Value Modifier and Value-Based Purchasing Risks - Sybrid MD

Value Modifier and Value-Based Purchasing Risks

Healthcare in the United States is transitioning from fee-for-service model to value-based care model. The Center for Medicaid and CHIP Services (CMS) has Value-based programs rewarding health care providers with incentive payments for the quality of care they give to people with Medicare. It is a model that focuses on paying for the quality rather than quantity.

There are four value-based programs:

* Hospital Value-Based Purchasing (HVBP) Program

* Hospital Readmission Reduction (HRR) Program

* Value Modifier (VM) Program or Physician Value-Based Modifier (PVBM)

* Hospital Acquired Conditions (HAC) Program

The Hospital Value-Based Purchasing (VBP) Program is a Centers for Medicare & Medicaid Services (CMS) initiative that encourages hospitals to improve the quality of care by eliminating errors, adopting evidence-based care standards, improving patient experience and delivering high-quality care at a lower cost. The program works by withholding hospitals’ Medicare payments and then give incentives based on their performance.

The implementation of payment models for pay-for-performance could let the providers avert patients belonging to a low-socioeconomic status and requiring complex care. According to a study published by JAMA, ‘Practices that served more socially high-risk patients had lower quality and lower costs, and practices that served more medically high-risk patients had lower quality and higher costs. These patterns were associated with fewer bonuses and more penalties for high-risk practices,’ which means that ‘As value-based payment programs continue to increase in size and scope, practices that disproportionately serve high-risk patients may be at particular risk of receiving financial penalties.’

In context of Value-Based Payment Program the study analyzed 899 physician practices with 5189880 beneficiaries and concluded, ‘during the first year of the Medicare Physician Value-Based Payment Modifier Program, physician practices that served more socially high-risk patients had lower quality and lower costs, and practices that served more medically high-risk patients had lower quality and higher costs.’

Given this fact, physicians can get a mistaken indication that treating highly complex patients will do no good to them if they wish to avert penalization. Also, the inducements under MIPS for improving care performance are too considered meager. It is the choice of practices to be judged on their preferred measure of quality.

‘In 2018, more hospitals will receive positive payment adjustments that will receive negative payment adjustments, indicating improved quality of care and the rewarding of better value, outcomes, and innovations,’ according to CMS. ‘More hospitals will have an increase in their base operating MS-DRG payments then will have a decrease. In total, almost 1600 hospitals will have a positive payment adjustment.’

It has been six years now since the CMS has introduced Value-Based Payment Program, affecting payment for participating hospitals across the country. The agency has continued to raise the bar to improve the quality of care which makes it essential for participating organizations to improve in every subsequent year rather than settling or maintaining last year standards. For this reason, healthcare organizations should stay ready for stricter measures in the future. CMS has also outlined the path for the year 2019, ‘As we more closely link patient outcomes and treatment costs to value-based hospital payment, the Hospital VBP Program not only aims for quality gains on paper, it also aims to promote a culture that prioritizes quality and value of care and better empowers patients and their healthcare providers through the public display of program results.’

Value-based purchasing is an essential step to revamping how care and services are paid for, moving increasingly toward rewarding better value, outcomes, and innovations. The program has sustained six years, affecting healthcare organizations in various ways and is here to stay for many years.

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