Many members are still contacting us asking for help with understanding what their value-based purchasing (VBP) performance will look like in FY 2013. We have a message for you: Time to move on. The performance periods that CMS will use to determine your FY 2013 incentive payment are over, meaning that your attention should now be squarely focused on the FY 2014 performance periods that are all well under way. As we enter year two, here are some of the most important things to keep in mind.
The clock is already ticking on FY 2014 VBP performance periods
Hospitals should focus their attention on maximizing their FY 2014 quality performance to achieve the highest incentive payment possible or risk losing ground, and ultimately payments, to their competitors. As shown below, the performance periods for FY 2014 payments have already commenced, and in the case of the mortality measures, only a month of the data collection period remains.
Failure to act swiftly comes with significant financial implications. CMS expects that approximately half of the hospitals participating in the VBP program will see reduced payments as money is redistributed from low-performing to high-performing hospitals on the basis of quality performance.
Time frame of FY 2014 VBP assessments
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New quality measures make it tougher to earn bonuses
In year two of VBP, CMS will raise the financial stakes by withholding 1.25% of payments to each hospital. While the higher withhold increases the overall pool of dollars available for incentive payments, earning a bonus becomes more difficult thanks to the introduction of four new quality measures.
CMS will add one surgical quality measure (post-operative urinary catheter removal) to the clinical process of care domain, while three new mortality measures for acute myocardial infarction, heart failure, and pneumonia comprise an entirely new outcomes domain. As a result, quality improvement staff will need to spread their focus more broadly to prevent lost revenue.
No shortcuts to healthy incentive payments
If the introduction of new measures wasn’t challenging enough, changes to the domain weighting in 2014 will add further complexity for hospitals that are trying to boost their VBP incentive payments. In FY 2013, the clinical process of care measures received 70% of the overall weighting, providing a clear focal point for attention.
In FY 2014, however, the addition of the outcomes domain shifts the overall weighting significantly. If a hospital chooses to ignore an entire domain, they will absorb significant financial risk. We expect the most successful hospitals will distribute their quality improvement focus evenly across all three domains.
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A customized estimate of your FY 2014 VBP performance
Our popular Customized Value-Based Purchasing Impact Assessment now incorporates the latest Hospital Compare data to instantly generate an institution-specific estimate of your FY 2014 performance and identify your top opportunities for improvement.
Health Care Advisory Board, Clinical Advisory Board, and Financial Leadership Council members, log in to view your estimated total performance score, incentive payment, and a measure-by-measure breakdown of what your performance would look like if the payment impact went live today, or use the modeling feature to input real-time data and perform scenario analyses. Access the tool.
For more information
To review the changes to the VBP program in FY 2014, watch our Medicare Payment Strategy on-demand webconference.