Hospital Value Based Purchasing:
The HVBP program is aimed at rewarding providers for quality care. The program provides an opportunity for hospitals to earn an incentive payment if these efficiency and quality benchmarks are exceeded. Conversely, lower performing hospitals could experience decreasing payments. The hospital performance scores are based on four weighted domains: clinical care (25%), patient and caregiver centered experience (25%), safety (25%), and efficiency and cost reduction (25%). In FY 2017, approximately 3,000 hospitals participating in the program, of which more than 1,600 (55%) hospitals received bonuses from Medicare under the program, which was 200 less than the previous year (59%).
Hospital Readmission Reduction Program:
The HRRP requires Medicare to reduce payments to hospitals with relatively high readmission rates and applies to most acute care hospitals, but exempts psychiatric, rehabilitation, long term care, children’s, cancer and critical access hospitals, as well as hospitals in Maryland (because they are not paid under the IPPS). Under the HRRP, hospitals with 30 day readmission rates that exceed their hospital specific expected readmission rate are penalized by a reduction in payments across all Medicare admissions. If a hospital is above its expected readmission rate for one of the conditions (heart attack, heart failure, pneumonia, COPD, CABG, or hip/knee replacement), up to a 3% across-the-board cut is triggered.
Medicare uses an “all-cause” definition of readmission, meaning that hospital readmission within 30 days of a discharge from the initial hospitalization are considered readmissions, regardless of the reason for readmission. However, as of 2014, CMS made an exception for planned hospitalizations within the 30-day window.
Hospital Acquired Condition Reduction Program:
The ACA created a broad healthcare acquired condition (HAC) policy that sets national infection rates and penalizes hospitals that fall into the top quartile. The penalty is a 1 percent cut of all its Medicare payments across the board. No matter how successful hospitals are in lowering infection rates, there will also be a top quartile that triggers a 1 percent cut to a quarter of the nation’s hospitals unless Congress changes the program.