According to CMS, more than 1,500 participating hospitals will receive nearly $1.9 billion in bonuses for the fiscal year 2020 under CMS’ Hospital Value-Based Purchasing Program. This is the eighth year of the Hospital VBP Program. It is important to remember when considering this program that inpatient hospital care accounts for the largest share of Medicare spending.
What is the Hospital Value-Based Purchasing Program?
The Hospital Value-Based Purchasing Program is a CMS initiative that aims to reward acute-care hospitals with incentive payments for quality care provided to Medicare beneficiaries. This affects payment for inpatient stays in more than 3,000 hospitals across the country. CMS rewards hospitals based on the quality of care provided, how closely best clinical practices are followed, and how well hospitals enhance patients’ experiences of care during hospital stays. Under the Hospital VBP Program, Medicare makes incentive payments to hospitals based on either how well they perform on each measure compared to other hospitals’ performance during a baseline period, or, how much they improve their performance on each measure compared to their performance during a baseline period.
Fiscal Year (FY) 2020
According to CMS, for FY 2020, more hospitals will have an increase in their Medicare payments than will have a decrease. In total, more than 1,500 hospitals (over 55 percent) will receive higher Medicare payments. Almost 60 percent of hospitals will see a small change (between -0.5 and 0.5 percent) in their Medicare payments. The average net payment adjustment is 0.16 percent. The average net increase in payment adjustments is 0.60 percent, and the average net decrease in payment adjustments is -0.39 percent. Due to the Hospital VBP Program, the highest performing hospital in FY 2020 will receive a net increase in payments of 2.93 percent, and the lowest performing hospital will incur a net decrease in payments of -1.72 percent.
Expectations
However, as described in this Modern Healthcare article, the program might not be living up to its expectations. Specifically, there is a debate as to how much of an impact it is having on quality, according to a report from the U.S. Government Accountability Office. It is also unclear whether the program’s small financial rewards are likely to impact how hospitals deliver care to their patients. The GAO found that the “program generally reinforced ongoing quality improvement efforts, but did not lead to major changes in focus.”