Many states have been pushing risk-sharing contracts as a way of controlling costs and improving provider quality. As providers assume more insurance risk through APCs, a greater percentage of their revenues is variable. They then face one of the largest risks an insurance company faces- insolvency due to patients (members) using more services than anticipated.
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New “insurance” regulations on providers participating in alternative payment arrangements
A recent growing trend has been to shift insurance (utilization) risk from payers to providers through alternate payment contracts (APCs) in an effort to align financial compensation with performance and financially penalize providers if certain financial and quality thresholds are not met.
Rebecca Johnson, Howard Kahn, Catherine Murphy-Barron, Robert Parke