Legal Impediments to Implementing Value-Based Purchasing in Healthcare

Abstract

The U.S. healthcare system continually confronts the challenge of controlling costs, improving quality and patient safety, and increasing or maintaining patient access to care. Payors and purchasers of healthcare (both public and private) strive to develop mechanisms to guarantee that they are purchasing the highest-value care – seeking to ensure that amounts paid take into account and provide incentives encouraging the delivery of high-quality, cost-efficient care. Through “value-based purchasing” (“VBP”) strategies, healthcare payors and purchasers are transforming from passive payors of claims (as in a traditional fee for service system) to active purchasers of quality care. To date, employers, health plans, and the Centers for Medicare and Medicaid Services (“CMS”) have implemented well over 100 VBP programs. However, progress is slower than anticipated. As the Institute of Medicine (“IOM”) and others have noted, adoption of VBP reforms may be hampered by legal barriers arising from a number of state and federal laws. The goal of this paper is to identify potential state and federal legal impediments to implementing VBP in healthcare.