Payment Bundling (PB)/Prospective Payment System (PPS)

According to Centers for Medicare and Medicaid Services, the Bundled Payments for Care Improvement (BPCI) initiative is comprised of four broadly defined models of care, which link payments for the multiple services beneficiaries receive during an episode of care. Under the initiative, organizations enter into payment arrangements that include financial and performance accountability for episodes of care.

Examples of Payment Bundling (PB) or Prospective Payment System (PPS) Investment Activities

PB or PPS Investment Activities Allowable Investments
A. ICD-10 software
  • Training that updates and computerizes hospital policies and procedures
  • Hardware/software investments that improve quality, efficiencies, and coding
B. ICD-10 training
C. Efficiency or quality improvement training in support of PB or PPS related initiatives

Training that improves processes through adoption of best practices and the transition to value-based payment strategies such as the following:

D. S-10 Cost Reporting training
E. Price transparency training, software or hardware

Software or hardware to support hospital compliance with price transparency rule

Training on revenue cycle management* to improve processes that provide clear information about charges and cost to Medicare beneficiaries. Training examples:

* New or expanded activities and examples

Provided below is a bar graph of the number of SHIP hospitals between FY2016 - FY2018 that invested in PB/PPS specific investment activities.

Resource List

This project is/was supported by the Health Resources and Services Administration (HRSA) of the U.S. Department of Health and Human Services (HHS) under grant number UB1RH24206, Information Services to Rural Hospital Flexibility Program Grantees, $1,009,121 (0% financed with nongovernmental sources). This information or content and conclusions are those of the author and should not be construed as the official position or policy of, nor should any endorsements be inferred by HRSA, HHS or the U.S. Government.