States purchase health care benefits for more than a third of all Americans — nearly one quarter of all Americans receive coverage through Medicaid and about 14 percent of working Americans are state or local government employees. Even more individuals come under the state coverage umbrella through qualified health plans defined by the Affordable Care Act.

It is no surprise then that state health care purchasers are increasingly interested in adopting new payment models that shift away from fee-for-service (FFS) reimbursement toward value-based purchasing (VBP) strategies that reward providers for value or outcomes. Because managed care plans oversee health care services for most Medicaid beneficiaries, public employees, and those getting coverage through the marketplaces, health plans are key channels through which state purchasers can accelerate VBP.

CHCS developed the following set of resources to help state purchasers design and implement effective VBP strategies within managed care. The resources, which draw from interviews and past work with state and federal VBP experts across the country, were developed under State Health and Value Strategies, a program funded by the Robert Wood Johnson Foundation. The resources include:

  • PART I: Strategic Considerations for State Purchasers — This brief outlines strategies states can use to advance delivery and payment reform. It presents key steps states would need to take to move the delivery system under managed care away from FFS — or transaction-based reimbursement — and toward payment for value or outcomes.
  • PART II: An Implementation Guide for State Purchasers — This implementation guide is designed to assist states in more effectively engaging Medicaid health plans, state employee insurance plans, and state insurance marketplaces to move the delivery system toward VBP. The guide outlines policy and regulatory levers states can use to implement VBP.
  • PART III: Planning Template for Value-Based Purchasing — This template aims to help states develop a tangible strategy for advancing system reforms through their health plans. The template can serve as a starting point for discussions with both health plans and other purchasers in the state.


State Health and Value Strategies, a program funded by the Robert Wood Johnson Foundation, provides technical assistance to support state efforts to enhance the value of health care by improving population health and reforming the delivery of health care services.