Health Information Management

News: GAO report says Hospital Value-Based Purchasing effects are modest

CDI Strategies, October 15, 2015

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Many CDI programs are shifting their focus to include some sort of quality review. One of those initiatives is Hospital Value-Based Purchasing (HVBP). In fact, 26.7% of respondents to the ACDIS CDI Week 2015 Industry Overview Survey, say they plan to expand their review focus to include HVBP.

Yet, HVBP’s effects on Medicare payments have been minimal thus far, according to a new report from the Government Accountability Office (GAO).  

The report, released in October, is the first study of how the HVBP program is performing. The GAO analyzed data provided by CMS on the bonuses and penalties received by the approximately 3,000 hospital eligible to participate in the program, and interviewed 20 officials from eight different organizations. Data revealed that most of the participating hospitals received bonuses and penalties that amounted to less than 0.5% of applicable Medicare payments each year. While that may seem like a small percentage of bonuses and payments, it amounts to billions of dollars, Erica Remer, MD, FACEP, CCDS said during the October 14, 2015 ACDIS Radio broadcast.

GAO found that “safety net hospitals,” which provide a significant amount of care to the poor, consistently had lower median payment adjustments—that is, smaller bonuses or larger penalties—than hospitals overall in the program’s first three years. However, this gap narrowed over time. Small urban hospitals had higher median payment adjustments each year than hospitals overall, and small rural hospitals’ median payment adjustments were similar to hospitals overall in the first two years and higher in the most recent year.

The study also found that there has been no apparent shift in existing trends in hospital performance on quality measures included in the HVBP program. Shifts in quality trends could emerge later on as the program evolves. New quality measures will be added, for example, and the weight placed on clinical process measures will be reduced.

Overall, the GAO noted that it is still too early to declare victory or failure for the program.

Hospitals have really ramped up their quality departments and are tackling longstanding quality issues,” said Remer. “These measures make a difference and they are important. 

To read the full GAO report, click here.

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