The Centers for Medicare and Medicaid Services announced Friday that the baseline used to calculate payment adjustments for their Hospital Value-Based Purchasing Program will remain static in 2018. The applicable percent reduction, which is the portion of Medicare payments available to fund the program's value-based incentive payments, will stay at 2 percent of the base operating Medicare Severity Diagnosis-Related Group payment amounts for all participating hospitals. CMS forecasted that the total amount available for value-based incentive payments for 2018 discharges will be approximately $1.9 billion.
The VBP program for hospitals adjusts what Medicare pays hospitals under the Inpatient Prospective Payment System based on the quality of inpatient care they provide to patients.
It's a quality program established by Medicare to pay for the quality of care rather than the quantity of services provided to patients, and part of an ongoing effort to structure Medicare payments to improve care across the entire healthcare delivery system.
"In FY 2018, more hospitals will receive positive payment adjustments than will receive negative payment adjustments, indicating improved quality of care and the rewarding of better value, outcomes, and innovations," CMS said.
For 2018, the scoring include clinical care, safety, patient and caregiver-centered experience of care and efficiency and cost reduction. Each category is weighted at 25 percent of the program score.
The program is in its sixth year and impacts payment for inpatient stays for roughly 3,000 hospitals nationwide. Their payments through the program depend on how well they performed compared to their peers on quality and cost measures during a given performance period and the care quality improvement over time.
"For 2018, more hospitals will have an increase in their base operating MS-DRG payments than will have a decrease. In total, close to 1,600 hospitals will have a positive payment adjustment," CMS said.
Roughly half of hospitals will see a minor change in their base operating MS-DRG payments. Taking into account the 2 percent withheld as required by law, the highest performing hospital will receive a net increase in payments of roughly 3 percent. The lowest will see a 1.65 percent net reduction in payments.
The program is budget-neutral and is funded annually through a reduction of participating hospitals' base operating MS-DRG payments for the applicable fiscal year. The reductions are redistributed to hospitals as incentive payments based on their Total Performance Score. The amount earned back by participating hospitals hinges on each hospital's Total Performance Score, value-based incentive payment percentage and total amount available under the program for value-based incentive payments.
Total Performance Score calculations considered minimum case size and measure requirements; hospitals needed a domain score for at least three of the four measurement domains in order to get a Total Performance Score. If hospitals don't meet the minimum domain requirements, they will not have their payments adjusted in the corresponding fiscal year. Each participating hospital receives an achievement score for every measure based on how well they performed compared to other hospitals and an improvement score based on performance improvement over time. The higher of the two scores becomes the measure score.
For FY 2019, Patient Safety for Selected Indicators Composite will be removed from the Safety domain and a risk-standardized elective primary total hip arthroplasty and/or total knee arthroplasty complications measure will be added to the Clinical Care domain.
Measurement domains and weighting will not change in FY 2019, CMS said.