Lakeland Regional Medical Center is projected to have a negative VBP adjustment of nearly 1.1M



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By: Parvathy Rajagopal  Oct. 16, 2020

Dexur analyzed the Medicare Claims data to evaluate Value-Based Purchasing (VBP) payment adjustment and found that Lakeland Regional Medical Center had a projected negative financial impact of $1,164,600 in 2020 which is an increase from $766,931 in 2018. During FY 2020, the VBP adjustment factor was 0.98, which reflected a VBP payment adjustment percentage of -1.23.

VBP adjustment factor is derived from the hospital’s Total Performance Score (TPS) during a fiscal year. TPS is calculated by summing each of the four domain scores, i.e., Clinical Care, Safety, Efficiency and Cost Reduction, and Person and Community Engagement. Each domain makes up 25% of the TPS and has a set of defined measures that refer to performance-based payment strategies, linking financial incentives to healthcare providers’ performance in an effort to achieve better value.

Measures are calculated for both on performance during a measurement period (achievement) and improvement above a baseline period (improvement). Achievement points are awarded by comparing an individual hospital’s rates during the performance period to all hospitals’ rates from the baseline period. Improvement points are allocated by comparing a particular hospital’s rates during the performance period to that same hospital’s rates from the baseline period.

VBP Decomposition for Lakeland Regional Medical Center

Domain Measure Achievements Point Improvement Point Measure Score
Efficiency and Cost Reduction MSPB 1 out of 10 1 out of 9 1 out of 10
Clinical Outcomes AMI Mortality 0 out of 10 0 out of 9 0 out of 10
Clinical Outcomes HF Mortality 0 out of 10 0 out of 9 0 out of 10
Clinical Outcomes Pneumonia Mortality 2 out of 10 0 out of 9 2 out of 10
Clinical Outcomes THA/TKA Complications 0 out of 10 0 out of 9 0 out of 10
Safety CLABSI 0 out of 10 4 out of 9 4 out of 10
Safety CAUTI 1 out of 10 2 out of 9 2 out of 10
Safety SSI: Colon Surgery 6 out of 10 5 out of 9 6 out of 10
Safety SSI: Hysterectomy 0 out of 10 0 out of 9 0 out of 10
Safety MRSA 0 out of 10 0 out of 9 0 out of 10
Safety CDI 2 out of 10 1 out of 9 2 out of 10

The analysis of the CMS data by Dexur showed that Lakeland Regional Medical Center’s Medicare Spending per Beneficiary (MSPB) average, the only measure under the Efficiency and Cost Reduction domain, at the hospital and DRG group level for the year 2019. The MSPB Cost for this period for all DRGs was $16,273. The TPS for the FY 2020 was 15.9, which was significantly below the national median of 37.

CMS’ MSPB score and payment by claim breakdown are retroactive by two years; this data lag makes cost evaluation and improvement uncertain. Dexur’s study of the latest data on the cost-share of the DRG groups showed that the top five groups constituted nearly 18% of the total hospital payments. The following table shows the cost-share of the top DRG group in Lakeland:

DRG Groups with Largest MSPB Cost Contribution for Renown Regional Medical Center

No. Detailed DRG Group DRG Group % of total payment
1 MAJOR JOINT REPLACEMENT OR REATTACHMENT OF LOWER EXTREMITY 4.49%
2 HEART FAILURE AND SHOCK 3.42%
3 KIDNEY AND URINARY TRACT INFECTIONS 3.30%
4 SEPTICEMIA OR SEVERE SEPSIS WITHOUT MV >96 HOURS 3.22%
5 HIP AND FEMUR PROCEDURES EXCEPT MAJOR JOINT 3.15%

MSPB average of DRG 273: Percutaneous Intracardiac Procedures with Major Complication or Comorbidity (MCC) rose by 46% from $24,227 to $35,439. The largest share of expenses were incurred by claims from index hospitalization (64.2%) at $22,762 which was followed by 30-day post-discharge index hospitalization (82.8%) and SNF (11.6%) at $10,490 and $1,465 respectively.

For DRG 393: Other Digestive System Diagnoses with Major Complication or Comorbidity (MCC), the MSPB average rose by 38% from $15,313 to $21,132. This DRG saw the largest share of cost in index hospitalization (47%) at $9,936. This was followed by 30-day post-discharge index hospitalization (29.1%) and SNF (53.8%) at $3,101 and $5,731 respectively.

DRGs with the highest MSPB average increase in 2019, compared to 2018 for Lakeland

No. DRG Avg. MSPB Cost Avg. Index Hospitalization Avg. Post 30-day discharge Index Hospitalization Avg. Post 30-day discharge SNF Cost Avg. Post 30-day discharge HHA Cost % change
1 DRG 273: Percutaneous Intracardiac Procedures with Major Complication or Comorbidity $35,439 $22,762 $10,490 $1,465 $709 46%
2 DRG 393: Other Digestive System Diagnoses with Major Complication or Comorbidity(MCC) $21,132 $9,936 $3,101 $5,731 $1,472 38%
3 DRG 551: Medical Back Problems with Major Complications or Comorbidity (MCC) $25,595 $9.532 $5,220 $9,591 $726 34%

The MSPB average of the DRG 551: Medical Back Problems with Major Complications or Comorbidity (MCC) rose by 34% from $19,071 to $25,595. The cost was shared between index hospitalization (37.2%), 30-day post-discharge index hospitalization (33.2%) and SNF (61%) at $9,532, $5,220 and $9,591 respectively.

DRGs with the highest MSPB average decrease in 2019, compared to 2018 for Lakeland

No. DRG Avg. MSPB Cost Avg. Index Hospitalization Avg. Post 30-day discharge Index Hospitalization Avg. Post 30-day discharge SNF Cost Avg. Post 30-day discharge HHA Cost % change
1 DRG 659: Kidney and Ureter Procedures for Non-Neoplasm with Major Complication or Comorbidity(MCC) $21,576 $15,375 $2,772 $1,171 $793 -57%
2 DRG 602: Cellulitis with Major Complication or Comorbidity(MCC) $14,846 $7,923 $1,364 $4,648 $201 -28%
3 DRG 377: G.I Hemorrhage with Major Complication or Comorbidity(MCC) $16,737 $10,423 $2,017 $2,426 $754 -23%

The highest MSPB average decrease was seen in DRG groups of 659, 602, and 377. The DRG 659: Kidney and Ureter Procedures for Non-Neoplasm with Major Complication or Comorbidity (MCC) saw a decrease in the average MSPB cost by 57% from $49,645 to $21,576. This was followed by DRG 602: Cellulitis with Major Complication or Comorbidity (MCC), which showed a decrease in the MSPB average by 28% from $20,633 to $14,846. The MSPB average of DRG 377: G.I Hemorrhage with Major Complication or Comorbidity (MCC) decreased by 23% from $21,795 to $16,737.