Our goal of building a value-based purchasing (VBP) model is to improve quality and health outcomes for our Medicaid members and reduce cost growth.

In a traditional fee-for-service system, the only financial incentive for providers is to provide more services; payment is not contingent on quality of care, efficiency, or patient outcomes. Consequently, there has been a national drive for health insurers to move away from fee-for-service reimbursement methodologies using alternative payment methodologies (change how you pay) and value-based purchasing (change what you pay for).  

Program Strategy

  • Healthier Populations. Improve the health status of North Dakotans by promoting healthy lifestyles, preventive care, disease management, and disparity elimination.
  • Better Outcomes. Improve access to quality healthcare at an affordable price to improve outcomes.
  • Better Experience. Enhance member and provider experience.
  • Smarter Spending. Increase effectiveness and efficiency in the delivery of healthcare programs and ensure value in healthcare contracts.

Quality Performance

Within the VBP Program, there are five priority health care domains included to improve population health. All measures selected align to these domain areas.

  • Primary Care Access and Preventive Care
  • Maternal Health Services
  • Behavioral Health Services
  • Care of Acute and Chronic Conditions
  • Oral Health Services

The VBP Program quality measurement and performance monitoring strategy will roll out in stages; expanding and building greater accountability over time.

The program will begin as a pay-for-reporting only program with an initial measure set for the first 18 months of the program (July 2023 – December 2024). The initial measure set will transition to pay-for-performance in subsequent years; beginning January 2025. The program will also expand to add measures.

The expanded set of measures will be under pay-for-reporting for a 12-month period (January 2025 – December 2025) and then transition to pay-for-performance in subsequent years; beginning January 2026.

Primary Care Access & Preventative Care Maternal Health Services Behavioral Health Services Care of Acute & Chronic Conditions Oral Health Services
Well-Child Visits 
First 30 Months of Life 
Postpartum Care: 
Prenatal and 
Postpartum Care 
Screening for Depression and Documented 
Follow-up Plan 
Emergency Department Utilization
per 1000
Topical Fluoride for Children (TFL-CH)
Child & Adolescent
Well-Care Visit 
Option 1:
Prenatal Care: 
Prenatal and 
Postpartum Care
Option 1:
Follow-up After Emergency Department Visit for Alcohol and Other Drugs Abuse or Dependence
Controlling High
Blood Pressure

Breast Cancer Screening (BCS-AD)

PCP Visit Percentage 

Option 2:
Contraceptive Care: Postpartum Women 
Option 2:
Initiation and Engagement of Alcohol and Other Drug Abuse or Dependence Treatment
Plan All-Cause Readmission 
Colorectal Cancer Screening 
Option 3:
Structural Measure: Perinatal Collaborative Participation
Option 3:
Continuity of Care After Medically Managed Withdrawal from Alcohol and/or Drugs


Initial Measure Set 
Expanded Measure Set 



Performance Payment

VBP Program participants put a portion of hospital payments at risk for performance on a suite of quality measures. 

In the first stage of the program, July 2023 – December 2024, if a participant satisfies the pay-for-reporting reporting requirements (i.e., submission of the required VBP Reporting Tool, participation in the VBP Outcomes Meeting, and submission of supplemental data at least once per year), the provider retains 100% of the at-risk funding for that measure.Graph with circles and plus signs showing payment for reporting calculation

If a participant does not satisfy one or more of the reporting requirements, the provider must pay the state 100% of the at-risk funds. Funds collected from pay-for-reporting measures will not be used to support the Redistribution Pool.


Health systems with PPS hospitals in North Dakota are mandatory participants in the model. As of July 1, 2023, the six health systems are: Sanford Bismarck, Sanford Fargo, Altru Health System, CHI St. Alexius, Essentia Health and Trinity Health.

ND map with icons PPS hospitals in Bismarck, Fargo, Grand Forks and Minot

The program is being implemented with pay-for-reporting periods during which the definition of successful performance will comprise three major components.

  1. Achievement will include the completion of an annual VBP Reporting Tool with associated attestations. Submission will occur once per year by the last day in February.
  2. Achievement will include participation in an annual VBP Outcomes meeting that will be required and will occur once per year per PPS hospital system between October and November.
  3. Achievement will include submission of supplemental data for associated measures at least once per year. Data may be submitted as often as quarterly.

Starting in 2025, Health system performance will be evaluated against the Statewide Target as well as their own historical performance. The Statewide Target is defined as the highest level of performance that the Department wishes to achieve across the state in order to provide high quality care to all North Dakotans. Statewide Targets will be selected for each measure except structural measures which will be rated as met/not met.

Statewide targets will be set based on availability and a reasonable, incremental rate of change according to the following hierarchy based:

  • Utilize the National HEDIS 75th percentile, or other applicable increment.
  • Utilize the National Adult or Child Core Median.
  • Utilize Regional data, as available.
  • Utilize State-selected Target or Improvement over self.

Additional Resources

ND Payment Reform Model Overview