How Value-Based Care Models Affect Medical Negligence Claims

What Exactly is Value-Based Care?

Think of the old fee-for-service model like paying a mechanic for every single task they perform on your car—an oil change, a tire rotation, replacing a filter. The more things they do, the more they get paid, regardless of whether the car runs better in the long run.

Value-based care is more like paying for a service plan that guarantees your car runs well for a full year. The mechanic is incentivized to perform preventative maintenance and make durable repairs to avoid future problems, because they are being paid for the result—a reliable car—not the number of individual tasks.

In healthcare, this means providers are rewarded for positive patient health outcomes. Several models are used to implement this approach:

• Accountable Care Organizations (ACOs): These are networks of doctors, hospitals, and other healthcare providers who come together to provide coordinated, high-quality care to their patients. If an ACO meets specific quality benchmarks and keeps costs down, it shares in the savings it achieves for the insurance program.
• Bundled Payments: For certain common procedures, like a knee replacement, a single “bundled” payment is made to cover all aspects of care—from the pre-surgery consultation to the surgery itself and post-operative rehabilitation. This encourages providers to work together efficiently.
• Patient-Centered Medical Homes (PCMH): This model focuses on primary care, where a single practice coordinates all of a patient’s healthcare needs. They are paid a monthly fee per patient to manage their overall health, incentivizing preventative care to avoid costly hospitalizations.
• Pay-for-Performance: In this system, providers receive financial bonuses for meeting specific quality metrics, such as high patient satisfaction scores or effective management of chronic diseases like diabetes.

How Can Value-Based Care Models Lead to Medical Errors?

While the intentions behind value-based care are positive, the financial pressures they create can inadvertently lead to decisions that harm patients. When keeping costs down becomes a primary metric for success, it can conflict with the provider’s duty to deliver the highest standard of care.

This tension can manifest in several dangerous ways:

• Failure to Order Necessary Tests: To control costs, a provider might be hesitant to order expensive diagnostic imaging like an MRI or CT scan, opting instead for a “watch and wait” approach. This can lead to a delayed diagnosis of a serious condition like cancer or a neurological disorder.
• Delayed Referrals to Specialists: In an effort to manage a patient’s care “in-house” and avoid the cost associated with a specialist, a primary care physician in a value-based system might delay a referral. This can prevent a patient from getting timely and appropriate treatment from a cardiologist, oncologist, or other needed specialist.
• Premature Hospital Discharge: Hospitals operating under a bundled payment model have a financial incentive to discharge patients as quickly as possible. Discharging a patient before they are medically stable can lead to serious post-discharge complications, infections, or the need for emergency readmission.
• Over-Standardization of Care: Value-based models often rely on standardized care pathways and protocols to improve efficiency. While these can be beneficial, they may not be appropriate for every patient. A provider who rigidly follows a protocol without considering a patient’s unique symptoms or medical history may fail to diagnose or treat an atypical presentation of a disease.
• Disincentives for Complex Cases: These models can sometimes create a disincentive for providers to take on patients with complex, costly medical conditions, as these patients may make it harder for the provider to meet their cost-saving targets.

Does the Standard of Care Change in Alabama for Value-Based Models?

No. This is an important point for all patients in Alabama to know. The legal and professional standard of care does not change based on a provider’s payment model. A doctor, nurse, or hospital has the same duty to provide competent medical care to a patient regardless of whether they are being paid through a traditional fee-for-service system or a value-based arrangement.

A provider cannot use cost-containment policies or financial incentives as a legal defense for delivering substandard care. The core question in any medical negligence claim remains the same: did the provider’s actions fall below what a reasonably prudent provider would have done in a similar situation?

To bring a successful medical malpractice claim in Alabama, an injured patient must prove four key elements:

• A Duty of Care Existed: When a healthcare provider agrees to treat you, a formal provider-patient relationship is established. They owe you a duty to provide care that meets accepted medical standards.
• The Duty Was Breached: The patient must show that the provider’s actions—or lack thereof—fell below the accepted standard of care. For example, a reasonably prudent physician would not delay a referral for a cardiac workup for a patient with clear signs of heart distress, even if their ACO has strict cost-control goals.
• Causation Was Present: The breach of duty must be the direct cause of the patient’s injury. It must be proven that if the provider had acted according to the standard of care—by ordering the necessary test or making the timely referral—the patient’s harm would have been prevented or been far less severe.
• Damages Resulted: The patient must have suffered actual harm. This includes physical pain, additional medical expenses to correct the error, lost income due to the inability to work, and a diminished quality of life.

