Back To Search Results

Clinical Resource Management Reimbursement Models and Accountable Care

Editor: Steven B. Myers Updated: 5/25/2024 12:20:11 PM

Summary / Explanation

Healthcare Reimbursement

Overview: The United States has a complex healthcare reimbursement system encompassing a range of insurance plans and payment methods. Understanding the fundamental ideas and the system's historical development is essential for successfully navigating this intricate structure.[1]

Historical context: Healthcare reimbursement in the United States dates back to the mid-19th century, with the introduction of health insurance terms. However, the widespread adoption of health insurance did not occur until the early 20th century, particularly after World War II. Reviewing this history may offer valuable perspectives on the present reimbursement environment.

Health insurance: Health insurance serves as the foundation of healthcare reimbursement, alleviating the financial burden of healthcare expenses for individuals and funding health care by sharing resources and risks across a larger group.[2]

Employment link: The link between health insurance and employment is a significant characteristic of the US healthcare system. Many individuals obtain health coverage through employer-sponsored plans, with employers often subsidizing a portion of the premiums. However, this reliance on employment for health coverage still poses challenges, especially for individuals without stable employment.[3]

Access challenges: Although health insurance is widely available, many individuals still face challenges accessing health care. Factors such as job loss, high premiums, and insufficient coverage may contribute to these disparities. Addressing these challenges is crucial for achieving fair and equal access to healthcare services.

Equity considerations in reimbursement: To promote equitable health care, reimbursement models should consider social determinants of health and prioritize underserved communities. This would reduce disparities in reimbursement rates and increase access to innovative treatments.

Traditional Reimbursement Models

Fee-for-service reimbursement: Fee-for-service reimbursement is a payment model where clinicians receive payment for each service provided, creating a direct connection between service delivery and payment. This model is widely used in the US healthcare system and has faced criticism for promoting quantity rather than quality.

Payment mechanisms: Clinicians charge for every service they provide under fee-for-service reimbursement, and third-party payers reimburse based on either fee schedules or negotiated rates. Although this model gives clinicians and patients autonomy in selecting and receiving healthcare services, it can also increase healthcare costs.[4]

Pros and cons: Fee-for-service reimbursement allows patients and clinicians to select and administer healthcare services. However, the absence of cost containment measures and the likelihood of excessive use raises concerns regarding viability and affordability.

Alternative Reimbursement Models: Episode-of-Care Reimbursement

Introduction: Episode-of-care reimbursement commonly bundles payments for all services linked to a specific condition or treatment, prioritizing coordination and efficiency. This model incentivizes patient outcomes and cost efficiency by shifting from an individual service focus to a holistic approach.

Capitated payment: Capitation is a payment model where clinicians receive a fixed amount per patient, regardless of their services. This model encourages clinicians to control costs and prioritize preventive health care, but it may also lead to concerns about patient selection and underuse of services.

Global payment: Global payment methods simplify payments for multiple healthcare services and clinicians involved in a single episode of care. By offering a lump sum for comprehensive care, they promote efficiency and care coordination while addressing healthcare system fragmentation.

Prospective payment: Prospective payment methods have fixed rates for healthcare services according to average resource consumption. Although this strategy aims to ensure financial predictability and contain expenses, it may create difficulties in predicting resource requirements and encouraging appropriate care.[5]

Critiques and concerns: Although episode-of-care payment models have advantages, including enhanced care coordination and financial efficiency, critics argue that they may lead to patient selection bias, underuse of services, and concerns about care quality. Addressing these concerns is essential to maximize the efficacy of these payment models.

Patient-centered reimbursement models: Incorporating patient preferences and outcomes into reimbursement methods is crucial. This incorporation can be achieved by incentivizing patient engagement, shared decision-making, and adherence to treatment plans. Reimbursement models should be customized to align with patient-centered care principles and strengthen the patient-clinician relationship.

Quality metrics and outcome-based reimbursement: Reimbursement frameworks continually improve by utilizing quality metrics and outcome measures. Patient-reported outcomes and subjective care experience measures are being incorporated to achieve standardized quality indicators while accommodating diverse patients and clinical settings.

Investments in health information technology: The health information technology infrastructure supports value-based care and reimbursement. However, health information technology systems present interoperability, data security, and usability challenges. Strategies are required to incentivize health information technology adoption and optimize its use to drive efficiency and quality improvement.[6]

Collaborative care models and interprofessional reimbursement: These models encourage teamwork and reimbursing team-based care models in the healthcare industry by removing reimbursement obstacles for nonphysicians such as nurses, pharmacists, and social workers. This approach prioritizes effective collaborative care and reduces healthcare expenses.

