[14] Another early experience with bundled payments occurred between 1987 and 1989, involving an orthopedic surgeon, a hospital (Ingham Regional Medical Center), and a health maintenance organization (HMO) in Michigan.
[15] The surgeon and the hospital received a predetermined fee for any arthroscopic surgery performed, but they also provided a two-year warranty in that they promised to cover any post-surgery expenses (for example, four re-operations) instead of the HMO.
The St. Joseph Hospital in Denver held an acute-care episode (ACE) demonstration project in 2003, administered by Deirdre Baggot.
[21] In 2006–2007, the Geisinger Health System tested a "ProvenCare" model for coronary artery bypass surgery that included best practices, patient engagement, and "preoperative, inpatient, and postoperative care [rehospitalizations] within 90 days... packaged into a fixed price.
[25] With support of the Commonwealth Fund, the project developed "evidence-informed case rates" for various conditions that are adjusted for severity and complexity of a patient's illness.
"[29][30] For one, it recommended that the Secretary of Health and Human Services examine approaches such as "virtual bundling" (under which providers would receive separate payments, but could also be subject to rewards or penalties based on the levels of expenditures).
[29] In addition, it recommended that a pilot program be established "to test the feasibility of actual bundled payment for services around hospitalization episodes for select conditions.
[31] The bundling includes only hospital and physician charges, not post-discharge care; by 2009, five sites in Colorado, New Mexico, Oklahoma, and Texas had been selected for the project.
[34] The white paper recommended that the Medicare ACE Demonstration "expand to other sites," "focus on other clinical conditions if certain criteria are met," and "include services that are provided post-hospitalization.
"[40] 450 healthcare organizations participated in the Bundled Payments for Care Improvement (BPCI) initiative held by the Centers for Medicare & Medicaid Services.
[43] In July 2016, CMS announced three new bundles, referred to as episode payment models (EPMs) aimed at cardiovascular care procedures including acute myocardial infarction (AMI), coronary artery bypass graft (CABG) and hip/ femur fractures.
These included managing cash flows, developing budgets for episodes paid prospectively (rather than retrospectively), and reliably tracking providers' enrollment in a bundled payment model.
In Case study: Delivery and payment reform in congestive heart failure at two large academic centers,[55] published in the July 2014 edition of Healthcare: The Journal of Delivery Science and Innovation, the authors state, "Convening organizations play a key role in providing technical assistance and implementation support.