Bundled Pricing & Standard Service Packages (SSPs)

Traditional healthcare billing treats each provider, each procedure, and each service as a separate line item. A colonoscopy involves a facility charge, a surgeon charge, anesthesia, and pathology—often billed as four separate claims, sometimes by four different entities. This fragmentation creates administrative burden and unpredictable costs for patients. Turquoise TEP solves this with Standard Service Packages (SSPs): bundled pricing units that package multiple providers and services into a single, negotiated rate.

What Is an SSP?

A Standard Service Package (SSP) is an atomic unit of bundled pricing. It defines which services, providers, and clinical activities are grouped together under a single rate. Once an SSP is defined in a Direct Contract, all encounters matching that SSP are priced as a single bundle—not as separate claims.

An SSP has three key attributes:

1. Clinical Definition — Which procedures (CPT codes), facility types (revenue codes), and provider roles (surgeon, anesthesia, pathology) are included.
2. Rate — A single negotiated price covering all included services.
3. Provider Shares — How the bundled rate is divided among the providers involved (e.g., 40% to facility, 35% to surgeon, 15% to anesthesia, 10% to pathology).

Three Levels of Bundling

SSPs operate at three hierarchical levels:

Episode Level

An Episode is the broadest bundle, representing a complete clinical journey for a condition or procedure. Examples:

• Total Knee Replacement (TKR): Global surgical episode including pre-operative testing, the surgery, hospital stay, post-operative recovery, physical therapy, and follow-up visits. Rate: $35,000 all-inclusive.
• Diabetes Management: 12-month episode including endocrinology visits, lab work, insulin/medications, and routine follow-up. Rate: $2,500 per year.

Episode-level bundles are typically negotiated between major health systems and regional payers. They require deep clinical and financial integration because they span weeks or months and may involve unexpected complications.

Encounter Level

An Encounter is a single discrete service delivery event. Examples:

• Outpatient Colonoscopy: A single visit including facility, surgeon, anesthesia, and pathology. Rate: $2,500 (includes all four provider roles).
• Outpatient MRI: Facility and radiologist. Rate: $800.
• Urgent Care Visit: Physician and facility. Rate: $250.

Encounter-level bundles are the most common for outpatient services. They are precise, easy to forecast, and align with patient expectations (one visit = one price).

Item/Service Level

An Item/Service is the granular level, typically a single CPT code or procedure. Examples:

• CPT 45378 (Colonoscopy with polypectomy): Rate: $1,200 (facility + surgeon only; anesthesia and pathology priced separately).
• CPT 99213 (Office visit, established patient, moderate complexity): Rate: $150.
• CPT 81003 (Urinalysis by dipstick): Rate: $10.

Item/Service level bundles are used for high-volume, commodity-like services where bundling overhead would exceed benefits.

How Bundles Work: The Sharp HealthCare GI Example

Sharp HealthCare (a large provider system in San Diego) has negotiated Direct Contracts with Sharp Health Plan (the payer) for outpatient GI procedures. Here is how bundling works:

Single Procedure Bundle: Colonoscopy (CPT 45378)

Clinical Scope:

• Facility charge (Sharp Outpatient Pavilion or hospital outpatient department)
• Surgeon (gastroenterologist performing the colonoscopy)
• Anesthesia (anesthesiologist or nurse anesthetist providing sedation)
• Pathology (if biopsies or polyps are removed, pathology review is included)

Bundled Rate: $2,500

Provider Shares:

• Facility (revenue code 0360, OR/Procedure Room): 40% = $1,000
• Surgeon (CPT 45378, professional): 35% = $875
• Anesthesia (CPT 00810, professional): 15% = $375
• Pathology (CPT 88307, professional): 10% = $250

Claim Submission: Four separate claims are submitted (one professional claim from each provider, one institutional claim from the facility), but they are grouped into a single SSP and priced as one $2,500 bundle. Each provider is automatically paid their negotiated share.

