What are bundled payments?

In January of 2015 the Center for Medicare and Medicaid Services (CMS) announced their Better, Smarter, Healthier campaign which calls for Medicare to shift over $300 billion away from fee-for-service into alternative payment models by 2018. It is clear from recent announcements that bundled payment models will be a major part of this shift.

Currently CMS is implementing two voluntary bundled payment programs, Bundled Payments for Care Improvement (BPCI) and the Oncology Care Model (OCM), and one mandatory program, Comprehensive Care for Joint Replacement (CCJR). In total there are between 3,000 and 4,000 providers across the country participating in these programs. Additionally, payors and employers in the commercial health insurance market are starting to enter into bundled payment contracts with physician groups and health systems.

Bundled payments are starting to gain traction because they offer an attractive care and risk management option that is designed specifically for specialists and acute and post-acute care providers. The theory behind bundled payments is that they focus care coordination responsibilities and opportunities on the best provider to treat targeted patient populations when those patients most need their expertise. When structured appropriately, these programs enable providers to access significant new revenue sources and dramatically increase overall profitability.

Click on the links below to learn more about the three major bundled payment programs being implemented by Medicare.

Bundled Payment for Care Improvement (BPCI)

Oncology Care Model (OCM)

Comprehensive Care for Joint Replacement (CCJR)