What best describes a bundled payment model compared with fee-for-service?

• A. Bundled payment covers an entire episode across multiple settings; FFS reimburses for each service separately.
• B. Bundled payments increase total cost automatically.
• C. Bundled payments ignore postacute care costs.
• D. Bundled payments are only used for outpatient services.

Answer: (C)

Bundled payments bundle all care for an episode into a single payment that spans multiple settings, from the initial hospitalization through postacute care (like rehab, skilled nursing, and home health) within a defined period. This stands in contrast to fee-for-service, which reimburses for each service or visit separately. The idea is to give providers a fixed price for the whole episode and encourage coordination and efficiency to stay under that price.

That makes sense why the other statements aren’t right. Bundled payments do not ignore postacute costs—they include them as part of the episode. They aren’t guaranteed to increase total costs; the goal is to reduce overall costs through better coordination. And bundled models aren’t limited to outpatient services—they typically cover inpatient care plus postacute care within a specified timeframe.