MedPAC's June report steps back from launching new programs to ask whether Medicare's existing payment incentives even point the same way. After fifteen years, that may be the more important question.
When a payment model underperforms, the reflex in American healthcare is to design another one. Over fifteen years, that reflex has produced an impressive catalog: accountable care organizations, bundled payments, primary care models, specialty and condition-specific demonstrations, and a steady stream of refinements to each. MedPAC’s June 2026 report to Congress does something quieter and, we think, more useful. Rather than propose the next model, it steps back to ask whether the incentives already in place point in the same direction.
The honest answer is that they often do not.
Three systems, three sets of incentives
Medicare pays for care through three broad channels, and each rewards something different. Fee-for-service still pays for volume: more services, more revenue. Accountable care models ask providers to do the opposite: restrain unnecessary utilization and share in the savings. Medicare Advantage pays in yet another way, with incentives shaped heavily by how thoroughly diagnoses are documented and which patients enroll.
A single clinician can sit inside all three at once. The same week, a physician may be rewarded for doing more under one contract, for doing less under another, and for coding more completely under a third. These are not edge cases; they are the ordinary conditions of practice. When the incentives a provider faces contradict one another, “value” stops being a strategy and becomes a label applied unevenly across a system still largely wired for activity.
Why misalignment is its own kind of failure
It is tempting to treat conflicting incentives as a technical nuisance, something for actuaries and contract teams to reconcile. But misalignment has consequences that reach the exam room. When the financial signals around a patient’s care pull in different directions, coordination suffers, and the friction lands on the person least equipped to absorb it: the patient, who experiences it as duplicated tests, conflicting advice, or care that stalls between settings.
This is the part worth keeping in view. The purpose of paying for value was never to perfect a contract, it was to organize care around the outcomes that matter to people: whether they can work, move, and live the way they want, for resources society can sustain. A system whose incentives cancel out cannot reliably deliver that, no matter how many models it runs in parallel.
What coherence would require
If the next chapter of payment reform is about alignment rather than invention, the work is less glamorous than a launch and harder to put in a press release. It means fewer models, designed to fit together rather than compete. It means measures that are consistent across programs, so that improving care does not require satisfying three incompatible scorecards. It means benchmarks that do not quietly punish the organizations that succeed, and payment designed on the assumption that a patient will touch more than one payer over a year of care.
None of this implies that the past fifteen years failed. Accountable care has produced real, if modest, savings, and in places genuinely better care. The lesson is narrower and more demanding: the details decide everything, and coherence among the details is the part we have most neglected. Adding another model to an incoherent system does not fix the incoherence; it deepens it.
The harder, quieter work
MedPAC’s restraint, analysis rather than another slate of recommendations, is itself a kind of argument. It suggests that the binding constraint on value-based care is no longer a shortage of ideas about how to pay for value, but the difficulty of making the ideas we already have add up.
That is slower work than announcing a new acronym, and it will earn fewer headlines. But if the goal is care organized around outcomes rather than billing, alignment is the part that has to hold.