Bundled Payments

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: Maternity Bundled Payment
 
Overview
 

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 43% 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. 


In November 2020, the Department launched the Maternity Bundled Payment program. The program is the Department’s first episode-based payment program as well as one of the adopted innovative alternative payment and delivery models that support transition from traditional fee-for-service (FFS) payments to value-based payments. The program aims to improve perinatal care service quality, pregnant/birthing members' health outcomes, and newborn health outcomes. 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. The Maternity Bundled Payment program specially addresses substance use disorder (SUD) and mental health issues through the program incentive design to promote quality mental health and substance use screening, referral, and treatment to pregnant and birthing parents.
Stakeholders have been and will be consistently involved in the design and operation of the Maternity Bundled Payment program. During the first program year from October 2020 to November 2021, the Department formed a new Maternal Advisory Committee (MAC) (composed of primarily Black, Indigenous and People of Color Health First Colorado members with lived experience in Colorado Medicaid maternity care) to bring members’ perspectives, insights, and knowledge to the program. The MAC has been involved in the selection and approval of the quality measures for the second program year and will continuously contribute to the program operation, evaluation and improvement moving forward. 


The Department also collaborated with a diverse group of consumer and member advocates to learn about emerging concerns and care models in maternal care. In response to this feedback, the Department has updated the program’s incentive payment model to specifically address substance use disorder and mental health issues. In future program years, the Department is devoted to implementing a formal program evaluation through collaboration with the MAC, advocacy groups, and providers to measure and ensure program effectiveness.
 

Who Can Participate


The Maternity Bundled Payment 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 (but do not deliver the baby) 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 can earn incentive payments for improving the quality of care and can use the extra payment to get upstream of the problems, which are traditionally not covered by fee for service reimbursement but cause poor birth outcomes. PAPs have an annual episode cost target calculated based on their most recent historical claims data. Episodes covered during each performance year will be retrospectively reconciled against the target. PAPs will receive shared savings only if all improvement goals are met. Typically, in bundled payment programs, providers’ participation is mandatory and they are subject to both upside (shared savings) and downside risks (shared costs). However, to give providers time to engage and learn how to succeed in the program long-term, the Department decided that the program participation remains voluntary, and all PAPs will only be subject to upside risk.

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.

Provider Resources

Program Specifications 

Maternity Definition

PAP Thresholds

Frequently Asked Questions

Public Sessions Recordings (with most recent program updates):