In a shared savings model, what happens when providers meet quality and cost targets?

• A. Providers share savings with the payer.
• B. Providers incur penalties without any benefit.
• C. The patient receives the savings.
• D. The payer alone profits from the savings.

Answer: (A)

Shared savings models are built to reward both cost efficiency and good quality. When providers meet the quality and cost targets, actual spending comes in under the benchmark, creating savings. Those savings are distributed between the provider organization and the payer, with the providers receiving a portion as an incentive and the remainder helping fund the program or reduce future costs for the payer. The patient doesn’t directly receive the savings, though overall care can improve and become more affordable as a result. This sharing arrangement is why the correct description is that providers share savings with the payer.