CMS announces new hospital and physician bundling payment system demo

The Centers for Medicare & Medicaid Services (CMS) today announced site selections 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.


Baptist Health System in San Antonio, Texas; Oklahoma Heart Hospital LLC in Oklahoma City, Okla.; Exempla Saint Joseph Hospital in Denver, Colo.; Hillcrest Medical Center in Tulsa, Okla.; and Lovelace Health System in Albuquerque, N.M., have been selected to participate in the demonstration.


The goal of the Acute Care Episode (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.


Click here for the Press Release and ACE Demonstration Project.


(SOURCE: AHA News Now,, December 3, 2008; CMS website release, December 2, 2008)