Risk-Based Contracts May Not Cut Low-Value Care in Medicare Advantage

AJMC November 10, 2025
Maggie L. Shaw, Giuliana Grossi

Key Takeaways

• Transitioning to risk-based contracts showed no significant impact on low-value service use or overall healthcare utilization.
• Difference-in-differences analysis revealed some reductions in specific services, but few remained statistically significant after adjustments.
• More consistent changes in service utilization were observed in later years for two-sided risk contracts.
• Challenges in clinician engagement and limited study timeframe may have influenced the results, with organizations already achieving goals more likely to participate.

In this investigation, the authors evaluated the impact of a voluntary transition to risk-based contracts under Medicare Advantage on health care use.

Despite making a voluntary switch to risk-based payment contracts.¹ An upside-only plan has potential for financial bonuses, and 2-sided plans include possible bonuses and penalties, the...

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