Which description matches Bundled Payments?

• A. A system where providers are paid for each service they perform.
• B. A payment model where patients pay out-of-pocket entirely.
• C. One combined payment for all services related to a specific treatment or condition.
• D. A private insurance plan offered by employers.

Answer: (C)

Bundled payments mean one upfront, fixed payment that covers all the services needed for a specific treatment or condition over a defined period. This setup contrasts with paying for each separate service as it’s delivered. The idea is to push providers to coordinate care and avoid unnecessary tests or hospital stays, since they share in any savings or losses from the overall bundle. For example, for a knee replacement, the bundle would cover pre-op assessment, the surgery, hospital stay, anesthesia, post-acute care, and follow-up visits under one payment. This aligns incentives toward efficient, integrated care while maintaining quality, rather than billing per individual service. The other options describe paying for each service, paying entirely out-of-pocket, or a separate insurance plan, which aren’t what bundled payments refer to.