What is the difference between a per diem payment and a per-episode (bundle) payment in post-acute care?

• A. Per diem pays a fixed daily rate; per-episode pays one bundled sum for the entire episode, regardless of days.
• B. Per diem pays a bundled payment for the entire episode.
• C. Per diem is calculated per patient length of stay but per-episode depends on the provider.
• D. Per diem payments are daily rates with no connection to episode length.

Answer: (A)

In post-acute care payment models, the time dimension is handled differently for per diem versus bundled payments. A per diem arrangement pays a fixed amount for each day of a patient’s stay. The total payment adds up as daily rate times the number of days, so longer stays mean more payment and shorter stays mean less. A per-episode (bundle) arrangement, on the other hand, provides one lump sum that covers all services for the entire episode of care from start to finish, regardless of how many days the patient spends in care. The provider must manage all costs within that single payment.

This matches the statement that per diem delivers a fixed daily rate and that per-episode delivers one bundled sum for the entire episode. The other descriptions don’t align with how these models are structured: per diem is not a bundled payment, and the idea that per-episode depends on the provider or that per diem has no connection to episode length misstates how these payments tie to time and episodes.