What Value-Based Purchasing Means to Your Hospital
On April 28, 2011, the U.S. Department of Health and Human Services (HHS) formally launched a new initiative designed to adjust Medicare reimbursement on the basis of quality measurements. The Hospital Value-Based Purchasing (VBP) program, administered by the Centers for Medicare & Medicaid Services (CMS), marks an unprecedented change in the way Medicare pays healthcare providers for their services.
The VBP seeks to reward hospitals for improving the quality of care by redistributing Medicare payment among them so that hospitals with higher performance in terms of quality receive a greater proportion of the payment than do the lower performing hospitals. Details of the program are described in a final rule published May 6, 2011, which will become effective for inpatient prospective payment system (IPPS) discharges on or after Oct. 1, 2012.
It is important that hospital finance leaders understand the quality measures already defined for the VBP and be prepared for their imminent impact on hospital payment under the inpatient prospective payment system (IPPS).