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. 

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.

Association of Hospital Participation in a Medicare Bundled Payment Program With Volume and Case Mix of Lower Extremity Joint Replacement Episodes

Sep. 5, 2018

Abstract [from journal]

Importance: Medicare’s Bundled Payments for Care Improvement (BPCI) initiative for lower extremity joint replacement (LEJR) surgery has been associated with a reduction in episode spending and stable-to-improved quality. However, BPCI may create unintended effects by prompting participating hospitals to increase the overall volume of episodes paid for by Medicare, which could potentially eliminate program-related savings or prompt them to shift case mix to lower-risk patients.

Objective: To evaluate...

Hospitals, Skilled Nursing Facilities, and Bundled Payment

Aug. 10, 2018

The Centers for Medicare and Medicaid Services has rolled out a number of bundled payment programs in the hopes that they will help to control costs and improve coordination and quality of care. A focus of these programs is the care delivered by skilled nursing facilities (SNFs) – a post-acute care setting that currently accounts for a significant portion of cost variation and spending in Medicare.

Physician Practice Variation Under Orthopedic Bundled Payment

Jun. 20, 2018

Joshua M. Liao, Ezekiel J. Emanuel,  Gary L. Whittington,  Dylan S. Small...

ABSTRACT [FROM JOURNAL]

Objectives: To describe the extent of and longitudinal changes in physician practice variation with respect to implant costs, institutional postacute care (PAC) provider utilization, and total episode payments, as well as to evaluate the association between physician volume and quality and these outcomes.

Study Design: Observational study.

Methods: We combined claims and internal hospital cost data for 34 physicians responsible for 3614 joint replacement episodes under bundled payment at...

Comparison Of Hospitals Participating In Medicare’s Voluntary And Mandatory Orthopedic Bundle Programs

Jun. 6, 2018

Abstract [from journal]

We analyzed data from Medicare and the American Hospital Association Annual Survey to compare characteristics and baseline performance among hospitals in Medicare’s voluntary (Bundled Payments for Care Improvement initiative, or BPCI) and mandatory (Comprehensive Care for Joint Replacement Model, or CJR) joint replacement bundled payment programs. BPCI hospitals had higher mean patient volume and were larger and more teaching intensive than were CJR hospitals, but the two groups had similar risk exposure and baseline episode quality and cost. BPCI hospitals...

Where Patients Go After Hospital Discharge: Trends in Post-Acute Care

Apr. 17, 2018

As the largest single source of health care spending, hospitals have drawn considerable attention from policymakers. Efforts to reduce costs have led to decreased lengths of hospital stays, but far less attention has been paid to where those patients go immediately after discharge. Medicare payment reforms implemented in the wake of the Affordable Care Act, such as hospital readmissions penalties and bundled payments, have made hospitals accountable for care beyond their walls, including institutional post-acute care.

Characteristics of Hospitals Earning Savings in the First Year of Mandatory Bundled Payment for Hip and Knee Surgery

Mar. 8, 2018

Amol S. NavatheJoshua M. Liao, Yash Shah, Zoe Lyon, Paula ...

In JAMA, Amol Navathe and LDI colleagues Joshua Liao, Paula Chatterjee, Dan Polsky, and Ezekiel Emanuel examine hospital savings and quality results for the first year of the Comprehensive Care for Joint Replacement (CJR) bundled payment program. Since April 2016, Medicare has bundled payments for hip and knee replacements at 799 hospitals through CJR. The program incentivizes quality and cost containment by providing retrospective bonus payments that increase as hospitals exceed their cost and quality benchmarks, or imposing penalties if hospitals fall short. While the CJR...

Value Based Payment: Is This Time Actually Different?

Mar. 8, 2018

Practice transformation and payment reform are defining features of contemporary health policy debates. The story goes like this: new provider organizations, such as Accountable Care Organizations (ACOs) are transforming care delivery from fragmented and volume driven to integrated and optimized for quality; meanwhile, innovative payment models, such as bundled payments and risk-based contracting, herald a national transition from fee-for-service (FFS) to value-based payments.

Payment Reform and Health Disparities: Two New Views

Mar. 2, 2018

The concern that value-based payments will worsen health disparities is not new. Much ink has been spilled about the best way to avoid penalizing hospitals that care for disproportionately poor populations, without rewarding poor performance. The big question has been whether and how to adjust value-based payments for socioeconomic factors.

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