CMS Publishes FY 2015 Hospital Value-Based Purchasing Updates

CMS has updated its Hospital Value-Based Purchasing (VBP) Program website to include fiscal year (FY) 2015 updates, including the value-based incentive payment adjustment factor. The Hospital VBP Program is part of CMS’ effort to link Medicare’s Inpatient Prospective Payment System (IPPS) to a value-based system to improve healthcare quality, including the quality of care provided to inpatients. Under the Hospital VBP Program, authorized by Congress in Section 3001(a) of the Patient Protection and Affordable Care Act (ACA) (P.L. 111-148), participating hospitals are paid for inpatient acute care services based on the quality of care, not just quantity of the services they provide.

2015 IPPS Final Rule

In its FY 2015 IPPS Final rule (79 FR 49854, August 22, 2014), CMS calculated the value-based incentive payment adjustment factor and the portion of Medicare’s IPPS payments that will be subject to the adjustment factor. CMS also updated the applicable percent for the FY 2015 Program, which is 1.50 percent. Table 16B of the FY 2015 IPPS Final rule contains the actual payment adjustment factors for FY 2015. These actual factors are based on the finalized baseline and performance period for FY 2015 and will be used to adjust base operating diagnosis-related group (DRG) payments to eligible hospitals for discharges occurring in FY 2015.

The Final rule included a number of policies related to the Hospital VBP Program. Specifically, CMS finalized payment and operational details for FY 2015, and some new policies for FY 2017, including: (1) new measures; (2) performance periods; (3) performance standards; (4) domain weighting; and (5) domain structure based on the National Quality Strategy and its priorities of better patient outcomes, quality, safety, and lower cost for Medicare payments.

The Final rule also included policies related to certain measures for FY 2018 through FY 2020, including select performance periods and performance standards for those program years.

Future Measures

In its FY 2015 IPPS Proposed Rule (79 FR 27978), CMS discussed six potential future hospital-based episode measures to supplement the Medicare Spending per Beneficiary (MSPB) measure in the Efficiency domain of the Total Performance Score (TPS).

A document prepared by Acumen LLC, in partnership with CMS, details the method used to construct these potential hospital-based episode payment measures. Specifically, the document: (1) explains the criteria used to select conditions for episode development; (2) outlines the methodology for constructing the episodes from Medicare administrative claims; (3) details the calculation of the episode-based measures; (4) describes the attribution rules; and (5) presents the results of the six hospital-based episode measures using calendar year 2012 Medicare Parts A and B claims data.