Hospital-Acquired Conditions and Value-Based Purchasing

Hospital-Acquired Conditions and Value-Based Purchasing at a Glance

Hospital-acquired conditions (HACs) and value-based purchasing (VBP) programs are central to modern healthcare reimbursement and quality reporting. VBP initiatives tie reimbursement to performance metrics, including the prevention of HACs. However, the interplay between these programs and anti-kickback statutes raises complex legal issues. Manipulation of quality reporting or improper incentives related to HACs may implicate the Anti-Kickback Statute and lead to false claims liability under the False Claims Act.

The Legal Framework

The Anti-Kickback Statute, 42 U.S.C. § 1320a-7b(b), prohibits the offer, payment, solicitation, or receipt of remuneration to induce or reward referrals of items or services payable by a federal health care program. This includes arrangements that may improperly influence hospital performance metrics or quality reporting, particularly where such actions are tied to reimbursement or incentives.

Under 42 U.S.C. § 1320a-7b(g), since 2010, any claim that includes items or services resulting from a violation of the Anti-Kickback Statute is considered a false or fraudulent claim under the False Claims Act (31 U.S.C. ch. 37, subch. III). This provision extends liability to hospitals and providers whose actions, even if not directly involving kickbacks, may result in claims tied to illegal incentives or improper quality reporting.

The False Claims Act, codified in 31 U.S.C. §§ 3729–3733, provides for qui tam actions where individuals may bring lawsuits on behalf of the government. A qui tam relator is entitled to a share of the proceeds—15-25% if the government proceeds with the action, 25-30% if the government declines, and no more than 10% if the action is based primarily on public disclosures.

Quality-reporting manipulation, such as altering data related to HACs or VBP metrics, may implicate the tainted-claims rule under 42 U.S.C. § 1320a-7b(g), which ties claims to illegal conduct and can expand the scope of liability under the False Claims Act.

The Federal Overlay

The federal Anti-Kickback Statute, 42 U.S.C. § 1320a-7b(b), makes it a felony to knowingly and willfully offer, pay, solicit, or receive remuneration to induce or reward referrals of items or services payable by a federal health care program. The Stark Law, 42 U.S.C. § 1395nn, separately prohibits physician self-referrals for designated health services payable by Medicare or Medicaid, on strict-liability terms. Both regimes carry safe harbors and exceptions published at 42 C.F.R. § 1001.952. State referral and fee-splitting statutes operate alongside these federal prohibitions and can apply even where no federal program payment is involved.

Reading the Research Desk

For further analysis on these topics, see related research pages such as /practice-areas/, /the-anti-kickback-statute-explained-why-referral-payments-trigger-scrutiny/, /safe-harbors-under-the-anti-kickback-statute-and-where-providers-get-tripped-up/, /aks-and-stark-law-how-the-two-regimes-overlap-in-healthcare-investigations/, /recent-antikickback-statute-decisions/, and /faq/.