The Centers for Medicare and Medicaid Services (CMS) has published the shared savings payments related to the Medicare Acute Care Episode (ACE) Demonstration for five participating sites effective June 1, 2011.  The ACE Demonstration tests the use of a bundled payment for both hospital and physician services for a limited set of inpatient episodes of care for orthopedic and cardiovascular procedures, and as such, Medicare will pay the hospital a single payment for both Part A and Part B services furnished during an inpatient stay.

The current participating health care systems are:

  • Baptist Health System, San Antonio, Texas;
  • Exempla St. Joseph Hospital, Denver, Colorado;
  • Hillcrest Medical Center, Tulsa, Oklahoma;
  • Oklahoma Heart Hospital, Oklahoma City, Oklahoma; and
  • Lovelace Health System, Albuquerque, New Mexico.

The goals of the ACE project are to improve quality of care and outcomes while providing savings for beneficiaries, providers, and the Medicare program.  Under the demonstration, Medicare shares 50 percent of the savings with the Medicare beneficiary (up to the maximum of the annual Part B premium, currently $1,157).  The CMS Medicare Demonstrations Group is conducting the demonstration, and a listing of the shared savings payment amounts by DRG for the five sites are available here.   

“Model 4” of the recently announced CMS Bundled Payments for Care Improvement initiative is a direct attempt at the expansion of the ACE project to other interested hospitals and to other inpatient conditions.  While there is no beneficiary shared savings in the Bundled Payment Initiative, interested hospitals may gain some insight into the amount of savings recognized by the ACE Demonstration hospitals by analyzing the information on the CMS website.