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Alternative Payment Models

“Alternative payment models” is a complex term for a simple idea: when we invest in better outcomes, we all win.

About This Priority

In order to understand alternative payment models, it’s helpful to understand traditional payment models.

Most community disability services are funded through what are known as “fee-for-service” models, wherein providers spend a certain amount of time delivering a service, and then states reimburse providers at a specific rate based on the amount of time spent delivering that service, typically in quarter-hour increments. With this approach, states pay providers for outputs—providers are paid for the amount of time they spend supporting someone, regardless of the outcomes of that support.

Alternative payment models, on the other hand, typically pay for outcomes—the amount of value that is delivered to the person accepting services, irrespective of how much time it takes for that value to be achieved.

Across the country, there are efforts to improve service delivery by pilot testing alternative “value-based” payment models. Within this landscape, ANCOR is a recognized leader, supporting the development of knowledge about how innovative funding structures can lead to more access to better services.

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