What is meant by "bundled payment" in healthcare reimbursement?

Bundled payment refers to a payment model in healthcare reimbursement where a single payment covers a group of related services delivered during a specific episode of care. This approach is designed to encourage efficiency and reduce overall healthcare costs by incentivizing providers to work together and manage care effectively, rather than billing separately for each individual service.

Under this model, providers are tasked with delivering all necessary services for a patient's treatment within a set price, thus promoting coordinated care and potentially improving patient outcomes through better management of resources and services. Bundled payments are particularly common in scenarios such as surgeries or chronic disease management, where multiple services are typically required to treat a patient over a certain period.

This contrasts with alternatives like separate payments for each individual service, which can lead to fragmented care and increased overall costs. Focusing on patient satisfaction scores or provider salaries, as indicated in other options, does not capture the essence of bundled payments, which is fundamentally about payment structure around episodes of care rather than isolated service fees or performance metrics.