Bundled payments are no longer a future concept—they’re becoming a structural part of how care is paid for.
Beginning in January 2026, the Centers for Medicare & Medicaid Services will require more than 700 hospitals nationwide to participate in its first mandatory bundled payment model: the Transforming Episode Accountability Model. Under TEAM, hospitals will be accountable for the cost and quality of entire episodes of care for Medicare patients undergoing five designated surgical procedures.
This shift signals where the market is heading. And while TEAM participation applies to providers, the implications extend well beyond hospitals—particularly for employers focused on cost control, predictability and outcomes.
At Vanderbilt Health, bundled payments are not new. We’ve been designing, testing and operating bundles for years, including for large Middle Tennessee employers.
In 2020, Vanderbilt partnered with Metro Nashville Public Schools after the district identified rising maternity-related claims and significant cost variation. Together, we developed a maternity bundled payment program that aligned incentives around coordinated care, quality outcomes and defined costs—while encouraging employees to receive care within a clinically integrated system.
The early results were clear:
- C-section rates declined by 12%
- Spending for Neonatal Intensive Care Unit services decreased by 16%
- MNPS reduced maternity-related spending by $500,000 in the first year
- Patients rated the program in the 90th percentile for Net Promoter Score
By 2024, annual savings from the maternity bundle reached $1 million.
That experience informed the expansion of MyHealth Bundles into other high-cost, high-variation areas, including joint replacement, bariatric surgery, minimally invasive spine surgery, weight management and more.
Between 2020 and 2024, more than 11,000 patients participated in a bundle, including 642 bariatric procedures, 2,885 babies delivered, 341 joint replacements and more than 41,000 pounds lost through the MyWeightLossHealth Bundle.
Why Bundled Payments?
For employers, the relevance of bundled payments is straightforward. Bundles offer a way to address unpredictable health care costs, wide variation in care and limited visibility into what a procedure will cost before it happens.
Across MyHealth Bundles, employers have seen a reduction in health care spend, along with a more supported patient experience and a clearer financial picture.
As CMS accelerates the move toward episode-based payment models, bundled payments are becoming less of an experiment and more of an operating reality. To learn more about how MyHealth Bundles work and what they can mean for employers in Middle Tennessee, click here for our latest impact report.
