Why most hospitals will never collect their Medicare quality bonuses

Although 1,714 hospitals earned bonuses under the Hospital Value-Based Purchasing Program this year, fewer than 800 will actually receive their bonus, according to a Kaiser Health News report.

The Medicare Hospital Value-Based Purchasing Program, established under the Patient Protection and 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 provided.

With 1,714 of the 3,000 hospitals graded as qualifying for bonuses under the program in 2015, the results seemed promising. However, due to being penalized through other Medicare quality programs focused on reducing readmissions and lowering the rate of hospital-acquired conditions, not even half of the hospitals that qualified for bonuses under the VBP program will receive extra money, according to the report.

When the incentive programs are combined, the average bonus for hospitals with more than 400 beds will be nearly $213,000. However, the average penalty will be about $1.2 million, according to the report.

When looking at both large and small hospitals, only 28 percent will "break even or get extra money" when the incentive programs are combined, according to KHN.

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