Value-based payment models are promoted as a way to transform our health care system from one that rewards value rather than the volume of health care services delivered. These models require providers to accept the risk of financial losses should spending on patients in their care exceed targeted levels. While they may hold potential for lowering health care costs and improving the quality of care, they may also have implications for provider financial stability. State regulators require insurers to maintain reserves sufficient to pay claims for enrollees, but directly regulating providers typically falls outside insurance regulations.

A new brief from State Health and Value Strategies, authored by researchers at Bailit Health and CHIR, explores potential state approaches to oversight of provider organizations that accept financial risk. “Safeguarding Financial Stability of Provider Risk-Bearing Organizations” describes considerations for state regulators, and an accompanying issue brief “Case Studies: State Examples of Safeguarding Financial Stability of Provider Risk-Bearing Organizations,” provides a deeper dive into approaches in four states: California, Massachusetts, New York and Texas.

You can read the full publication here. The state case studies can be found here.