The Plan-Do-Study-Act (PDSA) cycle is a continual, four-step model that is used in quality improvement efforts in order to test change.¹

In 1992, Medicare updated its payment system with the aid of the American Medical Association (AMA) to establish a standardized physician fee schedule based upon relative value units (RVUs).¹ RVUs define the value of a health care service relative to all other health care services based upon the extent of the provider’s work, practice resources (both clinical and nonclinical), malpractice insurance, and expertise needed to deliver the service to patients.² RVUs are the basis of the Resource-Based Relative Value Scale used by the Centers for Medicare and Medicaid Services (CMS) to determine health care providers’ payment.¹

Risk-based contracting is the act of establishing a contract between providers and payers that makes the provider (namely, the provider group) responsible for all the costs incurred in the care of empaneled health plan members. This includes not only primary care costs, but costs related to hospital visits (e.g., inpatient and emergency department), medications, and specialists. The provider is given a fixed amount of payment per member per month (PMPM) paid in advance for the delivery of all health care services to the health plan’s members, whether the patient utilizes the services or not.¹