Becker's Hospital Review

40 FINANCE 1,800 Hospitals See Payment Bump Under Value- Based Purchasing: 10 Things to Know By Ayla Ellison T he Medicare Hospital Value-Based Purchasing Program, established under the Affordable Care Act, is intended to encourage hospitals to provide high-quality care more efficiently by adjusting payments to hospitals based on the qual- ity of care they provide. In FY 2016, more than 1,800 hospitals will receive a positive payment adjustment under the program, according to recently released data from CMS on more than 3,000 U.S. hospitals. Here are 10 things to know about the Value-Based Purchas- ing Program and the hospitals receiving bonuses and penalties in fiscal 2016. 1. e program adjusts Medicare payments to hospitals under CMS' Inpatient Prospective Payment System. 2. Base operating MS-DRG payments to eligible IPPS hospitals are being reduced by 1.75 percent in FY 2016, up from the 1.5 percent reduction the year prior, to fund an estimated $1.5 billion in incentive payments for the Value-Based Purchasing Program. 3. In FY 2016, about half of the more than 3,000 hospitals that are subject to the program will see a change between -0.4 percent and 0.4 percent in their base operating MS-DRG payments. 4. e highest performing hospitals in FY 2016 will receive a net change in payments of slightly more than 3 percent aer the mandatory 1.75 percent reduction. 5. e worst performing hospitals will not recoup any of the 1.75 percent reduction. 6. ere are four Value-Based Purchasing Program domains used to score hospitals in fiscal 2016: clinical process of care, pa- tient experience of care, outcomes and efficiency. 7. e metrics are weighted differently, and a hospital's total weighted score is based 10 percent on clinical process of care, 25 percent on patient experience of care, 25 percent on efficiency and 40 percent on outcomes. 8. "Our goal is to include a broader, richer set of measures over time and aligning with the National Quality Strategy," said CMS in a news release. 9. For FY 2017, CMS is adopting two new safety measures and one new clinical care-process measure. More than 78 percent of the measures in the Value-Based Purchasing Program will assess health outcomes, patient experience and cost in FY 2017. 10. In FY 2018, the four domains for the program will be: clinical care; patient experience and caregiver centered experience/care coordination; safety; and efficiency and cost reduction. Each do- main will be weighted at 25 percent. n Study: Financial Physician-Hospital Integration Associated With Higher Prices By Emily Rappleye O ver the past decade, physi- cian-hospital integration has increased significantly — often to boost referrals and adjust to new payment models, as well as shield physicians from the growing costs of independent practice. However, according to a new study published in JAMA Internal Medicine, financial integration between physi- cians and hospitals could be straining commercial prices for outpatient care. After examining Medicare claims data for 240 metropolitan statistical areas between 2008 and 2012 for integration and concurrent changes in spending, researchers found physi- cian-hospital integration increased by an average of 3.3 percent, though considerable variation exists between the different areas. This increase in integration was associated with a $75 annual hike in spending on average for outpatient services. Since changes in utilization were minimal, researchers concluded this was due almost entirely to price increases. Similar changes in inpatient spending were not observed, accord- ing to the report. "Because hospital markets are much more concentrated than phy- sician markets on average, financial integration between hospitals and physicians may enhance bargaining power more for the physicians than for the hospitals involved," the authors of the study concluded. "By exerting market power derived primarily from its preexisting share of the hospital market, the integrated entity may be able to command price increases for outpatient physician services by threat- ening to exclude its affiliated hospitals from an insurer's network." n

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