The study was authored by Ed Klein and Paul Shoemaker, both from American Hospital Directory, and published with the Health Financial Management Association.
A hospital’s TPS is determined according to certain clinical practice and patient satisfaction measures for the performance period compared to a prior baseline period. Incentive payments for each discharge will be based on a hospital’s TPS.
An analysis of hospital TPSs, based on fiscal year 2010 Hospital Compare Data, showed a median score of 37 for hospitals. Only a small number of exceptional hospitals exceeded scores over 80. Under the program, hospitals with a TPS of zero will receive a 1 percent reduction in revenue, while hospitals with TPS of 100 will receive a 1.6 percent bonus.
The VBP program will be funded in FY13 by reducing the base operating DRG payment amount for each IPPS discharge by 1 percent. A hospital with a TPS of 37, for example, would receive an incentive payment of 0.99 percent of the base operating DRG payment for a discharge.
Therefore, the theoretical “break-even” TPS would be that of 37.7, according to the study. This represents the point at which there would be a 1 percent higher incentive payment that would equal the 1 percent IPPS discharge withholding needed to fund the VBP program.
Read the full study here.
Related Articles on Value-Based Purchasing:
CBO: Most Demonstration Projects Don’t Curb Medicare Costs
Making the Grade: Self-Service Strategies for Improving the Patient Experience
The Perfect 10: Hospital Officials Scramble to Ace Patient Satisfaction Scores
