Monday, 07 November 2016 20:45

CMS Releases 2017 Hospital Value-Based Purchasing Program Results – Fewer Hospitals Earn Medicare Bonuses

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Approximately 1,600 hospitals out of 3,000 will receive Medicare bonuses in 2017, leaving about 1,300 hospitals receiving a negative payment adjustment. The Centers for Medicare & Medicaid Services (CMS) released the news on Tuesday, Nov. 1, 2016. 

In addition, for the 2017 fiscal year, about half of hospitals will see a small change in their base operating MS-DRG payments (between -0.5 and plus-0.5 percent). After taking into account the statutorily mandated 2-percent withholding, the highest-performing hospitals will receive a net increase in payments of slightly more than 4 percent, and the lowest-performing hospitals will incur a net reduction of 1.83 percent.

The domains for the 2017 fiscal year Hospital Value-Based Purchasing (VBP) Program and the weighting for these domains were:

  • Clinical Care (30 percent)
    • Outcomes (25 percent)
    • Process (5 percent)
  • Patient and Caregiver-Centered Experience of Care/Care Coordination (25 percent)
  • Safety (20 percent)
  • Efficiency and Cost Reduction (25 percent)

According to a Nov. 1 article in Modern Healthcare, “the results are ‘somewhat concerning,’” said Francois de Brantes, executive director of the Health Care Incentives Improvement Institute. One reason was the fact that fewer hospitals are being rewarded. Another was hospitals' lack of movement in rankings.

The number of hospitals whose payments were docked grew from 1,236 in 2016 to 1,343 in 2017, according to a Modern Healthcare analysis of the data. Last year, 59 percent of hospitals received bonus payments; this year, 55 percent did.

More than half of the 2,879 hospitals participating in the program both years will see lower payment adjustments in 2017 than in 2016. Payments improved for 1,388 of those hospitals.

About 1,250 hospitals earned bonuses both years, and 875 were hit with penalties both years. By comparison, 437 hospitals that earned bonuses last year were docked in 2017, and 315 hospital penalized in the last round will receive bonuses next year.

The measure set for the 2018 program year includes several changes:

  • Two measures from the clinical care/process sub-domain are being removed:  AMI-7a and IMM-2 measures. The remaining measure, PC-01, is moving to the Safety domain.
  • A three-item care transition dimension is being added, as part of the Hospital Consumer Assessment of Hospital Providers and Systems (HCAHPS) survey, to the Patient and Caregiver Centered Experience of Care/Care Coordination domain.
  • In the 2017 Outpatient Prospective Payment System (OPPS) final rule, the pain management dimension – which is derived from the HCAHPS survey – is being removed from the Patient and Caregiver-Centered Experience of Care/Care Coordination domain, beginning with the 2018 fiscal year VBP program.

The 2018 Hospital VBP Program will include four equally weighted domains:

  • Clinical Care (25 percent)
  • Patient Experience and Caregiver-Centered Experience/Care Coordination (25 percent)
  • Safety (25 percent)
  • Efficiency and Cost Reduction (25 percent)

It is evident that the healthcare industry is moving forward at a rapid rate to implement programs focused on improving the quality of patient care and outcomes while reducing costs. While everyone may not agree on how it is being accomplished, I believe that everyone agrees that it is the right thing to do. The key will be to continue to assess what we are doing and improve on it moving forward.

CMS has posted the Hospital VBP incentive payment adjustment factors for the 2017 fiscal year in Table 16B, available online

For more information on the Hospital VBP Program, please visit the CMS website  and the QualityNet website

About the Author

Kim Charland is the editor of VBPmonitor and the senior vice president of clinical innovation with Panacea Healthcare Solutions. Kim has 30 years of experience in health information and reimbursement management for hospitals and physician offices. Kim’s primary role with Panacea is publisher of, which is the company’s newest online monitor and is focused on value-based purchasing and quality. She is also co-host of’s Internet news broadcast Talk-Ten-Tuesdays. In addition, she assists with product development for Panacea’s consulting and software divisions, as well as the MedLearn publishing division. Kim is also recognized as a national speaker who has spoken for numerous organizations.  Kim is also the president-elect for the New York Health Information Management Association. 

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Last modified on Wednesday, 09 November 2016 04:16