Objective: Medicare’s Hospital Value Based Purchasing program (HVBP) rewards hospitals which achieve a higher than mean Total Performance Score (TPS). This article investigates the relationship between hospital characteristics and prior year Total Performance Score (TPS) on current year TPS under Medicare’s Hospital Value Based Purchasing (HVBP) program.Methods: Regression analyses are used to investigate the relationship between prior year TPS and organizational characteristics on current year TPS.Results: Regression analyses show that certain geographic locations, smaller bed size, and lower disproportionate share hospital percentage (DSHPCT) lead to a significantly higher TPS in both FY 2015 and FY 2016. Teaching status is associated with higher scores in FY 2015 and lower scores in FY 2016. Furthermore, prior year TPS is a significant predictor of current year TPS.Conclusions: Results suggest HVBP performance is dependent upon organizational characteristics which may have little to do with quality or cost of care. Furthermore, the findings demonstrate that prior year HVBP performance is the strongest predictor of future performance which may impede low performing hospitals from achieving success in future years, despite significant gains in improving cost and quality.

Medicare Advantage was implemented in 2004 and the Recovery Audit Contractor (RAC) program was implemented in Florida during 2005. Both increase surveillance of medical necessity and deny payments for improper admissions. The purpose of the present study was to determine their potential impact on for-profit (FP) and not-for-profit (NFP) hospital operating margins in Florida. FP hospitals were expected to be more adversely affected as admissions growth has been one strategy to improve stock performance, which is not a consideration at NFPs. This study analyzed Florida community hospitals from 2000 through 2010, assessing changes in pre-tax operating margin (PTOM). Florida Agency for Health Care Administration data were analyzed for 104 community hospitals (62 FPs and 42 NFPs). Academic, public, and small hospitals were excluded. A mixed-effects model was used to assess the association of RAC implementation, organizational and payer type variables, and ownership interaction effects on PTOM. FP hospitals began the period with a higher average PTOM, but converged with NFPs during the study period. The average Medicare Advantage effect was not significant for either ownership type. The magnitude of the RAC variable was significantly negative for average PTOM at FPs (−4.68) and positive at NFPs (0.08), meaning RAC was associated with decreasing PTOM at FP hospitals only. RAC complements other Medicare surveillance systems that detect medically unnecessary admissions, coding errors, fraud, and abuse. Since its implementation in Florida, average FP and NFP operating margins have been similar, such that the higher margins reported for FP hospitals in the 1990s are no longer evident.

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Background:The Hospital Value-Based Purchasing Program (HVBP) is a pay for performance system that impacts traditional Medicare fee-for-service payments to hospitals through rewards and penalties.Objectives: To explore variation in overall and individual-hospital total performance score (TPS) and embedded domains for hospitals during 2014-2018. Data Source: Hospital data were retrieved from the publicly available HOSArchive dataset. Study Design: Distribution of annual TPS and HVBP domain scores for 2014-2018 was evaluated using descriptive statistics. Transitional probabilities were analyzed to evaluate annual movement in the TPS ranking for outlier hospitals in the Top and Bottom 5%. Principal Findings: TPS scores are positively skewed while the distribution of domain scores vary with patient experience, (clinical) outcome, and efficiency domains having a large number of (positive) outliers. Mean TPS score decreased from 40.54 in 2014 to 38.04 by 2018. Improvement was shown in mean domain scores for clinicalprocess of care and clinical outcome using 95% confidence intervals, with hospitals gaining 10 points over the study period in clinical outcome. Changes in the mean scores for other domains did not show consistent increases or decreases. Chi-square analyses of hospital ranking categories showed some evidence that, as a group, hospitals initially ranked in the Bottom 5% are making consistent annual movements to higher categories. In contrast, over half of the hospitals ranking in the initial Top 5% remained in the top category across all study years. Conclusions: It may be time for CMS to redesign the HVBP incentive program to assure the measures accurately demonstrate sustained improvement, the domain weights appropriately reflect the level of importance, and the TPS comparative ranking methodology does not discourage lower-performing hospitals from actively improving the care they deliver and achieving top ranks.

This research compares the mean severity level, length of stay, and cost of Medicare health maintenance organization (HMO) and Medicare fee-for-service (FFS) inpatients. The results suggest Medicare HMOs have healthier inpatients and shorter lengths of stay, but more costly per-day utilization. These findings are contrary to the assumption that HMOs reduce daily utilization.