It’s no secret that employers want to control their costs, and at the same time help their employees to have access to the highest quality care at the lowest possible price.
Bundled pricing is a one-off arrangement that employers have with a specific facility (i.e. hospital, outpatient facility, imaging center, etc.) where the price is negotiated ahead of time. Bundled pricing is aptly named because all the services are bundled into one fee. For example, if you have an employee that has torn their ACL or their meniscus, all the costs associated with treatment (i.e. the surgeon, anesthesiologist, radiologist, hospital fees, follow up, etc.) are all built into one price. There are several advantages to using a bundled pricing method, including predictable costs and being able to choose a high quality of the provider.
Bundled pricing is a win-win-win: you have budget predictability, you’re guaranteeing a high-quality experiencefor your employees, and the providers can count on proper and timely payments.
Even though some may believe that providers wouldn’t prefer this type of arrangement, that couldn’t be further from the truth. With bundled pricing, providers know exactly what and whenthey’re getting paid, as opposed to other situations where they may not get paid for up to 120 days after the fact, or not at all. So, to avoid revenue cycle issues, many providers will happily agree to bundled pricing arrangements.
Figuring this out on your own can be a bit tricky; however, your third party administrator can help you can choose a provider that is compatible with your needs. Typically, bundled pricing is offered by a separate company that works with your TPA or advisor on an as needed basis. They choose high quality providers, and set up everything for the agreed upon procedure to make it easy and simple for both you and the employee. When executed properly, your employee doesn’t have to navigate the healthcare system by themselves (i.e. post-surgery physical therapy, medical equipment, medications, etc.). Plus it’s much more affordable for you, the employer.