Managed Care Organizations: Win by Moving to Bundles and Real-Time Adjudication and Payments

What Are Healthcare Bundles—And Why Should You Care?

A healthcare bundle is a coordinated group of services designed to improve patient outcomes while streamlining costs. Bundles typically include three to five evidence-based interventions tied to a specific diagnosis or procedure. For instance, a knee replacement bundle might include the surgical procedure, anesthesia, post-op physical therapy, and follow-up care. A narrower example? Diagnosing strep throat and prescribing antibiotics—a single visit involving a rapid strep test and medication.

These combinations of care are already how many clinicians operate, even if reimbursement doesn’t reflect it. Whether it’s a physical therapist repeatedly delivering the same plan of care for lower back pain or a neurosurgeon performing standardized craniotomy protocols, providers (the industry term for clinicians and care delivery organizations) naturally work in bundles.

Yet, in the U.S. healthcare system, payments rarely reflect this logic. Instead, we maintain a fragmented and outdated fee-for-service (FFS) model. That approach adds waste and complexity, for managed care organizations (MCOs) and care delivery entities alike. The member/patient feels trapped in a confrontational, opaque, Kafkaesque system they did not choose. They do not know what they will pay, what outcomes they should expect, and their choices for alternative care.

The result? Billions are wasted on a bloated administrative layer euphemistically called “revenue cycle management.” Revenue cycle management is a foreign concept to almost every other industry. When you check into a Marriott hotel for a personal trip, they charge your personal credit card at the end of your stay. If you are on a business trip, they use the corporate rate, may provide bennies such as complimentary water bottles, and charge your company credit card. There is no revenue cycle management, payment integrity, etc.

The Status Quo: Fee-for-Service Still Dominates

Despite the rhetoric around “value-based care,” the numbers are damning:

• Fee-for-service still accounts for approximately 80% of healthcare payments in the United States.

• Value-based care (VBC) programs—which now include nearly 60% of Medicare Advantage beneficiaries and a growing share of Medicaid and commercial enrollees—often still rely on FFS infrastructure with some retrospective adjustments or bonuses.

• U.S. healthcare spending continues to climb, now exceeding $4.5 trillion annually, and projected to hit nearly $7 trillion by 2031, according to CMS (Centers for Medicare and Medicaid Services).

This signals a fundamental flaw: current VBC models are failing to control costs because they are layered on top of FFS instead of replacing it.

Meanwhile, bundled payments represent less than 5% of healthcare spending. This is a missed opportunity, given their proven ability to align incentives and improve outcomes.

Why Have Bundled Payments Stalled?

The answer is both cultural and structural.

Most MCOs were built around FFS. They receive fragmented claims through clearinghouses and process each individual service as a discrete transaction. Changing that model is difficult, especially when the organization doesn’t deeply engage in care delivery.

And building a successful bundle is not trivial. It requires understanding clinical pathways, care variation, risk stratification, and patient engagement—territory many payers have historically avoided.

But Things Are Changing. Fast.

Three powerful forces are reshaping the equation:

1. AI Enables Bundle Discovery and Pricing: Advances in machine learning allow payers to analyze historical claims data and identify “natural bundles”—diagnosis and procedure codes that consistently appear together. AI can also simulate cost outcomes and optimize pricing models.

2. Payers Are Already in Care Delivery: Whether it’s prior authorizations, claims audits, or member case management, most MCOs are already making clinical decisions—just inefficiently and after the fact. Many have also moved into direct care delivery: Humana owns CenterWell. Cigna operates Evernorth Care. UnitedHealth Group runs Optum Health, one of the largest providers in the country. Numerous regional MCOs are now owned by or affiliated with hospital systems.

3. Real-Time Technology Has Caught Up: Real-time adjudication, approvals, and even payments are now possible. With modern APIs (application programming interfaces), member communications tools, and fintech integrations, MCOs can approve and pay for a bundle instantly—just like a modern e-commerce transaction.

A Playbook for Action

Here’s how MCOs can lead the transformation to bundles:

1. Use Your Data: Start by mining your existing claims data to find common service clusters. These are your initial bundles. AI tools can accelerate this process and identify high-value opportunities.

2. Start Small: Pilot with a handful of providers and a limited set of bundles, ideally in high-volume, low-variation conditions, e.g., sinusitis, knee pain, and diabetes checkups.

3. Build a Simple Digital Front-End: Create a secure web portal that: a) Allows a clinic to propose a bundle for a patient; b) Clarifies any required documentation or diagnosis; c) Approves or rejects the bundle in real time, including any member cost share; d) Notifies the member (via SMS/email) to confirm approval and payment.

4. Eliminate Claims (Really): Once a bundle is approved, the clinic delivers care and uploads any required documentation. No claim submission is required. The MCO pays the provider automatically, ideally with member cost-share collected directly via card or bank transfer.

5. Dismantle the Revenue Cycle: No billing, no denials, no EOBs, no patient collections. You eliminate: a) Revenue cycle management vendors, b) Clearinghouse fees, c) Payment integrity audits, d) Member confusion and surprise bills.

6. Scale What Works: Once the model is validated, expand bundles to more services and more providers. Over time, this can replace a large portion of FFS (except true emergency care).

A Better Healthcare System Is Possible

It’s time for managed care organizations to do more than tweak around the edges. The tools are here. The incentives are aligned. The public is frustrated with opaque costs and post-care bills. And providers are exhausted by billing complexity.

By shifting to real-time bundles, MCOs can cut waste, improve satisfaction, and deliver true value-based care—not just by name, but by design.

Are you ready to create this future?