- Over 1,600 hospitals in the Hospital Value-Based Purchasing Program, representing over 50 percent of total participants, will receive positive Medicare payment adjustments in 2017 for value-based care performance, CMS reported in a recent fact sheet.
“The Hospital VBP [Value-Based Purchasing] Program is part of our long-standing effort to structure Medicare payments to improve care across the entire healthcare delivery system, including hospital inpatient care,” the announcement stated. “In FY 2017, more hospitals will receive positive payment adjustments, indicating improved quality of care and a strong example of better care, smarter spending, and healthier people in action.”
Through the value-based care program, CMS adjusts Medicare Inpatient Prospective Payment System reimbursements to hospitals based on quality performance and improvement. The federal agency withholds a set percentage of Medicare reimbursements to participating hospitals and uses the funds to allocate value-based incentive payments.
In 2017, the portion of Medicare payments withheld will increase from 1.75 percent to two percent of the base operating Medicare Severity Diagnosis-Related Group (MS-DRG) payment amounts for all participating hospitals, CMS reported. The total amount available for value-based incentive payments next year will be roughly $1.8 billion.
Most participating hospitals will only see a modest change in their base operating MD-DRG payments in 2017, the federal agency added. About half of the hospitals out of 3,000 total in the Hospital Value-Based Purchasing Program will receive an adjustment between negative 0.5 percent and positive 0.5 percent.
Although, CMS reported that the highest performing hospital in 2017 will face a four percent value-based incentive payment after accounting for the mandated two percent program withhold. On the other hand, the lowest performing hospital will incur a 1.83 percent reduction in Medicare reimbursement.
The federal agency calculated value-based incentive payments and penalties based on a hospital’s quality performance and improvement scores. CMS stated that total performance scores in 2017 were based on patient- and caregiver-centered experience of care and care coordination (25 percent), safety (20 percent), and efficiency and cost reduction (25 percent). CMS also assessed clinical care performance, which reflected patient outcomes (25 percent) and process (five percent).
Hospital payments were evaluated on how well the organization performed compared to their peers on quality and resource use measures during the performance period as well as how much the organization improved quality performance over time.
Participants received separate performance and improvement scores for each measure, CMS added. The greater of the two values was considered the measure score.
Participants in the Hospital Value-Based Purchasing Program, however, should expect some changes to the value-based care model in 2018. CMS reported the following modifications:
• Elimination of two measures from the process subcategory of the Clinical Care domain with the remaining measure moving to the Safety domain
• Addition of the three-time Care Transition dimension, which is a part of the Hospital Consumer Assessment of Hospital Providers and Systems (HCAHPS) survey, to the Patient and Caregiver Centered Experience of Care and Care Coordination domain
• Potential Pain Management dimension removal depending on stakeholder feedback and finalization of the proposed 2017 Outpatient Prospective Payment System rule, which is schedule for to come out later this month
In 2018, CMS will also determine performance scores by weighing each of the four domains equally. Each category will account for 25 percent of the total score.
As the federal agency continues to improve the model, it intends for the Hospital Value-Based Purchasing Program to develop a value-based care culture across hospitals.
“As we more closely link patient outcomes and treatment costs to value-based hospital payment, the Hospital VBP Program not only aims for quality gains on paper, it also aims to promote a culture focused on the needs of patients,” CMS stated. “Value-based purchasing in Medicare continues to move ahead, improving healthcare for people with Medicare now and creating a healthcare system that will ensure better care, smarter spending, and healthier people for generations to come.”
Last year, more hospitals in the program qualified for positive Medicare payment adjustments, according to a CMS fact sheet. Over 1,800 participants received a value-based incentive payment, accounting for about 200 more hospitals compared to 2017 results.
About half of the hospitals participating in 2016 faced small Medicare payment adjustments ranging from negative 0.4 percent to positive 0.4 percent.
In addition, the highest performing hospital received a three percent value-based incentive payment after the mandated 1.75 percent withholding amount, while the worst performing hospital in 2016, receiving a total performance score of zero, faced a 1.75 percent value-based penalty.