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.

Episode of Care: Asthma

Under Construction

Program Overview

  • Program Specifications
  • Asthma Definition

Episode of Care: Breast Cancer

Under Construction

Program Overview

  • Program Specifications
  • Breast Cancer Definition

Episode of Care: Maternity Care

Perinatal mortality in the United States continues to increase and the issue has gained attention from health care providers, public health officials, and policymakers. Improving maternal health is a priority for the State of Colorado. Providing prenatal care for more than 45% of births in Colorado, Health First Colorado recognizes the vital importance of a healthy start to life and has a deep commitment to providing quality maternity care to improve health outcomes, reduce cost, and address racial disparities for both pregnant and birthing parents and newborns. 

According to the Colorado Department of Public Health and Environment, mental health and substance use issues are the leading causes of the rising maternal morbidity and mortality in Colorado. In 2020, the Department launched its first episode-of-care program, the Maternity Bundled Payment Program, to incentivize providers to provide and improve quality mental health and substance use screening and referrals to pregnant and birthing parents by lowering maternal care cost and improving service quality.

The Maternity Bundled Payment Program was launched on Nov. 1, 2020. The program covers all prenatal care, care related to labor and delivery, and postpartum care for Health First Colorado pregnant and birthing parents. Obstetric care providers who deliver the baby or who provide prenatal services can join the program. Providers serve as principal accountable providers (PAPs) because of their partnership with the patient and their ability to influence the quality and cost of the episode. PAPs will have an episode budget calculated based on their historical claims data. Care episodes submitted during each performance year will be retrospectively reconciled against the budget. PAPs will receive shared savings if both episode cost reduction and quality improvement goals are met.

Typically, in bundled payment programs, PAPs are subject to both upside and downside risks. However, to give providers time to engage and learn how to succeed in the program long-term, the Department decides that PAPs will only be subject to upside risk during the program's voluntary participation years and the first year after the program goes mandatory. Downside risk will be applied starting the second mandatory year.

Program timeline:

  • Nov.1, 2020 - Program launch
  • Nov.1, 2020 – Oct.31, 2021: First program year (voluntary participation; upside risk only)
  • Nov.1, 2021 – Jun.30, 2022: Second program year (voluntary participation; upside risk only; aligning program year to the Department’s fiscal year)
  • Jul.1, 2022 – Jun.30, 2023: Third program year (voluntary participation; upside risk only)
  • Jul.1, 2023 – Jun.30, 2024: Fourth program year (mandatory participation begins; upside risk only)
  • Jul.1, 2024 – Jun.30, 2025: Fifth program year (mandatory participation; downside risk starts to apply)

Please contact Ke Zhang at ke.zhang@state.co.us for questions and more detailed information about the program. 

Please submit a Program Application if you are interested in joining the program.

Program Supporting Information