Bundled Payment
A bundled payment is a single payment for the combined cost of eligible services and supplies provided during a defined episode of care.
What is a Bundled Payment?
A bundled payment is a single payment for the combined cost of eligible services and supplies, such as treatments, tests, and procedures, provided during a defined episode of care. This approach aims to streamline billing and payment processes in healthcare by consolidating multiple services into one comprehensive payment.
The purpose of bundled payments is often to incentivize coordinated and efficient care among providers, as they are collectively responsible for managing the costs within the defined episode. This can lead to improved quality of care and potentially lower healthcare expenditures by encouraging collaboration and reducing unnecessary services.
What is the difference between a Bundled Payment and Fee-for-service?
Bundled payments consolidate the cost of eligible services and supplies for an episode of care into a single payment, aiming for streamlined billing, care coordination, and cost efficiency. Fee-for-service models, in contrast, bill for each service individually, which can lead to variable costs and fragmented care.
Bundled payments offer cost predictability by consolidating all services into a single payment, while fee-for-service can result in variable and often higher costs due to individual service fees.
Bundled payments incentivize coordinated and efficient care among providers as they are collectively responsible for managing costs within a defined episode, whereas fee-for-service may lead to fragmented care due to multiple providers working independently.
Establishing bundled payment agreements can be complex upfront, but they save time and effort once in place, while fee-for-service involves more straightforward, individual billing processes.
What are examples of a Bundled Payment?
A patient undergoing a knee replacement might receive a single bundled payment that covers the surgery, hospital stay, physical therapy, and follow-up appointments.
A bundled payment for maternity care could include all prenatal visits, the delivery, and postnatal care for the mother and baby.
A healthcare system might offer a bundled payment for a specific cancer treatment, encompassing chemotherapy, radiation, and all related medical services within a defined period.
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