Medicare’s transformation to value-based purchasing (VBP) and its recovery audit contractor (RAC) program are creating new front-end and back-end legal and financial and risk management challenges for healthcare providers. This discussion of the latest payment developments in VBP looks at recent payment impacts for never events and hospital-acquired conditions and the roll-out of the RAC program. The session covers compliance and risk issues associated with these new initiatives and forecasts similar upcoming initiatives that healthcare providers and risk managers should anticipate.