Annual Wellness Visits Are a Critical Value-Based Care Strategy

Best Practices for Higher Quality of Care, Lower Costs and Better Patient Engagement

A key foundation for value-based care success is the Annual Wellness Visit (AWV), a yearly preventive health visit for Medicare beneficiaries, designed to identify health risks early, establish necessary treatment plans, and document health conditions.  

Recent evidence shows that AWVs can significantly improve patient engagement and health outcomes, reduce healthcare costs and overutilization, and help capture necessary diagnosis coding. This article examines AWVs’ impact on value-based care programs for Accountable Care Organizations (ACOs).

The Value of AWVs for ACOs and Providers

ACOs are designed to balance healthcare costs with health outcomes, aligning incentives for providers to deliver quality care at the lowest overall cost. A 2022 qualitative study surveyed ACOs nationwide found that ACO leaders explicitly identified a focus on annual wellness visits and ensuring the patients’ medical complexity was captured with rigorous coding practices as their top strategies for success. Leaders concentrated on these areas along with improving care transitions to engage patients and achieve ACO targets.

Fostering Patient Engagement

Patients who complete Annual Wellness Visits (AWVs) with their primary care physicians tend to be more engaged in their long-term wellness. This positive patient experience encourages active participation in their healthcare journey, boosting adherence to screenings, routine care, and lifestyle changes, ultimately reducing the need for acute interventions down the road. For instance, a quality improvement project aimed at increasing AWV completion rates among Medicare patients in a primary care internal medicine practice increased from 1.7% to 3.8% over three months. This improvement underscores the potential of AWVs to foster strong patient-provider relationships and enhance adherence to recommended preventive measures.

Pathway to High-Quality, Lower-Cost Care

When ACOs optimize AWV completion, they realize downstream benefits in cost savings. A 2019 study published in The American Journal of Managed Care found that Medicare Advantage beneficiaries who received an Annual Wellness Visit had approximately 5.7% lower healthcare costs over the ensuing 11 months compared to matched beneficiaries who did not receive an AWV. The study partially credited this reduction to fewer avoidable hospital admissions and emergency department(ED) visits among patients receiving regular wellness assessments.

Data-Driven Benefits of AWVs

Now let’s discuss how ACOs can leverage data from AWVs to enhance quality scores, close coding gaps, reduce unnecessary utilization, and ultimately lower their overall healthcare expenditures.

Higher Quality Measure Scores

Many of the most widely tracked quality measures—such as breast cancer screening, colorectal cancer screening, and immunizations—can be addressed during the AWV. This is especially critical for ACOs, which are scored on these preventive measures to determine their share of any savings realized under value-based contracts. According to a study published in Population Health Management, Medicare beneficiaries who received an Annual Wellness Visit were significantly more likely to receive preventive services, with cancer screenings increasing by 36.4% for colonoscopy and 25.5% for mammography compared to those without an AWV. Over time, that performance boost can significantly impact an organization's reported quality scores and potential shared savings.

Fewer HCC Coding Gaps

Hierarchical Condition Category (HCC) coding is central to the risk adjustment process in Medicare. A quality improvement study in a large health system found that when AWV completion rates rose dramatically (from 23.7% of patients in 2018 to 59.8% in 2020), there was a corresponding increase in HCC recapture, enabled by the AWV completion. As more patients came in for AWVs, providers were able to document chronic conditions that might have been previously unrecorded, improving HCC recapture rates.

ROI in Value-Based Care

From a value-based care perspective, AWVs yield a strong return on investment by driving down per-member-per-year (PMPY) costs. For instance, a study published in The American Journal of Managed Care found that patients who received an AWV experienced a 5.7% reduction in adjusted total healthcare costs over the ensuing 11 months, equating to approximately $38 per member per month, or $456 annually. This suggests that AWVs are most effective when integrated with care management workflows. By investing time in annual preventive visits, providers can mitigate risks that might otherwise lead to expensive medical events. Consequently, Accountable Care Organizations (ACOs)that achieve higher AWV uptake often realize substantial shared savings.

Best Practices for Maximizing AWV Utilization

Successful ACOs have developed strategies to boost Annual Wellness Visit completion rates and reap the associated benefits. Key best practices focus on leveraging data, efficient scheduling, and provider engagement. Additionally, population health analytics platforms are being used to streamline these efforts by tracking AWV due dates and optimizing outreach by the care teams. Here are proven approaches to maximize AWV utilization:

1. Leverage Data Analytics and Technology

• Use Analytics Tools to Track AWV Due Dates
  ‍Use claims data and analytics to know exactly which patients are due for an AWV at any given time. Population health platforms can automate this process, by integrating Medicare claims data with the ACO’s Medicare population. Risk-adjusted patient roster. This ensures no patient is overlooked. Having real-time eligibility information is crucial for staff to avoid scheduling AWVs too early, preventing lost reimbursement. And if an outside provider performed an AWV, the platform flags that and resets the clock. By reviewing whether beneficiaries have had an AWV conducted outside the system, ACOs avoid duplicate efforts and focus outreach on truly eligible patients. In short, a centralized population health solution takes the guesswork out of AWV scheduling.

• Monitor AWV Year-to-Date Rates to Forecast Year-End Performance
  Robust data analytics allow administrators to compare the current AWV completion rate with organizational goals—be it 30%, 50%, or 70%. For instance, if a practice aims for a 60% AWV rate but is at only 20% midway through the year, it knows it’s time to ramp up outreach before backlog issues arise.