Innovation in alternative payment models: New alternative payment models are being developed to improve traditional fee-for-service and capitation arrangements. These innovative payment models include shared risk pools, bundled payments for complex conditions, and pay-for-performance incentives. Evaluating these payment models' potential benefits and challenges in enhancing patient care and driving value is imperative.[7]

Future directions in reimbursement policy: How stakeholders, research, and evidence-based policymaking determine trends and policy developments that influence the reform of healthcare reimbursement and financing policies. Scrutinizing healthcare reimbursement practices worldwide may benefit reform of the domestic healthcare system.

Data analytics and predictive modeling in reimbursement: An effective method for determining reimbursement decisions and allocating resources efficiently in health care involves data analytics and predictive modeling. By integrating big data and machine learning technologies, healthcare professionals can better identify high-risk patients, anticipate healthcare requirements, and manage care more effectively. Although challenges surrounding data integration, accuracy, and privacy exist, these techniques can significantly improve healthcare efficiency and efficacy.[8]

Regulatory frameworks and reimbursement compliance: Reviewing healthcare reimbursement regulations involves discussing compliance with federal and state laws, payer policies, and accreditation standards. Clinicians participating in alternative payment models, such as Accountable Care Organizations (ACOs) and bundled payment arrangements, must meet compliance requirements. Maintaining transparency, integrity, and ethical standards in reimbursement practices is essential for predicting and implementing regulatory reform.

Health equity and cultural competency in reimbursement: Reimbursement policies and practices should consider health equity and cultural competency, which means acknowledging and tackling disparities diverse patient populations face in healthcare access, quality, and outcomes. Policies should ensure culturally sensitive care delivery, language access, and health literacy that prioritize equitable reimbursement and healthcare delivery for all.

Incentivizing preventive care and population health management: Providing incentives for preventive care and population health management in reimbursement models is crucial. This action involves shifting reimbursement incentives towards preventive services, health promotion, and chronic disease management. These changes aim to improve health outcomes and reduce healthcare costs in the long term. However, challenges exist in aligning financial incentives with preventive care goals and engaging clinicians in population health initiatives.

Consumerism and patient financial responsibility: The rise of consumerism in health care affects patient financial responsibility and reimbursement practices. To improve financial responsibility, patients must be informed to make healthcare decisions, navigate reimbursement systems, and manage out-of-pocket costs. Healthcare transparency tools, price transparency initiatives, and value-based insurance design can significantly promote consumer engagement and financial responsibility.

Technology disruption and innovation in reimbursement: Technological innovations, including artificial intelligence, blockchain, and telemedicine, are reshaping healthcare reimbursement. Emerging technologies can improve reimbursement processes, data sharing, and value-based care delivery. However, adapting reimbursement frameworks to meet regulatory and patient privacy standards while keeping up with technological advancements can be challenging.

Value-based pharmaceutical reimbursement: Pharmaceutical reimbursement is shifting towards value-based pricing and reimbursement models. Policies that align drug prices with clinical outcomes, patient preferences, and healthcare value are being implemented. However, implementing these policies is challenging, including defining value metrics, establishing pricing benchmarks, and addressing market dynamics and regulatory constraints.[9]

Value-based purchasing and patient outcomes: Value-based purchasing initiatives incentivize high-quality care and positive patient outcomes by linking reimbursement to measurable outcomes such as clinical effectiveness, patient satisfaction, and population health improvements. Value-based purchasing promotes clinician accountability, reduces healthcare costs, and improves healthcare value.

Managed Care Strategies

Features: Managed care is a set of methods aimed at decreasing costs and improving the quality of treatment. Components of managed care include care coordination, utilization control, and an emphasis on preventive care.

Forms: Understanding Health Maintenance Organizations, Preferred Provider Organizations, and Point-of-Service plans is important, as they influence how health care is delivered within managed care. Knowing about these models is crucial for navigating managed care effectively.

Criticisms: Although managed care models offer advantages, they have encountered objections concerning limitations on patient choice, clinician independence, and the possibility of conflicts of interest. Managing expenses while prioritizing patient well-being remains a challenge in managed care settings.

Innovations in reimbursement models public-private financing agreements: The progress and acceptance of precision medicine interventions with proven clinical effectiveness could be accelerated by implementing collaborative funding agreements between public and private entities and reimbursement models based on performance. Furthermore, these agreements and models could also help ensure patients have greater access to these interventions.

Interplay between reimbursement and distribution models: The effectiveness of incentives in contracts with financial goals may be hindered if there is a misalignment between reimbursement and distribution models. Further research and analysis of these connections and factors can suggest evidence-based options for achieving affordable and convenient hospital patient services. Bridging the gap between financial incentives and care delivery is essential to ensure optimal outcomes and patient welfare.[10]

Transition to Value-Based Care Models

Background: The healthcare system in the United States is experiencing a significant transition from traditional fee-for-service payment to value-based alternative payment models, evidenced by the adoption of ACOs under the Medicare Access and CHIP Reauthorization Act. This shift indicates a strong desire from Congress to accelerate this change. With the market-based approach receiving bipartisan support, it is critical to evaluate the impact of ACOs on clinical care and resolve any emerging challenges.

