Healthcare Economist April 23, 2024
Jason Shafrin

While CMS has a target of getting 100% of Medicare beneficiaries into value-based payment (VBP) programs–such as accountable care organizations–by the end of the decade, implementing VBP in practice will be challenging. An editorial by Navathe et al. (2024) in Health Affairs provides some key considerations.

  • Providers forego certain revenue for uncertain ‘bonus’ payments. “One flaw is built into many VBP incentive designs: They require participants to forgo revenue for the opportunity to earn just a fraction of it back as shared savings. The math doesn’t work. These VBP contracts ask participating organizations to relinquish $1 for the uncertain opportunity to receive 50 cents in the future. For instance, hospital-led ACOs participating in the MSSP forgo revenue from hospitalizations...

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Topics: CMS, Govt Agencies, Insurance, Medicare, Payment Models, Provider, Value Based
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