The value-based care proposition sounds operationally clean: deliver measurable outcomes for a defined patient population, and you get paid for it. No chasing claims. No denial queues. No fee schedule negotiations. In practice, every provider organization that has signed a VBC contract and then tried to manage against it knows the proposition is considerably less clean than advertised.
The infrastructure problem is not abstract. According to the 2025 State of Technology in Value-Based Care report — a national survey of 203 payer and provider decision-makers conducted by The Harris Poll on behalf of Reveleer — only one in three providers rates their data integration capabilities as “excellent,” and fewer than half are highly confident in the accuracy and completeness of the patient data they are using in their VBC programs. That is a significant admission for an industry that is accelerating into risk-bearing contracts at a meaningful rate. The same report found that 84% of providers agreed that VBC infrastructure would become standard operating equipment — a sentiment that the subsequent pace of contract activity has done nothing to diminish. The gap between where organizations are heading contractually and where they actually are operationally is the problem worth examining.
The issue is structural, and it predates the current push into risk-bearing arrangements. Most mid-size provider organizations built their revenue cycle infrastructure around fee-for-service: claims submission, denial management, payer appeals, and AR recovery. Those systems are optimized for a world where the financial question is “did we get paid for what we billed?” VBC asks a fundamentally different question: “are we managing our total cost of care below a benchmark, in real time, with documented evidence?” The data systems required to answer that question — longitudinal claims feeds, HCC coding accuracy programs, care gap analytics, and in-year performance dashboards — are simply not the same systems that run a FFS billing operation well. The Center for Healthcare Quality and Payment Reform has documented that the administrative burdens associated with quality measurement in value-based programs frequently cause a provider’s costs to increase more than the additional revenue the performance payments generate. That is not a compliance problem. It is an infrastructure design problem.
Consider what this looks like in practice for a PE-backed specialty platform or mid-size MSO. The organization enters a VBC arrangement — perhaps with a Medicare Advantage plan, perhaps through the Medicare Shared Savings Program — with a genuine expectation of earning shared savings or hitting quality thresholds. The contract is signed. The performance year begins. And then the organization is essentially flying blind for twelve months, because the data infrastructure to track attributed patient spending against the payer’s benchmark in real time does not exist internally. What does exist is a billing system, an EHR that was never designed as a population health tool, and a CFO who needs to accrue for shared savings on a quarterly basis with no reliable basis for the estimate. That is not a hypothetical. A 2023 American Medical Association report on value-based practice models cited attribution discrepancies of as much as 40% between what payers believed and what providers actually documented — and those discrepancies directly determine the financial baseline against which performance is judged.
The Infrastructure That Actually Works
The contrast between organizations that built infrastructure before scaling contracts and those that reversed the sequence is well-documented, even if the clearest public examples come from the primary care and health system space rather than the specialty and PE-backed practice market. That distinction is worth holding onto, because it matters for understanding why the problem is actually harder for the organizations most aggressively moving into VBC right now.
Aledade, the nation’s largest network of independent primary care ACOs, built its model around a proprietary data platform that aggregates EHR, hospital, lab, and pharmacy data into a unified workflow before its partner practices ever entered a risk-bearing arrangement. The outcome in 2024 was that 93% of Aledade’s MSSP ACOs earned shared savings, compared to 73% of non-Aledade participants nationally, generating over $775 million in shared savings and preventing nearly 96,000 hospitalizations, according to the company’s analysis of the 2024 CMS ACO Public Use File. The data infrastructure was not a feature they added after signing contracts. It was the precondition for signing them.
The Innovative Healthcare Collaborative of Indiana, a joint venture between two Indiana health systems, illustrates the cost of the alternative sequence. IHCI entered value-based arrangements without integrated, real-time data access and, as documented in a published Health Catalyst case study, faced delays that directly prevented in-year intervention with high-risk patients. After building out integrated data infrastructure, IHCI achieved a $28.3 million cost reduction within a single year through improved inpatient utilization and reduced readmissions. The savings did not come from better clinical instincts. They came from being able to see the attributed population before the performance year closed.
