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Analysis

Most Medicare Value-Based Hospitals Will Get More Money in 2019

By John Commins  
   December 03, 2018

The top performing hospital in 2019 will receive a 3.6% net increase, and the lowest performing hospital will incur a net decrease of 1.59%.

More than half of the 2,800 hospitals participating in Medicare's Value-Based Purchasing Program will get more money in 2019, thanks to higher Total Performance Scores, the Centers for Medicare & Medicaid Services announced.

"This program is part of our long-standing effort to improve care across the entire healthcare delivery system, including hospital inpatient care, by tying Medicare payment to quality and cost measure performance," CMS said.

In total, more than 1,550 hospitals (over 55%) will share higher Medicare payments totaling about $1.9 billion in fiscal year 2019, the seventh year of the Hospital VBP Program, CMS said.

For FY 2019, almost 60% of hospitals will see a small change (between -0.5% and 0.5%) in their IPPS payments. The average net payment adjustment is 0.17%. The average net increase in payment adjustments is 0.61%, and the average net decrease in payment adjustments is -0.39%, CMS said.

The highest performing hospital in FY 2019 will receive a net increase in IPPS payments of 3.67%, and the lowest performing hospital will incur a net decrease in IPPS payments of 1.59%.

The Inpatient Prospective Payment System value-based incentives are based upon how the hospitals performed when compared with peer hospitals on quality and cost metrics, and how much they've improved care quality over time.

The Total Performance Score for each hospital is based equally on four measures; clinical care, safety, person and community engagement, and efficiency and cost reduction.

The value-based program is budget neutral, and CMS pays for it by cutting a portion of the base operating Diagnosis-Related Group payment amounts a participating hospital receives for each discharge by 2%. The estimated sum total of these reductions, $1.9 billion in FY 2019, is redistributed to participating hospitals based on their performance on quality and cost measures.

For FY 2019, the average TPS across all participating hospitals increased to 38.1 from 37.4 in 2018.

On average, rural hospitals performed better in the Safety, Person and Community Engagement, and Efficiency and Cost Reduction domains, while urban hospitals performed well in the Clinical Care domain.

For FY 2019, the average TPS across all rural hospitals of 42.4 was greater than the national average TPS. Similarly, smaller hospitals performed better in the Safety, Person and Community Engagement, and Efficiency and Cost Reduction domains, as well as overall TPS, while urban hospitals performed well in the Clinical Care domain.

John Commins is a senior editor at HealthLeaders.


KEY TAKEAWAYS

More than 1,550 hospitals (over 55%) will share higher Medicare payments totaling about $1.9 billion in fiscal year 2019.

The average net increase in payment adjustments is 0.61%, and the average net decrease is -0.39%.

For 2019, average Total Performance Score across all participating hospitals increased to 38.1 from 37.4 in 2018.


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