Press Release

For Immediate Release Contact


Sue Ducat
Director of Communications
(301) 841-9962

Bundled Payments for Care Improvement Initiative

A new policy brief from Health Affairs and the Robert Wood Johnson Foundation describes the Bundled Payment for Care Improvement (BPCI) initiative, four new payment models being tested by the Centers for Medicare and Medicaid Services (CMS), to reduce Medicare spending. Under this initiative, Medicare makes one payment for a bundle of services, instead of separately reimbursing each service provider. The Affordable Care Act (ACA) gives CMS the authority to create new payment models as long as they preserve or improve the quality of care being provided. There has been healthy interest by providers and health organizations in participating in the BPCI initiative, which first began enrolling participants in 2013. 



  • What's the background? The brief details the existing payment systems for Medicare, which have often led to wide variations in reimbursement; according to CMS, waste, overtreatment, and lack of care coordination have accounted for 20-40 percent of Medicare costs. As the brief notes, the ultimate aim of the BPCI initiative is not just to change how Medicare pays for services but to prompt changes in how health care is delivered in the United States. Detailed in this section are some of the new ways the BPCI initiative and similar models can accomplish that.

  • How does the BPCI initiative operate, and what's the debate? This section details the four different BPCI initiative models; each involves a different mix of patient services (inpatient care, postacute care, or a combination of the two). The brief also explains the models' varying payment methodologies. While CMS has given participants the flexibility to design a bundled payment model that would work best for their community and providers, the brief notes that stakeholders have expressed concerns with some elements of the design--and observers worry about the unintended consequences of bundled payments, such as avoiding or delaying needed care to keep costs down.
  • What's next? All four BPCI initiative models have projects underway that will continue into 2016. The Department of Health and Human Services (HHS) is committed to tying 50 percent of Medicare payments to these new models by the end of 2018; the brief outlines related initiatives (some on a non-voluntary basis) likely to be rolled out in the year ahead.