Shifting from Volume to Value
The Hospital Value-Based Purchasing (VBP) Program adjusts Medicare payments to acute care hospitals based on quality performance rather than the volume of services provided. RHIA candidates need to understand how quality measures are collected, reported, and translated into payment adjustments.
Key CMS Quality Programs
- Hospital VBP Program: redistributes a percentage of DRG payments based on performance across clinical outcomes, patient safety, patient experience, and efficiency domains
- Hospital Readmissions Reduction Program (HRRP): penalizes hospitals with excess readmissions for specific conditions
- Hospital-Acquired Condition (HAC) Reduction Program: reduces payment for hospitals in the lowest-performing quartile for hospital-acquired conditions
- Inpatient Quality Reporting (IQR) Program: requires submission of quality measure data as a condition of receiving the full annual payment update
Role of Coded Data
Many quality measures rely on accurately coded diagnosis and procedure data, including present on admission indicators, to calculate risk-adjusted outcomes. Coding accuracy directly affects how a hospital's performance is measured and, ultimately, reimbursed.
HIM's Contribution
- Ensuring complete and accurate POA indicator assignment for HAC determination
- Supporting accurate risk adjustment through specific diagnosis coding
- Participating in data validation before public reporting submissions
- Collaborating with quality departments on measure specifications and abstraction accuracy
Financial Stakes
Because these programs redistribute or withhold Medicare payment based on performance, coding and documentation quality have direct financial consequences beyond the individual claim level. A hospital with poor documentation of comorbidities may appear to have worse risk-adjusted outcomes than its actual clinical performance reflects.
Exam Tip
Be able to distinguish the purpose of VBP, HRRP, and HAC Reduction programs, and understand that all three rely on accurate, complete coded data to function correctly.