The Centers for Medicare & Medicaid Services (CMS) have been moving from volume-based, fee-for-service payment to value-based payment (VBP), which aims to improve health care quality, health outcomes, and patient care experiences, while also controlling costs. Since the passage of the Patient Protection and Affordable Care Act of 2010, CMS has implemented a variety of VBP strategies, including incentive programs and risk-based alternative payment models. Early evidence from these programs raised concerns about potential unintended consequences for health equity. Specifically, emerging evidence suggests that providers disproportionately serving patients with social risk factors for poor health outcomes (e.g., individuals with low socioeconomic position, racial and ethnic minorities, gender and sexual minorities, socially isolated persons, and individuals residing in disadvantaged neighborhoods) may be more likely to fare poorly on quality rankings and to receive financial penalties, and less likely to receive financial rewards.

The drivers of these disparities are poorly understood, and differences in interpretation have led to divergent concerns about the potential effect of VBP on health equity. Some suggest that underlying differences in patient characteristics that are out of the control of providers lead to differences in health outcomes. At the same time, others are concerned that differences in outcomes between providers serving socially at-risk populations and providers serving the general population reflect disparities in the provision of health care.

Systems Practices for the Care of Socially At-Risk Populations seeks to better distinguish the drivers of variations in performance among providers disproportionately serving socially at-risk populations and identifies methods to account for social risk factors in Medicare payment programs. This report identifies best practices of high-performing hospitals, health plans, and other providers that serve disproportionately higher shares of socioeconomically disadvantaged populations and compares those best practices of low-performing providers serving similar patient populations. It is the second in a series of five brief reports that aim to inform the Office of the Assistant Secretary of Planning and Evaluation (ASPE) analyses that account for social risk factors in Medicare payment programs mandated through the Improving Medicare Post-Acute Care Transformation (IMPACT) Act.