Health care cost is consuming a large portion of the nation's gross domestic product while placing added economic burdens on physicians and their patients. With total joint replacement being one of the early-targeted procedures in the evolving health care environment, knee surgeons will benefit from developing a critical knowledge on health care reforms and their financial implications. The Medicare Access and Children's Health Insurance Program Reauthorization Act represents a cohesive movement toward value-based payment reform and contains several unchartered rulings that require detailed attention by knee surgeons. In this article, we provide a contextual framework of health care legislation that has led to the formation of the current health policy, and present a comprehensive summary and update on the Merit-Based Incentive Payment Systems and Alternative Payment Models reimbursement models.