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February 19, 2014

Beyond ACOs and Bundled PaymentsMedicare’s Shift Toward Accountability in Fee-for-Service

Author Affiliations
  • 1School of Medicine, Washington University, St Louis
  • 2Massachusetts General Hospital, Boston
JAMA. 2014;311(7):673-674. doi:10.1001/jama.2014.11

For all the attention paid to accountable care models, few observers have recognized that Medicare is rolling out the core framework of bundled payments within the hospital fee-for-service payment system. Under its hospital value-based purchasing (HVBP) program, Medicare has established the Medicare Spending Per Beneficiary (MSPB) metric, defined as the average Medicare Part A and Part B spending per patient (eg, all traditional Medicare fee-for-service spending outside of prescription drug coverage) from 3 days prior to admission to 30 days after discharge. Hospital value-based purchasing adjusts each hospital’s fee-for-service Medicare reimbursement based on various performance benchmarks, such as MSPB; more than 1400 hospitals will receive reductions in their Medicare payment rates this year.1 Although Medicare has created a number of pay-for-performance programs over the past decade, MSPB represents the first pay-for-efficiency measure embedded within the fee-for-service system to penalize or reward hospitals not just for readmission rates or efficiency within an inpatient stay but for the value of care delivered across the entire continuum.

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