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Value-based care (VBC) is a health care delivery model that has grown increasingly common in recent years. Perhaps unsurprisingly, this growth seems to have attracted the attention of government enforcement agencies. In September 2024, the Department of Justice (DOJ) announced a large False Claims Act (FCA) settlement with a VBC primary care practice. In December 2024, the Office of Inspector General for the Department of Health and Human Services (OIG) issued a Special Fraud Alert addressing enforcement efforts implicating certain VBC business arrangements. VBC stakeholders should take note of these developments and the government’s apparent focus on patient recruitment and referral arrangements. As health care delivery models continue to shift from traditional fee-for-service to VBC, we expect this emerging enforcement trend will continue in 2025 and beyond.
As Adoption of VBC Arrangements Grew in 2024, So Too Did Enforcement Efforts
Generally speaking, VBC is a payment and health care delivery model through which payors offer health care providers and suppliers financial incentives to meet performance measures intended to improve the quality of care and reduce costs. While VBC arrangements can be extraordinarily complex, the VBC model is best understood in contrast to what it is not: a traditional fee-for-service model. In the fee-for-service context, the payor reimburses the provider for each service delivered. By contrast, under a VBC arrangement, the provider’s compensation typically is based on shared savings, achievement of certain quality metrics, a per-patient payment, or a combination of factors intended to incentivize better patient outcomes and high-quality, cost-effective patient care. Examples of providers and payors that have adopted VBC models include primary care practices and accountable care organizations, as well as Medicare Advantage Organizations (MAOs) and Managed Care Organizations.