How Payers Can Build a Successful Bundled Payment Strategy | HealthPayer Intelligence

The Bundled Payments for Care Improvement (BPCI) Initiative helped cut Medicare reimbursements at participating hospitals by $3,286  during its first 21 months for lower extremity joint replacements.  The BPCI is split into four bundled payment models with different strategies for when an episode of care starts. Each of the models relies on 48 MS-DRGs codes to identify applicable care episodes for bundled payments.

Model 1 is no longer in operation, but set the example for how future BPCI models by paying hospitals discounted amounts for retrospective acute care. The first BPCI model was novel and used seperate fee-for-service payments for physicians.

Model 2, or the Retrospective Acute & Post Acute Care Episode model, uses a bundled payment model where actual costs of services are compared against a targeted price for an episode of care.

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How Payers Can Build a Successful Bundled Payment Strategy.