For some time now, health plans have been moving toward value-based payments – paying providers in non-fee-for-service ways in order to improve quality, reduce the financial motivation to provide more, and sometimes, unnecessary care and to reign-in costs. Bundled payment has been a strategy used in the commercial, Medicare and Medicaid markets as one option to encourage providers to manage the costs and quality of care. A bundled payment is a fixed dollar amount that covers a set of services, defined as an episode of care, over a defined
period of time.

In the Medicaid market, three states have mandated the use of bundled payments (either with providers or managed care organizations (MCOs)) and many more states are, or are considering, mandating Medicaid MCOs to use alternatives to fee-for-service payment to pay

This document provides a set of recommendations that ACAP MCOs should consider when implementing a bundled payment program.

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