Medical group practices and health systems continue to plan for increased use of value-based care (VBC) models of care delivery and payment, emphasizing quality, patient outcomes, and cost-efficiency over the traditional fee-for-service (FFS) approach.
A Jan. 31, 2025, MGMA Stat poll found that just as many medical practice leaders have a positive outlook (40%) for VBC in their organizations in 2025 as those with a neutral outlook (40%). Only two in 10 (20%) respondents reported having a negative outlook for their organizations’ value-based care activities. The poll had 208 applicable responses.
Among respondents to this poll:
- More than four in 10 (44%) said they expected value-based programs from government payers would be the biggest area of change this year.
- Almost one in four (24%) said commercial insurance would be the biggest area of VBC change in 2025.
- Another 9% said both government and commercial would have significant changes to their VBC approach, while the remaining 23% responded “unsure” or “other.”
Recent MGMA industry data indicates a steady, albeit gradual adoption of value-based contracts among medical groups.
- A May 2024 MGMA Stat poll revealed that only one in four medical group leaders (25%) anticipated an increase in their organization's value-based contracts last year, while 41% expected their participation to remain the same. Notably, 27% were uncertain about future shifts, highlighting the cautious optimism prevalent in the industry.
- MGMA polling from August 2024 pointed to limited embrace of advanced analytics or AI tools in medical groups for these efforts, as only 18% of groups reported integrating these technologies to aid their VBC work.
Drivers of value-based care in 2025
The Centers for Medicare & Medicaid Services (CMS) aims to have all Medicare beneficiaries in an accountable care relationship by 2030. To support this goal, CMS has created alternative payment models (APMs) for practices to transition to value-based care and maintained the fee-for-service option with the Merit-based Incentive Payment System (MIPS). The ongoing transition to VBC is also influenced by the rise of Medicare Advantage plans, which often incorporate value-based components.
Private equity (PE) firms are also playing a pivotal role in reshaping the VBC landscape. After a period of subdued activity, there's renewed interest in physician practice management deals, as specialist providers leveraging value-based care are attracting significant attention. This resurgence is expected to drive deal momentum in 2025, especially in managing chronic care and complex specialties.
Despite these advancements, challenges persist. Many medical groups struggle to find clinically relevant APMs that align with their specialties. The complexity of transitioning to risk-based contracts and uncertainties about profitability further complicate the shift. Many practice leaders remain uncertain about how their value-based contracts will evolve, underscoring the need for more explicit guidance and support.
Take action
CMS previously incentivized Medicare providers to invest in value-based care by offering a bonus payment for those participating in alternative payment models. Initially, the incentive bonus was equal to 5% of estimated Medicare Part B professional services; however, for 2024, the bonus was cut to 1.88% before expiring at the end of the year. The incentive bonus has been instrumental in allowing practices participating in APMs to invest in new technology and processes. Without it, practices will face more challenges in transitioning to value-based care.
The Preserving Patient Access to Accountable Care Act was introduced in the House and, if enacted, would extend a 3.53% APM bonus and maintain the 2024 qualifying APM participant (QP) eligibility threshold levels through 2025. Act now and urge your representative to support this bipartisan effort to support value-based care.
Learn more
Join Anders Gilberg, senior vice president of MGMA Government Affairs, for a roundtable discussion with MGMA practice leaders as part of Health Care Value Week, Feb. 24-28. Click here to learn more about the program for the Fourth Virtual Value-Based Payment Summit.
MGMA’s perspective on CMS’ 2030 shift to value-based care
Anders Gilberg, Senior Vice President of Government Affairs at MGMA, recently spoke to HealthExec about the challenges and prospects of transitioning Medicare to a fully value-based program by 2030.
- A complex transition: While CMS aims to move away from traditional fee-for-service toward VBC, significant hurdles remain. The one-size-fits-all approach doesn’t work well across diverse healthcare settings — what works for a hospital might not suit a multispecialty practice.
- Fee-for-service elements are still needed: Despite the push for value-based models, some FFS components may still be necessary in the coming decade to address areas where uniform metrics are hard to apply.
- Population health and preventive care: There is hope that advancements in technology and better population management will allow for improved preventive care, which is especially important since Medicare beneficiaries typically remain in the program for life.
- Medicare Advantage growth: More than 50% of beneficiaries are now in Medicare Advantage plans, a figure expected to rise to about 75% soon. These plans, governed by private insurers, operate under different goals and contractual terms, adding another layer of complexity to the Medicare landscape.
While the goal of a fully value-based Medicare system by 2030 is on the horizon, a mix of FFS elements, varied practice environments, and the growing influence of Medicare Advantage will require a nuanced, adaptable approach.
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