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GAO-11-126R 1 (2011-01-31)

handle is hein.gao/gaobaanwg0001 and id is 1 raw text is: A GA 0 A o bintabity I integrity I Rehability United States Government Accountability Office Washington, DC 20548 January 31, 2011 The Honorable Dave Camp Chairman Committee on Ways and Means House of Representatives The Honorable Frank Pallone, Jr. Ranking Member Subcommittee on Health Committee on Energy and Commerce House of Representatives The Honorable Pete Stark Ranking Member Subcommittee on Health Committee on Ways and Means House of Representatives The Honorable John Shimkus House of Representatives Subject: Medicare: Private Sector Initiatives to Bundle Hospital and Physician Payments for an Episode of Care In recent years, we and other federal fiscal experts-including the Congressional Budget Office (CBO) and the Medicare Trustees-have noted the rise in Medicare spending and expressed concern that the program is unsustainable in its present form.' Concerns about the rising cost of health care are particularly pressing in light of evidence that suggests that greater spending does not necessarily translate to better health outcomes or higher-quality care. Medicare's fee-for-service (FFS) payment system may contribute to spending growth because it rewards volume of services regardless of the appropriateness, cost, and quality of those services. Under FFS, a payment is made for each unit of service based on the expected costs of delivering that service.2 For example, Medicare makes multiple separate payments 'GAO, The Federal Government's Long-Term Fiscal Outlook: January 2010 Update, GAO-10-468SP (Washington, D.C.: Mar. 2, 2010); CBO, Budget Options, Volume 1, Health Care (Washington, D.C.: December 2008); and The Boards of Trustees of the Federal Hospital Insurance and Federal Supplementary Medical Insurance Trust Funds, 2010 Annual Report of the Boards of Trustees of the Federal Hospital Insurance and Federal Supplementary Medical Insurance Trust Funds (Washington, D.C.: Aug. 5, 2010). 2In most instances, the unit of service is narrowly defined, such as a single office visit or a single test. However, in some instances, Medicare provides a single payment for multiple services furnished by a provider. For example, the hospital outpatient fee schedule includes payment for a primary service as well as other integral services and ancillary items related to that service, such as intraoperative services and imaging supervision/interpretation. GAO-11-126R Private Sector Initiatives for Bundled Payments

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