But Barron and others acknowledge that the program is gambling that the hospitals won't lose money. "We're at risk for everything that happens 30 days post-discharge on the part A side" if it exceeds the established baseline, he says.
Barron is certain that his hospitals should go forward now and learn what they can, and not "just wait and try to bilk the last dollars out of the system as long as we can."
Rather, he says, those networks who figure out how to improve care and be more efficient, "who know how to manage populations and improve quality will deliver a value proposition, and they will be successful, and will be where the business is going. The future is not that far ahead. We think that by 2017, the whole system will be largely reformed."
1. Retrospective Acute Care Hospital Stay Only
Medicare pays the hospital a discounted amount based on the traditional Inpatient Prospective Payment System DRG rate, and pays physicians under their traditional fee schedules. But hospitals and physicians are permitted to share gains arising from the providers' care redesign efficiencies.
The hospital, however, is responsible for some financial risk if Medicare Part A and Part B expenditures increase beyond a risk threshold for the period of the inpatient stay or during the 30 days after discharge, compared to historical expenditures.
2. Retrospective Acute Care Hospital Stay plus Post-Acute Care
The episode includes the acute care inpatient stay and all related services during the episode. The episode will end either 30, 60, or 90 days after hospital discharge. Participants can participate in any of up to 48 clinical condition episodes, from amputation to treatment of major vascular disorders.