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Analysis

CMS Value-based Purchasing Program IDs $1.9B for Hospitals in 2020

By John Commins  
   October 30, 2019

More than 1,500 hospitals will get higher Medicare payments from the program in FY 2020.

Hospitals could receive as much as $1.9 billion from the federal government in 2020 under projections put forward this week for the Hospital Value-based Purchasing Program, the Centers for Medicare & Medicaid Services announced.

In FY 2020, more than 1,500 hospitals – about 55% of participants – will get higher Medicare payments from the program, which is in its eighth year.

The law sets aside 2% of Inpatient Prospective Payment System payments for the approximately 2,700 participating hospitals, which is then distributed to hospitals based on the quality and cost for inpatient care.

The Total Performance Score for hospitals is based on performance scores in four metrics; clinical outcomes, safety, person and community engagement, and efficiency and cost reduction. Each metric accounts for 25% to the total score.   

Almost 60% of hospitals will see a small fluctuation in Medicare payments between -0.5% and 0.5% percent, with an average net payment adjustment of 0.16%. The average net increase is 0.60%, and the average net decrease is -0.39%.

The highest performing hospital in FY 2020 will receive a net increase of 2.93%, and the lowest performing hospital will see a net decrease of -1.72%.

The incentive payments earned back will depend on each hospital’s Total Performance Score, value-based incentive payment percentage, and money available under the program.

The payments will depend upon:

  • How hospitals performed—compared to peers—on quality and cost metrics during a performance period.
     
  • How much they have improved the quality of patient care over time.

Hospitals must have a domain score for at least three of the four TPS metrics to have a TPS calculated. Hospitals that don't do not have their payments adjusted in the corresponding fiscal year.

For FY 2020, the average TPS across all participating hospitals increased to 38.5 from 38.1 in FY 2019.

Rural hospitals performed better in the Safety, Person and Community Engagement, and Efficiency and Cost Reduction domains, while urban hospitals performed better in the Clinical Outcomes domain.

For FY 2020, the average TPS across all rural hospitals of 42.8 was greater than the national average TPS.

Smaller hospitals also performed better in the Safety, Person and Community Engagement, and Efficiency and Cost Reduction domains and had higher overall TPS. Urban hospitals performed better in the Clinical Outcomes domain.

For FY 2020, the average TPS across all rural hospitals is 42.8, which is greater than the national average TPS.  

John Commins is a content specialist and online news editor for HealthLeaders, a Simplify Compliance brand.


KEY TAKEAWAYS

Almost 60% of hospitals will see a small fluctuation in Medicare payments between -0.5% and 0.5% percent, with an average net payment adjustment of 0.16%.

The average net increase is 0.60%, and the average net decrease is -0.39%.

The highest performing hospital in FY 2020 will receive a net increase of 2.93%, and the lowest performing hospital will see a net decrease of -1.72%.


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