According to MedPAC, what is a benefit of bundling payments?

The selected answer highlights a key aspect of bundled payments, which is that it enables Medicare to pay a set fee per hospitalization episode. Bundled payment models provide a predetermined amount of payment that covers all the services provided to a patient during a specific episode of care. This can include not only the initial hospitalization but also follow-up care, rehabilitation, and any related services that occur over a defined period.

By adopting this structure, the incentive shifts from fee-for-service, where providers may be paid for each individual procedure or service, to a system where the focus is on maintaining quality while managing costs efficiently. This can lead to more cohesive and coordinated care as providers work together to stay within the budget for each episode. Lowering costs while improving patient outcomes becomes the goal, effectively tying reimbursement to the quality of care rather than the volume of services provided.

The other options, while they may have their own merits in different contexts, do not encapsulate the primary benefit of bundled payments as defined by MedPAC. For instance, individualized patient care and ensuring full service availability can be important, but they do not directly relate to the fundamental principle of how bundled payments operate within the Medicare framework. Similarly, encouraging hospitals to provide a variety of services is not as directly tied