Every year, Medicare withholds 2 percent of a Georgia hospital's base operating payments and makes the hospital earn it back through quality performance. That is the mechanism at the heart of the Hospital Value-Based Purchasing Program (HVBP). It is the largest of CMS's three IPPS quality programs, alongside the Hospital Readmissions Reduction Program (HRRP) and the Hospital-Acquired Condition Reduction Program (HACRP). Authorized at Section 1886(o) of the Social Security Act and effective since fiscal year 2013, HVBP redistributes that withheld pool to hospitals based on their scores across four performance domains.

For Georgia, HVBP affects every IPPS hospital. Major hospitals including Grady, Emory, Memorial Savannah, AU Medical Center, Phoebe Putney, Atrium Floyd, Northeast Georgia Medical Center, Wellstar, Piedmont, and Northside all participate in HVBP. Combined with HRRP and HACRP, a significant portion of Medicare IPPS revenue is at risk based on quality performance.

This guide covers the HVBP statutory framework, the four performance domains, Total Performance Score methodology, achievement and improvement scoring, the 2 percent withhold and linear exchange function, the Section 3001(b) Health Equity Adjustment effective fiscal year 2024, HCAHPS survey, CDC NHSN HAI measures, 30-day mortality measures, MSPB efficiency measure, exclusions, GMCF QIN-QIO support, and how major Georgia hospitals approach HVBP compliance and quality improvement.

The statute: Section 1886(o) and Section 3001(a) ACA

The Hospital Value-Based Purchasing Program is authorized at Section 1886(o) of the Social Security Act. The statute was added by Section 3001(a) of the Patient Protection and Affordable Care Act of 2010 (Public Law 111-148, enacted March 23, 2010), with HVBP effective for discharges occurring on or after October 1, 2012 (fiscal year 2013).

Section 1886(o) directs the Secretary of Health and Human Services to establish a value-based purchasing program under which value-based incentive payments are made in a fiscal year to hospitals that meet performance standards. The program is funded through a withhold from base operating IPPS DRG payments, with the withhold redistributed to hospitals based on performance. The starting withhold in fiscal year 2013 was 1 percent, increasing by 0.25 percent annually until reaching the statutory maximum of 2 percent in fiscal year 2017 and subsequent years.

Section 3001(a) ACA

Section 3001(a) of the ACA established HVBP as part of the broader healthcare reform legislation. The provision required CMS to develop and implement HVBP, specified the funding mechanism through IPPS DRG withhold, mandated budget-neutral redistribution, and established the framework for ongoing development of measures and methodology.

Section 3001(b) Health Equity Adjustment

Section 3001(b) of the ACA, as later refined through CMS rulemaking, authorizes the Health Equity Adjustment effective fiscal year 2024. The HEA adds bonus points to a hospital's Total Performance Score based on the hospital's proportion of dual eligible patients, recognizing hospitals serving high-need populations.

Statutory rationale

The statutory rationale for HVBP includes:

  • Aligning Medicare payment with quality and value
  • Creating financial incentive for quality improvement
  • Improving Medicare beneficiary outcomes
  • Reducing variation in quality across hospitals
  • Supporting healthcare system transformation toward value-based payment

Statutory limitations

The statute establishes specific limitations:

  • 2 percent withhold ceiling
  • Budget-neutral redistribution
  • Applicability to subsection (d) hospitals
  • Specific excluded hospital categories
  • Requirements for measure development and review

The four performance domains

HVBP measures hospital performance across four domains, each currently weighted 25 percent of the Total Performance Score in the current methodology. The four domains are Clinical Outcomes, Person and Community Engagement (formerly Patient Experience), Safety, and Efficiency and Cost Reduction.

Clinical Outcomes domain

The Clinical Outcomes domain measures 30-day mortality and procedural complications. Current measures include:

30-day mortality measures:

  • AMI (Acute Myocardial Infarction) 30-day mortality
  • Heart Failure (HF) 30-day mortality
  • Pneumonia (PN) 30-day mortality
  • COPD (Chronic Obstructive Pulmonary Disease) 30-day mortality
  • CABG (Coronary Artery Bypass Graft) 30-day mortality

Procedural complication measure:

  • THA/TKA (Total Hip Arthroplasty/Total Knee Arthroplasty) complication measure

The mortality measures use the same Yale Center for Outcomes Research and Evaluation (Yale CORE) hierarchical logistic regression risk-adjustment methodology used for HRRP readmission measures, applied to mortality rather than readmission outcomes. The 30-day window starts with hospital admission for the index admission.

Person and Community Engagement domain

The Person and Community Engagement domain (formerly Patient Experience of Care domain) uses the Hospital Consumer Assessment of Healthcare Providers and Systems (HCAHPS) survey. HCAHPS is a standardized patient survey administered by CMS-approved survey vendors that captures eight dimensions of patient experience:

  1. Communication with Nurses
  2. Communication with Doctors
  3. Responsiveness of Hospital Staff
  4. Communication About Medicines
  5. Cleanliness and Quietness of Hospital Environment (now split into separate measures in current configuration)
  6. Discharge Information
  7. Care Transition
  8. Overall Rating of Hospital

HCAHPS survey results are publicly reported on the Care Compare website. The eight HCAHPS dimensions each contribute to the Person and Community Engagement domain score.

Safety domain

The Safety domain measures healthcare-associated infections and patient safety. Current measures include:

CDC NHSN healthcare-associated infection measures:

  • CAUTI (Catheter-Associated Urinary Tract Infection)
  • CLABSI (Central Line-Associated Bloodstream Infection)
  • SSI Colon (Surgical Site Infection for Colon Surgery)
  • SSI Abdominal Hysterectomy (Surgical Site Infection)
  • MRSA Bacteremia (Methicillin-Resistant Staphylococcus aureus bloodstream infection)
  • C. difficile Infection (CDI)

Patient safety composite measure:

  • PSI-90 (Patient Safety Indicator 90 composite, based on AHRQ Patient Safety Indicators)

The HAI measures use Standardized Infection Ratio (SIR) methodology developed by CDC, comparing observed infections to expected infections given hospital case mix. SIR less than 1.0 means fewer than expected; SIR greater than 1.0 means more than expected.

Efficiency and Cost Reduction domain

The Efficiency and Cost Reduction domain currently includes:

Medicare Spending Per Beneficiary (MSPB):

  • Measures Medicare payments for services provided to a beneficiary during an episode
  • Episode begins 3 days before admission and ends 30 days after discharge
  • Includes Part A and Part B payments
  • Risk-standardized for patient mix
  • Calculated as ratio of hospital MSPB to national median MSPB

MSPB creates incentive for efficient care coordination across the episode, including post-discharge care.

Domain weighting

Current configuration weights each domain at 25 percent of TPS. Historical configurations had different weightings, and future configurations may evolve. CMS adjusts weighting through annual IPPS rulemaking.

Total Performance Score (TPS) methodology

The Total Performance Score is the core HVBP calculation that determines a hospital's value-based incentive payment.

Step 1: Measure scoring

For each measure, the hospital receives both achievement and improvement points:

Achievement points (0-10):

  • Based on hospital performance during performance period compared to national distribution
  • Achievement threshold (50th percentile of baseline) = 0 points
  • Benchmark (top decile of baseline) = 10 points
  • Linear scaling between threshold and benchmark
  • Performance at or below threshold = 0 points
  • Performance at or above benchmark = 10 points

Improvement points (0-9):

  • Based on hospital improvement from baseline to performance period
  • No improvement = 0 points
  • Closing all gap to benchmark = 9 points
  • Linear scaling
  • Hospitals already at benchmark do not need improvement points (achievement at maximum)

Step 2: Higher of achievement or improvement

For each measure, the hospital receives the higher of achievement or improvement points. This is a key feature: hospitals that have not yet reached high absolute performance can still earn maximum points by demonstrating substantial improvement.

