Ascension Macomb-Oakland Hospital in Madison Heights, MI, can avoid VBP penalties by reducing MSPB costs by 5.7%


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By: Sampath Kumar  May. 19, 2021

Ascension Macomb-Oakland Hospital in Madison Heights, MI, reported a CMS Value Based Purchasing (VBP) adjustment factor of 0.9936 in the year 2021, which could result in an estimated penalty of $471,977. Medicare Spending Per Beneficiary (MSPB) accounts for 25% of overall VBP score and is a significant factor in driving VBP payments. MSPB costs include the costs from 3 days before hospitalization, index hospital stays, and 30 days post-discharge. The measure score of the Efficiency & Cost Reduction domain for Ascension Macomb-Oakland Hospital during the period was 0/10. Dexur is an approved purchaser of CMS Medicare claims data and based on our simulator, we estimate that Ascension Macomb-Oakland Hospital can avoid VBP penalties by reducing MSPB Cost by 5.7%.

Ascension Macomb-Oakland Hospital’s average MSPB cost per episode (risk adjusted and price standardized) during the period of January 2019 to December 2019 was $22,528.The average cost of Post Index Stays was $9,309 with a total of 5,454 episodes.

Dexur Simulator for MSPB Cost Reduction

Ascension Macomb-Oakland Hospital can achieve the break-even VBP adjustment factor of 1 by earning 4 points in MSPB and thereby avoid VBP penalties. Hospitals need to reduce post Index hospitalization costs to meet these MSPB reduction targets. Dexur’s simulator has identified four main levers and estimated reduction in each of these levers to reduce MSPB to the target levels and ultimately achieve a positive MSPB score:

In Summary, the four levers impact 625 episodes and reduce the average MSPB cost by 5.7% and improve the MSPB performance rate to 0.957. This increases the VBP adjustment factor to 1.0 and helps avoid penalties.

A much higher reduction in Post Index stay costs can further improve VBP incentives. For example, a 22% reduction in post index stay costs can reduce the average MSPB cost by 7.3%, and earn a VBP Adjustment Factor of 1.0017, thereby achieving an incentive of $125.3k.