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Acute Care Episode Demonstration Project Effective October 1

April 22, 2008:
In a further advance towards value-based purchasing, the Centers for Medicare and Medicaid Services (CMS) is initiating an acute care episode (ACE) demonstration project effective for admissions occurring on or after October 1, 2008.

Under this project, expected to last three years, one bundled global Medicare payment including hospital and physician reimbursements will be made for each ACE. DME suppliers and ambulance providers are not included. It will be up to the provider to allocate the payment to other providers involved with the ACE. Fifteen demonstration sites are to be selected, all of which must participate in IPPS.

Patients must have both Medicare Part A and Part B and are free to choose their own facility and physicians. The inpatient deductible and copayments will apply if applicable. A fixed daily Part B copayment will be set for each hospital and MS-DRG. No Part B deductible will be applied.

The ACE hospital will be required to send an electronic notice of admission when a patient covered under one of the specified MS-DRGs is admitted. No outlier payments will be made. Indirect medical education (IME), disproportionate hospital (DSH), and new technology payments will be made in addition to the ACE payment.

Specific MS-DRGs to be included in the ACE demo are 0216–0221, 0226–0227, 0231–0236, 0242–0244, 0246–0249, 0258–0259, 0260–0262, 0461–0462, 0466–0468, 0488–0489, and 0469–0470 excluding ICD-9-CM procedure codes 84.26, 84.27, and 84.28.

Excluded situations include transfers from an ACE hospital to a non-ACE hospital where the ACE length of stay would qualify for less than the full MS-DRG payment. Post-acute care transfer rules will not apply to ACE MS-DRGs.

Regina Magnani, RHIT
Clinical/Technical Editor


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