Step 3: Domain score calculation

For each domain, measure scores are summed and normalized to a 0-10 scale. Specific normalization depends on number of measures in domain.

Step 4: Total Performance Score calculation

Domain scores are weighted (currently 25 percent each) and summed to produce TPS on 0-100 scale.

Step 5: Health Equity Adjustment (effective FY 2024)

Hospitals receive bonus points added to TPS based on dual eligible patient proportion. Top 20 percent of hospitals by dual eligible proportion receive maximum bonus; sliding scale for hospitals across distribution.

Step 6: Linear exchange function

TPS is translated to value-based incentive payment percentage through linear exchange function. Function calibrated so total value-based incentive payments equal total 2 percent withhold (budget neutral).

Step 7: Value-based incentive payment application

Value-based incentive payment percentage applied to base operating DRG payments. Net effect on hospital payment is value-based incentive payment minus 2 percent withhold:

  • Net positive = total adjustment greater than 0
  • Net neutral = total adjustment approximately 0
  • Net negative = total adjustment less than 0

Achievement threshold and benchmark

For each measure, two performance levels are defined.

Achievement threshold

  • 50th percentile of baseline period performance among hospitals
  • Hospitals at or below achievement threshold receive 0 achievement points
  • Hospitals between threshold and benchmark receive points scaled linearly

Benchmark

  • Top decile of baseline period performance among hospitals
  • Hospitals at or above benchmark receive 10 achievement points
  • Defines maximum achievement performance

Implications

  • Setting the threshold at 50th percentile means half of hospitals receive 0 achievement points on any given measure
  • The achievement scoring is therefore quite stringent
  • Improvement scoring provides important alternative pathway

Performance and baseline periods

Performance period

  • Measurement window for current fiscal year HVBP
  • Typically 12 months or longer
  • Aligns with CMS fiscal year and measurement timing

Baseline period

  • Three-year historical period used for achievement threshold and benchmark calculation
  • Provides stability and accounts for industry trends
  • Allows individual hospital improvement comparison

Three-year rolling

  • Both performance and baseline periods use multi-year rolling
  • Provides statistical stability
  • Reduces single-year variation effects

Section 3001(b) Health Equity Adjustment

Background

Concerns emerged that HVBP did not adequately account for hospitals serving disadvantaged populations. Safety-net hospitals serving high proportions of dual eligible and low-income patients faced HVBP penalties more frequently than hospitals serving wealthier populations. The pattern mirrored equity concerns that led to Section 15002 21st Century Cures Act peer group reform for HRRP.

Section 3001(b) reform

Effective fiscal year 2024, the Health Equity Adjustment adds bonus points to a hospital's Total Performance Score based on the hospital's proportion of dual eligible patients. The HEA is designed to recognize hospitals serving vulnerable populations rather than redistributing penalties.

Implementation

  • Top 20 percent of hospitals by dual eligible proportion receive maximum HEA bonus
  • Sliding scale for hospitals across distribution
  • Bonus added to TPS before linear exchange function calculation
  • Hospitals serving lower proportions of dual eligible patients do not receive HEA bonus

Effect on Georgia safety-net hospitals

For Grady Memorial Hospital and other Georgia safety-net hospitals serving substantial dual eligible patient populations, the HEA represents meaningful improvement in HVBP treatment. The HEA can offset some of the disadvantage that high dual eligible patient hospitals experienced historically.

Continuing refinement

CMS continues to refine the HEA through annual rulemaking, including potential adjustments to the dual eligible proportion threshold, the magnitude of bonus, and the implementation methodology.

Hospitals excluded from HVBP

Several hospital categories are excluded from HVBP.

Critical Access Hospitals

CAHs are excluded because they are not paid under IPPS but under cost-based reimbursement (101 percent of reasonable cost). Most rural Georgia hospitals designated as CAHs are excluded from HVBP. Georgia has numerous CAHs across rural areas including counties without major hospital infrastructure.

Maryland hospitals

Maryland hospitals operate under a unique all-payer rate-setting demonstration authorized under Section 1814(b)(3). These hospitals are not subject to HVBP.

PPS-exempt cancer hospitals

Eleven designated PPS-exempt cancer hospitals are excluded. These specialized cancer centers operate under a different payment system. There are no Georgia PPS-exempt cancer hospitals; the eleven facilities are distributed elsewhere in the country.

Hospitals with significant patient safety issues

Limited exclusion for hospitals with certain extraordinary patient safety circumstances. Rare in application.

Hospitals with insufficient cases or measures

Hospitals must have minimum cases for each measure to qualify. Hospitals failing to meet minimum thresholds for sufficient measures may not have complete HVBP scoring. Special handling applies in these cases.

Children's Healthcare of Atlanta

CHOA is a pediatric hospital. Adult HVBP measures generally do not apply to pediatric patients, and CHOA's HVBP participation is therefore limited.

The HCAHPS survey

The Hospital Consumer Assessment of Healthcare Providers and Systems survey is the cornerstone of the Person and Community Engagement domain.

Survey design

HCAHPS is a 32-item survey covering eight dimensions of patient experience. The survey is administered to a random sample of adult patients discharged from the hospital, with specific exclusions (e.g., psychiatric patients).

Survey administration

Hospitals contract with CMS-approved survey vendors to administer HCAHPS. Major HCAHPS vendors include:

  • Press Ganey (largest)
  • NRC Health
  • Professional Research Consultants (PRC)
  • Avatar Solutions
  • Various smaller vendors

Survey modes

HCAHPS can be administered via:

  • Mail only
  • Telephone only
  • Mixed mode (mail with telephone follow-up)
  • Active interactive voice response
  • Web-based (added in recent years)

Sampling and response

  • Random sampling of eligible discharges
  • Target sample size for statistical reliability
  • Response rate varies by hospital and mode (typically 20-30 percent)
  • Sufficient responses required for HVBP scoring

Patient mix adjustment

HCAHPS results are adjusted for patient characteristics including age, education, language, self-reported health status, and other factors that affect survey response patterns. The adjustment partially accounts for population differences across hospitals.

Public reporting

HCAHPS results are publicly reported on Care Compare. Star ratings derived from HCAHPS are also publicly reported. Beneficiaries can use HCAHPS results to inform hospital choice.

HCAHPS in HVBP

HCAHPS contributes to the Person and Community Engagement domain through:

  • Each of eight dimensions scored
  • Achievement and improvement points per dimension
  • Domain score calculated from dimension scores
  • 25 percent weight in TPS

CDC NHSN healthcare-associated infection measures

The Safety domain primarily comprises CDC National Healthcare Safety Network (NHSN) measures.

NHSN reporting

Hospitals report HAI data to CDC NHSN. NHSN is the primary national surveillance system for HAIs. Reporting is mandatory for hospitals subject to HVBP, with specific measure definitions and reporting requirements.

