By: Sampath Kumar  May. 28, 2021

North Carolina Baptist Hospital in Winston-Salem, NC, reported a CMS Value Based Purchasing (VBP) adjustment factor of 0.9927 in the year 2021, which could result in an estimated penalty of $807,917. 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 North Carolina Baptist Hospital during the period was 1/10. Dexur is an approved purchaser of CMS Medicare claims data and based on our simulator, we estimate that North Carolina Baptist Hospital can avoid VBP penalties by reducing MSPB Cost by 6.5%.

North Carolina Baptist Hospital’s average MSPB cost per episode (risk adjusted and price standardized) during the period of January 2019 to December 2019 was $21,639.The average cost of Post Index Stays was $8,956 with a total of 6,076 episodes.

Dexur Simulator for MSPB Cost Reduction

North Carolina Baptist Hospital 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:

• Reduction in Rehospitalizations: 31% reduction in rehospitalizations causes 3.0% reduction in MSPB cost and impacts 259 episodes.

• Shift from SNF discharge to Home: 31% shift causes 1.8% reduction in average MSPB cost and impacts 313 episodes.

• Shift from SNF discharge to Home Health: 31% shift causes 1.4% reduction in average MSPB cost and impacts 313 episodes.

• Shift from Home Health to Home: 31% shift causes 0.3% reduction in average MSPB cost and impacts 230 episodes.

In Summary, the four levers impact 1,115 episodes and reduce the average MSPB cost by 6.5% and improve the MSPB performance rate to 0.911. This increases the VBP adjustment factor to 1.0007 and helps achieve an incentive of $77.4k

A much higher reduction in Post Index stay costs can further improve VBP incentives. For example, a 38% reduction in post index stay costs can reduce the average MSPB cost by 7.9%, and earn a VBP Adjustment Factor of 1.0023, thereby achieving an incentive of $254.5k.