PA Hospitals Shine in CMS Value-Based Purchasing Program

The commonwealth’s hospitals sit atop the list of states with the highest projected net gain in CMS program

April 22, 2022

Even amid the COVID-19 pandemic, Pennsylvania’s hospitals continue to deliver extraordinary care.

Looking through CMS’ Hospital Value-Based Purchasing (VBP) program provides one telling example. The VBP program is designed to improve the quality of care and experience for hospital patients, and an analysis of performance-based measures through the program shows that Pennsylvania’s hospitals are delivering when it comes to engaging their communities, outcomes, efficiency, and safety.

But to better understand Pennsylvania hospitals’ performance, I’d like to provide a little insight into how the CMS value-based program works.

The VBP

The VBP program is designed to improve the quality of care and experience for hospital patients. The program accomplishes this by rewarding acute care hospitals for the quality of care provided in the inpatient hospital setting. ¹

These rewards are funded by a 2 percent reduction in all Medicare payments, which is paid back to the participating hospitals based on their performance. High-performing hospitals can earn back bonuses greater than the payment reduction and receive a net gain, while others may not earn a bonus payment at all, resulting in a net loss. ²

Hospitals participating in this program are evaluated in four different performance domains: ³

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

Participating in this program allows hospitals to: ³

• Improve documentation
• Adopt evidence-based standards
• Reduce or eliminate medical errors related to misdiagnosis, unnecessary treatment, or medication administration

How Pennsylvania Performs in the VBP Program

The Hospital and Healthsystem Association of Pennsylvania (HAP) provides participating hospitals reports on their performance in the program based on CMS’ Care Compare data. Based on the available hospital data during last the reporting period (fourth quarter 2021), Pennsylvania hospitals are projected to receive an overall net gain of $12.87 million for FFY 2023. This places Pennsylvania as the top state with the highest net gain among the 22 states and District of Columbia that are projected to be net winners. Twenty-seven states are projected to be at loss on VBP next year with greatest net loss states including Texas, Indiana, Florida, Kentucky, and Arizona. ⁴

The graphic below shows how Pennsylvania hospitals performed during the previous years based on the overall statewide payback percentage in the VBP program. The trend shows that while the pandemic that has crippled health care for the last couple of years, Pennsylvania hospitals continued to exhibit a steady improvement in the quality of care they deliver. ⁴

Statewide VBP Program Payback Percentage

Pennsylvania hospitals’ overall rank in the VBP program continues to improve across the key metrics and overall. Looking back at five years of reporting, you can see that Pennsylvania hospitals have steadily improved performance in each of the four domains the VBP program focuses on when compared to the rest of the U.S. ⁴

Pennsylvania Hospitals’ Rank for VBP Program Domains among the 50 States

HAP would like to congratulate each of the 124 participating Pennsylvania hospitals for demonstrating the quality care they provide, especially in the midst of a pandemic that has changed the dynamics of care delivery in each and every area.

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¹ Centers for Medicare and Medicaid Services. The Hospital Value-Based Purchasing (VBP) Program. Accessed: 04/05/2022.
² American Hospital Association. Hospital Value-Based Purchasing. Accessed: 04/05/2022.
³ Definitive Healthcare. Value-Based Purchasing (VBP) Program. Accessed: 04/06/2022.
⁴ Based on DataGen, Inc.’s March 2022 Analysis of 4Q 2021 CMS’ Care Compare data.