Standardized Infection Ratio (SIR)

The SIR is the primary HVBP measurement metric:

  • Observed infections / Expected infections
  • Expected infections risk-adjusted for hospital characteristics
  • SIR less than 1.0 = fewer than expected
  • SIR greater than 1.0 = more than expected
  • SIR of 1.0 = at expected

CAUTI

Catheter-Associated Urinary Tract Infection. Surveillance includes:

  • Patients with indwelling urinary catheters
  • Documented urinary tract infections meeting NHSN criteria
  • Catheter days as denominator
  • Unit-specific reporting (ICU, ward)

CLABSI

Central Line-Associated Bloodstream Infection:

  • Patients with central venous catheters
  • Laboratory-confirmed bloodstream infections meeting NHSN criteria
  • Central line days as denominator
  • Unit-specific reporting

SSI

Surgical Site Infection:

  • Procedure-specific SSI (Colon, Abdominal Hysterectomy currently in HVBP)
  • Defined surveillance period after surgery
  • Specific case definitions

MRSA Bacteremia

Methicillin-Resistant Staphylococcus aureus bloodstream infection:

  • Laboratory-identified hospital-onset MRSA bacteremia
  • Patient days as denominator

C. difficile Infection (CDI)

Clostridioides difficile infection:

  • Laboratory-identified hospital-onset CDI
  • Patient days as denominator

PSI-90 composite

Patient Safety Indicator 90 is a composite of multiple AHRQ-developed patient safety indicators including pressure ulcer rate, post-operative respiratory failure, perioperative pulmonary embolism or deep vein thrombosis, post-operative sepsis, post-operative wound dehiscence, accidental puncture or laceration, and other indicators. PSI-90 is based on administrative claims data rather than NHSN reporting.

Medicare Spending Per Beneficiary (MSPB)

The Efficiency and Cost Reduction domain uses the MSPB hospital measure.

MSPB calculation

  • Episode defined as 3 days before admission through 30 days after discharge
  • All Part A and Part B Medicare payments attributed to episode
  • Risk-standardized for patient characteristics
  • Hospital MSPB ratio = hospital MSPB / national median MSPB
  • Ratio less than 1.0 = below national median (more efficient)
  • Ratio greater than 1.0 = above national median (less efficient)

MSPB components

Spending in MSPB includes:

  • Hospital inpatient costs
  • Post-discharge skilled nursing facility care
  • Post-discharge home health
  • Physician services (Part B)
  • Outpatient services
  • Other Part A and Part B services
  • Drugs covered under Part B

Notable: Part D drug spending is generally not included.

Hospital MSPB management

Hospitals address MSPB through:

  • Length of stay management
  • Care transition optimization
  • SNF and home health partnership management
  • Coordinated post-discharge care
  • Avoiding unnecessary post-acute services
  • Coordinated readmission prevention (which also affects HRRP)

Application through Medicare claim payment

HVBP value-based incentive payment is applied through Medicare claim payment.

DRG payment multiplier

Each claim's base operating DRG payment is multiplied by the value-based incentive payment factor. The factor includes:

  • 2 percent withhold (negative)
  • Plus value-based incentive payment percentage (variable based on TPS)

Net effect calculation

  • Hospital with TPS at median: approximately neutral net effect
  • Hospital with high TPS: net positive
  • Hospital with low TPS: net negative

Hospital cost report

HVBP adjustments captured on hospital cost report Worksheet E, Part A. Year-end reconciliation may apply.

Annual notification

Hospitals receive annual notification of HVBP results including TPS, value-based incentive payment percentage, and projected net effect.

Worked example 1: Grady Memorial Hospital HVBP with Health Equity Adjustment

Grady Memorial Hospital is the major safety-net hospital in Atlanta, serving substantial dual eligible patient population. Hypothetical HVBP scenario:

  • TPS before HEA: 35 (below median performance)
  • Section 3001(b) HEA bonus: 5 points (top dual eligible proportion quintile)
  • Final TPS: 40
  • Linear exchange function: value-based incentive payment of 1.8 percent
  • 2 percent withhold less 1.8 percent VBIP = 0.2 percent net negative adjustment
  • On approximately $250 million base operating DRG payments, net effect ≈ $500,000 reduction

Without the HEA, Grady's TPS would have been 35, value-based incentive payment approximately 1.6 percent, and net adjustment approximately 0.4 percent negative ($1 million reduction). The HEA reduces Grady's net penalty by approximately $500,000.

Grady's response to HVBP includes:

  • HCAHPS improvement initiatives
  • HAI reduction programs
  • Mortality reduction programs
  • MSPB optimization through care coordination
  • Continued investment in quality improvement infrastructure

Worked example 2: Emory University Hospital academic HVBP

Emory University Hospital is a major academic medical center in Atlanta. Hypothetical HVBP scenario:

  • Strong clinical outcomes domain (mortality measures benefit from academic resources)
  • Mixed HCAHPS performance (academic patient mix can be challenging)
  • Strong safety domain (HAI reduction programs)
  • Average MSPB (academic costs offset by sophisticated care coordination)
  • TPS: 55 (above median)
  • HEA: minimal (Emory dual eligible proportion not in top quintile)
  • Linear exchange function: value-based incentive payment of 2.4 percent
  • Net adjustment: 0.4 percent positive
  • On approximately $400 million base operating DRG payments, net effect ≈ $1.6 million increase

Emory's HVBP strategy emphasizes:

  • Continued mortality reduction (clinical outcomes)
  • HCAHPS focus areas (communication, responsiveness)
  • HAI prevention investment (infection control)
  • Care coordination for MSPB

Worked example 3: Phoebe Putney rural HVBP

Phoebe Putney Memorial Hospital in Albany is a major southwest Georgia hospital serving substantial rural population. Hypothetical HVBP scenario:

  • Moderate clinical outcomes
  • Strong HCAHPS (rural community hospital advantage in patient experience)
  • Moderate safety domain
  • Moderate MSPB
  • TPS: 50
  • HEA: moderate (Phoebe serves substantial dual eligible population)
  • HEA bonus: 3 points
  • Final TPS: 53
  • Linear exchange function: value-based incentive payment of 2.3 percent
  • Net adjustment: 0.3 percent positive
  • On approximately $180 million base operating DRG payments, net effect ≈ $540,000 increase

Phoebe Putney leverages community connection for HCAHPS strength while addressing clinical outcomes and safety through targeted programs.

Worked example 4: AU Medical Center academic HVBP

Augusta University Medical Center is an academic medical center serving east-central Georgia. Hypothetical HVBP scenario:

  • Strong clinical outcomes (academic teaching)
  • Mixed HCAHPS
  • Moderate safety domain
  • Higher MSPB (academic medical center costs)
  • TPS: 45
  • HEA: moderate (substantial dual eligible patients in east Georgia)
  • HEA bonus: 3 points
  • Final TPS: 48
  • Linear exchange function: value-based incentive payment of 2.1 percent
  • Net adjustment: 0.1 percent positive
  • On approximately $220 million base operating DRG payments, net effect ≈ $220,000 increase

AU Medical Center's HVBP strategy includes HCAHPS improvement programs, continued HAI reduction, and MSPB optimization through care coordination.

Worked example 5: Memorial Health Savannah HCA HVBP

Memorial Health (HCA Healthcare) in Savannah is the major hospital for coastal Georgia. Hypothetical HVBP scenario:

  • Strong clinical outcomes (HCA system support)
  • Strong HCAHPS (HCA HCAHPS programs)
  • Strong safety domain (HCA HAI programs)
  • Strong MSPB (HCA care coordination)
  • TPS: 65
  • HEA: minimal (Memorial serves moderate dual eligible proportion)
  • Linear exchange function: value-based incentive payment of 2.6 percent
  • Net adjustment: 0.6 percent positive
  • On approximately $230 million base operating DRG payments, net effect ≈ $1.4 million increase

Memorial Savannah benefits from HCA Healthcare system-level quality programs and infrastructure.

