Bundled Payments

The Department of Health Care Policy & Financing (the Department) has adopted innovative alternative payment and delivery models that support transition from traditional fee-for-service (FFS) payments to value-based payments. The bundled payment program is offered to providers caring for Health First Colorado (Colorado’s Medicaid program) members. Bundled payments involve providing a single, comprehensive payment that covers all the services within an episode of care. 

Under a bundled payment model, participating providers are only responsible for outcomes of the episode. These providers hold limited risk for staying within the designated budget threshold and are eligible for shared savings when the threshold is not exceeded. Bundled payments are designed to align incentives for providers and encourage collaboration to improve the quality and coordination of care across care settings. The approach aims to reduce silos in a member’s care experience and create efficiencies that lower costs. This results in improving the quality of care a member receives throughout the episode and ultimately leads to better health outcomes.