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What Value-Based Care Is and Its Benefits

The Value of Value-Based Care



Value-based care ties physician payment to quality of care based on performance data.

Value-based care (VBC) changes how physicians and other medical providers are paid for services. The model, spearheaded by the Centers for Medicaid and Medicare Services (CMS), seeks to shift payment away from fee-for-service reimbursement and focus on priorities like patient outcomes and quality of care, cost efficiencies, and interoperability. 

Benefits of Value-Based Care

At a high level, value-based care aims to improve the quality of patient care by tracking measurable improvements across the industry. At the practice level, it pushes you and your staff to become data-driven as you track performance for reporting purposes. 

Your reporting, in turn, impacts your income. For example, MIPS is designed to reward physicians who provide high-quality care and penalize those who do not meet the performance criteria. 

For an understanding of what’s at stake in 2022, you could receive up to a maximum payment adjustment of 9% in 2024 for performance year 2022. For $1 million billed in Medicare, that could be up to a $90,000 bonus or penalty. 

For physicians and practice managers, understanding the benefits of value-based care is vital to both patient and financial outcomes. 

How Does Value-Based Healthcare Differ From Fee-for-Service Models?

Value-based care is an approach to how physicians are reimbursed. VBC ties payment to quality, rather than quantitative measures of care. Another intention of the model is to disrupt complexities that can arise from fee-for-service payments. 

Under the fee-for-service payment model, healthcare providers are paid based on the volume of services rendered. This traditional model may seem straightforward, but it also can lead to fragmented care that financially incentivizes increasing the number of tests, procedures, and follow-up visits. Under this model, patients can be exposed to inefficiencies that interfere with the quality of care, while market factors can drive the cost of services upwards.

Instead, value-based care rewards physicians for contributing to the defragmentation of services and for helping to keep costs under control for everyone. A data set of your practice’s performance indicators signals to CMS how well you satisfy the expectations of VBC — and determines your payment amounts. 

Value-Based Care Models

Since value-based care can have a significant impact on your practice, it’s important to equip yourself with technology that streamlines your ability to comply with VBC programs.

Under the Medicare Access and CHIP Reauthorization Act of 2015 (MACRA), CMS determines payment amounts as part of its Quality Payment Program (QPP). Physicians have two tracks from which to choose under QPP, depending on practice details, like specialty, location, size or patient population. One is called Advanced Alternative Payment Models and the other is Merit-based Incentive Payment System (MIPS).

In EMA, ModMed’s specialty-specific EHR, our MIPS solution can help you gather, track, benchmark and submit your MIPS reporting data. You can:

  • Collect MIPS data during the exam without lots of extra time or clicks
  • Track your estimated MIPS Composite Score
  • Monitor progress on each measure and category
  • Benchmark your performance against peers daily
  • Submit data to CMS through ModMed’s specialized registries

Tracking quality measures and accessing registries can be complex and time-consuming.  Registry solutions can help you experience relief from the weight of reporting responsibilities by eliminating the need for manual reporting. 

Clinical data registries, previously known as specialized registries, are integrated with our EHR, so it can easily report to them. Just collect the appropriate data during patient encounters. Based on client experiences, estimates show that submitting through ModMed’s qualified registry typically takes about one to five minutes. Plus, registries are available to EMA clients at no extra cost.

Impact of Value-Based Care 

The impact of value-based care can be sweeping for your practice. Ultimately, since your outcomes determine your income, it’s extremely important that you have the tools and frameworks in place to track performance, surface actionable insights, make indicated changes, and submit accurate reports that communicate your practice’s value.

This reflects a larger shift in medical care toward data-driven decision-making. Easy access to the right data can help improve the quality of care your patients receive, while reducing operational and administrative burdens on your staff. At scale, this data can contribute meaningfully to the benefits of value-based care and create a fuller picture of how the medical industry can continue to improve its offerings to society.  

More immediately, your data impacts your payment from CMS. Under MIPS, your payments are adjusted based on CMS evaluation of your performance across different categories: quality, interoperability, improvement activities, and cost activities. 

For practices with more than 15 clinicians, the following represents how to measure the impact of value-based care. If you’re identified as a small practice, earned points and weighting varies. 


In 2022, quality measures comprise 30% of your score, although the percentage could change based on certain factors. Six data collection types may apply:

  • Electronic Clinical Quality Measures (eCQMs)
  • MIPS Clinical Quality Measures (MIPS CQMs)
  • Qualified Clinical Data Registry (QCDR) Measures
  • Medicare Part B claims measures
  • CMS Web Interface measures
  • The Consumer Assessment of Healthcare Providers and Systems (CAHPS) for MIPS Survey.

Promoting Interoperability

In 2022, promoting interoperability will make up 25% of your score, although, again, certain factors could change that percentage. 

This category promotes patient engagement and electronic exchange of information using certified electronic health record technology (CEHRT). You’re required to use an Electronic Health Record (EHR) that meets the 2015 Edition certification criteria, 2015 Edition Cures Update certification criteria, or a combination of both. 

Improvement Activities

Improvement activities make up 15% of your MIPS score with changes possible under certain circumstances. To meet requirements, you need to attest to one of the following:

  • Two high-weighted activities
  • One high-weighted activity and two medium-weighted activities
  • Four medium-weighted activities

High-weighted activities closely align with public health priorities, while medium-weighted activities are still important, but not as closely aligned. CMS mandates that improvement activities have a minimum of a continuous 90-day performance period during the calendar years, unless otherwise stated.

If you’re a small practice, you’ll earn double the points for each improvement activity.*


Cost counts for 30% of your final score and can also change in certain circumstances. Cost measures assess:

  • Overall cost of care with a focus on the primary care
  • Cost of services related to hospital stays 
  • Costs for items and services provided, based on multiple procedural and condition-based episodes of care and 25 cost measures

CMS uses Medicare Part A and B claims data to calculate cost performance, so physicians don’t have to submit any data for this category.

In every other category, though, the reporting burden is high. While these categories combine to provide a measurable look at your practice’s value-based care, many physicians and their staff struggle to satisfy the reporting requirements and demonstrate their value. 

As a value-based care model continues to urge the medical industry towards a more data-driven approach, it can become easier to realize its intended benefits. For patients, VBC may help prevent illness or injury from becoming more severe or chronic. As payers gain control of costs, care may become more accessible for many. For physicians, improvements to quality of care may become more reliable as data underpins decisions. That data also directly impacts the financial health of practices, redirecting incentives towards measurable quality of care. 

*CMS Quality Payment Program: Special Statuses, Performance Year 2002.

This blog is intended for informational purposes only and does not constitute legal or medical advice. Please consult with your legal counsel and other qualified advisors to ensure compliance with applicable laws, regulations, and standards.