Trapped in a Bad Contract? How Healthcare Got Here—And How to Get Out
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TL;DR
Value-Based Care was supposed to make healthcare better. But without the right tools, practices are stuck in contracts they don’t understand, getting billed for penalties they can’t even verify. It’s time to fight back—with data.
It Started With a Simple Question
"How did we get here?"
That was the first thing the CFO said when they saw the letter from the payer. It was a hefty bill—$1.3 million. A downside risk penalty for exceeding cost benchmarks under their Value-Based Care (VBC) contract. No breakdown. No detailed justification. Just a number.
The payer had already done the math—or so they claimed. And now they expected a check.
There was a stunned silence in the room. Then came the finger-pointing. Who signed this deal? Did anyone run the numbers? Was this even a good contract?
And the worst part? No one knew how to check the payer’s work.
The Value-Based Care Trap
Value-Based Care was supposed to fix healthcare. Instead of paying doctors for every service (Fee-for-Service or FFS), it would reward them for providing high-quality, cost-effective care. The idea wasn’t new—its roots stretch back to the 1970s with HMOs and Medicare C.
But something changed along the way.
VBC contracts became labyrinths of financial risk, full of complex calculations and hidden variables. Payers held all the data, all the models, and all the leverage. And practices? They were flying blind.
Without real-time financial tracking or claims-level cost visibility, practices don’t even know how they’re performing until it’s too late. The bill arrives. The damage is done.
And that’s exactly what happened to this practice.
The “He Said, She Said” Game
The first instinct was to challenge the penalty.
The practice knew costs had gone up—but not because of anything they did. Hospital fees had surged. Facility-based costs had skyrocketed. They weren’t the ones driving the increase.
So they asked for Anthem’s numbers.
What they got was a black box report—a few high-level figures, some summary tables, and no way to verify the math. No transparency. No raw data. No clear cost attribution.
It was a classic payer playbook move:
Make the calculations too complex to challenge.
Control the data.
Get the provider to pay without asking too many questions.
And most of the time? It works.
Because most practices don’t have the tools to fight back.
How Do You Negotiate When You Can’t See the Math?
That’s where this practice almost found itself—locked in a debate without any leverage.
But instead of arguing anecdotes, they decided to build a case with data.
Using advanced search and analytics tools, they:
✅ Pulled every visit related to the VBC contract across the relevant time periods.
✅ Applied the same exclusions and adjustments Anthem used to make an apples-to-apples comparison.
✅ Analyzed cost drivers to prove that their increases were in line with medical inflation, not excessive spending.
✅ Rebuilt the payer’s cost model on their own terms.
And suddenly, the negotiation wasn’t about who had the better argument.
It was about the facts.
From Powerless to Prepared
By the time the practice went back to the payer, everything had changed.
Instead of debating, they demanded transparency. Instead of asking for mercy, they showed their own calculations. Instead of taking a $1.3 million hit, they negotiated it down to $300,000—and possibly less.
The difference? They had data.
For years, payers have operated under the assumption that practices can’t verify their numbers. They count on the complexity being too overwhelming to challenge. But that only works when providers don’t have the right tools.
The Bigger Problem No One Talks About
This isn’t just one practice’s problem.
This is happening everywhere.
Multi-million-dollar penalties that no one can verify.
Opaque payer calculations that can’t be checked.
Contracts that seemed “fine” when signed—until the bill comes due.
And the worst part? Most practices don’t even know how exposed they are until it’s too late.
The shift from FFS to VBC was supposed to be an evolution. Instead, for many practices, it feels like a financial trap.
But here’s the good news: it doesn’t have to be this way.
What You Can Do Now
If your practice is in a VBC contract—or thinking about one—ask yourself:
1️⃣ Can you track payer costs in real time?
If the answer is no, you’re at risk of getting hit with an unexpected bill.
2️⃣ Can you pull your own financial data and rebuild payer calculations?
If not, you’re trusting that the payer got it right. (Spoiler: They often don’t.)
3️⃣ Do you have the tools to make a fact-based counteroffer?
Because if you don’t, the negotiation is already over before it begins.
Value-Based Care isn’t going away. It will only get more complicated. The only way to survive—and thrive—is to fight back with better data.
The next time a payer sends an unexpected bill, don’t just take their word for it. Check their math.
And if you can’t?
It might be time to get the tools that let you.