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Recent Conferences

April 29, 2009

Implementing Bundled Payments for Health Care Services

Co-Sponsored by Aetna

There is broad consensus on the need to establish new payment methods to replace the current fee-for-service system, and growing support for payment models that bundle reimbursement for hospital, physician, ancillary, and post-acute care services over defined episodes of care. Episode-based payments create incentives for efficient resource utilization, reduction of avoidable complications, and greater integration of health care providers. This general approach had been supported by, among others, the Medicare Payment Advisory Committee and the Chairman of the Senate Finance Committee.

While the notion of episode payments is conceptually appealing, there are considerable challenges to practical implementation: for payers, this includes developing the clinical parameters of the episodes, determining levels of payment, and developing appropriate risk adjustment mechanisms. For physicians, hospitals, and other health care providers this means finding new ways of working together, and determining how responsibilities, revenues, and risk will be shared.

This meeting of The Health Industry Forum will assess practical considerations for implementing episode-based payment models. It will present case studies of organizations that are implementing bundled payment contracts, and examine challenges facing payers and provider organizations. It will specifically examine options for establishing episode payments under Medicare, and  potential strategies for doing so successfully.