NOVATO, Calif., Feb. 4, 2013 /PRNewswire/ -- Novato Community Hospital (NCH) is one of only seven providers in California to partner with the Centers for Medicare & Medicaid Services (CMS) on Model 2 of a new pilot program – Bundled Payments for Care Improvement Initiative. Under this model, NCH will enter into payment arrangements with CMS including financial and performance accountability for episodes of care related to hip and knee replacement surgery. The episode includes the inpatient stay in the acute care hospital and all related services 30, 60, or 90 days after hospital discharge. This is a three-year project aimed at raising bar on quality while lowering overall costs. "For patients, this means a hospital is coordinating their care in a completely new way—from the moment they enter the facility for joint replacement surgery through the crucial recovery time after they leave the hospital. We monitor their progress if they go home or to a residential rehabilitation center. We ensure they have needed in-home support to transition easily to outpatient physical therapy. We anticipate any issues that might arise and correct them early before they can escalate into serious problems," said Grant Davies, CEO of Sutter Health's North Bay Hospitals, which includes NCH. "Improving quality and lowering costs is the right thing to do for our patients and our community," Davies continued. "Novato Community Hospital is uniquely qualified to spearhead this effort because of its robust Orthopedics Program. It includes nine orthopedic surgeons with specialties in sports medicine, upper and lower extremity procedures, total joint replacement, integrated sports fitness and physical therapy, and strong relationships with community providers," Davies added. The Bundled Payments for Care Improvement initiative includes four models of bundling payments, varying by the types of health care providers involved and the services included in the bundle. Depending on the model type, CMS will bundle payments for services beneficiaries receive during an episode of care, encouraging hospitals, physicians, post-acute facilities, and other providers as applicable to work together to improve health outcomes and lower costs. Organizations of providers participating in the initiative will agree to provide CMS a discount from expected payments for the episode of care, and then the provider partners will work together to reduce readmissions, duplicative care, and complications to lower costs through improvement.