Lehigh Valley Hospital-Schuylkill S. Jackson Street in Pottsville, PA, can earn VBP incentives by reducing MSPB costs by 12.9%


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By: Sharath joji  May. 03, 2021

Lehigh Valley Hospital-Schuylkill S. Jackson Street, Pottsville, PA, reported a CMS Value Based Purchasing (VBP) Adjustment Factor of 0.9916 in the year 2021, which could result in an estimated penalty of $179,861. 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 Lehigh Valley Hospital-Schuylkill S. Jackson Street during the period was 0/10. Dexur is an approved purchaser of CMS Medicare claims data and based on our simulator, we estimate that Lehigh Valley Hospital-Schuylkill S. Jackson Street can avoid VBP penalties by reducing MSPB Costs by 12.9%.

Lehigh Valley Hospital-Schuylkill S. Jackson Street’s average MSPB cost per episode (risk adjusted and price standardized) during the period of January 2019 to December 2019 was $23,224. The average cost of Post Index Stays was $11,535 with a total of 1,969 episodes.

Dexur Simulator for MSPB Cost Reduction

Lehigh Valley Hospital-Schuylkill S. Jackson Street can achieve the break-even VBP adjustment factor of 1 by earning 6 points in MSPB and thereby avoid VBP penalties to achieve incentives. 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 535 episodes and reduce the average MSPB cost by 12.9% and improve the MSPB performance rate to 0.911. This increases the VBP adjustment factor to 1.0013 and helps attain an incentive of $27.8k.

A much higher reduction in Post Index stay costs can further increase VBP incentives. For example, a 39% reduction in post index stay costs can reduce the average MSPB cost by 14.3%, and earn a VBP Adjustment Factor of 1.0029, thereby achieving an incentive of $62.0k.