Global and Episodic Bundling

Bundled payments might help states control rising Medicaid costs while increasing quality and coordination of care, according to this report prepared by the Robert Wood Johnson Foundation-funded State Coverage Initiatives (SCI). Bundled payments create comprehensive budgets for all the care needed to treat a single illness or condition over a period of time. All medical providers who treat the patient for the specific condition share in the allocated payment, which creates incentives to coordinate and deliver the most effective, efficient care possible.

The report outlines key implementation considerations for state Medicaid agencies. SCI authors say states should consider how bundled payment models could be implemented to provide high-quality care more efficiently to the rising number of Medicaid enrollees. Considerations include which patients would benefit most, which providers and services to bundle, defining episodic time periods, setting payment levels, distributing payments to providers, building in safeguards for underutilization such as outcomes measures, and more. The authors conclude that pilot programs may be particularly useful in helping to determine which bundling approaches work best and when.