Bonuses to be smaller in Medicare’s value-based purchasing program for 2018

A larger percentage of hospitals will receive bonuses and fewer will be penalized under CMS’ Hospital Value-based Purchasing (VBP) program for fiscal year 2018, though the maximum positive payment adjustment will be smaller.

According to results released by the agency on Nov. 3, 1,597 hospitals, or 57 percent of the program’s participants, will see an increase in their Medicare Severity Diagnosis-Related Group (MS-DRG) payments next year. Nearly the same number saw a positive adjustment after 2016’s results, though higher participation meant that represented 55 percent of hospitals in the program that year. The number of hospitals which will see their payments decline in 2018 fell from 1,343 in 2017 to 1,211 in 2018.

What hospitals can make or lose will be slightly more limited for 2018. The highest-performing hospital will receive a net increase in payments of “slightly more than 3 percent,” down from 4 percent last year. The lowest-performing hospital will have payments reduce by 1.65 percent, a change from 2017’s 1.83 percent reduction. CMS estimated $1.9 billion would be available for value-based incentive payments for discharges in 2018.

Hospitals will be measured by four equally weighted domains under the VBP program: clinical care, safety, patient and caregiver-centered experience of care and efficiency and cost reduction. Measure changes are announced further in advance, but only small tweaks to the measure set will be made beginning in 2019:

  • Patient Safety for Select Indicators Composite will be removed from the safety domain.
  • A risk-standardized elective primary total hip arthroplasty and/or total knee arthroplasty complications measure will be added to the clinical care domain

The weighting of the domains will be unchanged in 2019, which each accounting for an equal 25 percent of the total VBP score.

A recent report by the Health Care Payment Learning and Action Network (LAN) credited the VBP program for contributing to the growth of pay-for-performance and care coordination’s share of healthcare payments.