A number of new payment models are being tested or implemented as part of national, state, and local efforts to achieve the “triple aim” which is to improve patient experience, improve health, and reduce costs. Some payment models build upon existing service/visit-based payment mechanisms such as Fee for Service (FFS) and Prospective Payment System (PPS) by offering additional financial incentives, like bonuses, for meeting certain quality and cost metrics. Other models move us further away from these traditional payment mechanisms to a more global approach at financing health care. In these models, providers are offered a fixed rate for a group of services rather than payment for each visit or service delivered; unused dollars are shared among the provider group.
This brief describes two such models—episodic bundled payments and global payments—along with the advantages, drawbacks and issues of both payment models for the HCH community. This brief also outlines strategies for representing your health center in payment reform discussions.