GAO finds value-based purchasing program rewards lower-quality hospitals
The U.S. Government Accountability Office found that the CMS' Hospital Value-Based Purchasing program provided bonuses for some lower-quality hospitals.
The program, which gives Medicare bonus payments to hospitals that reach efficiency and quality benchmarks while decreasing payments for lower performing hospitals, creates incentives for about 3,000 participating hospitals as part of the Affordable Care Act. The GAO found that about 20% of the hospitals that received value-based bonuses between 2015 and 2017 had less than average quality scores.
To ensure that the HVBP program balances providers' quality and efficiency, the GAO recommended that the CMS revise the methodology used to calculate total performance scores and its method of accounting for missing quality scores.
"Some hospitals with high efficiency scores received bonuses, despite having relatively low quality scores, which contradicts the CMS's stated intention to reward hospitals providing high-quality care at a lower cost," researchers for the government watchdog agency wrote.
The CMS implemented a 2% reduction to diagnosis-related group payments for hospitals in 2010, which allowed Medicare to redistribute that money to hospitals based on patient surveys and certain quality and efficiency measures.
The GAO analysis found that safety-net hospitals generally scored lower in quality, and were more likely to receive a penalty. In contrast, small rural and urban hospitals with 100 or fewer acute care beds scored higher on efficiency and were more likely to receive a bonus. Yet, hospitals with low quality scores could still earn bonuses if they had higher efficiency scores due to an imbalanced weight formula, the report concluded.
"The CMS' formula for weighting the domain scores to determine a total performance score has created a system that, in some cases, rewards lower-quality hospitals that provide care at a lower cost," researchers said.
The quality scores were based on the clinical processes, patient experiences, patient outcomes and safety, while efficiency ratings were based solely on Medicare spending per beneficiary.
Safety-net hospitals scored lower in clinical processes, which takes into account preventive or routine care, and patient experience, measured by communication and responsiveness. They generally performed better than smaller hospitals in patient outcomes that factor in mortality rates as well as safety scores including measures for infection rates.
But the findings were skewed because not all the individual quality measures were reported each year, the report found. Providers with missing quality scores were more likely to receive bonuses than hospitals with complete scores because efficiency scores carried more weight for hospitals with missing quality metrics.
The proposed changes, which are being reviewed by HHS, stand to benefit safety-net hospitals. As of now, they carry a disproportionate share of the program's burden, receiving about 5% of all bonuses but paying around 10% for penalties annually, the report found. Smaller hospitals received twice the percentage of dollars they paid in penalties.
The value of the HVBP program has been debated. More than 1,600 hospitals received bonuses from Medicare in 2017 under the program, which was down 200 from 2016. Francois de Brantes, executive director of the Health Care Incentives Improvement Institute, told Modern Healthcare last year that those results were concerning because there was a lack of movement in rankings and the drop-off from 2016.
A recent report in The New England Journal of Medicine concluded that the program did not significantly improve clinical outcomes or patient experience.
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