Value-Based Reimbursement Grows as Providers Take on More Risk

Value-Based Reimbursement Grows as Providers Take on More Risk

The shift towards value-based reimbursement in healthcare continued to grow in the past year, with over half of healthcare payments in 2022 being made through value-based reimbursement models. The latest data from the Health Care Payment & Learning Action Network (LAN) revealed that just 40.6 percent of payments were fee-for-service, while 18.1 percent had a link to quality and value. These models are gaining momentum, with 31.7 percent of payments coming from alternative payment models (APMs) involving both upside and downside financial risk for appropriate care. The data also demonstrated that risk-based models are on the rise, especially in Medicare Advantage, while the appetite for risk is growing across healthcare segments. The push towards value-based care, however, is still slower than expected, as providers and payers grapple with various challenges, including willingness to take on financial risk and operationalization hurdles. Despite these obstacles, there is a significant appetite for greater adoption of risk-based APMs, signaling progress towards transforming healthcare payments.

Medigy Insights

In 2022, value-based reimbursement models continued to gain traction in healthcare, with over half of healthcare payments being tied to such models, marking a shift away from traditional fee-for-service payment structures, according to the latest data from the Health Care Payment & Learning Action Network (LAN). This shift towards value-based care was further evident with an increase in payments linked to alternative payment models (APMs) featuring both upside and downside financial risk, showing a growing appetite for risk-based models. However, the transition to comprehensive population-based payments and risk-based APMs was slower than anticipated, with some challenges, including provider willingness to embrace financial risk and the operationalization of these models, hindering progress. Despite these challenges, there is a clear commitment to moving towards value-based reimbursement across the healthcare industry, signaling ongoing progress.


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