Four Best Practices for Payers to Consider When Contracting for Value-Based Care

By SpectraMedix Team

Successful value-based care (VBC) contracts are driven by actionable data that informs both the payer and the provider. Payers need to define clinical expectations and deliver feedback to providers based on those expectations. And they need to keep providers in the fold throughout the contract negotiation, implementation, and reconciliation process to help ensure that established benchmarks are met. This blog provides a quick refresher on four best practices for payers to keep in mind when taking on VBC contracts.

1) Help Clinicians Make Decisions

If payers generally hold the cards during contract negotiations, providers may feel like they are being undermined, deliberately or not, at the bargaining table. Transparency is key in moving towards full buy-in from providers for VBC. Retrospective and prospective insights throughout the process assist providers when tracking their performance and allows for more seamless course-correction when necessary. The more you as the payer can unburden the provider when it comes to contracting, the more smoothly the entire process will flow.

2) Present the Past, Present, & Future

Though the COVID-19 pandemic has highlighted the importance of VBC, many providers are still adjusting to the implications of VBC and may not feel ready to accept downside or shared risk.

Value-based payment models utilize a variety of data, some of which providers don’t have access to. Historic detail from claims (the past), informs provider care (the present) and should enable improvements in overall population health and ROI (the future). By giving clinicians access to meaningful, data-driven insights throughout the value-based care life cycle, payers allow them to assess workflow to improve performance.

It’s important for all parties to have clarity regarding where the care gaps are and which measures are not being met. If providers understand payers’ expectations from the outset, it will lead to improvements in care, and patient and provider satisfaction.

3) Create a Continuous Improvement Loop

Signing a contract doesn’t guarantee either party will get the ROI they had hoped for. A well-constructed and managed contract though should help you and your providers to take action to improve performance if mid-contract or monthly results don’t meet the outlined expectations. Sharing performance analytics, benchmark data, and cost analysis with your providers will help them achieve contract goals.

At the end of the contract period, compare actual results to the terms of the contract. If you’ve been transparent throughout with your providers, they should be hitting their marks. If the results fall short, use what you’ve learned to readjust your expectations and goals for the next contract. If you’ve exceeded expectations – even better!

4) Cohort Management

Patients with chronic conditions require coordinated care. Care systems for patients that share chronic conditions, or cohorts, will save your providers time, reduce physician stress, and improve patient outcomes. Taking data from multiple sources, including societal conditions, establishes a complete picture of each cohort. By using risk-adjusted assessments, payers can help providers develop a streamlined approach with evidence-based treatment plans.

Managing complicated cohorts involves delivering detail to the care team, sharing specialist data with PCPs, flagging patients who exhibit care gaps, and bringing insights directly to the point of care. The payer advantage is in keeping plan members in-network and healthier at a lower cost. Having an insight-driven approach to contracting, coupled with cohort care management, is a win-win-win for the patient, your providers, and you.


Right now, providers are feeling overwhelmed by a shifting healthcare landscape highly impacted by the COVID-19 pandemic. Two things all clinicians want are a healthier patient base and an income that recognizes their quality of work. No plan can see into the future of healthcare and anticipate any and all coming changes, but by investing time and resources to engage providers with these best practices, payers are more likely to improve outcome, reduce costs, and satisfy the needs of both patients and providers.

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