Value-Based Purchasing

The Centers for Medicare & Medicaid Services’ (CMS) Value-Based Purchasing (VBP) program began in October 2012 as a Medicare pay-for-performance program. Here’s how it works: a percentage of a hospital’s Medicare reimbursement is withheld, and the funds held in reserve are redistributed among hospitals based on performance. The VBP program is a redistributive program, not a penalty program along the lines of the Readmissions Reductions Program and the Hospital Acquired Conditions Program. For Federal Fiscal Year (FFY) 2013, the withheld percentage was one percent. It has grown to two percent beginning in FFY 2017 and beyond. When the program began in FFY 2013, there were three categories (or domains), which have since increased to five domains in FFY 2017. In FFY 2018, some consolidation will occur – there will be four domains equally weighted at 25 percent. Within each domain, multiple measures are being scored. Overall, the Commonwealth of Virginia was a winner in the first year of the program. Yet as the measures, domains, and weights have changed, Virginia has struggled to be a top performer. The VHHA Center for Healthcare Excellence works with health systems to improve performance in many of the areas that correspond to the VBP program. One critical factor is the need to improve performance more rapidly than other facilities. If a facility, or state, does not improve quicker than its peers it will fall further behind and be penalized instead of receiving a performance bonus. Virginia has shown significant improvement in two categories over the program years: early elective deliveries prior to 39 weeks, and patients assessed and given influenza vaccines. In working with members, VHHA has stressed these two areas, among others, through education and tracking. Unfortunately, there are several areas in which the overall state rankings have not improved even though improvements in some scores have occurred. Surgical site infections related to abdominal hysterectomy, 30-day readmissions for pneumonia, and 30-day readmissions for elective total hip/knee surgery are areas in which Virginia has dropped in the rankings. In keeping with the VHHA vision to make “Virginia the healthiest state in the nation by 2020,” working to improve VBP program rankings is one method of striving to reach that goal. (3/10)