Worked example 6: HCAHPS improvement at Georgia community hospital

A hypothetical Georgia community hospital (Wellstar Cobb) implements major HCAHPS improvement program:

  • Baseline HCAHPS Overall Rating: 65 (well below national average)
  • Performance period HCAHPS Overall Rating: 75 (substantial improvement)
  • Improvement points: 6 (significant improvement)
  • Achievement points: 3 (still below achievement threshold)
  • Higher of achievement or improvement = 6 improvement points

This illustrates how improvement scoring helps hospitals demonstrate progress even when absolute performance remains below average. Wellstar Cobb's HCAHPS program includes:

  • Nurse leader rounding
  • Communication training
  • Discharge process redesign
  • Hourly rounding
  • Service recovery program
  • Real-time HCAHPS feedback

Georgia Medical Care Foundation (GMCF) QIN-QIO

The GMCF is the Quality Innovation Network-Quality Improvement Organization for Georgia.

What is GMCF?

GMCF is a not-for-profit organization that serves as the QIO for Georgia. GMCF provides technical assistance to Georgia hospitals, nursing facilities, and other providers on quality improvement.

HVBP support

GMCF supports Georgia hospitals on HVBP through:

  • HCAHPS improvement programs
  • HAI reduction collaboratives
  • Mortality reduction programs
  • MSPB optimization support
  • Data analytics and benchmarking
  • Best practice dissemination

Coverage

GMCF serves Georgia hospitals at no cost as part of the CMS-funded QIN-QIO program.

National QIN-QIO program

GMCF is one of several QIN-QIOs nationally. The QIN-QIO program is funded by CMS to support quality improvement at the regional level.

Hospital Compare and Care Compare public reporting

HVBP results are publicly reported.

Care Compare website

Care Compare at medicare.gov/care-compare publishes hospital quality information including:

  • HVBP results
  • HCAHPS results
  • HAI rates
  • Mortality and readmission rates
  • Hospital star ratings
  • Other quality measures

Public reporting timeline

HVBP results are published in advance of the fiscal year of payment application. Beneficiaries can review results to inform hospital choice.

Hospital star ratings

CMS publishes overall hospital star ratings integrating multiple quality measures. HVBP measures contribute to star ratings.

Combined effects with HRRP and HACRP

HVBP combines with HRRP and HACRP for total quality-based payment effect.

Combined revenue at risk

  • HVBP: 2 percent withhold (redistributed based on performance)
  • HRRP: up to 3 percent reduction
  • HACRP: 1 percent reduction for bottom quartile
  • Combined: up to approximately 6 percent of Medicare IPPS revenue at risk

Integrated quality strategy

Effective hospital quality strategy addresses all three programs:

  • Quality measure improvement
  • Readmission reduction
  • HAI reduction
  • Patient experience improvement
  • Care coordination
  • MSPB optimization

Differing structures

  • HVBP redistributes 2 percent based on TPS (winners and losers)
  • HRRP reduces payment for excess readmissions (penalty only)
  • HACRP reduces 1 percent for bottom quartile HAI/PSI performers (penalty only)

MedPAC analyses

The Medicare Payment Advisory Commission has analyzed HVBP extensively.

MedPAC concerns

MedPAC has expressed concerns about HVBP including:

  • Small payment variability across hospitals limits incentive effect
  • Achievement vs improvement scoring effects
  • Measure overlap and redundancy with other quality programs
  • Health equity concerns (addressed in part by Section 3001(b) HEA)

MedPAC recommendations

MedPAC has recommended:

  • Consolidation of quality programs
  • Improved measure validity
  • Better risk adjustment
  • Continued health equity attention

Continuing CMS refinement

CMS continues to refine HVBP through annual rulemaking, including measure additions and removals, methodology refinements, and Health Equity Adjustment implementation.

Research evidence on HVBP

The research literature on HVBP effects includes:

  • HCAHPS scores have improved over time
  • HAI rates have declined
  • Mortality rates for HVBP conditions have improved
  • Whether HVBP caused or accompanied improvement is debated

Payment variation

  • HVBP payment variation is relatively small (typically less than 1 percent net adjustment)
  • Critics argue payment variation is too small to drive substantial behavior change
  • Defenders argue marginal payment incentive accumulates with other quality programs

Equity effects

  • Pre-Section 3001(b) HEA, safety-net hospitals experienced disproportionate HVBP penalties
  • Post-HEA, equity concerns reduced but not eliminated
  • Continued research

Patient outcome effects

  • Limited evidence of direct patient outcome causation
  • Correlations between HVBP performance and outcomes documented
  • Hospital quality improvement infrastructure broadly correlated with HVBP success

AHA position on HVBP

The American Hospital Association engages HVBP through:

  • Advocacy on methodology issues
  • Health equity adjustment advocacy
  • Combined burden concerns (HVBP/HRRP/HACRP)
  • Litigation on specific issues
  • Continued engagement with CMS rulemaking

Recent CMS HVBP rulemaking

Annual IPPS final rule

Each year's IPPS final rule addresses HVBP including:

  • Domain weighting
  • Measure additions and removals
  • Performance standards
  • Health Equity Adjustment refinement

COVID-19 modifications

  • Various pandemic-era HVBP modifications
  • Measure suppressions during pandemic peak
  • Adjustments for COVID-19 impact on quality measurement

Future direction

  • Continued health equity attention
  • Potential program consolidation with other quality programs
  • Integration with broader value-based payment
  • New measures consideration

Major Georgia hospitals and HVBP

Grady Memorial Hospital

  • Atlanta
  • Major safety-net hospital
  • Section 3001(b) HEA significant benefit
  • Substantial quality improvement investment
  • Atlanta DSH benefits

Emory University Hospital

  • Atlanta
  • Academic medical center
  • Strong clinical outcomes
  • Mixed HCAHPS
  • Significant Medicare volume

Emory University Hospital Midtown

  • Atlanta
  • Community teaching hospital
  • Emory system support

Memorial Health (HCA)

  • Savannah
  • HCA system support
  • Coastal Georgia primary hospital

AU Medical Center

  • Augusta
  • Academic medical center
  • East-central Georgia

Phoebe Putney Memorial

  • Albany
  • Major southwest Georgia hospital
  • Community connection HCAHPS advantage

Atrium Health Floyd

  • Rome
  • Atrium Health system
  • Northwest Georgia

Northeast Georgia Medical Center

  • Gainesville
  • Regional hospital
  • Northeast Georgia

Wellstar Health System

  • Multiple hospitals across metro Atlanta
  • System-level quality programs
  • Coordinated HVBP strategy

Piedmont Healthcare

  • Multiple hospitals across Georgia
  • System-level quality coordination
  • Major statewide presence

Children's Healthcare of Atlanta (CHOA)

  • Pediatric specialty hospital
  • Limited HVBP applicability

Northside Hospital

  • Multiple Atlanta campuses
  • Community hospital network

Rural Georgia hospitals

  • Various CAHs excluded from HVBP
  • Smaller PPS hospitals subject to HVBP

HVBP common compliance errors

  1. Failing to validate HCAHPS vendor performance: Hospitals delegate HCAHPS administration to vendors but remain responsible for data accuracy and completeness.

  2. Inadequate NHSN HAI reporting: HAI data must meet NHSN definitions. Incomplete or incorrect reporting affects scoring.

