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Value-based care has emerged as an alternative to fee-for-service reimbursement models. As you may have guessed, value-based care models reimburse based on quality instead of quantity.

So how exactly is value-based care different from the more tradition fee-for-service model?

In the traditional fee-for-service reimbursement model, healthcare providers were paid for services that they performed. This has incentivized many providers to order more tests and procedures as well as manage more patients to get paid more.

In an effort to lower healthcare costs and improve patient outcomes, the federal government designed value-based care programs. These reimbursement and care models strive to increase quality of care while also increasing patient access.

Value-based reimbursements are calculated by using numerous measures of quality and determining the overall health of populations. Unlike the traditional model, value-based care is driven by data because providers must report to payers on specific metrics and demonstrate improvement. Providers may have to track and report on hospital readmissions, adverse events, population health, patient engagement, and more.

To participate in value-based care, the Centers for Medicare & Medicaid Services (CMS) has developed several models for providers, such as the accountable care organization, bundled payments, and patient-centered medical homes.