Value Based Purchasing Program

Section 3001(a) of the Affordable Care Act (ACA) included the addition of a a new section 1886(o) to the Social Security Act and amended 42 U.S.C. § 1395ww to establish the hospital value-based purchasing (VBP) Program.

Under the VBP Program, which began in October 2012, hospitals faced a 1% reduction overall on Medicare payments under the Inpatient Prospective Payment System (IPPS), as these funds were used to pay for the performance bonuses under VBP Program. The 2014 fiscal year reduction increased to 1.25%, and by 2015, hospitals that continue to show poor performance ratings will not only be excluded from the bonus pool, they will also face additional cuts in reimbursement.


Under the VBP Program, the Centers for Medicare & Medicaid Services (CMS) must establish a minimum number of cases, measures, and surveys for hospital eligibility in the VBP Program.

Minimum Cases and Measures:  For Fiscal Year (FY) 2014, CMS created specific minimum reporting requirements for number of cases, measures, and surveys. Success in the VBP Program is based on a hospital’s performance in twelve Clinical Process of Care measures and eight Patient Experience of Care dimensions of the Hospital Consumer Assessment of Healthcare Providers and Systems (HCAHPS) survey. These requirements include:

  1. To receive a Clinical Process of Care score, hospitals must report a minimum of ten cases per measure and at least four applicable measures during the performance period.
  2. To receive a Patient Experience of Care score, hospitals must complete at least 100 HCAHPS surveys during the performance period.

Clinical Process of Care Measures include:

  • Acute Myocardial Infarction (AMI)
    • AMI-7a – Fibrinolytic Therapy Received Within 30 Minutes of Hospital Arrival
    • AMI-8 – Primary PCI Received within 90 Minutes of Hospital Arrival
  • Heart Failure (HF)
    • HF-1 – Discharge Instructions
  • Pneumonia (PN)
    • PN-3b – Blood Cultures Performed in the Emergency Department (ED) Prior to Initial Antibiotic Received in Hospital
    • PN-6 – Initial Antibiotic Selection for Community-Acquired Pneumonia (CAP) in Immunocompetent Patients
  • Surgical Care Improvement Project (SCIP)
    • SCIP-Inf-1 – Prophylactic Antibiotic Received Within One Hour Prior to Surgical Incision
    • SCIP-Inf-2 – Prophylactic Antibiotic Selection for Surgical Patients
    • SCIP-Inf-3 – Prophylactic Antibiotics Discontinued within 24 Hours After Surgery
    • SCIP-Inf-4 – Cardiac Surgery Patients with Controlled 6:00 a.m. Post-operative Serum Glucose
    • SCIP-Card-2 – Surgery Patients on a Beta Blocker Prior to Arrival Who Received a Beta Blocker During the Perioperative Period
    • SCIP-VTE-1 – Surgery Patients with Recommended Venous Thromboembolism Prophylaxis Ordered
    • SCIP-VTE-2 –Surgery Patients Who Received Appropriate Venous Thromboembolism Prophylaxis Within 24 Hours
Patient Experience of Care Dimensions include:
  • Communication with Nurses
  • Communication with Doctors
  • Responsiveness of Hospital Staff
  • Pain Management
  • Communication about Medicines
  • Cleanliness and Quietness of Hospital Environment
  • Discharge Information
  • Overall Rating of Hospital

Immediate Jeopardy:  Hospitals may be ineligible for the FY 2013 VBP Program if they are cited for deficiencies during the performance period that pose an immediate jeopardy to patients’ health or safety.  Details relating to immediate jeopardy concerns will be included in the Final Rule for the FY 2013 IPPS.


Also for FY 2013, a hospital’s performance in the VBP Program will be based on how it scores in the 12 Clinical Process of Care measures and eight Patient Experience of Care dimensions of the HCAHPS survey. The hospital’s Total Performance Score (TPS) will be composed: (1) 70% from the 12 clinical measures above; and (2) 30% from the 8 patient experience of care dimensions.

Hospitals will receive two scores on each measure and dimension: one for achievement and one for improvement. The achievement score measures how the hospital performed compared to other hospitals. The improvement score measures how much a hospital has improved compared to its own previous performance.

Both scores are determined based on the hospital’s performance compared to achievement and improvement ranges for each clinical measure and HCAHPS dimension. CMS will use the greater of either achievement or improvement scores on each measure and dimension to calculate the hospital’s TPS.  For additional information, see the Quality Assurance Guidelines published by CMS.

Like the Clinical Process of Care measures, the eight Patient Experience of Care dimensions are scored on the greater of improvement or achievement points. However, the Patient Experience of Care domain also includes a Consistency Score. Two scores—Base and Consistency—are calculated for this domain. The Base score is the greater of improvement or achievement points for the eight Patient Experience of Care dimensions. Consistency points are awarded based on a hospital’s lowest HCAHPS dimension score during the performance period relative to the other hospitals’ scores from the baseline period. Additional information can be found in this CMS publication on scoring. A guide to terms and definitions for the VBP Program can be found here.

A hospital that does not receive a domain score in both the Clinical Process of Care and Patient Experience of Care domains will not receive a TPS or an incentive adjustment.


As stated above, the HCAHPS survey accounts for 30% of a hospital’s TPS.  The HCAHPS survey, the first national, standardized, publicly reported survey of patients’ perspectives of hospital care, is a survey instrument and data collection methodology for measuring patients’ perceptions of their hospital experience.  Click on the following links for examples of the standard HCAHPS survey and the expanded HCAHPS survey.