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November 21, 2012

With health-care law set, now come the new rules

(Continued)

Dan Mendelson, chief executive of the consulting firm Avalere Health, said: "It's a breakneck time frame, because there's really only eight months left before open season, and they have to get these products up."

Mendelson said a lot is at stake for the government to make sure its rules lead to a marketplace that doesn't founder. He pointed to Medicare officials' efforts to get the prescription drug plan, Part D, ready to roll out in 2006. The Centers for Medicare and Medicaid Services needs "to work collaboratively with the health insurance industry to bring to market a new set of products," Mendelson said. "It's always a challenge for CMS. They did it beautifully under Medicare Part D and that resulted in a market that is quite robust and functioning."

Bundled payments

The administration has already gotten off the ground two major changes to the way the government pays hospitals and doctors. One designates accountable-care organizations that reward hospitals and doctors for working together to provide more efficient care. The other begins to pay hospitals on the quality of the care they provide through the value-based purchasing program. By January, the law calls for the government to launch another major initiative: bundled payments.

The Center for Medicare and Medicaid Innovation is in the final stages of selecting which providers will be included in the program. Under the plans, the government would pay a lump sum to cover all the medical needs of patients going into the hospital, a nursing home or getting home health services for a specific ailment.

Applicants have tailored their proposals to specify whether it covers just one part of the patients' medical treatment, such as post-hospital care, or all the services in the episode. The applicants have also selected specific diagnoses that they will use to test this new payment method. The goal is the same as the other ongoing experiments: to move providers away from being paid piecemeal for each service — a method that encourages excess treatments and drives up Medicare's expenses.

"People in our community are looking at it as a way to dip their toes in the water," said Atul Grover, chief public policy officer at the Association of American Medical Colleges.

Kaiser Health News (www.kaiserhealthnews.org) is an editorially independent news service, a program of the Kaiser Family Foundation, a nonpartisan health-care-policy organization that is not affiliated with Kaiser Permanente.

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