Bundled Payments

A payment mechanism that reimburses health care providers for the expected cost of a specific episode of illness, rather than for each service delivered. 

Payment and Pricing Decisions in Health Care Reform

Issue Brief
Jun. 23, 2020

Any effort to reform health insurance in the United States must tackle the prices we pay for health care. There are many complex challenges to addressing prices. Some proposals build on the existing Medicare fee schedule, while others suggest promoting alternative payment mechanisms—or even starting from scratch. The stakes are substantial, as many reform proposals rely on reining in prices to achieve the savings necessary to expand health insurance to the uninsured. At Penn’s LDI Medicare for All and Beyond conference, a panel of researchers, hospital administrators, and policy experts considered issues related to health care payment and pricing that any health care reform proposal must address, including the implications of rate setting for providers and patients. At what level should these rates be set to assure access and quality of care, while incentivizing innovation and rewarding excellence?

Which Hospitals Are Participating in BPCI Advanced?

Jun. 17, 2020

In October 2018, the Centers for Medicare & Medicaid Services (CMS) launched the Bundled Payments for Care Improvement Advanced (BPCI Advanced) program to continue expanding bundled payments nationwide. Participating hospitals and physician group practices are eligible for financial incentives if they meet quality and cost benchmarks for 90-day episodes beginning with either a hospital admission or an outpatient procedure.

Health Care Cost Drivers and Options for Control

Issue Brief
Apr. 28, 2020

The growth of health care costs remains a serious concern in the United States. Slowing this growth involves understanding what drives health care costs and how to target those drivers effectively. In this brief, we review the relative importance of different health care cost drivers, including insurance benefits design, price inflation, provider incentives, technological growth, and inefficient system performance. We analyze the impact of these factors on the growth of health care spending in the last decade, which has been concentrated in hospitals and felt most acutely in the private market.

Designing a Commercial Medical Bundle for Cancer Care: Hawaii Medical Service Association's Cancer Episode Model

Apr. 6, 2020

John W. Urwin, Kristen L. Caldarella, Shireen E. Matloubieh, Emily Lee, Mark Mugiishi, Lauren Kohatsu, Justin Yoshimoto, Jeffery Tom, Sherly Okamura, Erkuan Wang, Jingsan Zhua, Ezekiel J. Emanuel, Kevin G. Volpp, Amol S. Navathe

Abstract [from journal]

Background: Oncology care is expensive and exhibits substantial variation in cost and quality across clinicians and patients. Unlike many conditions with established bundled payment programs, cancer care includes a mix of inpatient and outpatient care that precludes hospital-based designs. In 2018, we worked with Hawaii Medical Service Association (HMSA), the Blue Cross Blue Shield of Hawaii, to design a novel commercial bundle for cancer care, the Cancer Episode Model.

Methods: Descriptive analysis of HMSA's

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The Impact Of Bundled Payment On Health Care Spending, Utilization, And Quality: A Systematic Review

Amole Navathe19-head
Jan. 1, 2020

Rajender Agarwal, Joshua M. Liao, Ashutosh Gupta, Amol S. Navathe

Abstract [from journal]

The Centers for Medicare and Medicaid Services (CMS) has promoted bundled payment programs nationwide as one of its flagship value-based payment reforms. Under bundled payment, providers assume accountability for the quality and costs of care delivered during an episode of care. We performed a systematic review of the impact of three CMS bundled payment programs on spending, utilization, and quality outcomes. The three programs were the Acute Care Episode Demonstration, the voluntary Bundled Payments for Care Improvement initiative, and the mandatory

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Association of Bundled Payments for Joint Replacement Surgery and Patient Outcomes With Simultaneous Hospital Participation in Accountable Care Organizations

Amole Navathe19-head
Oct. 9, 2019

Joshua M. Liao, Ezekiel J. Emanuel, Atheendar S. Venkataramani, Qian Huang, Claire T. Dinh, Eric Z. Shan, Erkuan Wang, Jingsan Zhu, Deborah S. Cousins, Amol S. Navathe

Abstract [from journal]

Importance:  An increasing number of hospitals have participated in Medicare’s bundled payment and accountable care organization (ACO) programs. Although participation in bundled payments has been associated with savings for lower-extremity joint replacement (LEJR) surgery, simultaneous participation in ACOs may be associated with different outcomes given the prevalence of LEJR among patients receiving care at ACO participant organizations and potential overlap in care redesign strategies adopted under the 2 payment models.

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National Representativeness Of Hospitals And Markets In Medicare's Mandatory Bundled Payment Program.

Amole Navathe19-head
Jan. 1, 2019

Joshua M. LiaoEzekiel J. Emanuel, Daniel E. Polsky, Qian Huang, Yash Shah, Jingsan Zhu, Zoe M. Lyon, Sarah E. Dykstra, Claire T. Dinh, Deborah S. Cousins, Amol S. Navathe

Abstract [from journal]

In 2016 Medicare implemented its first mandatory alternative payment model, the Comprehensive Care for Joint Replacement (CJR) program, in which the agency pays clinicians and hospitals a fixed amount for services provided in hip and knee replacement surgery episodes. Medicare made CJR mandatory, rather than voluntary, to produce generalizable evidence on what results Medicare might expect if it scaled bundled payment up nationally. However, it is unknown how markets and hospitals in CJR compare to others nationwide, particularly with respect to

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The Current State of Evidence on Bundled Payments

Issue Brief
Oct. 8, 2018

A review of the evidence shows that bundled payments for surgical procedures can generate savings without adversely affecting patient outcomes. Less is known about the effect of bundled payments for chronic medical conditions, but early evidence suggests that cost and quality improvements may be small or non-existent. There is little evidence that bundles reduce access and equity, but continued monitoring is required.

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