Policy Opportunities to Improve Care in the Safety Net through Accountable, Value-Based Payment Reform

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Policy Brief

Policy Opportunities to Improve Care in the Safety Net through Accountable, Value-Based Payment Reform

Published date

March 22, 2023


Safety net providers play an essential role in anchoring care for millions of Americans in underserved communities. Examples of safety-net institutions include (but are not limited to) community health centers, public and critical access hospitals, local health departments, community mental health centers, certified community behavioral health clinics, and special service providers such as family planning clinics and school-based health programs. Despite safety net institutions providing high-quality, cost-effective care to high-risk populations, the safety net remains a largely fragmented collection of providers offering a disparate array of services, leading to both duplication and gaps in care. Further, the financial viability of safety net health systems was challenged during COVID-19, given revenue declines, which disproportionately impacted under-resourced communities.

Value-based payment (VBP) models are accountable care tools that have the potential to mitigate these barriers and improve the quality and efficiency of care. However, safety net representation in VBP models has been limited to date. Reasons include the unique and diverse funding streams for the safety net that can discourage integration, limited payer alignment, historical siloes and underfunding, and limited capital to fund infrastructure development and technical support in redesigning care. These specific reasons can result from the broader context affecting safety net institutions, including systemic racism, historical disconnects between behavioral and physical health systems, and broader challenges to accessing sufficient funding for programs for lower-income individuals. As a result, people who receive care through safety net providers today are less likely than other Americans to have access to accountable care due to the barriers that safety net providers face.

Momentum among public and private payers and safety net providers is growing to address the limitations that challenge safety net provider participation in VBP models. CMS has prioritized safety net engagement in model development and recently finalized changes to its Medicare Shared Savings Program (MSSP), such as increasing ramp-up time before assuming risk and providing upfront investment support for certain provider types, to improve safety net provider participation. Similarly, states increasingly have introduced value-based arrangements in their Medicaid programs. Safety net adoption of VBP will be critical to CMS’ strategic vision for transitioning Medicare and Medicaid patients into accountable care relationships by 2030.

To help advance these efforts, this report describes policy reforms and technical design considerations for policymakers and payers to advance safety net participation in accountable care models. This report draws from a targeted literature review on the safety net landscape, proceedings from expert-focused convenings, and semi-structured informational interviews with 55 stakeholders, including health care providers, payers, industry leaders, and state and federal policymakers.

The goal of these recommendations is to utilize a variety of Federal and state policies to support accountable funding streams: funds explicitly tied to supporting safety net provider adoption of accountable care reforms. These funds would be aligned across payers to create a simple, flexible stream of funding for providers who demonstrate accountable care capabilities for historically underserved and under-resourced communities. In turn, these providers would gain streamlined access to funding with fewer reporting and administrative burdens, which would enable providers to allocate resources more effectively based on the needs of their patients.

The first section of this report, “Vision for Reform,” describes accountable funding streams and the complementary actions providers, payers, and policymakers must take to facilitate these funding streams. The next section, “Considerations for Value-Based Payment Models,” addresses considerations for designing specific components of accountable funding streams. The final section, “Pathway to Reform,” presents four action areas for Federal and state policymakers to achieve accountable funding: multi-payer alignment, upfront investment funding, guidance and technical assistance, and integrating social and community supports. The Appendices include further technical details on payment model components and a list summarizing policy action by federal and state agencies.

Duke-Margolis Authors

Jonathan Gonzalez-Smith

Jonathan Gonzalez-Smith, MPAff

Associate Research Director


Sherrie Wang

Policy Research Assistant

Frank McStay Photo

Frank McStay, MPA

Assistant Research Director

Robert Saunders

Robert Saunders, PhD

Senior Research Director, Health Care Transformation
Adjunct Associate Professor
Senior Team Member
Margolis Core Faculty

Mark McClellan

Mark McClellan, MD, PhD

Director of Margolis Center
Robert J. Margolis, MD, Professor of Business, Medicine and Policy
Margolis Executive Core Faculty