“Many forward-thinking ED groups are leading the way and assisting the hospital with post-discharge clinics or even becoming involved in home healthcare visits to reduce the number of readmissions for vulnerable patients, such as those with congestive heart failure, as well as other complex medical conditions and comorbidities,” Dr. Granovsky said.

While more hospitals faced penalties than bonuses in 2014 under HVBP, fewer than 800 received a reimbursement cut larger than 0.2% and just more than 600 saw a payment increase larger than this. The average penalty was 0.26%, up from 0.21% in 2013, while the average bonus was 0.24%, a marginal increase from 2013.

Hospitals in the Midwest fared better than hospitals in the Northeast and West. Private, for-profit hospitals performed better than public and nonprofit hospitals.

While there has been some debate about whether the financial incentives are strong enough to drive improvement, Dr. Granovsky said it’s something most hospital CEOs are taking very seriously, especially as these reforms lead to increased transparency.

“With Medicare as the dominant payer for hospital services, the 1.25% DRG withhold creates a strong incentive for hospitals to optimize their processes, improve outcomes, and increase patient satisfaction,” Dr. Granovsky said.

The idea behind CMS initiatives like HVBP is to move health care away from a fee-for-service system to one that pays for performance and quality. Whether these efforts can achieve this is unknown. A 2012 New England Journal of Medicine study of the Medicare Premier Hospital Quality Incentive Demonstration, the CMS pilot program that served as the basis for HVBP, showed performance incentives had no impact on clinical outcomes despite improvement in scores across performance measures.²

Kelly April Tyrrell is a freelance journalist based in Wilmington, Del.

References

1. McHugh M, Neimeyer J, Powell E, et al. An early look at performance on the emergency care measures included in Medicare’s Hospital Inpatient Value-Based Purchasing Program. Ann Emerg Med. 2013;61:616-623.e2.
2. Ashish KJ, Joynt K, Orav J, Epstein A. The long-term effect of premier pay for performance on patient outcomes. N Engl J Med. 2012;366:1606-1615.