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Value-based care is a form of reimbursement that ties payments for care delivery to the quality of care provided and rewards providers for both efficiency and effectiveness. This form of reimbursement has emerged as an alternative and potential replacement for fee-for-service reimbursement, which pays providers retrospectively for services delivered based on bill charges or annual fee schedules.
In order to transform how healthcare providers are reimbursed for services rendered, the Centers for Medicare & Medicaid Services (CMS) has itself introduced an array of value-based care models, such as the Medicare Shared Savings Program, Next Generation ACO Model, and Pioneer Accountable Care Organization (ACO) Model. Private payers have, in turn, adopted similar models of accountable, value-based care.
While the traditional fee-for-service reimbursement model promoted the quantity of services, federal officials have proposed several reimbursement programs that reward healthcare providers for the quality of care that they give to patients. Value-based care seeks to advance the triple aim of providing better care for individuals, improving population health management strategies, and reducing healthcare costs.
In more basic terms, value-based care models center on patient outcomes and how well healthcare providers can improve quality of care based on specific measures, such as reducing hospital readmissions, using certified health IT, and improving preventative care.