Inter Organizational Practice Committee

Health Care Reform and Neuropsychology Toolkit

The IOPC is a super committee of AACN, NAN, D40, and ABN, tasked with coordinating advocacy efforts and improving the practice climate for Neuropsychology. The Healthcare Reform Toolkit is an evolving interactive website designed to educate neuropsychologists about healthcare reform and share effective practice models

The best way to understand healthcare reform is to understand how the money will flow.

What are bundled payments?


Bundled payments are also known as:

     Episode payment

     Case rate

     Modified Global payment

A bundled payment is a lump sum paid to hospitals or a group of physicians for an episode of care.  The amount of the bundled payment is based on an estimate of typical costs for caring for a particular illness.  If the group of providers involved in the episode of care bill less than the bundle, they make a profit, if they bill more, then they operate at a loss.  That is the incentive to provide efficient care.

Bundled payments are a middle ground between fee for service, where providers bill an unlimited amount, and capitation, where there is one lump sum per patient per year, regardless of the number of episodes of illness they need care for. There is less risk for providers with bundled payments than global payments.  For example, if Mr. Smith has 6 episodes of care, the group of providers receives 6 different bundled payments.  In a Global Payment scenario, the provider group receives only one lump sum per patient, per month or year, regardless of the number of episodes of care they need.  

How are the payments distributed?

Bundled payments might be made to an ACO, which then distributes the payment.  Alternatively, the payments are made directly to providers, but adjusted using predetermined rules.  This is known as Virtual Bundling.

How will bundled payments effect neuropsychologists?

This is not yet clear.  

Neuropsychological services are currently frequently bundled with inpatient services in rehab hospital settings. That is, when patients need an evaluation for a TBI, hospital staff physicians refer to a staff neuropsychologist, but no extra payment is provided by the insurance company to the hospital as a result of the evaluation.  The service is considered "bundled" with the episode of care.  Neuropsychologists are typically salaried staff in these arrangements. 

In a virtual bundled situation, neuropsychologists may be paid directly by the insurance companies, but there may be a "discount" subtracted from the fee based on a predetermined formula if the service is considered "bundled" with a care episode.  For example, if a CABG procedure results in a delirium, and a neuropsychologist provides an inpatient bedside evaluation, the EOB for the bill may indicate that the neuropsychological evaluation is considered part of the bundled service, and a discount will be subtracted from the payment.  Whether neuropsychological services are bundled with particular care episodes is an evolving process. 

In private practice or outpatient hospital practice setting, how neuropsychological services will be bundled is not yet clear.

CMS Medicare Bundled Payments initiative:

CMS is still developing their bundled payment system.  Under the Bundled Payments Initiative, CMS would link payments for multiple services patients receive during an episode of care. Instead of a tonsillectomy generating multiple claims from multiple providers, there is only one “bundled” payment for the team providing the care.  There is flexibility with which services are bundled. 

The Affordable Care Act includes provisions for a pilot bundled payment initiative beginning in 2013, with expansion beginning 2016. During the pilot, specifics of the bundled payments will be worked out. It is not clear how a broad bundled payment system will look. 

What are Global Payments?