Safety-Net, Public Hospitals Lose the Most Under Quality-Based Payment Program

Public and safety-net hospitals are faring the worst within CMS' Hospital Value-Based Purchasing program, according to a blog post by Ashish K. Jha, MD, a professor at the Harvard School of Public Health.

According to an analysis conducted by Dr. Jha and his colleagues, hospitals in the highest quartile of the disproportionate share hospital index — those treating the most low-income patients — received an adjusted average total payment penalty of 0.09 percent, while public hospitals average a penalty of 0.1 percent.

Meanwhile, hospitals with the lowest DSH quartile received an average bonus of 0.06 percent. Nonprofit hospitals got an average penalty of 0.03 percent, and for-profits, on average and adjusted for other factors, received neither a bonus nor a penalty, according to Dr. Jha.

The Patient Protection and Affordable Care Act established the VBP program. For FY 2014, this meant CMS took back 1.25 percent of Medicare reimbursements at hospitals paid under Medicare's inpatient prospective payment system. The resulting $1.1 billion would then be dispersed to hospitals based on how well they performed on healthcare quality measures, like treatment of heart attack and congestive heart failure, as well as patient satisfaction. More than half of all hospitals within the program will lose some portion of their reimbursements in 2014.

It's unclear why public and safety-net hospitals do worse than others in the VBP program, Dr. Jha wrote.

More Articles on Hospital Payments:
CMS: 1,451 Hospitals Penalized in 2014 Value-Based Purchasing Program  
OIG: High Hospital Charges Lead to Excessive Medicare Outlier Payments  
MedPAC Discusses Potential Post-Acute Care Payment Reforms 

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