Majority of Hospitals Will Receive Incentive Payments in 2019 Hospital VBP Program

In fiscal year (FY) 2019, there will be approximately $1.9 billion in value-based incentive payments available to hospitals in the Hospital Value-Based Purchasing (VBP) Program, according to a new CMS fact sheet. The amount available is unchanged from FY 2018.

The Hospital VBP Program adjusts what hospitals receive in Medicare reimbursements under the Inpatient Prospective Payment System (IPPS), which bases payments on the quality of inpatient care provided to patients.

“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 explained in the fact sheet.

According to CMS, more than 55% of hospitals will receive an increase in their Medicare payments. FY 2019 will represent the seventh year of the Hospital VBP Program, which affects payment for inpatient stays for approximately 2800 hospitals.

Hospitals’ incentive payments depend on their Total Performance Score (TPS), value-based incentive payment percentage, and the estimated amount available for value-based incentive payments. The TPS is based on performance scores in 4 domains:

• Clinical care
• Safety
• Person and community engagement
• Efficiency and cost reduction

The Hospital VBP Program is budget neutral, and in FY 2019, the highest-performing hospital will receive a net IPPS payment increase of 3.67% while the lowest-performing hospital will be hit with a 1.59% decrease. The average net payment adjustment will be 0.17%.

In the fact sheet, CMS noted that it views value-based purchasing as important for “revamping how care and services are paid for” as the United States moves to a system that pays for value.

“As we more closely link patient outcomes and costs to value-based hospital payment, the Hospital VBP Program not only aims for quality gains on paper, it also aims to promote a culture that prioritizes quality and value of care and better empowers patients and their healthcare providers through the public display of program results,” CMS concluded.