Value-Based Purchasing (VBP) Program

The Value-Based Purchasing Program is an incentive program created by the Centers for Medicare and Medicaid Services (CMS) as a way to reward hospitals who provide high-quality care to Medicare beneficiaries. The program was first established as part of the 2010 Affordable Care Act (ACA), and implemented at U.S. hospitals starting in the 2013 fiscal year.

Hospitals participating in the VBP program are assessed in four different performance areas:

• Safety
• Clinical care
• Efficiency and cost reduction
• Care coordination / patient and caregiver-centered experience of care

Each of these performance areas is assigned the same 25 percent “weight,” which CMS uses to calculate a hospital’s total performance score. In assessing a hospital’s overall performance, CMS also considers achievement, improvement, and consistency points.

Achievement points are awarded to all hospitals who perform better than the baseline in each of the selected clinical and quality measures, while improvement points are awarded to each hospital that has improved upon their own previously reported quality measures. Consistency points are awarded to hospitals who perform at or above the 50th percentile in HCAHPS patient satisfaction scores.

CMS uses all of this scoring information to determine whether a facility will receive a financial bonus or penalty adjustment based on the care services they administered.