Managed Care Information Center
Site Navigation:
E-mail a Friend
FREE E-Mail Newsletters
Subscribe to the leading management newsletters
Health Resources Online
* * *
Health Resources Publishing
* * *
Wellness Junction
* * *
Healthcare Intelligence Network
Contact MCIC

Managed Care Information Center
1913 Atlantic Ave., Suite F4
Manasquan, NJ  08736
(732) 292-1100
fax: (732) 292-1111

Home / News & IndustryManaged Care Insight and Analysis
Updated: March 17, 2009
CMS Selects Sites For Demonstration To Improve Quality

The Centers for Medicare and Medicaid Services (CMS) said it has selected sites for the Acute Care Episode (ACE) demonstration.

ACE is a new hospital-based demonstration that will test the use of a bundled payment for both hospital and physician services for a select set of inpatient episodes of care to improve the quality of care delivered through Medicare fee-for-service.

The following sites have been selected to participate in the demonstration:

  • Baptist Health System, San Antonio, Texas;
  • Oklahoma Heart Hospital LLC, Oklahoma City;
  • Exempla Saint Joseph Hospital, Denver, Colo.;
  • Hillcrest Medical Center, Tulsa, Okla.; and
  • Lovelace Health System, Albuquerque, N.M.

The goal of the ACE demonstration is to use a bundled payment to better align the incentives for both hospitals and physicians, leading to better quality and greater efficiency in the care that is delivered. The demonstration will also test the effect that transparent price and quality information has on beneficiary choice for select inpatient care.

The ACE demonstration was open to applicants from Texas, Oklahoma, New Mexico and Colorado. Each demonstration site, or "Value-Based Care Center," will be actively marketed to both beneficiaries and referring physicians.

For purposes of this demonstration, a bundled payment is a single payment for both Part A and Part B Medicare services furnished during an inpatient stay. Currently, CMS generally pays the hospital asingle prospectively-determined amount under the inpatient prospective payment system for all the care it furnishes to the patient during an inpatient stay. The physicians who care for the patient during the stay are paid separately under the Medicare Physician Fee Schedule for each service they perform.

There are 28 cardiac and 9 orthopedic inpatient surgical services and procedures included in the bundled payment demonstration. These elective procedures were selected because volume has historically been high; there is sufficient marketplace competition to ensure interested demonstration applicants; the services are easy to specify, and quality metrics are available for them.

This demonstration provides an opportunity for Value-Based Care Centers to develop efficiencies in the care they provide to beneficiaries through quality improvement in clinical pathways, improved coordination of care among specialists, and "gainsharing." Gainsharing, or provider incentive programs, allow physicians and hospitals to share remuneration for implementing and coordinating improvements in efficiency and quality.

This demonstration also provides an opportunity for Medicare to share savings achieved through the demonstration with beneficiaries who, based on quality and cost, choose to receive care from participating demonstration providers. However, beneficiaries will still be able to choose a hospital that best meets their needs (Value-Based Care Center or other) and will not be restricted by this demonstration.

The ACE demonstration was implemented starting early this year.

Address: Centers for Medicare and Medicaid Services, 7500 Security Boulevard, Baltimore, MD 21244; (877) 267-2323,

  This article was taken from:
Pay-For-Performance Reporter

Free Trial Subscription

Become a Subscriber

    Back to This Week's List of Articles

"Managed Care Weekly Watch"
Subscribe Here



Top | Home

Resource of the Month | Database of MCOs | Publications | News & Industry | Surveys & Research | Free Products | Advertising Arena | Inside MCIC | Managed Care Archives | | For Subscribers | Customer Service

©2009 The Managed Care Information Center