Hospitals Respond Well to CMS Payment Incentives on Quality Care Measures

Published December 6, 2019

The eight-year old-program known as the Hospital Value Based Purchasing Program (VBP) rewards or penalizes hospitals for how they measure up on clinical outcomes, safety, person and community engagement, efficiency, and cost reduction. CMS withholds 2 percent of all payments to participating hospitals and then, after the fiscal year, distributes that money based on how well the hospitals meet the performance measures.

The program is part of a Trump administration effort to improve care by basing payment on quality, not quantity. Speaking at the Milken Institute Future of Health Summit, Health and Human Services Secretary Alex Azar discussed the advantages of value-based care similar to that in Medicare Advantage, where providers are paid a lump sum to provide all health care for beneficiaries.

“If a [provider] can help that patient, not through gatekeeping, not through rationing, but through coaching, advising, and guiding, they can reap a profit,” said Azar.

Medicare Advantage programs are now offering nontraditional benefits such as transportation, nutrition counseling, and carpet cleaning for relief of asthma as ways to keep seniors mobile, independent, and out of the hospital. 


—Staff Reports