  3. Insufficient minimum cases: Hospitals with low volume may not meet minimum case thresholds for measures, affecting scoring.

  4. MSPB attribution errors: MSPB attribution depends on accurate hospital association of episodes. Errors can affect scoring.

  5. Failing to review preview period results: Hospitals must review HSR preview period results and identify errors for correction.

  6. Not coordinating HVBP with HRRP and HACRP: Quality improvement programs benefit from integration across all three programs.

  7. Insufficient investment in HCAHPS improvement: HCAHPS represents 25 percent of TPS. Adequate investment in patient experience is essential.

  8. Inadequate infection control infrastructure: HAI reduction requires substantial infection control infrastructure.

  9. Failing to track improvement metrics: Improvement scoring requires tracking baseline-to-performance period change. Hospitals must maintain longitudinal performance data.

  10. Not engaging GMCF QIN-QIO: Free technical assistance from GMCF is available; not engaging this resource leaves value on the table.

  11. Failing to validate clinical outcomes coding: Mortality measures depend on accurate coding. Coding errors can affect scoring.

  12. Inadequate care coordination for MSPB: MSPB performance requires hospital-led care coordination across episode.

  13. Not anticipating Health Equity Adjustment effect: Section 3001(b) HEA affects safety-net hospital TPS. Hospitals should anticipate effect.

  14. Insufficient governance attention: Hospital boards and senior leadership must engage HVBP. Insufficient executive attention undermines quality improvement.

FAQ

The Hospital Value-Based Purchasing Program is a CMS quality-based payment adjustment program that withholds 2 percent of base operating IPPS DRG payments and redistributes to hospitals based on quality performance across four domains.

Section 1886(o) of the Social Security Act, added by Section 3001(a) of the Affordable Care Act of 2010 (Public Law 111-148).

Fiscal year 2013 (October 1, 2012).

2 percent of base operating IPPS DRG payments since fiscal year 2017. Started at 1 percent in fiscal year 2013 and increased annually.

Clinical Outcomes, Person and Community Engagement, Safety, and Efficiency and Cost Reduction.

Hospitals receive achievement and improvement points per measure, with the higher counted. Domain scores aggregated to Total Performance Score (TPS) on 0-100 scale.

The TPS is the cumulative measure of hospital performance across all HVBP domains, ranging from 0 to 100.

Mathematical function translating TPS to value-based incentive payment percentage. Designed for budget-neutral redistribution of the 2 percent withhold.

Effective fiscal year 2024, the HEA adds bonus points to TPS for hospitals serving high proportions of dual eligible patients, recognizing hospitals serving vulnerable populations.

Communication with Nurses, Communication with Doctors, Responsiveness of Hospital Staff, Communication About Medicines, Cleanliness and Quietness, Discharge Information, Care Transition, and Overall Rating of Hospital.

CAUTI, CLABSI, SSI Colon, SSI Abdominal Hysterectomy, MRSA Bacteremia, and C. difficile Infection, plus PSI-90 composite.

Medicare Spending Per Beneficiary measures hospital-attributed Medicare spending across an episode from 3 days before admission to 30 days after discharge.

No. CAHs are excluded because they are not paid under IPPS but under cost-based reimbursement.

No. Maryland hospitals operate under a unique all-payer rate-setting demonstration.

No. The eleven PPS-exempt cancer hospitals are excluded.

50th percentile of baseline period performance among hospitals. Hospitals at or below threshold receive 0 achievement points.

Top decile of baseline period performance among hospitals. Hospitals at or above benchmark receive 10 achievement points.

Improvement compared to hospital's own baseline. Range from 0 to 9 points based on closing gap to benchmark.

Combined, up to approximately 6 percent of Medicare IPPS revenue is at risk based on quality performance across the three programs.

Care Compare at medicare.gov/care-compare publishes HVBP results, HCAHPS results, HAI rates, and related quality measures.

Yale Center for Outcomes Research and Evaluation, the contractor that developed the mortality and other risk-adjusted measures.

Georgia Medical Care Foundation, the Quality Innovation Network-Quality Improvement Organization for Georgia. Provides free quality improvement technical assistance to Georgia hospitals.

Through systematic quality improvement programs targeting HCAHPS, HAI reduction, mortality reduction, MSPB optimization, and care coordination. GMCF QIN-QIO support available.

Indirectly. HVBP creates financial incentive for hospital quality improvement, which should produce better beneficiary outcomes. Beneficiaries can also use HVBP and Care Compare results to inform hospital choice.

For hospital provider questions, Palmetto GBA at 1-866-238-9650 or engage quality improvement support through GMCF. Georgia Hospital Association at 770-249-4500 provides advocacy. CMS QIO program through GMCF provides free technical assistance. Brevy at brevy.com publishes guides.

HVBP, beneficiary access, and care quality

The HVBP creates financial incentive for hospitals to improve quality across multiple dimensions. The ultimate goal is improved Medicare beneficiary outcomes through better clinical care, better patient experience, fewer infections and adverse events, and more efficient care delivery.

Beneficiary perspective

For Medicare beneficiaries, HVBP creates pressure that should result in:

  • Better clinical outcomes (lower mortality)
  • Better patient experience (improved HCAHPS dimensions)
  • Lower infection rates
  • Lower adverse event rates
  • More efficient care coordination
  • Better care transitions

Beneficiary information

Care Compare allows beneficiaries to review hospital quality information before choosing a hospital. HCAHPS results, HAI rates, mortality and readmission rates, and overall hospital star ratings inform beneficiary choice.

Implications for vulnerable beneficiaries

Section 3001(b) Health Equity Adjustment responded to concerns that hospitals serving disadvantaged populations experienced disproportionate HVBP penalties. The HEA is substantial improvement but continuing attention to safety-net hospital quality and resources remains important.

Beneficiary advocacy

Beneficiary advocacy organizations participate in HVBP debate from access and quality perspective:

  • Center for Medicare Advocacy
  • Medicare Rights Center
  • National Council on Aging
  • AARP
  • Patient advocacy organizations focused on specific conditions

Quality improvement programs targeting HVBP

Hospital quality improvement programs target HVBP measures through systematic approaches.

HCAHPS improvement programs

Comprehensive HCAHPS improvement includes:

  • Nurse leader rounding (regular nurse leader visits to patients)
  • Hourly rounding (regular structured patient care visits)
  • Service recovery (immediate response to complaints)
  • Communication training (AIDET, key words at key times)
  • Real-time feedback (tablet-based surveys, immediate response)
  • Discharge process redesign
  • Patient and family advisory councils
  • HCAHPS dashboards for unit-level performance
  • Vendor partnership for advanced HCAHPS analytics

Infection control programs

Comprehensive HAI reduction includes:

  • Hand hygiene programs
  • Catheter and central line bundles
  • Surgical site infection bundles
  • Antimicrobial stewardship
  • Environmental cleaning protocols
  • Staff training and certification
  • Infection prevention specialists
  • NHSN reporting and surveillance
  • HAI dashboards and benchmarking

Mortality reduction programs

Mortality reduction targets the HVBP clinical outcomes measures:

  • Clinical pathway standardization (AMI, HF, PN, COPD, CABG)
  • Early warning systems and rapid response teams
  • Sepsis early identification and treatment
  • Discharge planning standardization
  • Care transition optimization
  • Palliative care integration for appropriate patients

MSPB optimization programs

MSPB reduction targets episode-level Medicare spending:

  • Length of stay management
  • Care coordination across episode
  • Post-acute care optimization
  • Readmission prevention (also affects HRRP)
  • Avoiding unnecessary post-acute services
  • Provider efficiency analysis
  • Bundled payment program participation

Hospital Compare Star Ratings

CMS publishes overall hospital star ratings that integrate multiple quality measures.

