Medicare’s New Bundled Payments: Design, Strategy, and Evolution

The Centers for Medicare & Medicaid Services (CMS) is increasingly paying for health care through alternative payment models (APMs) that reward value and quality. Currently, more than 20% of Medicare fee-for-service payments flow through APMs, putting the Administration’s goals of 30% by 2016 and 50% by 2018 within reach.¹ These APMs include accountable care organizations (ACOs), bundled payments, and advanced primary care medical homes. In this Viewpoint, we discuss the role of bundled payments.