What is an 'episode of care' in bundled payment models?

• A. A defined set of care across multiple providers and settings for a specific condition, covered by a single payment.
• B. A yearly bundled payment for all services.
• C. A single procedure done in a hospital.
• D. A monthly capitation for a patient.

Answer: (A)

An episode of care in bundled payment models is a defined bundle of care across multiple providers and settings for a specific condition, covered by a single payment that spans the entire course of treatment from start to finish. This means the payment is intended to cover all related services—preparation, the main treatment, post-acute care, and follow-up—that a patient receives for that condition, regardless of where the care is delivered or which clinicians are involved. The goal is to promote coordination, reduce unnecessary variation, and control overall costs while maintaining or improving quality.

This isn’t a yearly bundled payment for all services, nor a single hospital procedure, nor a monthly capitation for a patient. Those describe other payment models: global or comprehensive payments mix many conditions and time frames; a single procedure is a one-off service; and capitation is a per-member-per-month payment regardless of the specific services used.