Bundled Payment
Single payment that covers all services for an episode of care.
Definition
Bundled payments pay a single, episode-level price covering all services (hospital, physician, post-acute) for a defined clinical event such as a total joint replacement. CMS BPCI Advanced and CJR are examples. Bundles usually cover a period such as 90 days after discharge and compare spending to a target price, with the provider sharing savings or losses. CJR, which ran from 2016 through 2024, and BPCI Advanced are major CMS examples, and CMS's TEAM model starts in 2026. Hospitals in bundles push for lower device prices and products that reduce complications.What this means in practice
Bundles pressure device prices and post-acute spend. Devices that reduce complications, enable same-day discharge, or shorten rehab are commercially advantaged.Examples
- A manufacturer of an orthopedic implant provides data demonstrating that its device significantly reduces revision surgeries and shortens hospital stays, making it an attractive option for hospitals participating in a bundled payment for joint replacement.
- A company developing a remote patient monitoring system highlights how its technology can reduce readmissions for chronic conditions, thereby lowering costs for providers under a bundled payment arrangement.
- A MedTech firm designs a surgical kit that streamlines procedures and reduces operating room time, appealing to facilities aiming to optimize efficiency within a fixed bundled payment.
- •Misconception: Bundled payment models directly regulate medical device pricing, they do not, rather they influence purchasing decisions.
- •Assuming that because a device is included in a bundled payment, it is automatically compliant with regulatory requirements, overlooking necessary pre-market approvals or post-market surveillance.
- •Failing to consider the impact of bundled payments on post-market surveillance data, as adverse events may be attributed to the overall episode of care rather than specific devices.
- •Neglecting to assess how device modifications or new device introductions might affect the cost structure and outcomes within established bundled payment programs.
- •Ignoring the need for robust real-world evidence collection to demonstrate device value and cost-effectiveness within a bundled payment framework.
Frequently asked questions
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Sources
2 sourcesSources support the definition or relevant regulatory context, not necessarily every claim on this page. Each is graded against our source-tier hierarchy so you can see what rests on binding law versus commentary.
Official citation replacements checked: . Medicare documents support Medicare coding, coverage or payment context, not every payer policy or CPT editorial procedure. Citation replacement does not change the full term review date.
- 1CMS BPCI AdvancedTier 2 VerifiedCMS Innovationinnovation.cms.gov
- 2Transforming Episode Accountability Model (TEAM)Tier 2 UncheckedCMScms.gov
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