Hospital Value-Based Purchasing Program: How YOUR Hospital’s Quality is Being Graded

Quality can be difficult to judge and determine.

To use an example outside of healthcare, a gymnast or figure skater needs to know how the judges score and what they’re looking for in order to perform well.

In a similar way, hospitals need to know what Medicare is looking for in order to maximize reimbursement while maintaining and improving high-quality patient care.

The vision of the Centers for Medicare and Medicaid Services is that “all CMS beneficiaries [achieve] their highest level of health, and disparities in healthcare quality and access [are] eliminated.”1 In accordance with this vision, a shift is taking place. Historically, hospitals were paid based on the quantity of services they provided. Recent changes reinforce the need to reward hospitals based on the quality of care they provide. This includes a renewed focus on following best clinical practices and enhancing patients’ experience in the hospital.

Under the Hospital Value-Based Purchasing (VBP) Program, Medicare makes incentive payments to hospitals based on either: 2

  • How well they perform on each measure compared to other hospitals’ performance during a baseline period.
  • How much they improve their performance on each measure compared to their performance during a baseline period.

Every hospital in the Inpatient Prospective Payment System (IPPS) is given a Total Performance Score (TPS) to determine the amount of funding it receives. Specific measures are used to determine each hospital’s TPS. This is Medicare’s “scorer’s card” or blueprint for evaluating the VALUE that each hospital provides.

For the Fiscal Year 2018, the TPS is derived from four domains (25% weight for each):

  1. Clinical Care Domain.
  2. Patient and Caregiver-Centered Experience of Care/Care Coordination Domain.
  3. Safety Domain.
  4. Efficiency and Cost Reduction Domain.

HCAHPS Survey results form the basis for the Patient Experience of Care domain in the Hospital Value-Based Purchasing program.3

The world of healthcare is an ever-changing one. If an organization hopes to continue to thrive, those who lead it cannot be spectators. Click To Tweet

They must recognize the changes that are taking place – the standard by which they are being judged – and adjust accordingly.

How will your organization respond?




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