- In the eighth year of Medicare's Hospital Value-Based Payment Program (VBP), there were more winners than losers, but not much change from the prior year.
- About 55% of the roughly 2,700 hospitals participating in VBP will receive increased Medicare payments for fiscal 2020. Rural hospitals significantly outperformed their urban counterparts, according to data released Tuesday by CMS.
- Nearly 60% of participating hospitals will see only a minute cut or increase in their payments (between -0.5% and 0.5%), based on their performance.
The VBP program is intended to move the needle in how hospitals respond to such issues as patient safety and experience. It does so mostly incrementally.
The Medicare Payment Advisory Commission has been underwhelmed by the incremental changes accomplished by the Hospital VBP, and recommended last year it be consolidated with the Hospital Inpatient Quality Reporting Program, Hospital-Acquired Condition Reduction Program and the Hospital Readmissions Reduction Program. Instead, CMS has expanded incentive-based payments to primary care physicians.
Hospitals are sorted on what is known as the total performance score (TPS). They are scored in six categories. They include patient mortality and complications; efficiency and cost reduction; patient safety; patient experience; processes; and healthcare-associated infections.
Hospitals are rated in both their overall achievement and any improvements made compared to past scores. The final score they receive is the higher of the two. Scores are also weighted equally across four domains: clinical outcomes; person and community engagement; safety; and efficiency and cost reduction. Hospitals must have scores in three of those domains to receive a TPS.
The average TPS was up slightly for fiscal 2020, reaching 38.5, compared to 38.1 in fiscal 2019. Rural hospitals did significantly better, with a TPS of 42.8. Smaller hospitals also outperformed larger hospitals in all domains except clinical outcomes.
However, the total amount of Medicare payments at stake is relatively small, usually totaling no more than 2% in either direction. For most hospitals, they did not see much of an overall difference in fiscal 2020.
Altogether, CMS said that VBP incentive payments for fiscal 2020 totaled $1.9 billion. That translates to an average payment of about $1.26 million to a hospital receiving an incentive payment, although many received less than that and some received significantly more.
While more than half of all hospitals boosted their payments, the average hike for them is only 0.6% of their total Medicare payments. That's similar to fiscal 2019's average 0.61% boost. For the about 45% of hospitals that saw their payments cut, the reduction was comparatively smaller, averaging 0.39%, identical to fiscal 2019.
The best and worst-performing hospitals will see hikes of 2.93% and cuts of 1.72% from their total Medicare payments. CMS did not say how many hospitals saw their payments unchanged.