Disparities. ONC’s official blog, Health IT Buzz Blog, published a post late Wednesday night asking for public commen t on a plan to address Health IT disparities. The plan will build off the previously released Federal Strategic Health IT Plan, on which CHIME commented in April. This draft strategy is the result of work conducted by the Health IT Disparities Workgroup and it will “endeavor to assure that underserved and at-risk individuals enjoy benefits [conferred by health IT] to the same extent as all other citizens.” The HIT Disparities Workgroup will work with other parts of HHS and non-HHS agencies to align metrics correlating with adoption of EHRs in underserved communities; align future health IT and payment reform pilots; prioritize the engagement of minority patient advocacy organizations; and work closely with the Federal Communications Commission, US Department of Agriculture and others to facilitate broadband build out in support of telemedicine and telehealth, among two-dozen other objectives outlined in the draft strategy.