More than 1,500 participating hospitals will receive about $1.9 billion in bonuses for fiscal 2020 under the CMS' Hospital Value-Based Purchasing Program, the agency revealed on Tuesday.
The results are about the same as last year, with about 55% of participants scoring bonuses. The program, which started in 2012, increases or decreases payments to hospitals under the inpatient prospective payment system depending on the quality of care they deliver to patients.
Inpatient hospital care accounts for the largest share of Medicare spending.
The value-based pay program is part of the agency's broader efforts to cut healthcare expenditures and improve quality by moving away from traditional fee-for-service payments. Those payments contribute to overuse and unmanageable costs throughout the healthcare system because they pay for the volume of services provided instead of patient outcomes.
But the program might not be living up to its expectations.
The program hasn't had much of an impact on quality, according to a report from the U.S. Government Accountability Office. It's also unclear whether the program's small financial rewards are likely to impact how hospitals deliver care to their patients.
The GAO found that the "program generally reinforced ongoing quality improvement efforts, but did not lead to major changes in focus."
The program reduces inpatient payments to about 2,700 hospitals by 2% so that Medicare can pay out bonuses to hospitals that score well in four areas: clinical care, safety, person and community engagement, and efficiency and cost reduction. The CMS weighs each area equally.
The highest-performing hospitals can earn bonuses greater than the 2% payment reduction, while others may see no payment increase at all. The program is budget-neutral, so it doesn't increase overall healthcare spending.
Just under 60% of the hospitals will see small changes in their payments, less than half a percent up or down. The average net payment adjustment is 0.16%. The best-performing hospital in 2020 will get a pay bump of 2.93%, while the worst-performing hospital will have its payments slashed by 1.72%, according to the CMS.
The average total performance score increased from 38.1 in fiscal 2019 to 38.5 in fiscal 2020. Small and rural hospitals performed better than the national average, with an average total performance score of 42.8.
Urban hospitals outperformed rural hospitals on clinical outcomes but trailed in all other measures, including safety, person and community engagement, and efficiency and cost reduction.