Health Insurer Pilots Outcome-Based Contracting With Providers
Program ties provider reimbursement to patient recovery metrics, targeting $50M in savings and 15% reduction in readmissions over three years
HARTFORD, Conn. – Nov. 25, 2025 AetnaCare Health announced today the launch of a three-year outcome-based contracting pilot with 12 integrated hospital systems across six states, marking one of the most comprehensive provider risk-sharing initiatives undertaken by a commercial insurer this year. The program shifts from traditional fee-for-service payments to a model where up to 30% of provider reimbursement depends on achieving specific clinical milestones, including reduced hospital-acquired infection rates, 30-day readmission targets, and validated patient functional improvement scores.
The initiative comes as the Centers for Medicare & Medicaid Services accelerates value-based care adoption, with a goal of enrolling all Medicare beneficiaries in alternative payment models by 2030. According to CMS data, value-based programs have already reduced hospital readmissions by nearly 2 percentage points across participating facilities since 2020, generating approximately $1.9 billion in Medicare savings. Private insurers are following suit, with industry data showing 68% of commercial health plans now operating at least one outcomes-based contract, up from 52% in 2023.
AetnaCare’s pilot focuses on high-cost episodes spanning orthopedic surgery, chronic obstructive pulmonary disease management, and maternity care. Participating providers will receive baseline fee-for-service payments enhanced by shared-savings bonuses for beating cost benchmarks and quality penalties for missing outcome thresholds. The model incorporates CMS-validated HEDIS metrics and real-time clinical registry data to track performance. Early projections indicate the program could reduce inpatient days by 12% and complications by 18% within the first 18 months.
“For too long, volume-based incentives have misaligned what’s best for patients with what gets rewarded,” said Dr. Rebecca Morrison, AetnaCare Health’s Chief Medical Officer. “This pilot puts skin in the game for both parties—we’re wagering on measurable health improvement, not just activity. Our data shows that when providers have the right analytics and flexibility to coordinate care, patients recover faster and stay healthier. That’s the win we’re chasing.”
The 12 hospital systems, representing 47 facilities and nearly 8,000 affiliated physicians, were selected based on existing care coordination infrastructure and willingness to accept downside risk. Participants gain access to AetnaCare’s integrated data platform, which uses predictive analytics to identify high-risk patients and suggests evidence-based interventions. The insurer has committed $15 million in upfront technology grants to support participants’ electronic health record enhancements and care management staffing.
Market research demonstrates strong financial rationale for the shift. Elevance Health reported that 65.5% of its 2024 medical expenditures flowed through value-based arrangements, yielding $1.2 billion in additional provider payments tied to quality performance. AetnaCare projects its pilot will deliver $50 million in gross savings by 2028, with 40% returned to providers as performance bonuses and the remainder reducing premiums for the 2.3 million members affected by these contracts.
The program will be evaluated by an independent academic consortium led by the University of Michigan’s Institute for Healthcare Policy and Innovation, with quarterly public reporting on cost, quality, and equity metrics. If successful, AetnaCare plans to expand outcome-based contracting to 40% of its provider network by 2029, potentially covering oncology, cardiology, and behavioral health services.
About AetnaCare Health
AetnaCare Health provides comprehensive health insurance to 4.2 million members across 14 states. Through its clinically integrated networks and value-based care initiatives, the company partners with more than 85,000 providers to improve health outcomes and reduce total cost of care. AetnaCare has been recognized by the National Committee for Quality Assurance for its care management programs and maintains an A- (Excellent) financial strength rating from AM Best.
Media Contact
Sarha Al-Mansoori
Director of Corporate Communications
G42
Email: media@g42.ai
Phone: +971 2555 0100
Website: www.g42.ai