Star rating methodology

  • Multiple measure groups combined
  • HVBP measures contribute
  • Mortality, readmission, patient experience, and other measures included
  • Star rating from 1 to 5 stars
  • Annual updates

HVBP integration

HVBP measures including HCAHPS, mortality, and HAI rates contribute to star ratings. Strong HVBP performance generally correlates with higher star ratings.

Beneficiary use

Beneficiaries can use star ratings as overall hospital quality indicator alongside more detailed measures.

Bond rating implications

Hospital bond ratings reflect financial performance including quality-based payment results.

Bond rating agencies

  • Moody's Investors Service
  • S&P Global Ratings
  • Fitch Ratings

Quality program effects on ratings

Quality-based payment results affect:

  • Hospital operating margin
  • Predictability of Medicare revenue
  • Demonstrated quality improvement capability
  • Management capability assessment

Strategic implications

Hospital boards and senior leadership consider quality program performance in strategic planning, capital allocation, and bond issuance decisions. Strong HVBP performance supports financial stability and access to capital markets.

HVBP measure technical specifications

The HVBP measure specifications are highly detailed and run to hundreds of pages.

Yale CORE mortality measures

The Yale CORE mortality measures use hierarchical logistic regression methodology similar to HRRP readmission measures. Key elements:

  • Index admission definition per condition
  • 30-day mortality outcome
  • Risk factors from 12-month look-back claims
  • Hierarchical model with patient-level and hospital-level random effects
  • Bayesian shrinkage for small hospitals
  • Risk-standardized mortality rate (RSMR) calculation

CDC NHSN measure specifications

NHSN measures use Standardized Infection Ratio methodology:

  • Observed infections defined by NHSN criteria
  • Expected infections risk-adjusted for hospital characteristics
  • SIR calculated as ratio
  • Statistical significance assessment

AHRQ PSI-90 specification

PSI-90 composite includes weighted combination of individual PSIs:

  • Defined administrative claim criteria
  • Risk-adjusted for patient mix
  • Composite calculation methodology

HCAHPS specifications

HCAHPS specifications include:

  • Survey items and response options
  • Patient mix adjustment
  • Top box scoring (highest response category)
  • Achievement and improvement scoring per dimension
  • Vendor administration requirements

MSPB specification

MSPB specification includes:

  • Episode definition (3 days pre to 30 days post)
  • Spending attribution
  • Risk adjustment
  • Standardization to national prices (removes price variation)
  • Ratio calculation

Hospital governance and HVBP

Hospital boards and senior leadership engage HVBP at strategic level.

Board quality committees

Hospital board quality committees typically:

  • Review HVBP performance
  • Approve quality improvement priorities
  • Allocate resources for quality
  • Oversee compliance with quality programs
  • Engage with medical staff leadership

Senior leadership accountability

Senior leadership engagement includes:

  • Chief Quality Officer reporting
  • CEO and CFO attention to HVBP financial impact
  • Chief Medical Officer engagement with clinical measures
  • Chief Nursing Officer engagement with HCAHPS and care
  • Service line leader engagement with specific measures

Strategic planning

HVBP is incorporated in hospital strategic planning:

  • Quality goal setting
  • Investment prioritization
  • Performance management
  • Compensation incentive alignment
  • Capital allocation

HVBP enforcement and dispute resolution

While HVBP scoring is formulaic, certain dispute and review mechanisms exist.

Preview period review

Hospitals receive Hospital-Specific Report (HSR) during preview period and can identify:

  • Data accuracy errors
  • Measure calculation errors
  • Coding errors
  • Specific eligibility issues

Limited corrections

CMS allows corrections through limited process for clear errors:

  • Data submission errors
  • Clear calculation errors
  • Eligibility issues

No substantive methodology appeal

Hospitals cannot appeal underlying measure methodology, risk-adjustment models, or scoring methodology through individual review. Methodology is established through CMS rulemaking subject to notice-and-comment rulemaking.

Judicial review

HVBP methodology can be challenged through judicial review of final rulemaking. AHA and individual hospital systems have participated in various litigation on specific HVBP methodology decisions.

Provider Reimbursement Review Board

Limited PRRB jurisdiction over HVBP. Most disputes proceed through CMS administrative process rather than PRRB.

HVBP and the future of value-based hospital payment

HVBP is part of broader CMS strategy for value-based hospital payment.

Continuing refinement of the program

  • Annual IPPS rulemaking refines methodology
  • Health Equity Adjustment continues to evolve
  • Measure additions and removals
  • Domain weighting adjustments

Health equity focus

  • Section 3001(b) Health Equity Adjustment
  • Continued attention to social determinants of health
  • Equity-focused measure development
  • Disparities reduction goals

Program consolidation potential

  • MedPAC has recommended consolidation of HVBP/HRRP/HACRP
  • Future legislation could restructure programs
  • Continued evolution of value-based payment

Integration with broader value-based payment

  • ACO programs
  • Bundled payment programs
  • Medicare Advantage
  • Direct contracting

For Georgia hospitals, the trajectory means continued financial and operational attention to HVBP and related quality programs is essential to long-term financial health under Medicare.

Worked example 7: Wellstar Health System integrated HVBP approach

Wellstar Health System operates multiple hospitals across metro Atlanta. System-level HVBP approach includes:

  • Centralized quality and patient safety infrastructure
  • System-wide HCAHPS improvement program
  • System-wide infection prevention program
  • System-wide mortality reduction program
  • System-wide care coordination for MSPB
  • Shared electronic health record (Epic)
  • System-level data analytics
  • Coordinated medical staff engagement

Wellstar's system-level approach allows efficient quality improvement infrastructure across hospitals while maintaining hospital-specific HVBP accountability. Individual hospitals (Kennestone, Cobb, Atlanta Medical Center, Paulding, North Fulton, etc.) report HVBP separately but benefit from system-level resources and infrastructure.

Worked example 8: Piedmont Healthcare statewide HVBP coordination

Piedmont Healthcare operates hospitals across Georgia. Statewide HVBP coordination includes:

  • System-wide quality leadership
  • Coordinated HCAHPS programs
  • Coordinated infection prevention
  • Coordinated clinical pathways for mortality measures
  • Coordinated care transitions for MSPB
  • Shared EHR (Epic) supporting continuity
  • System analytics

Individual Piedmont hospitals (Atlanta, Henry, Newnan, Fayette, Macon, Columbus, etc.) report HVBP individually while benefiting from system-level resources.

Working with Brevy and Georgia resources

Brevy publishes regularly updated guides at brevy.com on Medicare, Medicaid, hospital quality, and related topics. We do not provide quality improvement consulting, legal advice, or hospital operations advice. We provide research-grade content explaining the framework so that Georgia hospital teams, administrators, and Medicare beneficiaries can understand how Medicare quality-based payment programs work.

For hospital provider HVBP questions, contact Palmetto GBA at 1-866-238-9650, engage Georgia Medical Care Foundation for QIN-QIO support, or work with quality improvement consulting firms. For Medicare beneficiary questions about hospital quality, contact Medicare at 1-800-MEDICARE, GeorgiaCares SHIP at 1-866-552-4464, or use Care Compare at medicare.gov/care-compare.

