The unintended consequences of bundled payments.

Consensus is building that episode-based bundled payments can produce substantial Medicare savings, and the Center for Medicare & Medicaid Innovation's Bundled Payment Initiative endorses this concept. The program generates potential cost savings by reducing the historic cost of time-defined episodes of care, provided through a discount. Although bundled payments can reduce waste primarily in the postacute care setting, concerns arise that, in an effort to maintain income levels that are necessary to cover fixed costs, providers may change their behaviors to increase the volume of episodes.