Complex Bundle: Double Header (EGD + Colonoscopy)

A "Double Header" is a single encounter in which two GI procedures are performed: an esophagogastroduodenoscopy (EGD, CPT 43235) and a colonoscopy (CPT 45378). Both procedures are performed under the same anesthesia and in the same facility visit. This is an encounter-level bundle.

Clinical Scope:

• Facility charge (for two procedures + one anesthesia)
• Surgeon (EGD and colonoscopy, same provider or two providers)
• Anesthesia (single anesthesia for both procedures)
• Pathology (biopsies from both procedures)

Bundled Rate: $3,800 (rather than $2,500 + $2,500 = $5,000 for two separate encounters, the Double Header is discounted because there is only one facility visit, one anesthesia, one setup)

Provider Shares:

• Facility: 40% = $1,520
• Surgeon(s): 35% = $1,330
• Anesthesia: 15% = $570
• Pathology: 10% = $380

Why Bundle? The Double Header saves the payer $1,200 (27% discount) and the patient the same amount. The provider system benefits from higher volume and simpler billing. Both parties have incentive to structure these bundles.

Rate Types

Direct Contracts can define rates using different methodologies:

Case Rate (Fixed Dollar Amount)

A fixed dollar amount per encounter or episode, regardless of complexity. Example: "Colonoscopy = $2,500, always."

Pros: Simple, predictable, easy to forecast. Cons: May not account for complexity variations.

Percent of Medicare

A rate expressed as a percentage of the Medicare Physician Fee Schedule (MPFS) or the Medicare Inpatient Prospective Payment System (IPPS). Example: "Surgeon share = 120% of Medicare MPFS for CPT 45378."

Pros: Automatically adjusts annually as Medicare rates change; ties to industry standard. Cons: Requires ongoing reference to Medicare Relative Value Units (RVUs).

Percent of Base Weight

A rate expressed as a percentage of a contractually defined "base weight" (often the provider's current billed charge or a reference price list). Example: "Facility share = 75% of base charge weight."

Pros: Tied to provider's existing fee schedule, easy to understand. Cons: Less transparent, can hide underlying cost assumptions.

SSP Definition in Direct Contracts

A Direct Contract specifies SSPs in a structured way. Here is an example contract excerpt for Sharp HealthCare:

{
  "directContractID": "SHARP-GI-2024",
  "provider": "Sharp HealthCare",
  "payer": "Sharp Health Plan",
  "effectiveDate": "2024-01-01",
  "ssps": [
    {
      "sspID": "COLONOSCOPY-001",
      "clinicalDefinition": {
        "procedureCodes": ["45378"],
        "facilityTypes": ["outpatient", "ambulatory-surgery-center"],
        "includeAnesthesia": true,
        "includePathology": true
      },
      "rateType": "caseRate",
      "rate": 2500,
      "currency": "USD",
      "providerShares": [
        { "provider": "Sharp Outpatient Pavilion", "role": "facility", "share": 0.40 },
        { "provider": "Sharp GI Specialists", "role": "surgeon", "share": 0.35 },
        { "provider": "Sharp Anesthesia", "role": "anesthesia", "share": 0.15 },
        { "provider": "Sharp Pathology Lab", "role": "pathology", "share": 0.10 }
      ]
    },
    {
      "sspID": "DOUBLE-HEADER-001",
      "clinicalDefinition": {
        "procedureCodes": ["43235", "45378"],
        "facilityTypes": ["outpatient", "ambulatory-surgery-center"],
        "includeAnesthesia": true,
        "includePathology": true,
        "simultaneousProcedures": true
      },
      "rateType": "caseRate",
      "rate": 3800,
      "currency": "USD",
      "providerShares": [
        { "provider": "Sharp Outpatient Pavilion", "role": "facility", "share": 0.40 },
        { "provider": "Sharp GI Specialists", "role": "surgeon", "share": 0.35 },
        { "provider": "Sharp Anesthesia", "role": "anesthesia", "share": 0.15 },
        { "provider": "Sharp Pathology Lab", "role": "pathology", "share": 0.10 }
      ]
    }
  ]
}

