How Do Outlier Payments Work in Bundled Payment Arrangements?

Outlier payments provide additional reimbursement when costs significantly exceed the bundled payment amount, protecting providers from excessive financial risk. Outlier thresholds define how far costs must exceed the bundle before additional payment triggers, typically 2-3 times the bundled amount. When costs surpass this threshold, providers receive a percentage of costs above the threshold. Outlier provisions are crucial in bundled payment arrangements because they limit downside risk from unusually expensive cases while maintaining incentives for efficiency in typical cases.