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Value-Based Care Contract Performance Review
Every threshold in the arrangement read in order, the one that actually binds named, and what a unit of improvement in each is worth.
River's value-based contract performance review reads the arrangement as a sequence of conditions rather than a scorecard. It pulls the quality gate, the savings threshold, the sharing rate and the payment cap out of the contract, puts your actual performance against each one, and works out which single condition decided the payment. What comes out is a dollar figure for the gate that bound, and a dollar figure for every gate that did not, so the next year's effort goes somewhere it can be paid.
The spreadsheets that rank for this search all model the payment as performance multiplied by a rate, which is the wrong shape. A real arrangement is gated. Miss the quality standard and the savings pay nothing. Land below the minimum savings rate and the savings pay nothing again, not a smaller amount. Clear both and hit the cap, and further savings pay nothing after that. Three different zeros, and a proportional model shows none of them.
So the output is an ordered ladder with one gate marked as binding, because effort spent on any other term returns exactly nothing. This is for practice CFOs, ACO finance leads and administrators reading a reconciliation statement that does not match the year they had. Building the outreach list that moves the quality term is a care gap and population report, and it is a different job done earlier in the year.
A tenth of a point can cost a million
Three lines in the shared savings regulation set the shape. Qualifying for a payment requires expenditures below the benchmark by at least the minimum savings rate, and an ACO entering a two-sided model picks that rate from a fixed menu, locked for the agreement period. Meeting the quality performance standard is a separate condition of eligibility. Once both clear, sharing applies from the first dollar, capped at ten percent of the benchmark in the BASIC track.
Take an illustrative ACO in a two-sided track, with 11,400 assigned beneficiaries and a benchmark of $141.4 million. It holds spending 1.94 percent under the benchmark, $2,743,160 in savings, and is paid nothing. Years earlier it chose a 2 percent minimum savings rate, so it needed $2,828,000. The shortfall is $84,840, about $7.44 per beneficiary. Its quality score rose thirteen points that year on a deliberate effort, and none of those points paid, because the savings gate was never cleared.
That prices the two gates precisely. Assume a 50 percent sharing rate. The first $84,840 of extra savings would have turned a zero payment into $1,414,000, because sharing runs from the first dollar once the rate is met. Each dollar after that is worth fifty cents. So one dollar of spending reduction is worth nearly seventeen times itself up to the threshold, and half of itself immediately past it. No percentage on a scorecard shows a cliff like that one.
How it works
Send the contract
The payment terms themselves, not a summary of them. The exhibits are where the gates live.
Add the statements
Whatever the payer sent at reconciliation, plus your own quality and expenditure numbers for the period.
Find the binding gate
Each condition is tested in order. The first one that fails is the one that set the payment.
Price the rest
Every other term gets a dollar value too, and most of them come back as zero.
What you get
- Every gate in the arrangement listed in the order the contract applies them
- The one gate that actually bound this period, named and priced in dollars
- What a unit of improvement in each term is worth, including the zeros
- The minimum savings rate your contract selected, and what the other options would have paid
- Downside terms read separately, because the loss side is rarely the mirror of the upside
- Which contract terms are vague enough to trigger an obligation on the plan itself
Common questions
We beat every measure and got nothing. How?
Usually the savings threshold. Qualifying requires spending under the benchmark by at least the minimum savings rate, and landing short of it pays zero rather than a smaller amount. Quality is a separate condition, so passing it does not substitute. The illustrative ACO above cleared quality, missed the rate by about $7 per beneficiary, and collected nothing.
Who picked our minimum savings rate?
In the Medicare Shared Savings Program, your organization did, from a short menu, when it entered a two-sided model, and the choice holds for the agreement period. In a commercial contract it was negotiated. A wider band raises the bar for savings and also widens the loss cushion, so it is a real bet. Reading which option was taken off the contract is step one.
Is quality improvement worth doing then?
Often yes, and sometimes worth nothing at all, which is the point of pricing it. Quality gates eligibility and can scale the sharing rate, so past the savings threshold it converts directly into dollars. Below the threshold it converts into none. Knowing which side you are on before the year runs is the whole exercise, and the care gap report is how the work gets done.
Does this cover capitation and withhold arrangements?
Yes, and they read differently. For Medicare Advantage a plan must provide stop-loss protection once an incentive arrangement puts a group at substantial financial risk for referral services, set at twenty-five percent of potential payments. Quality-based bonuses are excluded from that calculation entirely, so a practice adding them into a total at risk figure gets the answer wrong.
Our capitation contract is vague about the numbers. Does that matter?
It matters more than most practices realize. A capitation arrangement counts as substantial financial risk if the maximum and minimum potential payments are not clearly explained in the contract. Vagueness is the trigger, not a symptom of one. That puts a stop-loss obligation on the plan, which makes the ambiguity worth raising rather than tolerating.
How does fee-for-service performance feed into this?
Directly, through two channels. The benchmark and the risk adjustment both come off claims, so coding completeness moves the target rather than the score, and a charge capture review is where that gets checked. Separately the underlying rates still pay most of the revenue, which is what a fee schedule review is for.
What if the reconciliation statement itself looks wrong?
Then the review becomes a reconciliation rather than a forecast. Recompute each gate from your own expenditure and quality figures, compare against the payer's, and the disagreement will sit in one specific term. Benchmark updates and risk score adjustments are the usual location, and both are documented well enough to check line by line.
Sources
- eCFR42 CFR 425.605 — Calculation of shared savings and losses under the BASIC track (opens in a new tab)
- eCFR42 CFR 425.512 — Determining the ACO quality performance standard for performance years beginning on or after January 1, 2021 (opens in a new tab)
- eCFR42 CFR 422.208 — Physician incentive plans: requirements and limitations (opens in a new tab)
Built by
Chandler Supple
Co-founder & CEO, River
Chandler has spent the last six years working in AI, building tools for millions of users and Fortune 100 companies. In 2025, he co-founded River to build a new kind of operating system for AI agents.
Value-Based Care Contract Performance Review
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