The Centers for Medicare & Medicaid Services (CMS) launched the Value-Based Purchasing (VBP) Program in 2012 to reward hospitals that provided high-quality care. Each year, hospitals would be eligible for an increase or decrease in their Inpatient Prospective Payment System rate, a model that determines Medicare reimbursement for each hospital based upon the quality of care they provide. In Fiscal Year 2017, the payments are supported through a 2 percent reduction of Diagnosis-Related Group funding for all hospitals, which in turn is distributed between eligible facilities according to performance. For the year, the total amount of available funds was about $1.8 billion

Overall, about 55 percent of hospitals received positive adjustments in 2017. Of those receiving bonuses, the average adjustment rate was 0.71 percent, with an average estimated increase in revenue of about $135,000. Hospitals with high positive adjustment rates tended to be smaller, and the majority of facilities earning rates over 1 percent had less than 100 beds. The highest estimated revenue earners had modest rate increases, though their larger size translated to greater bonus payments overall.

To learn more, download The Definitive List: Top 20 Winners & Losers in Value-Based Purchasing by filling out the form. 

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