The Guide to The Categories of Value-Based Care (VBC) Models

This category incentivizes providers based on quality measures and cost-saving benchmarks.

• Features:

  • Providers earn financial rewards for achieving predefined quality outcomes, such as reducing hospital readmissions or improving chronic disease management.
  • Shared savings programs allow providers to share in the financial benefits of reducing healthcare costs.

• Distribution:

  • CMS: 40-50% of VBC models.
  • Commercial Payers: 30-40% of VBC models.

Category 3 combines traditional FFS payments with incentives tied to quality and cost efficiency. These models are more advanced and include partial risk-sharing agreements.

• Features:

  • Providers are paid per service but receive additional payments for meeting quality and cost benchmarks.
  • Bundled payments for specific episodes of care (e.g., joint replacement surgery) are common.
  • Emphasizes care coordination and efficiency to prevent unnecessary costs.

• Distribution:

  • CMS: 20-30% of VBC models.
  • Commercial Payers: 30-40% of VBC models..

This category focuses on comprehensive care for a defined patient population with fixed payments.

• Features:

  • Providers receive a set payment (capitated or global budget) to manage the health of a patient population, regardless of service volume.
  • Encourages preventive care, chronic disease management, and addressing social determinants of health (SDOH).
  • Shifts significant financial risk to providers.

• Distribution:

  • CMS: 20-30% of VBC models.
  • Commercial Payers: 20-30% of VBC models.

As the healthcare landscape evolves, new models are emerging to address specific patient needs and improve efficiency. Both CMS and commercial payers are driving these innovations.

1. Emerging CMS Models:

   • Direct Contracting (ACO REACH Model):

     Focuses on providing greater flexibility and risk-sharing arrangements for providers managing diverse patient populations.

   • Kidney Care Choices (KCC) Model:

     Designed to enhance outcomes and reduce costs for patients with chronic kidney disease.

   • Primary Care First (PCF): :

     Emphasizes accessible and proactive primary care to improve outcomes and reduce hospitalizations

2. Emerging Commercial Models:

   • Integrated Care Models:

     Foster collaboration among providers to streamline patient care and reduce fragmentation.

   • Oncology Care Models:

     Made to improve outcomes for cancer patients through personalized and coordinated care pathways.

   • Employer-Driven VBC Models:

     Employers play a direct role in driving better care for their workforce through innovative value-based strategies.

Understanding these categories and emerging trends is essential for healthcare providers, payers, and organizations aiming to thrive in a value-based environment. Here’s why it matters

• Knowing the level of financial and clinical risk involved helps organizations prepare accordingly.
• Each model provides opportunities to enhance patient care while reducing costs.
• Selecting the right model ensures alignment with organizational goals and patient needs.