Bundled payments offer a value-based approach for specialty physicians

Value-based payment programs increasingly lead to improved outcomes for patients and lower costs for the healthcare system. While the approach has centered on primary care, alternative models such as bundled payments offer a value-based approach for specialty physicians.

Integrating care coordination and delivery between primary care physicians and specialists, bundled payment programs provide considerable short- and long-term benefits to patients. Furthermore, success in both quality and efficiency measures has allowed the program to grow, covering more than 1,600 specialists operating in 27 states.

2020 proved to further illustrate the positive impact of bundled payments on quality of care. As compared to non-participants, bundle providers drove improved quality outcomes across the board in areas such as complication rate, wound infection rate and more. Readmissions, specifically, were 12% to 39% lower among MA bundle participants.1

Humana launched its first bundle in 2016 around total joint replacements. Since then, the effort has grown to include two spinal fusion bundles and a coronary artery bypass grafting bundle within MA, along with a commercial maternity bundle.

Here’s how the bundled payment programs work:

  • Humana’s bundles are upside-only, retrospective, episodic, total cost-of care models that offer a value-based opportunity to specialists. The care arrangements focus on improving quality and reducing costs across a patient’s entire episode of care, offering the potential for additional payment for better outcomes.
  • Bundle procedures are oftentimes performed at outpatient, lower-cost ambulatory surgical centers (ASCs). To that point, CMS added 11 codes to the ASC-covered procedure list—including total hip replacements—continuing the agency’s efforts to shift more inpatient hospital care to outpatient settings.
  • Partners participate with no risk in the first year. If the cost of the episode of care exceeds an allotted amount, the practice absorbs no financial penalty. There is an option to take risk in future years.

 Bundled payment participation


1,600 total physicians with bundled agreements in 27 states

14,000 Approximate number of Humana MA members undergoing surgeries performed by those physicians

33 Percentage of Humana total joint replacements performed by a bundle payment physician

30-day readmission rate by specialty bundled payment program1