Modernizing the Medicare Program using global payment policies.

This article describes efforts by HCFA to implement global payment demonstrations for Medicare fee for service inpatients. The Medicare Heart Bypass Center Demonstration operated from 1991 to 1996, and used global payments to pay for bypass surgery inpatient episodes. The demonstration operated effectively, with significant cost reductions at many sites and improvements in quality of care. The Medicare Program and its beneficiaries saved over $52 million in that demonstration. The planned Medicare Participating Centers of Excellence Demonstration and the Medicare Provider Partnerships Demonstration will also use global payment methods. These demonstrations will include cardiac and orthopedic care in the Centers demonstration, and all types of medical and surgical cases in Provider Partnerships. Successful implementation of these demonstrations could lead to expansion of global payment methods in the Medicare Program, with increases in efficiency and cost savings anticipated.