How are Medical Negligence Claims Involving Value-Based Care Investigated?

Proving that a negative health outcome was caused by financial pressures inherent in a value-based model, rather than an isolated clinical error, requires a deep and sophisticated investigation. It involves looking beyond the individual provider’s actions to examine the systemic policies and incentives that may have influenced their medical judgment.

The investigation of these cases often includes:

• A Meticulous Review of Medical Records: We analyze electronic health records (EHRs), doctors’ notes, nurses’ logs, and all communications to build a complete timeline of the patient’s care. We look for evidence of delayed orders, cancelled referrals, or notes that indicate a deviation from standard practice.
• Examination of Institutional Policies: A key part of the investigation is obtaining and analyzing the policies of the hospital, clinic, or ACO. We examine their protocols related to cost-containment, quality metrics, and provider incentives to determine if they encourage or pressure providers into making decisions that could compromise patient care.
• Engaging Medical and Healthcare Finance Experts: These cases almost always require testimony from qualified medical professionals who can speak to the standard of care. Additionally, we may engage experts in healthcare administration or finance who can explain how a particular value-based model created financial pressures that foreseeably could lead to the type of harm the patient suffered.

What Evidence is Important in These Complex Cases?

Building a strong case requires more than just the patient’s medical chart. An attorney with experience in this area will seek a broad range of evidence to connect the dots between a healthcare system’s policies and a patient’s injury.

Key pieces of evidence can include:

• Electronic Health Record (EHR) Metadata: This “data about data” can show when orders for tests or referrals were placed, when they were viewed, and if they were later cancelled or altered.
• Patient Portal Communications: Messages between the patient and the provider’s office can be powerful evidence, especially if the patient repeatedly reported worsening symptoms that were not acted upon.
• ACO or Hospital Policies and Procedures: Internal documents outlining the institution’s cost-saving goals, provider performance metrics, and bonus structures can reveal the financial pressures at play.
• Billing and Payment Records: These records can show whether the care was provided under a bundled payment or other value-based arrangement, helping to establish the financial context for the provider’s decisions.
• Provider Communication Logs: Internal emails or memos discussing patient care protocols or cost-saving initiatives can sometimes shed light on a culture that prioritizes finances over patient safety.

Can the Hospital or Healthcare System Be Held Liable?

Yes. In many cases involving harm under a value-based care model, the negligence is not solely the fault of an individual doctor. The hospital, clinic, or healthcare system that creates and enforces the policies may also be held liable.

Liability can be placed on the institution for several reasons:

• Flawed Policies: If a hospital implements policies that directly or indirectly incentivize doctors to provide substandard care—for example, by penalizing them for ordering “too many” tests—the institution itself may be negligent.
• Inadequate Staffing or Resources: A common cost-cutting measure is reducing staff or limiting access to resources. If understaffing leads to a provider being too overworked to provide proper care, the hospital may be responsible for the resulting harm.
• Failure to Supervise: A healthcare system has a duty to oversee its providers. If it is aware that its value-based incentives are leading to poor patient outcomes but does nothing to correct the problem, the system can be held accountable.

Holding an institution accountable is not just about securing compensation for one injured patient; it is about forcing changes that can protect the health and safety of the entire community.

Navigating the Legal Path After an Injury in a Complex System

A late diagnosis or preventable complication is devastating, especially when financial incentives may have contributed to the harm. Despite the evolving healthcare system, patients retain the right to safe care. If you suspect a value-based care system error caused harm, seek legal evaluation from a team familiar with these complex issues.

The Law Office of J. Allan Brown, L.L.C., is committed to helping patients in Alabama who have been injured by medical negligence. We have the resources and determination to investigate these complicated cases and hold providers and institutions accountable for the harm they cause. A conversation with our team can help you get a clearer picture of your legal options and decide on the best path forward.

Please call our Mobile, Alabama, office at 251-473-6691 to have your case reviewed.