The most notable change from the FY 2014 to FY 2015 Centers for Medicare and Medicaid Services (CMS) Value-Based Purchasing ruling is the addition of the Efficiency domain. CMS proposed the addition of the Efficiency domain to examine all Medicare (Part A and Part B) spending, beginning three days prior to admission through 30-days after discharge.
Average Medicare Spending per Beneficiary (MSPB) episodes will represent 20 percent of an organization’s Value-Based Purchasing score to determine incentive payments for discharges starting October 1, 2014. CMS has proposed to increase the 20 percent in FY 2015 to 25 percent in FY 2016.
Value-Based Purchasing Medicare Spending Per Beneficiary Score
The Hospital Compare website provides comparative price-standardized and risk-adjusted values, showing average costs for an "episode" of care, described as a point three days prior to admission to 30 days after discharge for care delivered by any provider paid under Medicare Part A or Part B. CMS shares “A hospital’s MSPB Measure is calculated as the hospital’s average MSPB Amount divided by the median MSPB Amount across all hospitals, where a hospital’s MSPB Amount is the hospital’s average price-standardized, risk-adjusted spending for an MSPB episode.” Additional information can be found here.
MSPB is reported as the ratio of the MSPB amount for an organization to the weighted median MSPB amount across all organizations.
- An MSPB measure of 1.1 indicates that the organization had average risk-adjusted spending levels (which are 10 percent higher than the median MSPB episode).
- An MSPB measure of 0.9 indicates that the organization had average risk adjusted spending levels (which are 10 percent lower than the median MSPB episode).
For this measure, it’s important to remember that lower is better. In order to compare organizations across the nation, CMS standardized the Medicare payments included in the MSPB measure:
- MSPB is standardized for geographic payment differences such as geographic practice and wage index cost differences.
- The MSPB is also patient risk adjusted for severity of illness, patient age, and enrollment status indicators.
There are three spending periods in an episode of care.
1. One to Three days prior to Index Hospital Admission
- Nationally Represents 1.5 percent of total spending per episode of care
- Correlation with MSPB score = .224 (weak correlation)
2. During Index Hospital Admission
- Nationally represents 55 percent of total spending per episode of care
- Correlation with MSPB Score = .117 (weak correlation)
3. One through 30 days after discharge from Index Hospital
- Nationally represents 43.5 percent of total spending per episode of care
- Correlation with MSPB Score = .841(strong correlation)
Let’s look at the data.
The data indicates that organizations that have better quality of care results also have lower Medicare Spending per Beneficiary after the patient is discharged from the hospital. The quality of impatient care, quality of discharge planning, and the quality of follow up care align to produce meaningful differences in spending per beneficiary. Hospitals that have poorer quality of care results also have higher Medicare Spending per beneficiary after the patient is discharged from the hospital.