Value-based contracts impose risk both on providers and payers. The appropriate structure of a contract is an important component of mitigating your risk as a provider and ensuring that you are paid correctly for the value that you create for a payer. Similarly, a payer wants to be sure that it pays for value and does not over-compensate the provider. The variability inherent in populations and claims, however, poses a risk for the parties. We will discuss different outcomes evaluation methodologies in value-based care contracts. Additionally, we will review a study of variability in outcomes in an accountable care organization contract that shows a considerable risk of under-or over-payment and discuss methods to mitigate the risk to the parties.