Advancements in payment models: In the healthcare industry, there has been significant advancement in comprehending how hospitals and physician groups adjust to variations in payment methods and alternative payment models, particularly ACO contracts. These models ensure clinicians remain responsible for the cost and caliber of care. A diverse range of clinicians with varying structures and capabilities, such as care management programs, advanced analytics, and support for shared decision-making, can participate in these programs to enhance the quality of healthcare delivery.

Effects of Accountable Care Organizations: Patients who receive care under ACOs generally encounter moderate reductions in healthcare costs and better satisfaction rates, particularly those with high healthcare requirements and expenses. ACOs managing a more significant proportion of high-need patients with multiple chronic conditions or disabilities had prior experience with financial risk, higher initial financial benchmarks, and achieved more substantial savings. Nevertheless, the performance of different ACOs varies considerably; while some surpass their economic expectations, others do not.

Research insights: Multiple studies have analyzed diverse ACO payment models, such as the Medicare Shared Savings Program (MSSP), Colorado's Accountable Care Collaborative, and Oregon's Coordinated Care Organizations, demonstrating different degrees of success. For example, the MSSP has demonstrated improved inpatient and skilled nursing spending compared to the state-based Medicaid ACO models, which have improved quality and cost performance.

Policy considerations: Policymakers must consider many factors when designing healthcare policies, including concerns about the consolidation of the healthcare industry, the amount of financial risk required to bring about behavior alterations, and potential discrepancies between various payment approaches. Antitrust regulators must thoroughly assess the need for economic unity across different care environments to guarantee efficient clinical coordination, which is crucial for providing high-quality healthcare services to patients.

Impact of healthcare policy changes: Analysis of recent policy modifications and their effects on reimbursement models revealed the impact of political shifts on the progress of initiatives related to value-based care. In addition, issues related to regulatory barriers and opportunities to promote innovation while upholding patient safety and quality standards were observed. Therefore, policymakers and healthcare executives must closely consider these factors while designing and implementing healthcare policies.

Integration of telehealth and remote care: Telehealth is pivotal in transforming healthcare delivery and reimbursement. However, integrating telehealth services into existing reimbursement frameworks presents significant challenges. Despite these challenges, telehealth must be leveraged to improve access, efficiency, and patient outcomes while controlling costs. By incorporating telehealth into the healthcare system, we can potentially notice a shift towards more patient-centered care and improved health outcomes.

Financial accountability in Accountable Care Organizations: ACOs differ in their level of financial responsibility, with some adhering to complete global budgets that may result in significant losses and others conforming to shared savings schemes. The level of economic pressure required to encourage behavioral change is still being explored, although some studies reveal that more reasonable incentives might not always be required. Although financial incentives may not always be necessary, they serve as essential motivators for many ACOs.[11]

Interplay between payment models: Implementing different alternative payment models may lead to conflicting interests, particularly regarding allocating cost savings among bundled payment programs. As more alternative payment models become viable, the Centers for Medicare & Medicaid Services must actively evaluate and address these potential conflicts and strive to ensure that the ACO goals are not compromised. Maintaining a comprehensive approach to cost savings is critical for maximizing overall savings for the healthcare system.

Challenges in value-based care implementation: Although the healthcare industry is moving towards value-based care, implementing these models poses significant challenges. These challenges include reluctance from clinicians accustomed to the fee-for-service system, technical and operational obstacles in sharing data and coordinating care between clinicians, and the importance of educating and engaging patients in value-based care. In addition, policy and regulatory changes are also necessary to advance the adoption of value-based care.


Comprehending healthcare reimbursement in the United States is complex and requires understanding historical, economic, and regulatory factors. Two common reimbursement models are fee-for-service and episode-of-care, each with advantages and drawbacks. Ongoing innovation and refinement of reimbursement policies are necessary to ensure equitable access to high-quality care for everyone. In addition, evaluating alternative payment models such as ACOs in the long term may contribute significantly to the practical and sustainable reform of payment and delivery systems.

