Evaluation of Medicare's Bundled Payments Initiative for Medical Conditions
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Updated: Jan 11, 2026
Disorders of Erythrocytes
Karen E Joynt Maddox1, E John Orav1, Jie Zheng1
1From Washington University School of Medicine, St. Louis (K.E.J.M.); and Brigham and Women's Hospital (E.J.O., A.M.E.) and Harvard T.H. Chan School of Public Health (E.J.O., J.Z., A.M.E.) - both in Boston.
Background:
The Center for Medicare and Medicaid Innovation (CMMI) launched the Bundled Payments for Care Improvement (BPCI) initiative in 2013. A subsequent study showed that the initiative was associated with reductions in Medicare payments for total joint replacement, but little is known about the effect of BPCI on medical conditions.
Methods:
We used Medicare claims from 2013 through 2015 to identify admissions for the five most commonly selected medical conditions in BPCI: congestive heart failure (CHF), pneumonia, chronic obstructive pulmonary disease (COPD), sepsis, and acute myocardial infarction (AMI). We used difference-in-differences analyses to assess changes in standardized Medicare payments per episode of care (defined as the hospitalization plus 90 days after discharge) for these conditions at BPCI hospitals and matched control hospitals.
Results:
A total of 125 hospitals participated in BPCI for CHF, 105 hospitals for pneumonia, 101 hospitals for COPD, 88 hospitals for sepsis, and 73 hospitals for AMI. At baseline, the average Medicare payment per episode of care across the five conditions at BPCI hospitals was $24,280, which decreased to $23,993 during the intervention period (difference, -$286; P=0.41). Control hospitals had an average payment for all episodes of $23,901, which decreased to $23,503 during the intervention period (difference, -$398; P=0.08; difference in differences, $112; P=0.79). Changes from baseline to the intervention period in clinical complexity, length of stay, emergency department use or readmission within 30 or 90 days after hospital discharge, or death within 30 or 90 days after admission did not differ significantly between the intervention and control hospitals.
Conclusions:
Hospital participation in five common medical bundles under BPCI was not associated with significant changes in Medicare payments, clinical complexity, length of stay, emergency department use, hospital readmission, or mortality. (Funded by the Commonwealth Fund.).
Insights
The Bundled Payments for Care Improvement (BPCI) initiative did not significantly change Medicare payments or clinical outcomes for common medical conditions like CHF and pneumonia. This study found no significant impact on costs, length of stay, or readmissions.
Area of Science:
- Health economics
- Healthcare policy
- Clinical outcomes research
Background:
- The Center for Medicare and Medicaid Innovation (CMMI) launched the Bundled Payments for Care Improvement (BPCI) initiative in 2013.
- While BPCI showed reduced Medicare payments for joint replacements, its impact on medical conditions was unclear.
Purpose of the Study:
- To evaluate the effect of BPCI on Medicare payments and clinical outcomes for five common medical conditions.
- To assess changes in costs, clinical complexity, length of stay, emergency department use, readmissions, and mortality.
Main Methods:
- Utilized Medicare claims data from 2013-2015 for congestive heart failure (CHF), pneumonia, COPD, sepsis, and acute myocardial infarction (AMI).
- Employed difference-in-differences analysis comparing BPCI hospitals with matched control hospitals.
- Analyzed standardized Medicare payments per episode of care (hospitalization plus 90 days post-discharge).
Main Results:
- No significant changes in Medicare payments per episode of care were observed between BPCI and control hospitals for the studied conditions.
- There were no significant differences in clinical complexity, length of stay, ED use, 30/90-day readmissions, or mortality.
- Average Medicare payment per episode decreased slightly in both BPCI and control hospitals without a significant difference between groups.
Conclusions:
- Hospital participation in BPCI for common medical conditions was not associated with significant changes in Medicare payments or key clinical outcomes.
- The findings suggest BPCI's impact on cost and quality for these medical conditions was limited during the study period.
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