Value-based purchasing (VBP) is a healthcare payment reform method that rewards providers based on quality and efficiency rather than volume. This approach, which includes programs like Hospital Value-Based Purchasing (HVBP) and Skilled Nursing Facility Value-Based Purchasing (SNF-VBP), aims to align financial incentives with care quality and cost reduction. VBP is gaining momentum in healthcare, influencing the future of provider reimbursements and population health management.

1. VALUE-BASED
PURCHASING
BY TXCIN
WHAT IS IT?

2. Value-based purchasing (VBP) is a
methodology of healthcare payment
reform that focuses on paying providers
for quality and value, not just volume.
Sometimes referred to as “pay-for-
performance” (P4P), value-based
purchasing is becoming the new normal
in healthcare, linking provider
reimbursements to quality measures
and cost-efficiency.

3. The traditional fee-for-service (FFS)
payment model is “morphing” into
alternative payment models (APMs) that
increase provider accountability for both
quality and total cost of care, while
requiring a greater focus on population
health management. Cheryl L. Damberg,
et al., explains that value-based
purchasing “refers to a broad set of
performance-based payment strategies
that link financial incentives to
providers’ improvements in quality and
slowing the growth in health care
spending.”

4. Value-based purchasing is
already gaining strong
momentum, and it will
certainly influence the future
of healthcare payment
reform, so it’s helpful to have
a brief history and basic
understanding of this
significant methodology.

5. THE
FIRST
OF ITS
KIND:
ESRD-
QIP
This new pay-for-performance
approach scored facilities on
each measure and dinged
them with a payment
reduction of up to two percent
if their total performance score
did not meet or exceed
established performance
standards. Payment and
quality performance were now
being aligned as CMS focused
on its Quality Strategy to
improve health care and to
reduce costs.

6. NEXT
IN LINE:
HVBP
AND
SNF-
VBP
The HVBP rewards participating
hospitals for achieving
performance thresholds for
improved patient experience
and care coordination, patient
safety, clinical care, and
efficiency and cost reduction.
The IPPS is a system of payment
for the operating costs for acute
care hospital inpatient stays
under Medicare Part A (hospital
insurance), based on
prospectively set rates.

7. HVBP AND SNF-VBP
(CONT.)
The value-based purchasing methodology
continued to gain momentum in 2014 with
the Protecting Access to Medicare Act
(PAMA), which established the Skilled
Nursing Facility Value-Based Purchasing
Program (SNF-VBP). Like other VBP
programs, the SNF-VBP uses value-based
incentive payments to reward providers for
the quality of care they give to patients.

8. Source: CMS

9. THE
CURRENT
TIME:
MIPS
AND
APMS
The Quality Payment Program
initiated a number of innovative,
alternative payment models
such as the Pioneer ACO
Program, the Medicare Shared
Savings Program (MSSP), the
Bundled Payment for Care
Improvement Initiative, and the
Comprehensive Primary Care
Initiative, among others, and all
models were strategically
designed to incentivize care
providers with shared savings,
bonuses, and other financial
rewards to venture into greater
shared risk, while focusing on
quality and efficiency.

10. Want
More?
http://www.insight-
txcin.org/post/what-is-value-
based-purchasing

11. ABOUT
TXCIN
North Texas Clinically
Integrated Network, Inc. (dba
TXCIN) is a non-profit ACO
that began in late 2014. A
small group of independent
physicians aligned to initiate
clinical integration and value-
based contracting. Partnering
with RevelationMD and its
state-of-the art information
platform, TXCIN has become
the largest independent
network of physicians in North
Texas.