Lessons Learned Preparing for Medicare Bundled Payments

Abstract

For nearly 50 years, Medicare has operated separate payment systems for hospitals, clinics, physicians, post-acute care facilities, and other categories of health care providers, with few incentives for coordinating care across the continuum of services. These systems support a fragmented delivery system at substantial cost to taxpayers and Medicare beneficiaries. Policy analysts have long been interested in encouraging improved efficiency and care coordination by bundling Medicare payments for a range of services delivered during defined episodes of care.1 For example, an episode-based payment for total joint replacement could include the inpatient admission and professional services, plus skilled nursing, home health . . .