Which payment reform model bundles payments for a set of services across an episode?

• A. Global budgeting.
• B. Capitation.
• C. Fee-for-service.
• D. Bundled payments.

Answer: (D)

The idea being tested is paying for an entire care episode with a single bundled amount. Bundled payments provide one payment that covers all the services needed for a defined episode of care—pre-op, the procedure itself, and post-operative care, often across multiple providers and settings. This setup incentivizes coordination, reduces duplication, and encourages cost-conscious, quality-focused care because providers must work within the fixed payment to deliver the whole episode.

Global budgeting sets a fixed annual total for an organization, not tied to a specific episode of care. Capitation pays a set amount per patient per month to cover all needed care, regardless of utilization, not tied to a single episode. Fee-for-service reimburses separately for each service rendered, which can incentivize more services rather than efficient care.