Value-Based Payment Models Underrepresent Black, Hispanic Medicare Beneficiaries

Medicare beneficiaries who receive care through CMS’s largest voluntary value-based payment models are disproportionately White and less likely to be dual eligible for Medicare and Medicaid or live in disadvantaged or rural areas than those outside these models, according to a new research letter published in JAMA Health Forum.¹

Examining Beneficiary Representation in CMS Value-Based Payment Models

CMS has tested more than 50 value-based payment models aimed at improving quality while controlling costs by holding clinicians and health care organizations accountable for spending and quality outcomes.

Because most of these models have been voluntary, clinicians and organizations can choose whether to participate, raising concerns about selection bias and whether findings generalize to the broader Medicare population. To assess whether voluntary participation affected beneficiary representation, researchers compared beneficiaries receiving care through Medicare's largest voluntary models from 2013 to 2022 with the overall Medicare fee-for-service (FFS) population.

The cross-sectional study examined a 20% sample of Medicare FFS beneficiaries, including more than 17 million beneficiaries and over 115 million beneficiary-year observations across 8 of CMS's largest episode-based and population-based models. Investigators linked CMS participation data, Accountable Care Organization (ACO) beneficiary files, Bundled Payments for Care Improvement (BPCI) enrollment files, and Medicare claims to compare demographic representation in major value-based payment models with the broader Medicare FFS population.

Beneficiary-years attributed to any of the 8 value-based models were more likely to involve White beneficiaries (83.3% vs 72.2% outside any model) and less likely to involve Black (7.4% vs 11.2%), Hispanic (4.3% vs 10.0%), or dual-eligible (15.7% vs 20.9%) beneficiaries, as well as those living in highly deprived areas (13.2% vs 17.2%). Using a standardized mean difference (SMD) threshold of 0.1 to indicate a meaningful difference, each of these comparisons met that benchmark.

When the Medicare Shared Savings Program (SSP), the largest model in the analysis, was excluded, the disparities became even more pronounced. A rural representation gap also emerged, with 4.9% of beneficiaries in non-SSP models living in rural areas compared with 11.3% of beneficiaries outside those models (SMD, −0.13). Similar patterns were observed across individual models, including BPCI, BPCI Advanced, Pioneer ACO, Next Generation ACO, ACO Realizing Equity, Access, and Community Health (ACO REACH), Comprehensive Primary Care Plus, and Primary Care First.

Why Representation Matters in Value-Based Payment Models

The authors attributed these patterns to the voluntary nature of CMS’s payment models, noting that clinicians and organizations may choose to participate when they anticipate financial advantages. Their findings build on prior research documenting equity gaps across individual value-based payment models, including differences in ACO participation and racial representation in primary care initiatives.

Previous reporting by The American Journal of Managed Care^® (AJMC^®) has also highlighted concerns that payment models not explicitly designed to reduce disparities may disadvantage hospitals and practices serving socially at-risk populations.²

Designing Future Models With Equity in Mind

The researchers acknowledged their study’s limitations, including that it was limited to 8 major models, meaning the "no program" comparison group may still include some beneficiaries attributed to smaller or disease-specific value-based arrangements not captured in the data set.¹ They concluded by emphasizing the need for additional research.

“…our findings may help improve the generalizability and rigor of demonstration projects as CMS increases its emphasis on mandatory models and designs future models to include more safety-net and rural clinicians and organizations,” the authors concluded. “Future efforts are necessary to determine whether these models are effective at improving quality and cost-efficiency across all populations.”

References

1. Crowley A, Huang QE, Wang E, et al. Representation in Medicare's value-based payment models. JAMA Health Forum. 2026;7(7):e262202. doi:10.1001/jamahealthforum.2026.2202
2. Inserro A. Moving value-based payment models to a disparities paradigm. AJMC^®. February 28, 2018. Accessed July 27, 2026. https://www.ajmc.com/view/moving-valuebased-payment-models-to-a-disparities-paradigm