Register For Free And Read The Full Article
Get the answers you need instantly with the StatPearls Clinical Decision Support tool. StatPearls spent the last decade developing the largest and most updated Point-of Care resource ever developed. Earn CME/CE by searching and reading articles.
  • Dropdown arrow Search engine and full access to all medical articles
  • Dropdown arrow 10 free questions in your specialty
  • Dropdown arrow Free CME/CE Activities
  • Dropdown arrow Free daily question in your email
  • Dropdown arrow Save favorite articles to your dashboard
  • Dropdown arrow Emails offering discounts

Learn more about a Subscription to StatPearls Point-of-Care



Petersohn S, Grimm SE, Ramaekers BLT, Ten Cate-Hoek AJ, Joore MA. Exploring the Feasibility of Comprehensive Uncertainty Assessment in Health Economic Modeling: A Case Study. Value in health : the journal of the International Society for Pharmacoeconomics and Outcomes Research. 2021 Jul:24(7):983-994. doi: 10.1016/j.jval.2021.01.004. Epub 2021 Mar 31     [PubMed PMID: 34243842]

Level 2 (mid-level) evidence


Switzer T, Sawin EM, Eaton M, Switzer D, Lam C, Robinson J, Elkins D. Implementing Enhanced Primary Care Registered Nurse Reimbursement in Rural Health Clinics: A Policy Analysis. Policy, politics & nursing practice. 2021 Aug:22(3):201-211. doi: 10.1177/15271544211011989. Epub 2021 Apr 27     [PubMed PMID: 33906510]


McGuirk J, Divine C, Moon SH, Chandak A, Zhang Z, Papanicolaou GA. Economic and Clinical Burden of Virus-Associated Hemorrhagic Cystitis in Patients Following Allogeneic Hematopoietic Stem Cell Transplantation in the United States. Transplantation and cellular therapy. 2021 Jun:27(6):505.e1-505.e9. doi: 10.1016/j.jtct.2021.02.021. Epub 2021 Feb 26     [PubMed PMID: 33775616]


Benipal H, Demers C, Cerasuolo JO, Perez R, You JJ, Amin F, Keshavjee K, Lee DS. Association of a Heart Failure Management Incentive in Primary Care With Clinical Outcomes: A Retrospective Cohort Study. Journal of the American Heart Association. 2024 Jan 2:13(1):e031498. doi: 10.1161/JAHA.123.031498. Epub 2023 Dec 29     [PubMed PMID: 38156519]

Level 2 (mid-level) evidence


Behzadi A, Bayati M, Bashzar S, Jaafaripooyan E. The Effect of Prospective Payment Systems on Health Care Providers' Behavior: A Case Study of Global Surgeries Payment System in Iran. Medical journal of the Islamic Republic of Iran. 2022:36():32. doi: 10.47176/mjiri.36.32. Epub 2022 Apr 9     [PubMed PMID: 36128284]

Level 3 (low-level) evidence


Parackal A, Tarride JE, Xie F, Blackhouse G, Hoogenes J, Hylton D, Hanna W, Adili A, Matsumoto ED, Shayegan B. Economic evaluation of robot-assisted radical prostatectomy compared to open radical prostatectomy for prostate cancer treatment in Ontario, Canada. Canadian Urological Association journal = Journal de l'Association des urologues du Canada. 2020 Aug:14(8):E350-E357. doi: 10.5489/cuaj.6376. Epub     [PubMed PMID: 32379598]


Tavabi N, Singh M, Pruneski J, Kiapour AM. Systematic evaluation of common natural language processing techniques to codify clinical notes. PloS one. 2024:19(3):e0298892. doi: 10.1371/journal.pone.0298892. Epub 2024 Mar 7     [PubMed PMID: 38451905]

Level 1 (high-level) evidence


Velez FF, Colman S, Kauffman L, Ruetsch C, Anastassopoulos K, Maricich YA. Comparison of Healthcare Resource Utilization Between Patients Who Engaged or Did Not Engage With a Prescription Digital Therapeutic for Opioid Use Disorder. ClinicoEconomics and outcomes research : CEOR. 2021:13():909-916. doi: 10.2147/CEOR.S334274. Epub 2021 Oct 29     [PubMed PMID: 34754205]


Nguyen BT, Heyrana K, Ohsfeldt R, Johnston A, Summers K. Descriptive study of the real-world, long-term cost estimates and duration of use for hormonal and nonhormonal intrauterine devices using US commercial insurance claims. Journal of managed care & specialty pharmacy. 2023 Dec:29(12):1303-1311. doi: 10.18553/jmcp.2023.29.12.1303. Epub     [PubMed PMID: 38058139]


Al-Omar HA, Czech M, Quang Nam T, Gottwald-Hostalek U, Vesic N, Whitehouse J, Dawson M. Cost saving analysis of prediabetes intervention modalities in comparison with inaction using Markov state transition model-A multiregional case study. Journal of diabetes. 2024 May:16(5):e13553. doi: 10.1111/1753-0407.13553. Epub     [PubMed PMID: 38664882]

Level 3 (low-level) evidence


Duff S, Bargiacchi F, Norregaard C, Brener M, Sullivan E. The budget impact of adding pralsetinib to a US health plan formulary for treatment of non-small cell lung cancer and thyroid cancer with RET alterations. Journal of managed care & specialty pharmacy. 2022 Feb:28(2):218-231. doi: 10.18553/jmcp.2021.21308. Epub 2021 Nov 2     [PubMed PMID: 34726500]