HCD Healthcare Payment and Delivery Models Exam 2 Practice

The model uses a bundled payment that covers the entire episode of care around a hip or knee replacement, including postacute care, with an aggregate payment target. In this setup, Medicare pays a single bundled amount for the entire episode (not just the hospital stay or per diem), and that amount includes post-acute services (like skilled nursing facilities, home health, rehab, etc.). If actual spending is below the target, providers can share in the savings; if it's above, they may owe payments back. This contrasts with paying only the initial admission, excluding postacute care, or using per diem payments.