healthcare Reimbursement Models

New Reimbursement Models Providers Should Know About

The traditional fee-for-service reimbursement model in healthcare is undergoing a transformation, making way for innovative models that prioritize value-based care. Value-based care is a healthcare delivery model that rewards providers for the quality and outcomes of care, rather than the volume of services provided. Through this approach, providers are encouraged to provide higher-quality patient care instead of seeing more patients.

To help healthcare providers and practice leaders improve their practice and promote provider job satisfaction, let’s explore a number of different value-based reimbursement models that are emerging in the US healthcare landscape;


Pay-For-Performance (P4P) is a reimbursement model that rewards healthcare providers for meeting or exceeding certain quality metrics. These metrics can be related to a variety of factors, such as patient satisfaction, preventive care, and chronic disease management. By emphasizing the delivery of high-quality care that aligns with patient needs, P4P programs aim to enhance patient outcomes, decrease operational costs, and boost overall patient satisfaction.

Shared Savings

Shared savings programs are a type of reimbursement model that promotes collaboration between providers and payers. In this model, providers are incentivized to reduce costs and improve quality, and they receive a share of the savings they generate. For instance, a provider can earn savings by minimizing hospital readmissions for their patients. These programs encourage value-based care and help alleviate financial risks associated with high-cost patients.

Capitated Payments

Capitated payments are a type of value-based reimbursement model where providers are paid a fixed amount of money per patient, regardless of the amount of care that the patient receives. This is in contrast to the traditional fee-for-service model, where providers are reimbursed for each individual service that they provide. Capitated payments incentivize providers to coordinate care and manage costs effectively.

New reimbursement models are transforming the way healthcare is delivered. As the landscape continues to evolve, it is likely that these new reimbursement models will become more common, and providers who are able to successfully transition to and embrace these models will be well-positioned to thrive in the changing healthcare industry.

Policymakers also have a role to play in supporting this transition, creating an enabling environment that encourages innovation and collaboration. By working together, providers, payers, and policymakers can help to ensure that all Americans have access to high-quality, affordable healthcare.