Value-Based Purchasing

Create your strategy to be successful in the Centers for Medicare and Medicaid Hospital Value-Based Payment Program

Use a Value-Based Purchasing tool to target areas of improvement

The Hospital Value-Based Purchasing or VBP Program is part of the Centers for Medicare & Medicaid Services’ (CMS’) long-standing effort to link Medicare’s payment system to improved healthcare quality, including the quality of care provided in the inpatient hospital setting. Hospitals participating in the VBP program have a percentage of their estimated Medicare DRG payments withheld each year. Depending on their total scores in the VBP program for the year, a percentage of these withheld payments is released back to the hospitals. Returns of withheld amounts roughly range from zero to 200% of the initial withholding.

The Value-Based Purchasing Tool can be used to assist in determining which domains and measures have the highest potential to give the highest total scores, hence maximizing reimbursement. Improvement in Total Point Score can be used to help direct Quality improvement initiatives.

What is the VBP Calculation Tool?

The Value-Based Purchasing Calculation Tool delivers an approximation of your value-based purchasing reimbursement using your hospital’s most recent performance based on:

  • Clinical Process of Care Measures
  • Patient Experience of Care Dimensions (HCAHPS)
  • 30-Day Outcome Mortality Measures
  • The AHRQ Composite Measure or Patient Safety Indicator (PSI-90)
  • Healthcare Associated Infections
  • Medicare Spending Per Beneficiary (MSPB)

The Value-Based Purchasing Tool Can:

  • Estimate DRG withholding reimbursement
  • Help focus efforts to maximize reimbursement

Basic Navigation

For Historical Purposes: For each measure component for which you have information, enter the data directly onto the spreadsheet in the appropriate cell. For missing information, leave the cell blank. Note that some cell values range from 0-100 while others range from 0.00 to 1.00. Normally, the range reflects the value of the measure and there is no need to translate the value to a different format. Once all known values are entered into their respective cells, the tool will provide a score and the Executive Summary tab will show approximate reimbursements. Past fiscal year estimated reimbursement amounts are expected to vary from the actual values because of the unknowns in the reimbursement equations.

Looking Forward: For each measure, the hospital is encouraged to create plausible scenarios with the values in the hospital performance period cells to understand how different performance effort can be maximizing clinical outcomes and to see how changes will probably impact reimbursements. This is especially valuable in attributing resources for getting maximal return. It may be the case that the hospital baseline score on a measure is already at an upper limit and achieving a meaningfully higher performance score would not be plausible. It may also be the case that small efforts in certain measures would result in sizeable improvements in score and reimbursements.

Need assistance with the Value-Based Purchasing Tool?
Vincent Dufort, PhD
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Jeanne Dufresne, CPHQ - Senior Program Coordinator
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