Cheat Sheet

C-Suite Cheat Sheet: Bundled Payments

    Executive Summary

    Under a bundled payment model, a payer issues a lump sum, or a “bundled” payment, to providers involved in delivering an episode of care during a specific time period. This bundle may include physicians, hospitals, and post-acute care providers. Because a bundled payment is smaller than the sum of individual payments to providers, providers must reduce input costs and deliver a more efficient episode of care to succeed. The Centers for Medicare and Medicaid Services (CMS) has created a few bundled payment programs for Medicare beneficiaries, but providers can also commercial payers or employers in similar bundled payment programs.

    In April 2013, Medicare introduced the Bundled Payment for Care Improvement (BPCI) Initiative, an optional program that aimed to increase coordination among providers treating Medicare beneficiaries. This program set the stage for other similar programs like Medicare’s first mandatory bundled payment program, CJR (Comprehensive Care for Joint Replacement), introduced in 2016. However, in 2017, CMS retired BPCI and made CJR voluntary in some markets. In 2018, CMS replaced BPCI with an updated program called BPCI Advanced.

    Want more?

    This is a preview of content outside your membership portfolio. See what else we have to offer within your memberships, then contact us for information about the Health Care Industry Committee.

    Log in to access this content

    Log in

    Don't have an account? Learn about membership benefits

    Have a Question?

    x

    Ask our experts a question on any topic in health care by visiting our member portal, AskAdvisory.

    X
    Cookies help us improve your website experience. By using our website, you agree to our use of cookies.