Trends in Value Based Care, Accountable Care Organizations and Data Management in 2025
Key Takeaways
CMS aims for all Medicare patients to be in value-based care by 2030.
ACOs have proven to improve outcomes, patient experience, and generate savings.
Payment models rely on capitated, risk-adjusted reimbursement.
Accurate data and coding are critical to success in VBC.
Major challenges remain with data sharing, equity, and financial pressures.
The amalgamation of these topics represents a huge multilayered onion in the endeavor to redesign healthcare. Accountable Care organizations are closely tied to Value Based Health Care as both aim to improve patient care and keep costs down. Sharing data and data integrity is key to their success. There is growing controversy and concern for the success of Medicare Advantage plans (MA) and a push for beneficiaries on traditional Medicare to have access to value based care (VBC).
The Centers for Medicare and Medicaid Services’ (CMS’s) have a goal to bring every Medicare patient into a value-based care arrangement by 2030. In 2024 only half of the Medicare beneficiaries were affiliated with an accountable care organization (ACO) providing care within a VBC alignment. Closing The Gap In Value-Based Care: Lessons From Provider-Led ACO Experience | Health Affairs
As of January 2025, 53.4% of people with Traditional (fee-for-service) Medicare are in an accountable care relationship with a provider, showing the largest annual increase since CMS began tracking accountable care relationships. This statistic includes patients whose providers are in Accountable Care Organizations (ACOs), including the Medicare Shared Savings Program ACOs and entities participating in Center for Medicare and Medicaid Innovation (Innovation Center) accountable care models, as well as other Innovation Center models focused on total cost of care, advanced primary care, and specialty care.
According to the Journal of Health Affairs August 6, 2024: “Data shows ACOs participating in the Medicare Shared Savings Program (MSSP) and alternative payment models developed by the Innovation Center have proven that they can deliver high-quality care, improve the patient experience, and generate savings for Medicare. The Congressional Budget Office has found that physician-led ACOs and ACOs with a larger proportion of primary care providers, as opposed to specialists or clinicians in non-primary care settings, generate greater savings.”
To the reader who is not yet familiar with all of this jargon let’s start with the basics and work our way out.
According to CMS the following definitions describe these key terms for this evolving landscape:
Accountable Care: A person-centered care team takes responsibility for improving quality of care, care coordination and health outcomes for a defined group of individuals, to reduce care fragmentation and avoid unnecessary costs for individuals and the health system.
Value-Based Care (VBC): Designing care so that it focuses on quality, provider performance and the patient experience.
Care Coordination: The organization of an individual’s care across multiple health care providers. (Healthcare.gov)
Integrated Care: An approach to coordinate health care services to better address an individual’s’ physical, mental, behavioral and social needs.
Person-Centered Care: Integrated health care services delivered in a setting and manner that is responsive to individuals and their goals, values and preferences, in a system that supports good provider–patient communication and empowers individuals receiving care and providers to make effective care plans together.
The AMA addresses value based care as having five key points of focus:
Provide the best patient experience.
Advance health equity.
Improve patients’ health outcomes.
Deliver health care services at a reasonable cost.
Support the well-being of the health care workforce
As of this year, Value Based Care is growing, despite potential setbacks. The latest data shows 14% of nationwide provider reimbursement is tied to delegated or capitated risk models. VBC in 2025: What's now and what's next
Medicare Advantage (MA), ACO and VBC reimbursements are usually tied to alternative reimbursement schemas such as:
The Delegated Payment Model and Medicare Advantage (MA). Under MA, organizations are paid under a population‐ based payment model (also referred to as capitation).
The Centers for Medicare & Medicaid Services (CMS) makes premium payments to health plans. The health plans then pay the physician group an allocated amount for each patient enrolled for services over a set period of time. Typically, this is done as a per member / per month payment plan.
