Bundled Payment

Bundled Payment

Many experts believe piecemeal, volume-based fee-for-service payment encourages fragmented and inefficient care that not only costs more but is lower quality. One alternative is bundled payment—paying for services on the basis of an episode of care rather than individual tests, procedures or visits. IHA has spearheaded California pilots to test bundled payment approaches for orthopedic and maternity care and developed a wide array of resources, such as episode definitions and model contracts, to lay the groundwork for others’ work on bundled payments.

IHA’s engagement with bundled payment emerged from a value-based purchasing project as a promising opportunity to align incentives and improve coordination across care settings. In 2009, the California HealthCare Foundation funded an IHA pilot project to test implementation of bundled payments in California. A year later, the Agency for Healthcare Research and Quality awarded IHA a three-year grant to expand the bundled payment demonstration.  In 2012-2013, IHA also served as a Facilitator Convener for the Center for Medicare and Medicaid Innovation’s Bundled Payments for Care Improvement (BPCI) initiative, supporting several California hospitals as they explored the BPCI opportunity.  

IHA is committed to sharing knowledge, resources, and lessons learned from payment reform efforts through issue briefs and other publications for both policymakers and practitioners.  Available resources, most of which were released in 2013 when the initiative concluded, are included below.

Project Information

AHRQ Demonstration Overview

Bundled Episode Payment & Gainsharing Demonstration Results Presentation


Issue Brief: Bundled Payment for Orthopedic Surgery

Issue Brief: Bundled Payment Care Redesign

Issue Brief: Bundled Payment Approach to Maternity Care 

Issue Brief: Redesigning Insurance Benefits and Consumer Copayments for High Cost Surgical Service

Issue Brief: Aligning Consumer Cost-Sharing with Episode of Care Provider Payment

Technical White Paper

Article: Implementing Bundled Payment: Learning From Our Failures

Article: Implementing Bundled Payment: No Pain No Gain

Contract Templates 

Health Plan and Hospital Agreement

Hospital and Physician Agreement

Bundled Payment Contract Model Scenario

Episode Definitions

Orthopedics: Total Knee Replacement, Total Hip Replacement, Unicompartmental Knee Arthroplasty, Knee Arthroscopy with Meniscectomy, and Cervical Spinal Fusion

Cardiovascular: Diagnostic Cardiac Catheterization and Angioplasty with Stents

Maternity and Women's Health: Case Rate Delivery Only, Pregnancy and Delivery (Mother Only), and Hysterectomy