CMS Initiative to Test Bundled Payment Models to Improve Coordination and Quality of Care

A new voluntary Medicare bundled payments initiative being launched by the Center for Medicare and Medicaid Innovation Center (Innovation Center) will test four different payments models aimed at improving care coordination across all health care settings.

This initiative will bundle payments for a package of medical services a patient receives during a single episode of care. Physicians, hospitals, and other health care providers who are interested in participating will have the flexibility to choose how an episode of care is defined and determine which model of bundled payments works best for them.

The payment model options include:
  • Model 1: Retrospective payment models for the acute inpatient hospital stay only
  • Model 2: Retrospective bundled payment models for hospitals, physicians, and post-acute providers for an episode of care consisting of an inpatient hospital stay followed by post-acute care
  • Model 3: Retrospective bundled payment models for post-acute care where the bundle does not include the acute inpatient hospital stay
  • Model 4: Prospectively administered bundled payment models for hospitals and physicians for the acute inpatient hospital stay only
Read more about these models and their requirements in the request for applications.

Those interested in applying must submit a letter of intent by Sept. 22, 2011, for Model 1 and Nov. 4 for Models 2-4. The extended deadline for Models 2-4 gives applicants time to complete request forms for historical Medicare claims data that will help in developing episode of care definitions. To receive this claims data, applicants must submit a separate research request packet and data use agreement in conjunction with the letter of interest. All application materials can be found here. Final applications must be received by Oct. 21, 2011, for Model 1 and March 15, 2012, for Models 2-4.

Questions can be emailed to BundledPayments@cms.hhs.gov.

The Innovation Center was created by the Affordable Care Act to identify new and better ways to provide and pay for health care for the Medicare and Medicaid populations.

Additional resources:
Bundling Payments Fact Sheet
Bundling Payments FAQs

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Comments: 3


The PMS readily advises us of these government ratcheting down & control of our income, but like all the other societies to which we pay dues it is powerless to or apathetic about doing anything to stop it. What is the point of having advocacy societies that have done and will do nothing to help us in these matters? I'd appreciate an answer to that question, and please don't use the Obama excuse that without your "help" things would be much worse! I have no clue why intelligent people still apply to Medical School knowing they will work for and be controlled by a federal agency.

anonymous at 9/8/2011 6:48:55 PM


Bundling=chisling of providers.

barry kisloff at 9/8/2011 5:08:06 PM


My concern as a physician in private practice is who will receive the bundled payment. If a health system is the receipient, how will they determine the physician's component of the care. Is this the beginning of the government's effort to move private prctice into employed physicians?

anonymous at 9/8/2011 3:57:01 PM

Last Updated: 8/31/2011
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