Which statement describes bundled payment?

• A. Fee-for-service provides a lump-sum for an episode.
• B. Capitation pays per service delivered.
• C. Bundled payment pays per episode unit.
• D. Bundled payment provides a lump-sum for an episode.

Answer: (D)

Bundled payment is a single, predetermined lump-sum payment that covers all the care needed for an entire episode of treatment for a patient. This means one payment is made to cover everything from pre-op or initial assessment through the entire course of care and discharge within a defined time frame. The idea is to encourage care coordination and cost efficiency across all providers involved in that episode, since they must manage services within that fixed amount.

This differs from fee-for-service, where reimbursement comes for each individual service provided, which can incentivize more services or longer stays. It also differs from capitation, which pays a fixed amount per patient for a set period, regardless of how many services that patient uses or whether it relates to a specific episode of care.

So the statement that best describes bundled payment is that it provides a lump-sum for an episode of care.