Research evidence on HVBP: quality, payment, and equity findings

The research literature on HVBP effects includes:

Quality measure improvement

Multiple analyses find improvement in HVBP-measured outcomes since program inception:

  • HCAHPS scores have improved across most dimensions
  • HAI rates have declined substantially
  • 30-day mortality rates for HVBP conditions have declined
  • MSPB has shown limited variation but stable performance

Causation debate

Whether HVBP caused or merely accompanied improvement is debated:

  • Other quality programs (HRRP, HACRP) also implemented during HVBP era
  • Industry-wide quality improvement trends
  • Patient safety initiatives
  • Hospital quality reporting transparency

Payment variation analysis

HVBP payment variation is modest:

  • Most hospitals receive net adjustment within 0.5 percent
  • Limited extreme positive or negative adjustments
  • Critics argue insufficient to drive substantial behavior change
  • Defenders argue cumulative effect with other programs

Equity research

Substantial research on HVBP equity effects:

  • Pre-HEA, safety-net hospitals disadvantaged
  • Post-HEA, equity concerns reduced
  • Continuing analysis

Hospital quality improvement infrastructure for HVBP

Effective HVBP performance requires substantial quality improvement infrastructure across the hospital.

Quality and patient safety department

Hospitals subject to HVBP maintain dedicated quality and patient safety departments with:

  • Chief Quality Officer or equivalent senior leader
  • Quality improvement specialists
  • Patient safety officers
  • Data analysts and informaticists
  • Patient experience leaders
  • Infection prevention specialists

The department coordinates HVBP response across clinical, operational, and administrative departments.

Medical staff engagement

Physician engagement is essential for clinical practice change supporting HVBP measures:

  • Hospitalist medical directors
  • Service line medical directors (cardiology for HF/AMI, pulmonology for COPD, etc.)
  • Medical staff committees
  • Quality and patient safety committees
  • Department chairs and program directors

Nursing leadership engagement

Nursing leadership drives HCAHPS, infection prevention, and care transition initiatives:

  • Chief Nursing Officer
  • Unit nurse managers
  • Nurse leader rounding
  • Clinical nurse specialists
  • Nurse informatics

Information technology infrastructure

HVBP response requires substantial IT infrastructure including:

  • Electronic health record supporting quality workflows
  • Real-time quality dashboards
  • Patient experience platforms
  • Infection prevention surveillance tools
  • Predictive analytics
  • Care coordination technology
  • Patient portals for engagement
  • Telehealth platforms

Data analytics capabilities

HVBP performance analysis requires data analytics including:

  • Measure-level performance trending
  • Service line analysis
  • Unit-level performance
  • Benchmarking
  • Predictive modeling
  • Root cause analysis

Hospitals invest in business intelligence platforms supporting decision-making at multiple organizational levels.

Community partnerships

Effective HVBP performance extends beyond hospital walls:

  • Primary care relationships supporting care transitions
  • Skilled nursing facility partnerships for MSPB optimization
  • Home health agency partnerships
  • Community organization engagement
  • Patient and family advisory councils

Social determinants of health and HVBP

The relationship between social determinants of health (SDOH) and HVBP measures is well-documented. Beneficiaries with adverse social determinants experience worse outcomes on multiple HVBP measures.

Documented SDOH effects on HVBP measures

  • HCAHPS responses correlate with patient socioeconomic factors
  • HAI rates correlate with patient acuity and comorbidities
  • 30-day mortality correlates with patient social support and post-discharge resources
  • MSPB correlates with patient complexity and post-acute care availability

Section 3001(b) Health Equity Adjustment response

The HEA addresses these correlations by adding bonus points to TPS for hospitals serving high proportions of dual eligible patients. While imperfect, the HEA recognizes that hospitals serving vulnerable populations face structural challenges in HVBP measurement.

Continuing CMS attention

CMS Office of Minority Health publishes equity-focused analyses. Future HVBP refinement may include additional SDOH adjustment. The trajectory is toward more explicit equity consideration in value-based payment.

HVBP in the context of broader healthcare reform

HVBP is one component of the broader healthcare reform architecture under the ACA and subsequent legislation.

Hospital Readmissions Reduction Program (HRRP)

Section 1886(q) authorizes HRRP, which reduces IPPS payments for hospitals with higher-than-expected 30-day readmission rates for six condition-specific measures. Combined with HVBP, HRRP creates additional financial incentive for care transition quality. Section 15002 21st Century Cures Act 2016 added peer group stratification by dual eligible proportion.

Hospital-Acquired Condition Reduction Program (HACRP)

Section 1886(p) authorizes HACRP, reducing IPPS payments by 1 percent for hospitals in the worst-performing quartile on hospital-acquired conditions including healthcare-associated infections and PSI-90. HACRP shares safety measures with HVBP.

Medicare Promoting Interoperability Program

Section 1886(n) authorizes Promoting Interoperability (formerly Meaningful Use), adjusting IPPS payments based on EHR meaningful use. Many HVBP measures depend on EHR data, creating natural integration.

Accountable Care Organizations

Section 3022 ACA established Medicare Shared Savings Program ACOs creating population-level accountability for cost and quality. Georgia ACOs include various physician groups and integrated systems.

Bundled Payment Programs

Bundled Payments for Care Improvement (BPCI) and BPCI Advanced create episode-level payment. These programs share readmission reduction and care coordination objectives with HVBP MSPB.

Patient-Driven Payment Model

PDPM for SNF and PDGM for home health adjust post-acute payment, indirectly affecting partner incentives for hospital coordination.

The combined effect shifts hospital payment from pure volume-based fee-for-service toward integrated value-based payment.

HVBP strategic considerations for Georgia hospitals

Hospital leadership considers HVBP in broader strategic context.

Quality reputation

Beyond direct financial impact, HVBP performance affects:

  • Care Compare public reporting
  • Hospital reputation in community
  • Patient choice
  • Physician referral patterns
  • Physician recruitment
  • Payor contracting
  • Bond ratings

For Georgia hospitals competing in major metropolitan markets like Atlanta, quality reputation is significant strategic consideration.

Investment ROI

Investment in HVBP improvement has demonstrated return on investment through:

  • Direct HVBP payment increase
  • Related HRRP and HACRP performance
  • Reduced cost of preventable adverse events
  • Quality reputation benefits
  • Community health benefits
  • Payor contracting leverage

Risk-bearing arrangement alignment

Hospitals in risk-bearing arrangements (ACOs, capitation, bundled payments, Medicare Advantage at-risk) have additional financial incentive for HVBP-aligned improvement beyond direct HVBP payment effect.

Workforce investment

Effective HVBP performance requires workforce investment in:

  • Quality improvement specialists
  • Patient experience leaders
  • Infection prevention specialists
  • Care coordinators
  • Data analysts

Technology investment

Hospital technology investment supporting HVBP includes EHR enhancements, predictive analytics, patient engagement platforms, infection surveillance tools, and care coordination technology.

HVBP and Medicare Advantage interaction

Many Georgia Medicare beneficiaries are enrolled in Medicare Advantage rather than traditional Medicare. HVBP affects this dynamic.

Medicare Advantage hospital reimbursement

Medicare Advantage plans negotiate hospital rates separately from traditional Medicare. However, MA plans often:

  • Reference Medicare rates as starting point
  • Consider hospital quality performance
  • Use HVBP and related public quality data
  • Incorporate quality requirements in contracts

Quality measure overlap

Many HVBP measures overlap with MA Star Rating quality measures and HEDIS measures. Hospital quality improvement supporting HVBP often supports MA contract performance.

