The Military Health System (MHS) provides healthcare to over 9.4 million beneficiaries. The majority of
this healthcare is purchased from the civilian sector using large regional Managed Care Support
Contracts that rely on fee-for-service (FFS) reimbursement. While FFS was once the dominant
reimbursement model in the commercial sector, it has been eclipsed by a new set of “value-based”
purchasing practices. Evidence suggests that value-based purchasing models can reduce costs
relative to FFS models while maintaining or improving the quality of care.