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Author Topic: Bundled Payments  (Read 499 times)

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Bundled Payments
« on: November 22, 2020, 11:04:48 PM »
Bundled payments come in many shapes and sizes. Centers for Medicare and Medicaid Innovations (CMMI) Bundled Payments for Care Improvement Initiative has one of the most well known types. Bundled payments have advantages for both payers and providers. Providers can reduce expenses, allow for incentive across individual providers within groups, and have better integration of services across their delivery system. Meanwhile, payers move forward with simpler contracting and can reduce the cost of claims for services covered by that bundle payment.

Whether it is for a select set of services or all of those tied to an "episode", bundled payments allow for a fixed payment to cover the services. Providers take on the risk for costs greater than the fixed fee. This is very similar to the aspect of capitation, but instead of all of members' claim costs being at risk, it is a specific set of services for the members of that payer, and the payment is only guaranteed upon triggering of that event.

At Five70, our actuaries have developed specific models for bundled payments. Actuarial analysis of historical claims data is necessary and allows for actuaries to determine the consistency in the cost of a given episode, volatility over time, and how those risks vary by different types of settings.
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