NYC Health + Hospitals/Harlem in New York, NY, can earn VBP incentives by reducing MSPB costs by 17.3%

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By: Sharath Joji  Jun. 07, 2021

NYC Health + Hospitals/Harlem in New York, NY, reported a CMS Value Based Purchasing (VBP) Adjustment Factor of 0.9884 in the year 2021, which could result in an estimated penalty of $113,800. 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 NYC Health + Hospitals/Harlem during the period was 0/10. Dexur is an approved purchaser of CMS Medicare claims data and based on our simulator, we estimate that NYC Health + Hospitals/Harlem can avoid VBP penalties by reducing MSPB Costs by 17.3%.

NYC Health + Hospitals/Harlem’s average MSPB cost per episode (risk adjusted and price standardized) during the period of January 2019 to December 2019 was $23,938. The average cost of Post Index Stays was $19,112 with a total of 588 episodes.

Dexur Simulator for MSPB Cost Reduction

NYC Health + Hospitals/Harlem can achieve the break-even VBP adjustment factor of 1 by earning 8 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 173 episodes and reduce the average MSPB cost by 17.3% and improve the MSPB performance rate to 0.891. This increases the VBP adjustment factor to 1.0013 and helps attain an incentive of $12.7k.

A much higher reduction in Post Index stay costs can further increase VBP incentives. For example, a 54% reduction in post index stay costs can reduce the average MSPB cost by 19.0%, and earn a VBP Adjustment Factor of 1.0029, thereby achieving an incentive of $28.4k.