13 statistics on value-based purchasing — Top challenges by hospital type & geographic location

For FY 2016, which began Oct. 1, hospitals received payment adjustments based on Medicare Hospital Value-Based Purchasing Program performance in 2014. A total of 3,041 hospitals received payment adjustments.

The VBP 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.

The program adjusts Medicare payments to hospitals under CMS' Inpatient Prospective Payment System. In fiscal year 2016, base operating MS-DRG payments to eligible IPPS hospitals are being reduced by 1.75 percent to fund an estimated $1.5 billion in incentive payments for the VBP Program.

Here are 13 statistics on the VBP Program, according to a recent Leavitt Partners report.

1. Of the 1,806 hospitals that received a bonus in FY 2016, the average bed count was 155.

2. The average bed count of the 1,235 hospitals that received a penalty in FY 2016 was 256.

3. Of the hospitals that received a bonus in FY 2016, 10.8 percent are located in a rural area.

4. Four percent of the hospitals that received a penalty in FY 2016 are located in a rural area.

5. Academic medical centers made up 17.9 percent of the hospitals that received a penalty in FY 2016.

6. Of the hospitals that received a bonus in FY 2016, 6.9 percent are academic medical centers.

7. Of the hospitals that received a bonus, 74 percent are part of a network.

8. The vast majority (82.1 percent) of the hospitals that received a penalty in FY 2016 are part of a network.

9. Hospital performance in the VBP Program varied across the country. Leavitt Partners estimated average state scores by averaging hospital performance in each state, weighting by hospital size. The highest performing states tended to be in the Upper Midwest and Pacific Northwest while the worst-performing states were scattered throughout the nation.

10. Payment modifiers for the VBP Program are calculated annually. This gives hospitals an opportunity to improve their performance. Approximately 45 percent of hospitals received a bonus in both 2015 and 2016.

11. Under the VBP Program, about 30 percent of hospitals were penalized in both 2015 and 2016.

12. Approximately 11 percent of hospitals received a bonus in 2015 and then received a penalty in 2016.

13. About 14 percent of hospitals received a penalty in 2015 and then a bonus in 2016.

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