CPT to SSP Mapping

When a claim is submitted, TEP must determine which SSP applies. This is done via CPT code matching. Here is a reference table for Sharp HealthCare GI services:

CPT Code	Description	Provider Role	SSP	Notes
43235	Esophagogastroduodenoscopy (EGD)	Surgeon	COLONOSCOPY-001 (if standalone) or DOUBLE-HEADER-001 (if with 45378)	Bundled with anesthesia + facility + pathology
45378	Colonoscopy with biopsy/polypectomy	Surgeon	COLONOSCOPY-001 (if standalone) or DOUBLE-HEADER-001 (if with 43235)	Most common gastroenterology procedure
00810	Anesthesia for lower GI endoscopy	Anesthesia	COLONOSCOPY-001 or DOUBLE-HEADER-001	Included in bundle; separate professional claim
88307	Pathology consultation, surgical specimen	Pathology	COLONOSCOPY-001 or DOUBLE-HEADER-001	Included in bundle; separate professional claim
0360	OR/Procedure Room (revenue code)	Facility	COLONOSCOPY-001 or DOUBLE-HEADER-001	Institutional claim; required for facility bundling

tip

Bundle Selection Logic: When multiple claims are submitted from the same encounter, TEP uses the primary procedure code (usually the surgeon's CPT) to select the SSP. If a secondary code is present (e.g., both 43235 and 45378), TEP checks for a multi-procedure SSP (like DOUBLE-HEADER-001) before defaulting to single-procedure bundles. This logic is configurable per contract.

Provider Shares and Payment Splitting

Once an SSP and bundled rate are identified, payment is split to each provider according to the contract-defined shares. This happens automatically in the ClaimResponse stage.

Example: A colonoscopy is performed at Sharp Outpatient Pavilion. The bundled rate is $2,500. Claims are submitted from the facility, surgeon, anesthesiologist, and pathologist.

TEP prices the bundle at $2,500 and calculates:

• Facility: $2,500 × 0.40 = $1,000
• Surgeon: $2,500 × 0.35 = $875
• Anesthesia: $2,500 × 0.15 = $375
• Pathology: $2,500 × 0.10 = $250

Four separate payment transfers are initiated via Stripe Connect, each tagged with the encounter ID and trace_id. All four payments complete within seconds.

warning

Important: Provider shares must sum to 100%. If shares are defined as 40% + 35% + 15%, the remaining 10% must be explicitly assigned (e.g., to pathology or retained by the payer/plan as an administrative fee). Unallocated percentages result in claim validation errors.

Managing Bundle Variations

Real-world clinical scenarios sometimes create bundle ambiguity. For example:

• What if the colonoscopy didn't require biopsies? Pathology was still included in the $2,500 bundled rate because the contract requires it. No adjustment is made.
• What if the patient required an emergency blood transfusion? The transfusion is out of scope. A new claim is submitted for the transfusion with its own SSP and pricing.
• What if the procedure took 3 hours due to complexity? The bundled rate of $2,500 applies regardless of duration or complexity. (This is a risk the provider assumes in accepting the bundle.)

Contract metadata fields allow for nuanced handling:

• includePathologyAlways (boolean): Even if no biopsies are taken, pathology is paid.
• outOfScopeThreshold (float): If additional costs exceed this amount, they trigger a separate claim.
• emergencyServiceHandling (enum: "inclusive" | "separate"): Whether emergencies are bundled or billed separately.

Next Steps

See Encounter Lifecycle to understand how SSPs are applied during claims processing. Then explore Fast FHIR R4 Mapping for the detailed claim structure and how SSPs are represented in FHIR.