A health plan likes your program and wants to sign. Then the contract comes back with a third of your fee tied to results. That's normal now, and it can be a good deal for a coaching company that knows its numbers. It can also turn a profitable client into one you pay to serve, depending on a few terms most people skim.
Here's what's changed, where these contracts tend to go wrong, and the six terms we'd settle before signing.
How common these contracts have become
The Peterson Health Technology Institute surveyed 321 people who buy digital health solutions for health plans, employers and health systems this summer. In its 2026 purchasing survey, 57% said they use performance-based contracts. Among employers it was 68%.
Those contracts carry real money.
PHTI, 2026 (182 buyers using them)
Among those 182 buyers, 31% of contracts tie more than half the fee to results. And 71% of all the buyers surveyed said their contracts run two years or less, so you may be measured, paid and renewed on a short clock.
Where performance-based contracts go wrong
The buyers told PHTI what gets in the way, and most of it isn't about whether the program works. Among buyers using these contracts, the most common barrier, named by 41%, was agreeing with vendors on how the metrics are defined. A third pointed to relying on vendor-reported results they can't check, and 32% said guarantees are hard to enforce when targets are missed.
The data is the other sore spot. In the full survey, 40% of those buyers said vendors report results on a favorable slice of members rather than everyone eligible, and 38% said they can't verify what vendors report. PHTI also found cost savings are where vendors most often miss their targets.
Six terms to settle in performance-based contracts
This is our advice, from the vendor's side of the table.
Who counts
Agree on the denominator in writing. Is it every eligible member, everyone who enrolled, or only members with a qualifying diagnosis? PHTI found buyers split almost evenly: 46% open contracts to all covered members, while 44% limit them by diagnosis. Either can work. What breaks trust is a denominator that changes when the report comes out. Also settle what happens to members who leave the plan or the job partway through. If they stay in the count, your numbers drop for reasons you can't control.
What engagement means
"Engaged" can mean enrolled, logged in, attended a session or finished a program. Health plans most often define it as active use, according to PHTI. Pick one definition, attach a number of contacts and a time window to it, and keep it identical in the contract and in your outcomes reporting.
The baseline
Results are only results against something. Settle whether you're measured against the member's own starting point, a comparison group or a prior year, and who supplies that starting number.
Whose data decides
If the buyer judges you on its claims data, ask for member-level data or an independent check of it, not just a summary. If they won't share member-level data, agree in writing on exactly what the report will contain. Fix the method for counting results for the length of the contract, so a change on their side can't change your score. If you're judged on your own data, agree on the export format now. Put the data delivery dates in the contract.
The measurement window
Don't tie your fee to cost savings in a one-year contract unless you're sure the change will show up in claims by then. Claims also take months to come in after care happens, so even a two-year contract may leave only a short stretch of complete data to judge savings on. We'd tie year one to things a coaching program controls, like enrollment, engagement and completion, and phase in clinical or cost measures later. Medicare's ACCESS model is a useful reference for how a payer structures outcome-based payment over time.
Disputes
Decide now what happens when your number and the buyer's number disagree. Who reconciles, how long they have, and whether a disputed amount is held or paid while it's sorted out. It's a dull paragraph to negotiate and the most expensive one to leave out.
What we'd tie to results, and what we wouldn't
Tie your fee to what you can measure and influence: enrollment, engagement, completion, member satisfaction. Be careful with savings you can't see coming, especially when the buyer owns the claims data and the timeline is short.
That doesn't mean saying no to financial targets. PHTI found buyers expect vendors to tie payment to clinical and financial results, so come with an offer. Put a smaller share of the fee on savings, cap how much you can lose, ask for a longer window, or set a middle range where your fee doesn't change, with a bonus above it and a smaller penalty below it.
Where Avidon fits
Every term above comes down to whether both sides can see the same numbers. Avidon's reporting and ROI tools track member activity, course progress and coaching engagement, and every report is exportable, so you can hand a buyer the same data you're paid on.
If you're building a coaching business around contracts like these, see how Avidon works for coaching companies.
