What does "bundled payment" mean in healthcare?

Bundled payment refers to a payment method that consolidates various costs associated with a specific treatment or patient episode into a single payment. This approach streamlines billing and encourages efficiency by reimbursing healthcare providers a set fee that encompasses all services related to a treatment group. For example, if a patient undergoes surgery, the bundled payment would include all costs for the operation, hospital stay, and follow-up visits, rather than billing each service separately.

This model aims to enhance coordination of care among providers and can lead to cost savings for both healthcare systems and patients while also maintaining or improving the quality of care rendered. The focus on a single payment incentivizes providers to deliver necessary treatments without unnecessary services, promoting value over volume.

The other options do not accurately capture the essence of bundled payments. For instance, multiple charges for individual services do align with a fee-for-service approach rather than a bundled payment model. A fee-for-service structure typically applies without limits, contrasting with the specificity and all-inclusive nature of bundled payments. Additionally, limiting bundled payments to outpatient services would misrepresent its application since bundled payments can apply to both inpatient and outpatient services, depending on the treatment being provided.