Payment Models

At UnitedHealthcare, value-based care means we provide the support and compensation necessary to serve physicians’ overall patient populations. Equally important, we reward care providers for improving individual patients’ health.

Understanding how compensation changes in value-based care

UnitedHealthcare’s value-based compensation models are categorized into three general areas:

  • Performance-based programs.
  • Bundled and episode-based programs.
  • Accountable care programs.

Performance-based programs

Performance-based programs include primary care incentives, as well as hospital and physician performance-based contracts.

These contracts pay bonuses when care providers demonstrate improvements in quality care and cost-effectiveness. While providers continue to be paid on a fee-for-service basis, they also are paid a bonus when they meet or exceed certain goals, including:

  • Healthcare Effectiveness Data and Information Set (HEDIS) measures, which focus on patient health outcomes.
  • Hospital readmissions.
  • Hospital-acquired conditions.
  • Potentially avoidable hospitalization rates.
  • Out-of-network provider use.
  • Primary care incentives work well in smaller physician practices that may not have the staff or budget to cover more sophisticated technology and patient outreach.

Graphic: Value-based Care Payment Model

Bundled and episode-based programs

Bundled and episode payment programs pay a physician a lump sum in advance to manage the overall course of treatment for a specific condition or illness, including transplants.

This approach removes any focus or concern regarding how the health care is paid for, and instead places full attention on the patient’s care plan. The program identifies and rewards best treatment practices, consistent evidence-based care and better health outcomes.

In late 2014, UnitedHealthcare launched a three-year pilot program with the University of Texas MD Anderson Cancer Center to explore a new, bundled payment model for care of head and neck cancers that focuses on quality patient care and outcomes.

Accountable care programs

Accountable care programs are the most advanced of UnitedHealthcare’s suite of value-based programs. These programs work with care providers to manage the health of an overall population through shared savings, shared risk and/or capitation.

Accountable Care Organizations (ACOs)

An ACO is an organized group of care providers – physicians and a variety of health care professionals, specialists and/or hospitals.

  • By closely coordinating patient care, these care providers not only are more efficient, but also reduce costs and improve patient satisfaction.
  • When goals are met or exceeded, the providers share in the savings.

Providers in an ACO are encouraged to invest in technology, care coordinators and infrastructure to help track and monitor patient care. Unlike a patient-centered medical home, which is a single practice with multiple doctors, an ACO may include multiple physician practices as well as hospitals or other entities across an entire community.

Patient-Centered Medical Homes

In a patient-centered medical home, each individual has a personal primary care physician, or “medical home.” The physician coordinates all aspects of patient care both inside and outside of the clinic – including specialty care, hospital stays, home health care, community services and other resources as needed to provide comprehensive care.

Primary care physicians are compensated in two ways for improving quality: through a per-member-per-month (PMPM) payment and a shared savings bonus.

  • The PMPM payment is for the extra time spent on patient management and care coordination. These payments are in addition to typical office visit payments.
  • Providers also may earn bonuses by reducing discretionary or unnecessary hospitalizations and emergency room visits, specialty referrals and diagnostic tests.