Hospitals to get $1.8 billion in 2017 bonuses for value-based purchasing, CMS says

Hospitals will receive about $1.8 billion in incentive payments for 2017 inpatient hospital discharges under the value-based purchasing program, the Centers for Medicare and Medicaid Services announced Tuesday.

CMS also released new program requirements for 2018. For that year, the agency is adding a three-item care transition dimension, which is part of the Hospital Consumer Assessment of Hospital Providers and Systems survey.

The program is budget-neutral, so that a reduction in one hospital's base operating Medicare severity diagnosis-related group payments means other hospitals receive those funds based on their total performance scores. 

In 2017, about 1,612 out of 2,955 hospitals will see payment increases, which CMS said proves that the quality of care is improving. Approximately 1,343 hospitals will have a negative payment adjustment.

No hospitals in FY 2017 will have a zero net payment adjustment if they were eligible to participate in the value-based purchasing program, CMS said.

About half of hospitals will see a small change -- from  negative 0.5 to a 0.5 percent increase -- in their payments. 

[Also: CMS removes pain management from value-based purchasing]

However,  because the law requires that payments increase from 1.75 to 2 percent, the highest performing hospital in 2017 will receive a net increase of slightly more than 4 percent, and the lowest performing hospital will incur a net reduction of 1.83 percent, CMS said.

Hospitals could see an increase, a decrease, or no change to their Medicare inpatient prospective payment system payments. 

Hospitals' payments depend on how well they performed compared to their peers in measures such as healthcare quality and resource use during a performance period, and also improved quality of care over time.

The actual amount will depend on the hospital's total performance score, its value-based incentive payment percentage and the total amount available for value-based incentive payments.

Hospitals may also earn back a value-based incentive payment percentage that is less than, equal to, or more than the applicable percent reduction for that program year. 

The weighted domains for 2017 were: clinical care outcomes, 25 percent; process, 5 percent; patient and caregiver centered experience of care and care coordination, 25 percent; safety 20 percent; and efficiency and cost reduction, 25 percent.

Hospitals must  have a domain score for at least three of the four domains to have a total performance score calculated.

[Also: Full list: These 20 hospitals earned 'F' grades in the Fall 2016 Leapfrog patient safety ratings]

Hospitals that do not meet the minimum domain requirements do not have their payments adjusted in the corresponding fiscal year. 

Also, hospitals excluded from the hospital value-based program are not subject to the reduction of two percent and are not eligible to receive incentive payments, CMS said. 

For every measure, each of the hospitals participating in the program receives an improvement score and an achievement score. The higher of the two scores is awarded as the measure score.

The measure set for the 2018 has several changes, including removal of two measures from the clinical care–process subdomain, and the movement of the remaining measure to the safety domain.

In 2018, CMS is adding a three-item care transition dimension, which is part of the HCAHPS survey, to the patient and caregiver centered experience of care/care coordination domain.

[Also: Full list: These 844 hospitals earned an 'A' in the Fall 2016 Leapfrog ratings]

The 2018 program will include four equally-weighted domains: clinical care, 25 percent; patient experience and caregiver centered experience/care coordination, 25 percent; safety, 25 percent; and efficiency and cost reduction, 25 percent.

For the 2017 outpatient prospective payment system proposed rule, CMS proposed to remove the pain management dimension, which is derived from the HCAHPS survey, from the patient and caregiver centered experience of care/care coordination domain beginning with the 2018 program year. 

CMS will address the proposal and respond to any comments submitted in its final rule anticipated for release later this month.

This is the fifth year of the hospital value-based purchasing program.

The program is among the Affordable Care Act initiatives established by Medicare to pay for value over volume -- in this case, for hospital inpatient care.

Twitter: @SusanJMorse