Value-based care means payments are tied to how good the care is and the results, not just how many services are done. The Centers for Medicare and Medicaid Services (CMS) supports this change and wants all traditional Medicare patients to be part of value-based care by 2030. In 2022, more than half of healthcare payments were made through value-based methods, according to the Health Care Payment & Learning Action Network (LAN).
There are two main ways providers handle money in these models:
Many value-based payment plans use shared savings or shared risk ideas. Knowing how these work helps decide which model fits best.
ACOs are groups of providers who manage the quality and cost of care for Medicare patients. Nearly half of traditional Medicare patients get care through ACOs, especially in the Medicare Shared Savings Program (MSSP). MSSP lets ACOs earn savings if they lower costs and meet quality standards. Some ACOs also agree to two-sided risk where they share losses if targets are not met.
In 2022, MSSP saved Medicare $1.8 billion. About 63% of ACOs made money from shared savings, showing these rewards work.
The new ACO REACH Model started in 2023. It requires strong provider leadership with at least 75% control by providers and includes patient advocates. It offers two risk options:
This model supports teamwork and focuses on patients with complicated needs while sharing financial risk more widely.
Bundled payments give one fixed amount for all services in a care episode, like joint surgery plus follow-up care. Providers keep savings if they manage costs within the fixed amount but pay if costs go over. This encourages efficient and standard care but needs careful management.
Programs like CMS’s Bundled Payments for Care Improvement (BPCI) have made bundled payments more common for certain treatments.
Capitation means a fixed payment per patient over time, no matter how many services are used. Providers take full financial responsibility for care within this budget. It can improve care coordination and cut unnecessary care, but also challenges providers to keep quality high while managing costs.
There are two types of capitation:
Medical practice leaders must think about money risk, readiness, and care skills when choosing between shared savings and shared risk.
In New York, Federally Qualified Health Centers (FQHCs) can only lead Level 1 upside-only contracts due to legal limits. To join Level 2 or 3 contracts with shared losses, they must work with larger groups. These higher-level contracts focus more on social needs like housing, food, and transportation, with help from community groups.
Both shared savings and shared risk models depend a lot on data to check performance and manage care.
Artificial Intelligence (AI) and workflow automation can help simplify tasks and improve care in value-based payment models, especially shared risk where operations are harder.
AI tools for phones and answering services, like those from Simbo AI, help with patient calls by:
This automation makes patients happier and helps meet care access and engagement goals tied to payment.
AI helps providers by:
By cutting down manual work and improving data, AI helps handle shared risk complexity.
AI can predict which patients might face hospital stays or problems. This allows providers to act early. This approach helps reduce costly events, which is very important when providers share financial losses.
AI automation can improve team communication, track patient follow-ups, and make sure care plans are followed. Good coordination helps avoid extra services, tests, and readmissions. This helps meet cost and quality goals in value-based contracts.
Choosing between shared savings and shared risk means balancing money and readiness. Some tips are:
Shared savings and shared risk models are two ways to link payment with quality and cost control in US healthcare. Understanding the responsibilities and using technology for data-based care and patient work can help practices do well in these payment plans.
CMS aims to have all traditional Medicare beneficiaries under a value-based care model by 2030.
Over half of healthcare payments in 2022 were made through value-based reimbursement models according to the Health Care Payment & Learning Action Network.
These models require extensive data analytics capabilities, population health management programs, and effective use of electronic health records (EHRs) for documentation and reporting.
Pay-for-performance models link claims reimbursement to quality and value, allowing providers to earn incentives based on their performance.
Providers are reimbursed under a fee-for-service model, but can retain a portion of savings if they reduce healthcare spending below a benchmark set by the payer.
Bundled payments involve paying providers a fixed amount for all services related to a patient’s episode of care, incentivizing cost control.
Providers may need to invest in health IT and care delivery systems, and they might not receive reimbursement for certain related services.
Shared risk models require providers to repay payers for financial losses if they exceed cost benchmarks, while shared savings models allow them to retain some savings.
Capitation payments require providers to take on full financial risk, receiving a fixed amount per patient, whether or not care is provided.
The two basic tracks are global capitation, covering all healthcare services with a single payment, and partial capitation, which pays for specified services with the rest on a fee-for-service basis.
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