Health Care Payment 'Bundling' Draws Scrutiny in Reform Debate

Hospitals and other medical facilities that perform a series of costly procedures on a patient at several different locations could end up getting reimbursed by the government with just a single, set payment under health care legislation being debated on Capitol Hill.

At the same time, the proposed system -- known in the health care industry as "bundling" -- could be used to bring down the cost of health care reform and encourage physicians to be more efficient and effective.

The "bundling" provision is just one of a slew of details in the massive health care reform legislation that are stirring concerns and controversy from lawmakers. Cost is a big factor, with the House package estimated to cost up to $1.5 trillion over 10 years. But as Congress seems to slow, slightly, the pace at which it is considering health care reform, items like "bundling" are getting extra attention.

"Basically, it's a game changer," said Gerben DeJong, director of the Center for Post-Acute Studies at the National Rehabilitation Hospital in Washington, D.C.

DeJong said the most common "bundling" proposal in the mix would establish a series of set payments to cover the cost of tests and treatments for patients during and after their hospital stays.

The payment amounts would vary depending on the medical condition -- but not on the severity of the illness or the number of facilities at which a patient is treated.

DeJong said the system, if structured properly, could create a "powerful incentive" for better care with better outcomes. In other words, the emphasis would be on getting a patient better and would discourage, for instance, unnecessary tests that prolong a patient's stay.

But on the flip side, the system -- without provisions in place to measure performance -- could result in medical facilities "cherry-picking" healthy patients to usher them through care as quickly as possible, DeJong said. Concerns over being short-changed by the government could have harmful side effects.

He also said there are a number of questions to be answered in the course of the debate. What duration of care would it cover? What services would be covered? Who's the entity responsible for making the payments?

DeJong said "bundling" could be used effectively, but that it would probably take several years to roll out a manageable new system.

Right now, the Obama administration is pushing to get a health care bill out of Congress as soon as possible.

But the health care reform push hit a hurdle Tuesday as the House Energy and Commerce Committee postponed a key session on its version of the bill that has passed out of two other committees. Bill backers apparently are struggling to win the support of moderate Democrats known as Blue Dogs -- who happen to hold a number of seats on the Energy and Commerce Committee.

Rep. Baron Hill, D-Ind., one of the concerned Blue Dogs who met Tuesday with President Obama on health care, has raised bundling as a key issue for him.

To secure his vote, Hill said he's seeking specific cuts in cost but also wants a better understanding about how bundling health care dollars would work.

Aside from bundling, the Blue Dogs have drafted a list of specific concerns that they have delivered to Chairman Henry Waxman, D-Calif. According to a copy of the list obtained by FOX News, the Blue Dogs want more done to address costs, want a public option available as a fallback but on a level playing field with other plans and several other adjustments.