1,600 hospitals see payment bump under value-based purchasing: 8 things to know

The Medicare Hospital Value-Based Purchasing Program, established under the ACA, is intended to encourage hospitals to provide high-quality care more efficiently by adjusting payments to hospitals based on the quality of care they provide.

In fiscal year 2017, more than 1,600 hospitals will receive a positive payment adjustment under the program, while about 1,300 will receive a payment reduction, according to recently released data from CMS on nearly 3,000 U.S. hospitals. 

Here are eight things to know about the Value-Based Purchasing Program and the hospitals receiving bonuses and penalties in FY 2017.

1. The program adjusts Medicare payments to hospitals under CMS' Inpatient Prospective Payment System. Base operating MS-DRG payments to eligible IPPS hospitals will be reduced by 2 percent in FY 2017, to fund an estimated $1.8 billion in incentive payments for the Value-Based Purchasing Program.

2. In FY 2017, about half of the 3,000 hospitals subject to the VBP Program will see a change between -0.5 percent and 0.5 percent in their base operating MS-DRG payments.

3. The highest performing hospitals will receive a net increase in payments of more than 4 percent in FY 2017.

4. The worst performing hospitals will incur a net decrease in payments of 1.83 percent.

5. Four VBP Program domains were used to score hospitals in fiscal 2017: clinical care, which includes subdomains of outcome and process; patient and caregiver centered experience of care/care coordination; safety; and efficiency and cost reduction.

6. The metrics are weighted differently, and a hospital's total weighted score is based 25 percent on clinical outcomes, 5 percent on clinical process, 25 percent on patient and caregiver centered experience of care/care coordination, 20 percent on safety and 25 percent on efficiency and cost reduction.

7. In FY 2018, the four domains of the program will be weighted equally at 25 percent.

8. "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," said CMS in a news release. "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."

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