Dexur analyzed Medicare Claims data to evaluate Value-Based Purchasing (VBP) payment adjustment and found that Ocala Regional Medical Center had the highest projected negative financial impact of $1.2m. For FY 2020, their VBP adjustment factor was 0.986, which translated into a payment adjustment percentage of -1.4. The adjustment amount has gradually increased, almost by 30%, since an adjustment of $830,288 was made in 2018 against Ocala’s favor.

The VBP adjustment factor is derived from a hospital’s Total Performance Score (TPS) for 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.

Dexur further replicated CMS algorithms to calculate Ocala’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. During this period, the hospital’s MSPB cost per episode for all DRGs was $19,093. Ocala’s TPS for FY 2020 was 13.5, markedly 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 shows that five DRG groups constituted almost 27% of the total hospital payments. The following table shows the cost share of top DRG groups for Ocala.

Examination of DRGs within a detailed group showed that the MSPB average of DRG 515: Other Musculoskeletal System And Connective Tissue O.R. Procedures with Major Complication or Comorbidity, staggeringly grew by 97% from $36,082 in 2018 to $71,225 in 2019. The largest share of expenses were incurred by claims from index hospitalization (28%), 30-day post-discharge index hospitalization (34.4%) and SNF cost (37.6%) at $19,967, $24,509 and $26,748 respectively.

For DRG 175: Pulmonary Embolism with Major Complication or Comorbidity, the average increased by 72% for the same period, rising from $11,546 to $19,834. Index hospitalization had the highest share of cost (48.1%) at $9,544, following post 30-day discharge cost from SNF(25.6%), index hospitalization (22.9%) and HHA (2.8%) claims at $5,070, $4,434 and $549 respectively.

DRG 056: Degenerative Nervous System Disorders with Major Complication or Comorbidity saw the third-highest jump in MSPB cost per episode over the 12-month rolling period. The average cost increased from $17,498 to $28,703, by 64%. Index hospitalization cost (44.8%) per episode was $12,870, highest among all claims included. Post 30-day discharge index hospitalization, SNF and HHA costs were $8,584, $5,648 and $1,226 respectively.

Note: DRG Groups with more than 25 episodes were considered. Not all MSPB claims are shown in the table.

The DRG groups that saw the highest decrease were DRG 082, 438, and 459. MSPB average of DRG 082: Traumatic Stupor and Coma, Coma >1 Hour With Major Complication Or Comorbidity improved by 62% as the cost plummeted from $64,691 in 2018 to $24,324 in 2019. There was a 34% reduction in MSPB average for DRG 438: Disorders Of Pancreas Except Malignancy With Major Complication Or Comorbidity, from $22,023 in 2018 to $14,486. DRG 459:Spinal Fusion Except Cervical With Major Complication Or Comorbidity saw the average decrease by 32% to reach $41,547 in 2019 from $61,196 in 2018.

Note: DRG Groups with more than 25 episodes were considered. Not all MSPB claims are shown in the table.