The Department of Health and Human Services (HHS), working with the Centers for Medicare and Medicaid Services (CMS) and its new Innovation Center, is rolling out a program called Bundled Payments, which seeks to provide one lump-sum payment to all providers and physicians involved in an "episode" of care. An episode of care for a heart bypass, for instance, might begin with all the steps needed to prepare for the surgery and then end with the patient's final recuperative visit.

A demonstration program overseen by the Innovation Center claims to have saved an average 10 percent on a series of Medicare heart bypass surgery episodes.

“This Bundled Payment initiative responds to the overwhelming calls from the hospital and physician communities for a flexible approach to patient care improvement,” said CMS Administrator Donald Berwick, M.D.  “All around the country, many of the leading health care institutions have already implemented these kinds of projects and seen positive results.

“From a patient perspective, bundled payments make sense.  You want your doctors to collaborate more closely with your physical therapist, your pharmacist and your family caregivers.  But that sort of common sense practice is hard to achieve without a payment system that supports coordination over fragmentation and fosters the kinds of relationships we expect our health care providers to have,” added Dr. Berwick.

The concept of Bundled Payments was included as part of the Patient Protection and Affordable Care Act (PPACA) of 2010.