GAO: Bundling Easier Said than Done

Medicare may have a hard time shifting to paying for care on an episode-of-care basis, according to officials at the U.S. Government Accountability Office (GAO).

GAO officials looked into health care reimbursement methods at the request of several Republican and Democratic members of Congress who wanted to know what Medicare program managers might be able to learn from private-sector efforts to move away from paying separate fees for each service provided.

The fee-for-service approach in use in the traditional Medicare program gives physicians and hospitals little incentive to coordinate care or avoid unnecessary use of care, James Cosgrove, a GAO director, writes in a report on Medicare and private-sector payment strategies.

“Bundling,” or making a single payment for a group of services related to an episode of care, could help, Cosgrove says.

But Cosgrove says Medicare may face challenges when it tries to move toward bundling.