Medicare value‑based payment models, which aim to link reimbursement to quality and cost outcomes, appear to serve a disproportionately White population, a new study finds.
Study shows racial and socioeconomic gaps
Researchers examined a 20% sample of Medicare fee‑for‑service beneficiaries, covering more than 17 million individuals and over 115 million beneficiary‑year observations from 2013 to 2022. They linked data on participation in eight of the Centers for Medicare & Medicaid Services’ (CMS) largest episode‑based and population‑based models with claims and enrollment records.
The analysis revealed that beneficiary‑years attributed to any of the eight models were 83.3% White, compared with 72.2% in the broader Medicare population. Black beneficiaries comprised 7.4% of model participants versus 11.2% outside the models, while Hispanic individuals made up 4.3% versus 10.0% elsewhere. Dual‑eligible enrollees—those qualifying for both Medicare and Medicaid—were 15.7% in the models, lower than the 20.9% figure for non‑participants. Residents of highly deprived neighborhoods accounted for 13.2% of model beneficiaries, compared with 17.2% outside the models. Each of these differences exceeded a standardized mean difference of 0.1, the threshold the authors used to denote a meaningful gap.
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When the Medicare Shared Savings Program (SSP), the largest model in the data set, was removed, the disparities widened. Rural representation fell to 4.9% in the remaining models, while 11.3% of non‑model beneficiaries lived in rural areas, yielding an SMD of –0.13. Similar patterns surfaced across individual programs such as Bundled Payments for Care Improvement (BPCI), BPCI Advanced, Pioneer ACO, Next Generation ACO, ACO REACH, Full Primary Care Plus, and Primary Care First.
The authors attribute the skewed representation to the voluntary nature of most CMS payment models. Clinicians and health‑care organizations may opt in when they anticipate financial benefits, inadvertently leaving behind providers that serve higher‑risk or under‑served populations.
Prior research has documented equity gaps in specific value‑based arrangements, including lower participation rates among safety‑net hospitals and primary‑care initiatives that do not explicitly target disparities. An earlier report by the American Journal of Managed Care warned that models lacking a focus on equity could disadvantage practices serving socially at‑risk groups.
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While the study’s scope was limited to eight major models, the authors note that the comparison group may still contain beneficiaries linked to smaller or disease‑specific value‑based programs not captured in the data set. This limitation suggests the observed gaps could be even larger if all such arrangements were considered.
Future mandatory programs could draw a broader mix of providers, potentially narrowing the current disparities. However, without targeted incentives or support for safety‑net and rural clinicians, compulsory enrollment alone may not guarantee more inclusive representation.
“Our findings may help improve the generalizability and rigor of demonstration projects as CMS increases its emphasis on mandatory models and designs future models to include more safety‑net and rural clinicians and organizations,” the researchers wrote. “Future efforts are necessary to determine whether these models are effective at improving quality and cost‑efficiency across all populations.”