Both examples prove the infrastructure principle. Neither maps cleanly onto a mid-size oncology platform, a PE-backed urology group, or a multi-specialty MSO operating across four states under a patchwork of Medicare Advantage VBC contracts. Their attributed populations are smaller, which means a single high-cost outlier patient can move the performance needle in ways that would be statistically absorbed in a primary care population of ten thousand. Their HCC coding complexity is higher. Their payer contract fragmentation is worse, with each MA plan running its own attribution logic, benchmark methodology, and data feed on a different cadence. The infrastructure gap is the same problem. The margin for error is considerably narrower.
The Benchmarking Problem
The benchmarking problem compounds this. Under the Medicare Shared Savings Program, high-performing ACOs face what actuaries call the “ratchet effect” — each successful performance year reduces the benchmark used in subsequent periods, because the program recalibrates based on historical spending. A Milliman white paper on MSSP benchmark methodology confirmed that this deterioration is a recognized design flaw, and CMS has been iterating on it. The more recent ACPT (Accountable Care Prospective Trend) adjustment, intended to add predictability to benchmarks, has introduced its own documented problem. CMS projected cost growth of approximately 3.6% for the 2024 performance year using the ACPT methodology, while Milliman’s analysis of CMS quarterly expenditure reports documented actual nationwide expenditure trends running closer to 9% for the 2023 to 2024 period. CMS acknowledged the discrepancy was “unusually large” and reduced the ACPT weight from 1/3 to 1/6 for 2024 settlement. The problem carried forward: Aledade’s September 2025 analysis projected that the ACPT headwind could cost the ACO program more than $500 million in aggregate in 2025 if left unchanged. Milliman’s January 2026 update confirmed that FFS expenditure trends have remained “stubbornly high” heading into 2026.
None of this means VBC is the wrong direction. The clinical evidence is reasonably compelling: Humana’s 2024 report on its kidney care VBC arrangements documented 5% fewer unnecessary hospital admissions among its Medicare Advantage members in value-based arrangements compared to FFS counterparts, and a medical expense ratio improvement of more than 12% for that population since 2019. CMS reported $6.5 billion in gross savings from MSSP ACOs in the 2024 performance year, the program’s highest recorded total to date. The model has demonstrated that it works. The question is whether the organizations entering these contracts now have the operational infrastructure to replicate those results.
The Four-Part Assessment
The operational question for provider organizations — particularly the mid-size practices and PE-backed platforms that are my market — is whether they have built the infrastructure to know whether they are winning or losing before the payer tells them at settlement twelve to twenty-four months after the performance year closes.
For an MSO that is ready to move from contract execution to contract management, the internal assessment work begins in four places.
Contract standardization mapping: pulling every active VBC contract and building a side-by-side inventory of the quality metrics, attribution methodology, benchmark basis, data submission requirements, and reconciliation timeline for each payer. Most MSOs have never done this across their full payer mix in a single document, and the gaps it surfaces are immediately actionable.
Data source auditing: for each quality metric in the contract inventory, tracing the claim back to the system of record that produces it — EHR, billing system, clearinghouse, or external registry — and identifying where the data does not exist, exists but is not structured for reporting, or is being produced inconsistently across sites.
Attribution reconciliation: obtaining the most recent attributed population file from each payer and comparing it against the practice’s own patient panel data, using claims history, visit frequency, and PCP assignment to identify the discrepancies before they become settlement disputes. A 40% attribution mismatch at the start of a performance year is not recoverable at reconciliation — it has to be addressed prospectively.
Financial baseline modeling: using the contract terms, the audited data sources, and the reconciled attribution file to build a current-state projection of where the organization is tracking against each benchmark, what the shared savings or loss exposure looks like at the current trajectory, and which specific patient cohorts or care gaps represent the highest-leverage opportunities to move the number before the performance year closes.
None of this requires a technology platform investment before the work begins. It requires operational discipline, a working knowledge of how VBC contracts are structured across different payer types, and the analytical infrastructure to connect contract language to claims data at the member level. Organizations that complete this assessment rarely find that their VBC performance is as strong as their payer relationship suggests. They also rarely find that it is unsalvageable. What they find, consistently, is that the leakage is concentrated, traceable, and correctable — if they can see it before the year closes rather than after the payer tells them what happened.
Melanie Tisman, MBA, CHFP, CPBI is the founder of Z8 Health, a provider-side RCM consulting and workflow solutions firm serving mid-to-small medical practices and PE-backed healthcare companies.