The Implications of Value Based Purchasing in the American Healthcare System

The change to value based purchasing has bought many challenges to the healthcare industry. With the change to value-based purchasing for payments, it has changed how healthcare organization receive payment and delivery care. The advantage of have value based purchasing is that it improves the quality of care while reducing cost in an effort of aligning patient’s with the right provider and treatment plan (Minemyer, Jun 29, 2016). However, there are many disadvantages, such as it increases the patient volume as counteracting the reduction of procedure volume (Brown, B. & Crapo, 2016). Also it makes providers more responsible for care that is beyond the expected treatment of care needed (Minemyer, Jun 29, 2016). With quality measures tied

In the past several years, there have been several changes in economic policy at federal and state levels. The two economic policies that present to be the most precedent for healthcare leaders with concern to facility reimbursement are the Affordable Care Act (ACA) and the switch from volume to value reimbursement. First, there is the ACA policy, which have affected healthcare facilities and their reimbursement methods. In fact, ever since this policy was implemented, provider reimbursement has started to decrease in terms of fee-for-service payments (The Common-Wealth Fund, 2015). In other words, the intention of this policy was to provide budget relief to the government payers as well as giving providers an incentive to provider patients with great quality of care.

According to L. Horton, LTACHs are funded by commercial insurance, Medicare, and charity (personal communication, March 7, 2014). For claims reimbursed by Medicare, patient satisfaction survey’s or Hospital Consumer Assessment of Healthcare Providers and Systems/HCAHPS help determine the hospital’s reimbursement scores. Value Based Purchasing (VBP) was established by the Affordable Care Act, which implements a pay-for-performance approach to the Medicare payment system (“Linking Quality to Payment,” n.d.). This program can help hospitals evaluate the performance of the services they provide to the public. Part of the VBP plan includes a questionnaire to patients that determines 30% of the weight of the hospital’s reimbursement scores. There are eight measures included in the HCAPS: nursing communication, doctor communication, responsiveness of staff, pain management, communication of medications, discharge information, cleanliness and quietness of hospital environment, and overall rating (Grellner, 2012, p.57).

When Medicare was first established, Medicare adopted the payment methods of Blue Cross Blue Shield which meant that the program was paid hospitals on the basis of their own costs and physicians were being reimbursed by the fees that they charged which caused hospitals and physicians to provide care without boundaries (Anderson et al., 2015). This method caused Medicare to dissipate the budget that was established for beneficiaries to utilize. Now, with the ACA being implemented, Medicare had done an overhaul of payment reimbursement. Medicare is now moving toward a volume to value payment initiative that links payment to patient outcomes, experience of care, while giving providers an incentive to limit spending

The Affordable Care Act has enable Medicare & Medicaid Services(CMS) to link Medicare’s payment system to a value-based purchasing system to improve healthcare quality1. Hospital Value-Based Purchasing (VBP) which is part of the Centers for Medicare & Medicaid Services; the program allows

Besides, the financial incentives for hospitals and physicians that belong to ACOs, Jaffery & Golden 2013, asked and then answered the question “why would providers join this program? One reason is to prepare for the future”. Fee-for-service reimbursement, which has been how hospitals get paid for their services rely solely on the volume of patient seen without taking into consideration the quality of care provided. Payers today, such as government, commercial insurers, employers, and individual consumers are now requesting on value -based-payment, which consist of delivering the highest level of care at a lower cost. The volume based system even though the traditional way of how payments are made is not a viable long-term option (Jaffery and Golden, 2013, p.98).

The Centers for Medicare and Medicaid’s (CMS) Value-Based Purchasing program (VBP) was implemented in 2012. This program adjusts what CMS will pay hospitals based on the quality of care hospitals give patients. The value-based purchasing is a financial incentive for hospitals to get and maintain higher patient satisfaction scores.

