How to Prepare Your Therapy Business for Value-Based Care Models

Value-based care (VBC) is no longer a future concept on the horizon for rehabilitation providers. It's the direction the entire healthcare system is moving, and quickly. For physical therapy, occupational therapy, and speech therapy organizations, this shift represents both a challenge and an opportunity. Practices that begin preparing now will be better positioned for long-term stability, stronger payer relationships, and improved patient outcomes in 2026 and beyond.

In this guide, we break down the key pillars of value-based care, Accountable Care Organizations (ACOs), bundled payments, and population health, and offer actionable steps to help therapy businesses adapt strategically.

What Is Value-Based Care?

In a traditional fee-for-service (FFS) model, providers earn revenue based on the number of visits or procedures billed. In value-based care, payment is tied to performance and proven outcomes. Organizations are rewarded for:

• Improving functional outcomes
• Reducing unnecessary utilization
• Preventing avoidable hospitalizations
• Coordinating effectively with other providers
• Delivering patient-centered, efficient care

For therapy practices, transitioning to VBC means strengthening your ability to demonstrate measurable value, and aligning your operations with broader healthcare goals.

1. Understand Accountable Care Organizations (ACOs)

ACOs bring together hospitals, physicians, therapists, and post-acute providers to deliver coordinated care for Medicare beneficiaries. If they deliver high-quality outcomes while reducing overall costs, they can share in the savings.

What This Means for Therapy Providers

ACOs want high-performing therapy partners who can demonstrate:

• Strong functional outcomes
• Low hospital readmission rates
• Efficient plan-of-care progression
• Consistent communication with referring physicians
• Ability to integrate into coordinated care pathways

How to Strengthen Your ACO Readiness

• Establish standardized outcome reporting (ROM, gait measures, PROMs, fall risk assessments, etc.)
• Develop clear care pathways for high-volume diagnoses like osteoarthritis, CVA, post-surgical rehab, low back pain, and chronic conditions
• Participate in care coordination meetings or case conferences
• Demonstrate efficiency (e.g., shorter episode-of-care averages without compromising outcomes)

Track and report data trends quarterly. ACOs value partners who can communicate results clearly.

2. Prepare for Bundled Payment Models

Under a bundled payment model, multiple providers receive one predetermined payment for all services related to a specific episode, such as a joint replacement or stroke rehab.

This model rewards teams that coordinate well, avoid cost overruns, and achieve predictable outcomes.

How Therapy Practices Can Prepare

Analyze Cost Structure

• Understand your true cost per visit
• Identify unnecessary variability in care delivery
• Monitor therapist productivity and visit utilization patterns

Standardize Care Pathways

• Use evidence-based protocols
• Establish expected visit ranges by diagnosis
• Ensure consistent clinical documentation

Measure and Report Outcomes

• Track progress using validated tools
• Measure episode length and improvement rates
• Identify trends across therapists, locations, or diagnoses

NARA’s benchmarking tools and operational templates help members prepare for bundled payment participation and identify performance gaps early.

Become a NARA Member

3. Integrate with Population Health Initiatives

Population health focuses on improving outcomes for groups of patients by addressing both clinical and social determinants of health (SDOH).

Therapy providers are uniquely positioned to support these efforts because functional ability influences nearly every aspect of health and independence.

Steps to Integrate Effectively

• Identify high-risk populations (older adults, chronic pain, post-operative, fall-risk)
• Collaborate with primary care, hospitals, public health programs, and community agencies
• Implement fall prevention, chronic disease management, and mobility-focused interventions
• Use screening tools for SDOH (transportation, home safety, social isolation)
• Train staff in care coordination and interprofessional communication

NARA’s education and webinar series can help organizations build a strong population health strategy aligned with payer expectations.

4. Build a Data-Driven Culture

In value-based care, data is no longer optional; it’s the foundation of your practice’s credibility.

Therapy organizations must be able to demonstrate measurable improvements, patient satisfaction, and cost efficiency.

Core Components of a Data-Driven Practice

• Outcome tracking systems (FOTO, AM-PAC, HOOS/KOOS, ABC Scale, Oswestry, etc.)
• Patient satisfaction surveys aligned with CAHPS or similar measures
• Accurate, timely documentation aligned with payer requirements
• Staff training on quality measures, compliance, and reporting

Why It Matters

ACOs, payers, and hospital partners rely on data when selecting partners, and therapy organizations that demonstrate strong metrics become more attractive collaborators.

5. Advocate and Stay Informed

Value-based care is still evolving. Federal and state-level policy changes continue to shape reimbursement, reporting standards, and provider eligibility.

NARA helps members stay ahead through:

• Weekly regulatory updates
• Advocacy alerts
• Opportunities to participate in policy discussions
• Education on payment reform, quality programs, and compliance requirements
• Partnership with national coalitions working to protect therapy access

Staying informed helps your practice respond early, not react late.

Start Now, Scale Smart

Transitioning to value-based care requires thoughtful planning and a willingness to adapt. But you don’t need to overhaul your operations overnight. Start by strengthening foundational areas, data, care pathways, outcomes, and communication, and build from there.

NARA can support you every step of the way with the tools, training, advocacy, and peer collaboration you need to lead confidently in a value-based world.

If you’re already a NARA member, explore the resources available in your member portal. If not, now is an ideal time to join an organization dedicated to elevating therapy providers nationwide.