The bundled payment program works like this: For some medical procedures, including joint replacements or some heart operations, the Centers for Medicare & Medicaid Services will add up the costs for the entire episode, from the hospital stay and medical supplies to the rehabilitation afterward. If the total costs are below a target set by CMS, the hospital gets to keep the savings. If not, the hospital has to pay Medicare the difference. This is supposed to encourage efficient spending and better care coordination between providers, so they can lower costs.