The Rise of Value-Based Care and the Reimbursement Flywheel

For home health agencies, the transition to value-based care is no longer a future consideration—it’s a present necessity. Providers facing shrinking margins are increasingly exploring episode-based and upside-risk arrangements as pathways to revenue expansion while simultaneously prioritizing care quality. The key, according to industry experts, lies in establishing a sustainable “reimbursement flywheel.”

Jeff Kang, CEO of WellBe Senior Medical and former Chief Medical Officer of the Centers for Medicare & Medicaid Services (CMS), emphasized the transformative power of value-based models. “The big difference is the introduction of a value-based model,” Kang stated. “We are not actually dependent on fee-for-service billing. We are, essentially, both the provider and the payer. We’re economically responsible for the hospital bills, the radiology bills, the specialist bills. That’s a value-based model or a full risk model. We can make it work because we’re prepared to spend the time with the patient and keep them healthy and out of the hospital. We make money by keeping people healthy and out of the hospital. It’s completely flipped.” Kang suggests a shared savings model as an initial step for providers venturing into value-based care.

Sue Chapman Moss, Managing Director of Payer and Provider Contracting and Strategy at Bayada Home Health Care, further illuminated this concept with the “reimbursement flywheel.” For Bayada, a shared savings model facilitates reinvestment in critical areas—workforce development, cutting-edge technology, and clinical innovation. “The payment model with Medicare Advantage allows us to be able to distribute upside performance dollars back through our organization to continue to invest in the data pipelines, the talent, the people to be able to deliver the results that we’re really proud of,” Moss explained. “That’s the impact it’s had on margins. I think what’s really interesting about my tenure here at Bayada is that I can’t imagine what sort of margin pressure we would be facing without having done this body of work.”

This flywheel effect is crucial for providers recognizing the need for innovation but grappling with challenges like implementation costs and training requirements. Investment in reimbursement innovation can, in turn, fuel advancements in other vital business areas.

Did You Know? A recent study by the National Association for Home Care & Hospice (NAHC) found that agencies participating in value-based care arrangements reported a 15% increase in patient satisfaction scores. NAHC Website

Technology as a Catalyst for Change

Alongside payment innovation, technology is emerging as a pivotal force in reshaping home health care. Agencies are increasingly leveraging artificial intelligence (AI) and electronic health records (EHRs) not only to streamline operations but also to strategically position themselves for broader regulatory and payment shifts.

AI is proving particularly valuable in reducing administrative burdens, such as documentation time, while simultaneously providing data-driven insights to support value-based care initiatives and meet evolving reporting demands. However, successful AI implementation hinges on data quality and interoperability. Agencies must address underlying data issues within their EHRs and other systems to unlock the full potential of AI-powered tools.

Selecting and integrating an EHR is a complex undertaking that often reveals deeper organizational needs, including change management, cross-functional collaboration, and robust data governance. Leaders report that EHR implementation frequently highlights gaps in internal processes and underscores the importance of workflow redesign and comprehensive training.

What role will interoperability play in the future of home health technology? And how can agencies balance the benefits of AI with the need for data privacy and security?

Pro Tip: Before investing in new technology, conduct a thorough assessment of your agency’s existing infrastructure and data management practices. HIMSS Website

The annual HHCN+ member survey consistently highlights the importance of these topics. In 2025, respondents expressed significant interest in learning more about AI and EHRs, leading to in-depth coverage of AI tools that alleviate pressure from the Outcome and Assessment Information Set (OASIS) and policies for safely leveraging AI without triggering compliance risks. The survey also prompted articles on selecting and integrating the right EHR system.

Frequently Asked Questions

• What is value-based care in home health?

  Value-based care in home health focuses on delivering high-quality care that improves patient outcomes while controlling costs. It moves away from traditional fee-for-service models and incentivizes providers to prioritize patient health and well-being.

• How can a shared savings model benefit my agency?

  A shared savings model allows your agency to reinvest cost savings generated through improved patient care back into the organization, funding initiatives like workforce development, technology upgrades, and clinical innovation.

• What are the biggest challenges to implementing AI in home health?

  The biggest challenges include ensuring data quality, addressing interoperability issues, and navigating potential compliance risks. Agencies must prioritize data governance and invest in appropriate training for staff.

• Why is EHR integration so complex?

  EHR integration is complex because it requires significant changes to workflows, data management practices, and organizational culture. Successful implementation demands careful planning, robust training, and ongoing support.

• How does technology support the transition to value-based care?

  Technology, particularly AI and EHRs, provides the data and analytics needed to track patient outcomes, identify areas for improvement, and demonstrate value to payers. It enables more proactive and coordinated care.