In recent years, emphasis has been placed on improving the quality of health care services and the overall patient experience. Innovative measures are needed to meet these expectations, while also containing the rising costs of health care. The government has enacted new laws in attempts to provide incentives that base Medicare payments in part on quality. In fact, the Patient Protection and Affordable Care Act of 2010, requires the implementation of value-based purchasing (VBP), which bases Medicare reimbursement rates on the quality of care (Kennedy, Wetzel & Wright, 2013). Hospitals may experience a decrease in revenue initially, however, it is theorized that the increase of transparency and accountability will serve as an incentive for improvements in the overall quality of care provided in the United States.

Quality and financial viability being closely tied is an extremely salient point. Furthermore, the Affordable Care Act has influenced the requirement for high-quality, cost-effective care provision by implementing Value Based Purchasing (Aroh, Colella, Douglas, & Eddings, 2015). In addition, there are presently Centers for Medicare and Medicaid (CMS) quality indicators that effect reimbursement for hospitals (Xu, Burgess Jr, Cabral, Soria-Saucedo, & Kazis, 2015). For example, if a facility does not meet the indicator threshold for catheter associated urinary tract infections, central line infections and/or pressure ulcers their reimbursement is affected. Given that the quality of care provided by a hospital is

One of the major goals of the ACA is to improve quality of care by using a value-based system. Nationwide, nearly 3,500 short-term acute-care hospitals are reimbursed under the Inpatient Prospective Payment System (IPPS). Within the IPPS is the Hospital Value-Based Purchasing Program is (VBP). This program “rewards acute care

This savings would be a direct result of decreased overpayment by Medicare to hospitals, physicians and insurance companies (Perez, 2013). As a result, Centers for Medicare and Medicaid is incentivizing increased quality care in hospitals. Consequently, hospitals are not getting reimbursed for hospital acquired conditions. In addition, CMS is penalizing hospitals for readmissions (Bauchner, 2015). Lawmakers are expecting resounding savings related to CMS expectations. The short term savings of more than $200 billion through 2016 (CMS, 2015). As a result, hospitals are in a paradigm shift from volume based care to value based care. The expectation is that hospitals will reduce waste and decrease inappropriate waste which will result in savings that be used for other therapies (Bauchner,

The idea that the healthcare reimbursements should be linked to the quality outcomes and performance measures is central to the Patient Protection and Affordable Care Act. The legislation provides various reforms that either provide incentives to healthcare providers for better quality services and outcomes or reduce their payments if certain quality standards are unmet. This paper talks about the different reforms under PPACA, aimed at introducing payment variations based on quality of care such as, Hospital Value Based Purchasing (VBP) program, improvements to different quality reporting programs, payment adjustments for hospital acquired conditions (HAC), reduction of hospital readmission rates (HRRP), testing for

Value-Based Payments (VBP) is a tactic utilized by purchasers to encourage quality and the value of health care services (Health Care Incentives, 2017). Value-Based Payments offer financial incentives to doctors, hospitals, medical groups, and health care providers (Webb, 2015). The incentive is to provide better care for their patients and to focus on the quality of the care they are providing rather than the number of people they treat. This payment model is being used as a way to keep DSRIP sustainable (NYSDOH, 2015). The VBP Model offers a roadmap, which outlines a five year plan to attaining inclusive payment reform; which includes a shift to 80% VBP through Medicaid managed care plans (The Commonwealth Fund, 2017). This payment reform should be accomplished by the end of DSRIP enactment period of five years (The Commonwealth Fund, 2017).

United States Health Care Reimbursement and Health Care Quality CMS Attempt at Improving Health Care Quality Traditionally, healthcare has been based on a volume status, or how many patients a single healthcare provider can see. This overload of patient to healthcare provider has caused a decline of the quality of care patients are receiving. The United States government recognized this and wanted to move to a better system of healthcare, one that is based on quality instead of volume.

According to the GAO, “Initial Results Show Modest Effects on Medicare Payments and No Apparent Change in Quality-of-Care Trends”. Has Value Based Purchasing been a success based on the resources provided in this course?