For most hospitals, penalties wipe out quality bonuses -AND- Few Calif. Hospitals Will Profit From CMS' Performance Programs

CAL/AAEM News Service calaaem.news.service1 at gmail.com
Mon Feb 2 14:57:00 PST 2015


 
January 22, 2015
 
For most hospitals, penalties wipe out quality bonuses
 
 
Fierce Health Finance
 
 
By Zack Budryk

Medicare will award quality bonuses to the majority of hospitals it assesses, but in most cases, other penalties will offset those gains, Kaiser Health Newsreports.

Of the hospitals graded, 1,700, or 55 percent, scored high enough on quality reviews to earn increased payments. However, of these hospitals, fewer than 800 will receive any net extra money, according to an analysis by KHN. The rest of the providers will receive penalties under separate Medicare programs because too many patients developed hospital-aquired infections and the organizations failed to reduce readmissions.

The average penalty, at $1.2 million, vastly outweighs the average bonus of about $213,000 for large hospitals, Eric Fontana, an analyst at the Advisory Board Company, told KHN. The gap is smaller for hospitals with 200 beds or fewer, with an average bonus of $32,000 and an average penalty of $131,000. Overall, only 28 percent of the hospitals will either get extra money or break even.

This comes in the same year Medicare began to penalize hospitals for insufficient progress in the transition to electronic medical records. More than 6 percent of Medicare payments are based on performance measures, KHNnoted. The Hospital Value-Based Purchasing Initiative is the only program that gives bonuses as well as penalties. A recent study found that safety-net hospitals are particularly likely to receive penalities under the program, FierceHealthFinance reported.

Despite the amount of penalties, the program, now in its third year, saw nearly 500 more hospitals earning bonuses this year compared to last year, according to the KHN report. In 2013, the program reduced payment rates for nearly 1,500 hospitals. 



January 26, 2015
 
Few Calif. Hospitals Will Profit From CMS' Performance Programs
 
 
California Healthline


Fewer than 800 of the roughly 1,700 hospitals that earned quality performance bonuses under the Affordable Care Act's value-based purchasing program this year will reap the benefits because of penalties levied by two additional Medicare quality programs, according to a Kaiser Health News analysis, KHN reports.

Background

Under the VBP program, CMS calculates an incentive payment for each hospital based on its performance on quality and patient experience measures, such as patient satisfaction, lower mortality rates and how much Medicare pays for each patient (Rau, Kaiser Health News, 1/22).

The payment for each hospital is relative to a "withhold," meaning a certain percentage of inpatient payments are withheld from each hospital to fund the program. Some hospitals could recoup a portion of the payments that were withheld, while others could break even or receive extra funds (California Healthline, 10/1/12).

Meanwhile, under the Hospital-Acquired Condition Reduction Program, CMS has assessed rates of 10 patient injuries at hospitals, including:

• Bed sores;
• Blood clots;
• Blood stream infections;
• Collapsed lungs;
• Cuts that occur during or after surgery;
• Patient falls; and
• Urinary tract infections.

CMS calculates each facility's HAC score on a scale from one to 10, with 10 being the greatest rate of patient harm. Hospitals that scored a seven or higher are being penalized a full 1% of their inpatient revenues as of Oct. 1, 2014 (California Healthline, 12/19/14).

Similarly, the Hospital Readmissions Reductions Program penalizes hospitals with excess readmissions for patients with acute myocardial infarctions, heart failure and pneumonia (California Healthline, 10/3/14).

VBP is the only one of the three ACA penalty programs to offer bonuses for strong performance. About 1,600 hospitals were exempt from the programs because they are critical access hospitals or are paid differently by Medicare.

Analysis: Few VBP Hospitals Will Receive Bonuses

According to the KHN analysis, nearly 1,700 hospitals -- or 55% of all graded hospitals -- earned bonuses in the VBP program for providing quality of care comparatively higher than other institutions reviewed by CMS, while 1,360 hospitals were penalized.

However, fewer than 800 hospitals will see benefits from such bonuses because they performed poorly on readmissions and HAC quality measures.

In California, the analysis found that out of the 283 hospitals assessed, 49% will receive a bonus, while 52% will receive a penalty. The analysis found 1% of hospitals assessed in California will break even.

Eric Fontana, a practice manager at The Advisory Board Company, said that when all of the incentive programs are combined, large hospitals with more than 400 beds are likely to receive an average bonus of $213,000 and be docked about $1.2 million across the three penalty programs. The Advisory Board publishes California Healthline.

Meanwhile, he said small hospitals with 200 or fewer beds will see an average bonus payment of about $32,000 and an average penalty of $131,000.
Overall, just 28% of hospitals will come out even or make a profit through the programs (Kaiser Health News, 1/22).
 
 

 
 
Bryan Sloane
Deputy Editor, CAL/AAEM News Service
 
Brian Potts MD, MBA
Managing Editor, CAL/AAEM News Service

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