According to CMS, “the CMS-HCC risk adjustment model is used to calculate risk scores to adjust capitated payments made for aged and disabled beneficiaries enrolled in Medicare Advantage (MA) plans and certain demonstrations. The CMS-HCC model has been calibrated using two full risk segments with separate coefficients to reflect the unique cost patterns of beneficiaries in the community and beneficiaries residing in long term care institutional facilities. The community segment of the model predicts costs for beneficiaries who reside in the community or have been in an institution for fewer than 90 days. The institutional segment of the model predicts costs for beneficiaries who have been in an institution for 90 days or longer.” HCCRiskAdjustmentModel102815.pdf
Medicare Shared Savings Program (Shared Savings Program). When an ACO succeeds in both delivering high-quality care and spending health care dollars more wisely, the ACO may be eligible to share in the savings it achieves for the Medicare program (also known as performance payments). https://www.cms.gov/medicare/payment/fee-for-service-providers/shared-savings-program-ssp-acos
ACOs employ multiple strategies to put value-based care into action. By partnering with VBC providers, ACOs can focus on improving patient outcomes while keeping costs low. The best way to achieve this is to use data analytics to track and improve performance. Good data can help ACOs find areas where they can improve and do it quickly.
In April of 2025 the National Association of ACO’s spring conference brought leaders from ACOs, health systems, payers, and technology innovators together to highlight the growing financial pressures facing health care. Despite many advances, multiple challenges remain in the successful implementation of Value Based Care (VBC). Data privacy concerns, lack of data standardization, and varying data infrastructures across providers are significant hurdles in advancing VBC models. Efforts to address these issues are ongoing and require collaborative approaches among stakeholders.
Three main organizations have been working together to promote VBC through data sharing. America’s Health Insurance Plans (AHIP), American Medical Association (AMA) and the National Association of ACOs (NAACOS) released a playbook on Voluntary Best Practices to Advance Data Sharing.
“The playbook is intended to provide health insurance providers, physicians and other health professionals, and VBC entities with access to best practices informed by real-world experiences to help guide, in a voluntary manner, considerations for the design, implementation, and evaluation of potential future arrangements that accommodate participants with a range of experience. The work group addressed data sharing, privacy and affordability.”
A data focused work group for NAACOS identified the need to create a Data Ecosystem that would provide interoperability for consistent and standardized content exchange. There is a big need for VBC providers to provide complete, consistent and accurate data for this to work. Data collection needs improvement to advance health equity and identify disparities in healthcare that extend beyond the clinical setting. Providers need to be able to trust the data received is accurate, detailed, and timely.
What does all this mean to the heads down coders and auditors in the trenches? Documentation needs to be consistent throughout the medical record, and it needs to reflect the current clinical picture. Cloned notes are making it next to impossible to achieve this when they are not edited properly. Coder’s selection of ICD 10 CM diagnosis codes must be correct and reflect current conditions under care for the encounter. Health conditions in patient history should not be coded if they are resolved, removed or no longer requiring treatment. For Example: Coders should not list hypertension that is resolved, and the patient is no longer under surveillance or on medications for treatment and they have no co-morbid related conditions. Diagnoses listed in an encoder from AI or computer assisted coding tools must be validated prior to being added to the claim.
Hierarchical Condition Codes (HCCs) are a form of a case mix index used to place patients into groups with other patients that are clinically similar and follow similar patterns of healthcare costs. The HCCs are re-evaluated annually, and ICD 10 CM assignment drives the risk adjustment for each patient. The bottom line is if the data driving the codes is bad then the HCCs are not reliable, and it is counterproductive to base capitated payments or shared savings off of bad data.
Provider documentation drives coding. Both the clinical data and subsequent coding contribute to the HCC, VBC and ACO data. Ultimately the data is used to drive healthcare systems and provider payment. As these systems evolve it is in everyone’s best interests to keep the data clean and accurate.
References
HHRG-113-IF14-Wstate-MargolisB-20131204.pdf
The-Coders-Playbook-for-Success-with-Risk-Adjustment-Payment-Methodologies-AAHIMA-.pdf
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