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April 08, 2007

Medicare Value-Based Purchasing: Old wine in new bottles?

At first blush, VBP looks like RHQDAPU redux.  Once it is implemented, though, in FFY 2009, it looks like it will call for quicker data submission (and therefore allow for quicker feedback).  More importantly, the feedback will be infinitely tweakable, as the federales play around with the metrics yielding VBP payments to hospitals -- no longer simply a 2% gimme:

CMS is proposing a method for translating the VBP performance score into the incentive payment, which would provide three parameters that could be varied to achieve policy goals. These are:

o The minimum performance level below which a hospital would receive none of the VBP incentive. This parameter allows CMS to lower or raise the bar for the base level of overall performance that is required to earn incentive payments.

o The benchmark level of performance required for a hospital to obtain its full incentive amount.

o The exchange rate for performance scores between the minimum and benchmark performance levels that would translate the performance score to the percent of the VBP incentive payment earned. The structure of the exchange rate would allow policy makers to determine how difficult it would be to qualify for the full incentive payment. As such, the exchange rate could be 1:1, more than 1:1, or less than 1:1, or could vary across the range of performance scores.

Check out the Options Paper and other materials posted here.  Listening Session #2 on Medicare Hospital VBP will take place April 12.  You can sign up by April 9, or listen in online later.

-- David Harlow


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