Value-based care is a way of paying for health care that links payment to cost, quality and outcomes instead of paying only for each service delivered. In dementia care, the best-known example is CMS's GUIDE Model, which adds a performance-based adjustment to a monthly care management payment.
The vocabulary can be hard to follow, especially for teams new to Medicare payment models. This glossary defines the terms that come up most often in GUIDE, PACE and Medicare Advantage conversations. Each definition draws on CMS, Medicare.gov, Medicaid.gov or another named source. For how these models work day to day, see our Value-Based Care and GUIDE pages.
Payment and Policy Terms
Accountable care relationship. An arrangement in which a provider organization is accountable for the quality and total cost of a patient's care. CMS's Innovation Center has set a goal of increasing the number of people in this kind of relationship. CMS reported that 53.4 percent of people with traditional Medicare were in one as of January 2025.
Alternative payment model (APM). A payment approach that differs from traditional fee-for-service billing. GUIDE is a CMS alternative payment model. It is not an Advanced APM under the Quality Payment Program, which requires certain minimum levels of financial risk and other criteria, so GUIDE participants who are eligible for MIPS still have to report to it.
Capitation. A capped, fixed payment for the care of a person, instead of payment for each service. Medicaid.gov says PACE financing is capped, which lets providers deliver all the services a participant needs rather than only those reimbursable under fee-for-service.
Dementia Care Management Payment (DCMP). GUIDE's monthly, per-patient payment for care management and coordination and for caregiver education and support. It replaces fee-for-service billing for certain care management services. CMS adjusts it for geography, population and income, and performance.
Medicare Advantage. Also called Part C. CMS describes it as a private insurance alternative to Original Medicare. Patients enrolled in Medicare Advantage are not eligible to be aligned to a GUIDE participant.
Original Medicare. The fee-for-service Medicare program run by the federal government, made up of Part A (hospital insurance) and Part B (medical insurance). GUIDE aligns patients who have it, including those who also have Medicaid.
PACE (Program of All-inclusive Care for the Elderly). A Medicare and Medicaid program that provides comprehensive medical and social services, through an interdisciplinary team, to people 55 and older who need a nursing home level of care but can live safely in the community. Participants must live in the service area of a PACE organization.
Performance-based adjustment (PBA). A percentage that CMS applies to a GUIDE participant's DCMP based on performance on five measures. In performance year 2026 it ranges from -3.5 percent to +10 percent. CMS applies each year's PBA from the following January for 12 months.
Risk adjustment. A method of adjusting payment or performance results to reflect how sick or complex a population is. Under Medicare Advantage, plans are paid in advance, so risk adjustment accounts for the expected costs of each enrollee. In GUIDE, several measures are risk-adjusted so results reflect patient characteristics.
Value-based care. Payment models that link reimbursement to cost, quality and outcomes. Definitive Healthcare describes today's system as one where older payment structures coexist with newer models that tie reimbursement to results.
