1,800 hospitals see payment bump under value-based purchasing: 10 things to know

The Medicare Hospital Value-Based Purchasing Program, established under the Affordable Care Act, 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 FY 2016, more than 1,800 hospitals will receive a positive payment adjustment under the program, according to recently released data from CMS on more than 3,000 U.S. hospitals.

Here are 10 things to know about the Value-Based Purchasing Program and the hospitals receiving bonuses and penalties in fiscal 2016.

1. The program adjusts Medicare payments to hospitals under CMS' Inpatient Prospective Payment System.

2. Base operating MS-DRG payments to eligible IPPS hospitals are being reduced by 1.75 percent in FY 2016, up from the 1.5 percent reduction the year prior, to fund an estimated $1.5 billion in incentive payments for the Value-Based Purchasing Program.

3. In FY 2016, about half of the more than 3,000 hospitals that are subject to the program will see a change between -0.4 percent and 0.4 percent in their base operating MS-DRG payments.

4. The highest performing hospitals in FY 2016 will receive a net change in payments of slightly more than 3 percent after the mandatory 1.75 percent reduction.

5. The worst performing hospitals will not recoup any of the 1.75 percent reduction.

6. There are four Value-Based Purchasing Program domains used to score hospitals in fiscal 2016: clinical process of care, patient experience of care, outcomes and efficiency.

7. The metrics are weighted differently, and a hospital's total weighted score is based 10 percent on clinical process of care, 25 percent on patient experience of care, 25 percent on efficiency and 40 percent on outcomes.

8. "Our goal is to include a broader, richer set of measures over time and aligning with the National Quality Strategy," said CMS in a news release.

9. For FY 2017, CMS is adopting two new safety measures and one new clinical care-process measure. More than 78 percent of the measures in the Value-Based Purchasing Program will assess health outcomes, patient experience and cost in FY 2017.

10. In FY 2018, the four domains for the program will be: clinical care; patient experience and caregiver centered experience/care coordination; safety; and efficiency and cost reduction. Each domain will be weighted at 25 percent.

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