• ‍Generate Patient Assessment Reports for Potential HCC Conditions
  Thorough patient medical reviews during an AWV can uncover conditions that may have been overlooked during routine visits. Detailed patient assessment reports from population health solutions help identify possible Hierarchical HCC gaps, ensuring that providers can more accurately capture and treat chronic conditions. For example, a quality improvement initiative across 89 primary care practices demonstrated that AWV completion rates increased from 23.7% in 2018 to 59.8% in 2020, while HCC recapture rates improved from 75.9% in 2019 to 79.7% in 2020.

2. Strategic Scheduling and Outreach

• ‍Use AWV Due Date Tracking to Proactively Schedule Appointments
  Rather than waiting for patients to reach out and contact patients nearing or having just passed their 12-month mark from the previous AWV. By taking a proactive stance, practices reduce the chance to book an AWV prematurely or let it fall by the wayside. Implementing phone calls, texts, or portal messages a month before eligibility ensures a smoother scheduling process.

• ‍Distribute AWV Opportunity Lists to Providers
  Giving providers a monthly or quarterly list of eligible patients for AWVs can significantly boost utilization. This transparency prompts providers to remind patients during in-person or telehealth appointments. Setting monthly or quarterly AWV targets at the provider or clinic level fosters healthy competition and accountability, often leading to higher completion rates.

3. Provider Engagement and Incentives

• ‍Educate Providers on AWV Value Beyond Direct Reimbursement
  A common misconception is that AWVs don’t pay enough to warrant the added work. However, the indirect returns—such as improved quality scores, higher HCC recapture rates, and more thorough treatment plans—are substantial. Sharing accurate data on cost savings, quality improvements, and better patient outcomes can shift provider mindsets toward seeing AWVs as fundamental rather than optional.

• ‍Link AWV Completion to Provider Bonus Structures
  Many ACOs embed AWV targets within compensation models, awarding bonuses for reaching certain AWV completion thresholds. Alternatively, AWV performance can be rolled into shared savings distributions. For instance, if an ACO achieves a 60% AWV completion target, providers might receive a percentage of the earned shared savings—an effective motivator.

• ‍Use Real Data to Demonstrate Improved Metrics
  Detailed, physician-level dashboards can illustrate how AWV completion correlates with key outcomes: fewer ED visits, lower readmission rates, higher patient satisfaction, and improved HCC capture. Seeing the numbers for their patient panels makes the benefits more tangible for providers. As noted in a 2024 study by Koan Health, physicians who embraced AWVs saw up to a 16% increase in quality gap closure, underlining the direct clinical impact.

4. Key Metrics to Track

• ‍AWV Completion Rates (Year-to-Date)
  At the core, ACOs should measure the percentage of eligible patients who’ve had an AWV this year and forecast where they’ll be by year-end if current trends continue.

• Impact on HCC Recapture
  Does increased AWV participation correlate with better HCC coding accuracy? Monitoring how many chronic conditions are redocumented or newly discovered proves that AWVs enhance risk adjustment and care planning.

• ‍Quality Measure Improvements
  Track shifts in the closure rate for preventive services (e.g., diabetes, flu shots, depression screenings). Please be sure to look for an uptick associated with AWV attendance. If a clinic or provider sees suboptimal screening rates, AWVs can become a specific strategy to close those gaps.

•  Cost Reduction and Utilization Patterns
  Monitor claims for ED visits, hospitalizations, and high-cost procedures among patients who have had AWVs compared to those who have not. Over time, a gap here suggests that AWVs are helping to reduce unnecessary utilization.

• ‍Provider Engagement Levels
  Lastly, measure the number of providers consistently scheduling AWVs and meeting or exceeding set benchmarks. If only a fraction of providers are dedicated to AWVs, it may indicate the need for more education or adjustments to incentive structures.

Building a Culture for Value-Based Care Success

AWVs drive high-quality care, patient engagement, and cost containment. When seamlessly integrated into an organization’s care management, they achieve better care across an entire patient panel: fewer acute episodes, deeper patient-provider relationships, and a stronger foothold in the shift from fee-for-service to value-based care models. As studies indicate, the correlation between AWVs and better health outcomes is evident.

Implementing Best Practices and Incentives

‍To make the most of AWVs, ACOs and providers must adopt a systematic approach. That means using a population health analytics platform for precise scheduling, setting clear AWV completion targets, and rewarding providers who embrace these visits as a cornerstone of their practice. It also means educating patients—and staff—on the critical nature of prevention. Simple measures, like distributing easy-to-understand AWV flyers in waiting rooms, can spur patients to ask about scheduling.

Emphasizing Quality, Cost, and Outcomes

AWV is not a box to check, but a strategic investment in your patient population. Comprehensive data analytics and strategic engagement efforts can significantly elevate AWV completion rates, strengthening ACOs’ overall performance. You'll build a robust preventive care culture by refining your AWV approach—optimizing scheduling, enhancing patient awareness, and leveraging technology for real-time eligibility checks. And in doing so, you’ll bring about a future in which Medicare beneficiaries are healthier, providers are more satisfied, and the healthcare system sees markedly lower costs and higher value.

Ready to take your Annual Wellness Visit program to the next level? Partner with Koan Health to help you evaluate your current AWV completion rate, assess your data infrastructure, and set tangible monthly and quarterly goals. Align incentives, communicate the benefits to patients and providers, and see how quickly AWVs can transform your practice and your ACO’s performance.

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