Value-Based Purchasing (VBP) is a CMS program which aims to improve the quality of care through financial rewards and penalties. The quality of care provided by a hospital, rather than the quantity of services provided, determine the incentive payments.
Performance in four quality measurement domains, as compared to their peers, dictate a hospital’s score:
- Clinical Care (25%)
- Safety (25%)
- Person and Community Engagement (25%)
- Efficiency and Cost Reduction (25%)
Hospitals with a final score that ranks above the national median receive a percentage bonus to their Medicare reimbursements in the following fiscal year. The incentive payments to hospitals are paid for by penalizing hospitals with scores below the median. So far in 2019, 21 states scored higher than the national average of 39.5.
Nationwide, Average VBP scores ranged from a low of 32.4 to a high of 51.3. North Dakota had the lowest median score at 32.4, and Minnesota had the highest score with 51.3 out of 100. Utah scored closest to the overall average, with a score of 39.4. Case mix index (CMI) does not appear to strongly influence VBP performance, with all states reporting between a 1.0 and 1.5 CMI.
The top 5 states with the highest VBP scores—Minnesota, Oregon, Alaska, Wyoming, and Montana—reported average CMIs between 1.1 and 1.4.