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Bundled Payments

What are bundled payments?

Bundled payments take all services used to treat a patient within a specific episode of care and pay a single payment for them. With this payment model, the bundled payment price uses a set fee for the episode of care based on historical costs. If providers exceed this pre-arranged reimbursement, they are responsible for the remaining financial costs.

Because of this, there is some financial risk with bundled payments, but less than with other payment models, such as ACOs. At the same time, if the cost of care is less than the bundled payment reimbursement, the providers can keep the difference.

There are also bundled payment programs specific to CMS, such as the Medicare Bundled Payment for Care Improvement (BPCT) and Comprehensive Care for Joint Placement programs.

How do bundled payments affect healthcare?

By reimbursing only a set amount of money and holding providers responsible for any overages, there is an encouragement for cost-effective and standardized care decisions.

Additionally, bundled payments aim to improve patient care by increasing care coordination between hospitals, rehabilitation centers, skilled nursing facilities, home health agencies, and other facilities providing care services.