Bundled Payments in Healthcare

The shift to value-based care models are leading many payors to adopt a reimbursement model that has long been popular in mental health care: bundled payment.

Bundled payments are a single payment for all providers, services, and equipment rendered for a single, predefined “episode of care” or care given within a certain time period. In the past, each service, test, provider, and facility may send itemized bills, leading to multiple bills and a longer reimbursement time. But bundled payments simplify that process. For instance, a bundled payment for maternity care may include prenatal care, ultrasounds, labor, delivery, provider fees, and hospital stay in one big payment instead of many small charges over the course of the pregnancy.

In the bundled payment model, if a provider exceeds the agreed-upon bundled payment amount, they are financially responsible for any excess charges. The idea is that bundled payments will help encourage standardized, evidence-based care that is more cost effective for everyone.

The Risks of Bundled Payments

But because there is an agreed-upon payment for an episode of care, bundled payments come with increased financial risks for providers. If their care is cost effective and cheaper than the agreed upon amount, they get to keep the difference and make extra money. If they go over, then they lose money.

Unfortunately, this could affect how care is delivered. Some patients may need extra testing or care within that episode of care if they experience complications or have other health conditions. They may not adhere to medicines or participate in other behaviors that lead to adverse events and additional necessary services. Bundled payments may discourage providers from offering that necessary care. They may also encourage providers to reduce testing and services in order to come in under the payment amount.

The Benefits of Bundled Payments

Still, some professionals and certainly payors believe that bundled payments lead to higher quality care and better care coordination. After all, to achieve optimal reimbursement, providers must communicate clearly with one another and manage all aspects of care to ensure the patient has the best outcomes possible.

Early treatment planning, at the very beginning of an episode of care, can lead to more cost-effective care and help keep the patient on track for good outcomes. Working as a team to try to predict a patient’s needs can not only help a patient receive the right care but ensure that care falls within the price of the bundled payment. This requires individual evaluation of each patient, leading to more personalized care.

Bundled payments also make billing simpler and faster. This may lead to some savings within administration as well as fewer headaches when seeking reimbursement from payors. Faster, more accurate payments can help providers better manage their revenue cycle and finances.

At Datapro billing, our experts can help you navigate new payor models, whether your payors prefer bundled payments or itemized billing. Contact us to discuss your billing policies, staff training, and other services that can improve your billing efficiency and lead to faster reimbursement.