CMS Hospital Value-Based Purchasing Program results for fiscal year 2018

Nov. 6, 2017

The Hospital Value-Based Purchasing (VBP) Program adjusts what Medicare pays hospitals under the Inpatient Prospective Payment System (IPPS) based on the quality of inpatient care they provide to patients.  For fiscal year (FY) 2018, the law requires that the applicable percent reduction, which is the portion of Medicare payments available to fund the program’s value-based incentive payments, remain at 2% of the base operating Medicare Severity Diagnosis-Related Group (MS-DRG) payment amounts for all participating hospitals.  We estimate that the total amount available for value-based incentive payments for FY 2018 discharges will be approximately $1.9 billion.

The Hospital VBP Program is one of many quality programs Medicare has established to pay for the quality of care rather than the quantity of services provided to patients.  The Hospital VBP Program is part of our long-standing effort to structure Medicare payments to improve care across the entire healthcare delivery system, including hospital inpatient care.  In FY 2018, more hospitals will receive positive payment adjustments than will receive negative payment adjustments, indicating improved quality of care and the rewarding of better value, outcomes, and innovations.

Fiscal Year 2018 Hospital VBP Program Results

  • The measurement domains for the FY 2018 Hospital VBP Program and the weighting for these domains are:
  • Clinical Care (25%)
  • Safety (25%)
  • Patient and Caregiver-Centered Experience of Care (25%)
  • Efficiency and Cost Reduction (25%)

CMS has posted the Hospital VBP incentive payment adjustment factors for each participating hospital for FY 2018 in Table 16B, available here:

For more information on the Hospital VBP Program, please visit the CMS website