Bundled Payments


Product Overview

The Bundled Payments analytics tool evaluates cost and variation associated with care delivery for patients, and is intended to prioritize areas of focus and provide a baseline for exploratory analysis. The application is modeled on the Centers for Medicare and Medicaid Services (CMS) Bundled Payment for Care Improvement (BPCI) Initiative.


  • Summary: The summary dashboard is based on the Pareto Principle, also known as the 80/20 rule. The charts are used to identify which of the episodes of are types are consuming the most resources, and may represent the greatest opportunities for cost reduction.
  • Variation: This dashboard graphs episode of care types on two axes: financial metrics on the x-axis vs. variation on the y-axis. Those episodes of care types that are highly variable and high resource-consuming processes – found in the upper right quadrant of the cart – reflect the greatest quality improvement opportunities that may lead to cost reduction. Selecting a single episode of care type will allows users to drill a layer deeper on the variation chart to gain insights into the variation of resource consumption at the level of DRG and care institution.
  • Bundled Analysis: This dashboard graphs the average spend per bundled across service providers stratified by the service categories inpatient, outpatient, professional, additional and other. Selecting two or more service providers will allow users to compare average spend across service
  • Detail: Users approved for patient-level detail will have access to this dashboard. The dashboard provides both summary and patient-level detail of the account and claim underlying the analytic application, thus providing additional insights into financial metrics and variation.


Quickly and easily prioritize improvement efforts across the care continuum

  • Claims-based tool supports cross-continuum view of each bundle
  • Identify the episodes of care that have the highest total payment amounts
  • Determine how cost is allocated across settings of care within each bundle
  • Review trends in the average amount paid and the number of episodes per bundle over time

Guides identification of cost- and variation-related opportunities

  • Highlight opportunities for reduction in variation and cost
  • Detailed views allow for evaluation at the DRG, site of service, provider, and patient level
  • Identify the qualifying inpatient ‘anchor’ admission as well as subsequent acute and post-acute care across 30, 60, and 90 days


Available Measures include:

  • Variation in total payment, by bundle
  • Mean paid amount by service provider, by bundle (includes severity)
  • Average spend per episode by institution and provider
  • Bundles ranked by total payment amount
  • Total spend by place of service, per bundle

See Sample Screenshots of Bundled Payments

Data Sources

  • Required: Claims data, for full tool functionality (to look at both in and out of network care). We can provide an in-network view using patient financial data, but this is much less ideal.

Bundled Payments: A Deeper View


ACO Bundled payment initiatives attempt to reduce care fragmentation and improve overall quality of care by aligning incentives between all providers—including hospitals, physicians, and post-acute care providers–that touch a single episode of care. Instead of issuing separate payments to each of the participating providers, the payer issues a single payment for the episode of care. Participating providers need to work closely with any provider that provides services to the patient as a part of that episode to manage costs and overall quality. CMS is currently piloting a bundled payment program, called the Bundled Payment for Care Improvement Initiative. This tool is built to support the most popular model in the pilot, Model 2, which provides a retrospective bundled payment after actual expenditures are reconciled against a target price for the episode of care in question.

What types of problems does Bundled Payments address?

To secure incentive dollars for participating in the bundled payment program, participants must work to control costs and manage quality with all providers that participate in the patient’s episode of care. Understanding sources of cost and variation in cost across settings and the providers that are participating in the episode is critical.

Use Cases

  • Health system leadership are considering the possibility of entering into a bundled payment initiative, and want to better understand which of the 48 episodes of care to choose; using the Bundled Payment analytic tool, leadership quickly identifies five bundles with the greatest variation in care, revealing significant opportunity for improvement
  • A health system has entered CMS’s Bundled Payment Initiative and is participating in all 48 episodes of care. An improvement team uses the Bundled Payment tool to identify the bundles with the highest costs and sources of variation. Specifically, the team evaluates payments across participating sites of care, and identifies its emergency room as a place to focus improvement efforts.

Anticipated Improvements

  • Reductions in cost and variation, improvements in care coordination

Success Measure Examples

Opportunity Identification:

  • Identify $ to save by reducing variation in care for sepsis, the highest ranked bundle by total payments
  • Identify the ED visit as a focus for improvement efforts and cost reduction for patients with COPD after determining that this setting of care is disproportionately costly