Combined market pressure

Combined traditional Medicare and Medicare Advantage market pressure for quality creates substantial overall incentive for hospital quality improvement.

Worked example 9: rural Georgia critical access hospital HVBP exclusion

Many rural Georgia hospitals are designated Critical Access Hospitals and therefore excluded from HVBP. CAH exclusion means:

  • No HVBP measure calculation
  • No HVBP withhold
  • Continued cost-based reimbursement at 101 percent reasonable cost
  • No HVBP value-based incentive payment

CAH status provides protection from HVBP financial effects but does not exclude rural hospitals from quality improvement attention. CAHs:

  • Participate voluntarily in quality measurement
  • Report Hospital Compare measures
  • Engage GMCF QIN-QIO on quality improvement
  • Participate in Medicare Beneficiary Quality Improvement Project (MBQIP)
  • May voluntarily collect HCAHPS

For rural Georgia communities, CAH HVBP exclusion preserves hospital viability while continuing to support quality improvement through technical assistance rather than financial mechanism.

Worked example 10: Atrium Health Floyd northwestern Georgia HVBP

Atrium Health Floyd in Rome, part of the Atrium Health system, serves northwestern Georgia. Hypothetical HVBP scenario:

  • Moderate clinical outcomes
  • Strong HCAHPS (community connection and Atrium system support)
  • Strong safety domain (Atrium system infection prevention)
  • Moderate MSPB
  • TPS: 55
  • HEA: limited (moderate dual eligible proportion)
  • Linear exchange function: value-based incentive payment of 2.3 percent
  • Net adjustment: 0.3 percent positive
  • On approximately $120 million base operating DRG payments, net effect ≈ $360,000 increase

Atrium Floyd's response includes leveraging Atrium Health system quality programs, regional partnerships, and community engagement.

Detailed HCAHPS dimensions

The HCAHPS dimensions deserve closer examination given their substantial weight in HVBP.

Communication with Nurses

HCAHPS items:

  • Nurse courtesy and respect
  • Nurse listening
  • Nurse explanations

Hospital improvement strategies:

  • Nurse communication training (AIDET)
  • Hourly rounding
  • Bedside shift report
  • Nurse leader rounding

Communication with Doctors

HCAHPS items:

  • Doctor courtesy and respect
  • Doctor listening
  • Doctor explanations

Hospital improvement strategies:

  • Physician communication training
  • Physician engagement programs
  • Multidisciplinary rounds
  • Physician quality dashboards

Responsiveness of Hospital Staff

HCAHPS items:

  • Call button response
  • Help with bathroom

Hospital improvement strategies:

  • Hourly rounding
  • Call light response programs
  • Staff training
  • Technology supporting call response

Communication About Medicines

HCAHPS items:

  • Medicine purpose explanation
  • Side effects explanation

Hospital improvement strategies:

  • Pharmacist medication counseling
  • Nurse medication education
  • Patient education materials
  • Discharge medication review

Cleanliness of Hospital Environment

HCAHPS items:

  • Room and bathroom cleanliness

Hospital improvement strategies:

  • Environmental services programs
  • Quality audits
  • Staff training

Quietness of Hospital Environment

HCAHPS items:

  • Nighttime quietness around room

Hospital improvement strategies:

  • Quiet hours programs
  • Hush kit programs
  • Noise reduction initiatives
  • Equipment alarm management

Discharge Information

HCAHPS items:

  • Information about help needed at home
  • Information about medications

Hospital improvement strategies:

  • Discharge process standardization
  • Teach-back method
  • Discharge planning specialists
  • Patient education materials

Care Transition

HCAHPS items:

  • Hospital staff considered preferences
  • Understood responsibility at home
  • Understood medication purpose

Hospital improvement strategies:

  • Care transitions programs (similar to HRRP programs)
  • Discharge planning
  • Patient and family engagement

Overall Rating

HCAHPS items:

  • Overall hospital rating (0-10)
  • Willingness to recommend hospital

Strategies for overall rating reflect cumulative effect of all other dimensions.

CDC NHSN HAI measure technical detail

CAUTI surveillance

  • Patients with indwelling catheters
  • Catheter days as denominator
  • Symptomatic UTI meeting NHSN criteria
  • Risk adjustment for hospital characteristics

CLABSI surveillance

  • Patients with central venous catheters
  • Central line days as denominator
  • Laboratory-confirmed bloodstream infection
  • NHSN criteria application

SSI surveillance

  • Procedure-specific surveillance
  • Defined surveillance period
  • NHSN case definitions

MRSA Bacteremia surveillance

  • Hospital-onset MRSA bloodstream infection
  • Patient days as denominator
  • Laboratory identified

CDI

  • Hospital-onset Clostridioides difficile infection
  • Patient days as denominator
  • Laboratory identified

Disclaimers

This article is for educational purposes only and does not constitute legal, financial, quality improvement, audit, compliance, or medical advice. HVBP rules are subject to change through CMS rulemaking, congressional action, and ongoing administrative guidance. The information in this article reflects rules in effect as of May 2026. Always verify current HVBP rules at cms.gov and through current measure specifications before making decisions.

Brevy is not affiliated with CMS, Yale CORE, HHS, CDC, AHRQ, GMCF, Palmetto GBA, MedPAC, AHA, or any hospital. Brevy is an eldercare research and information company. We accept no compensation from healthcare providers, hospitals, insurance carriers, audit firms, consulting firms, or other parties.

Get help with Medicare HVBP and hospital quality questions in Georgia

Federal agencies

  • Medicare: 1-800-MEDICARE (1-800-633-4227) for general questions
  • CMS Provider Enrollment: 1-866-484-8049 for enrollment
  • HHS-OIG hotline: 1-800-447-8477

Georgia state agencies

  • Georgia Department of Community Health: 1-866-211-0950
  • GeorgiaCares SHIP: 1-866-552-4464 for Medicare beneficiary counseling

Quality Improvement Organization

  • Georgia Medical Care Foundation (GMCF): Quality Innovation Network-QIO for Georgia, free hospital quality improvement technical assistance

Medicare Administrative Contractor

  • Palmetto GBA: 1-866-238-9650 for provider questions
  • Atlanta Legal Aid: 404-377-0701
  • Georgia Legal Services: 1-800-498-9469
  • Medicare Rights Center: 1-800-333-4114

Quality and care transitions resources

  • Care Compare: medicare.gov/care-compare for hospital quality information
  • CDC NHSN: National Healthcare Safety Network reporting and resources
  • AHRQ: Agency for Healthcare Research and Quality patient safety resources

Healthcare financial management

  • Healthcare Financial Management Association (HFMA) Georgia Chapter
  • Georgia Hospital Association: 770-249-4500

Healthcare policy resources

  • Yale CORE: measure development methodology
  • MedPAC: Medicare Payment Advisory Commission analyses
  • AHA: American Hospital Association advocacy

Additional resources

  • 211 Georgia: dial 211 for community resources
  • Eldercare Locator: 1-800-677-1116
  • National Patient Safety Foundation

Brevy

  • Brevy resources: brevy.com for additional guides on Medicare, Medicaid, hospital quality, and eldercare topics

Learn More

Find personalized help understanding how Medicare hospital quality programs affect your care at brevy.com.


The information on Brevy.com is for educational purposes only and is not a substitute for professional legal, financial, or medical advice. Rules vary by state and program and change frequently. Always verify with the relevant agency or a qualified professional. Brevy is not a law firm, financial advisor, or healthcare provider.

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