55% of hospitals to earn bump in payments under Value-based Purchasing Program

CMS released the results of the Hospital Value-based Purchasing Program for fiscal year 2019.

Hospital performance in the VBP program determines how much hospitals are paid under the Inpatient Prospective Payment System.

Here are five notes on how hospitals performed:

1. Hospitals are improving on quality and cost. The program gives hospitals a total performance score based on clinical care, safety, engagement and cost reduction. Between fiscal years 2018 and 2019, the average total performance score rose from 37.4 to 38.1.

2. Rural hospitals outperformed urban hospitals. The average total performance score of rural hospitals was 42.4 — more than four points higher than the national average. Rural and smaller hospitals generally excelled in the safety, engagement and cost-reduction categories, while urban hospitals performed best in the clinical care category.

3. Most hospitals (55 percent, or about 1,550) will see a bump in IPPS payments for fiscal 2019. The average net payment adjustment is 0.17 percent, and among hospitals that will receive a positive net adjustment, the average is 0.61 percent. The highest performing hospital earned a 3.67 percent net increase in payment.

4. Most hospitals will see little change — between -0.5 percent and 0.5 percent adjustments — in payment. For those that will be penalized, the average net decrease is 0.39 percent. The lowest performer will be knocked 1.59 percent.

5. Payments are based on how well hospitals perform compared to their peers and their own past performance. To fund the incentive payments, CMS reduces base operating diagnosis-related group payment amounts for each discharge from participating hospitals by 2 percent. These funds are reallocated based on performance in the program. CMS estimates the total available for incentive payments in fiscal 2019 will be $1.9 billion.


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