Under a bundled payments model, a payer issues a single payment to physicians, hospitals, and post-acute providers for a complete episode of care over a specified time period, ranging from a single inpatient acute care encounter to a full episode capturing up to 90 days of post-discharge care.
A bundled payment is smaller than the sum of individual payments to providers, meaning providers succeed by reducing input costs and delivering a more efficient episode of care. Medicare’s Bundled Payment for Care Improvement (BPCI) Initiative—which aims to increase coordination among Medicare beneficiary providers—is the most prominent bundled payment program to date; however, commercial payers have also partnered with provider to offer bundled payment programs.
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Post-Acute Care Cheat Sheet: Accountable Care Organizations