Renown Regional Medical Center is projected to have a negative VBP Adjustment of almost $180k



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By: Parvathy Rajagopal  Oct. 09, 2020

Dexur analyzed the Medicare Claims data to evaluate Value-Based Purchasing(VBP) payment adjustment and found that Renown Regional Medical Center in Reno, Nevada, had a projected negative financial impact of $178,000 in 2020. During FY 2020, the VBP adjustment factor was 0.99 which reflected a VBP payment adjustment percentage of -0.16.

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 Renown Regional Medical Center
Domain Measure Achievements Point Improvement Point Measure Score
Efficiency and Cost Reduction MSPB 0 out of 10 0 out of 9 0 out of 10
Clinical Outcomes AMI Mortality 7 out of 10 4 out of 9 7 out of 10
Clinical Outcomes HF Mortality 0 out of 10 0 out of 9 0 out of 10
Clinical Outcomes Pneumonia Mortality 5 out of 10 6 out of 9 6 out of 10
Clinical Outcomes THA/TKA Complications 8 out of 10 8 out of 9 8 out of 10
Safety CLABSI 4 out of 10 3 out of 9 4 out of 10
Safety CAUTI 5 out of 10 0 out of 9 5 out of 10
Safety SSI: Colon Surgery 0 out of 10 0 out of 9 0 out of 10
Safety SSI: Hysterectomy 10 out of 10 9 out of 9 10 out of 10
Safety MRSA 5 out of 10 0 out of 9 5 out of 10
Safety CDI 3 out of 10 3 out of 9 3 out of 10

Dexur’s data on CMS was further analyzed to calculate Renown 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 time period for all DRGs was $22,132. The TPS for the FY 2020 was 24.8, which was 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 showed that the top five DRG groups constituted nearly 15% of the total hospital payments. The following table shows the cost-share of the top DRG group in Renown:

DRG Groups with Largest MSPB Cost Contribution for Renown Regional Medical Center
No. Detailed DRG Group DRG Group % of total payment
1 SEPTICEMIA OR SEVERE SEPSIS WITHOUT MV >96 HOURS 5.85%
2 INTRACRANIAL HEMORRHAGE OR CEREBRAL INFARCTION 3.29%
3 HEART FAILURE AND SHOCK 2.01%
4 SIMPLE PNEUMONIA AND PLEURISY 1.60%
5 PERCUTANEOUS CARDIOVASCULAR PROCEDURES WITH DRUG-ELUTING STENT 2.07%

Further examination of the DRG groups showed that the MSPB average of DRG 518: Back and Neck Procedures Except Spinal Fusion with Major Complication or Comorbidity (MCC) or Disc Device or Neurostimulator grew by 145% from $19,359 in 2018 to $47,340 in 2019. The largest share of expense was incurred by index hospitalization(72.6%) at $34,377 followed by 30-day post-discharge index hospitalization(80.7%), and HHA(11.4%) at $10,461 and $1,475 respectively.

The MSPB average for the DRG 056: Degenerative Nervous System Disorders with Major Complication or Comorbidity showed an increase of 128% from $20,239 in 2018 to $46,201. The highest share of expenses were index hospitalization(31.3%), post 30-day discharge index hospitalization(84.3%) and SNF(9.6%) at $14,441, $26,286, and $2,987 respectively.

DRGs with the highest MSPB average increase in 2019, compared to 2018 for Renown
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 518: Back and Neck Procedures Except Spinal Fusion with Major Complication or Comorbidity (MCC) or Disc Device or Neurostimulator $47,340 $34,377 $10,461 ___ $1,475 145%
2 DRG 056: Degenerative Nervous System Disorders with Major Complication or Comorbidity $46,201 $14,441 $26,286 $2,987 $923 128%
3 DRG 471: Cervical Spinal Fusion with Major Complication and Comorbidity $103,203 $59,749 $33,356 $7,926 $1,133 104%
4 DRG 459: Spinal Fusion Except Cervical with Major Complication or Comorbidity(MCC) $67,179 $44,339 $13, 700 $6,727 $750 65%

The DRG 471: Cervical Spinal Fusion with Major Complication and Comorbidity saw that there was an increase of 104% from $55,556 in 2018 to $103,203 in 2019. The largest share of expenses was Post 30-day SNF(86%) at $59,749 which was followed by index hospitalizations(32.5%) and Post 30-day index hospitalization(11.4%) at $33,356 and $7,926 respectively.

For the DRG 459: Spinal Fusion Except Cervical with Major Complication or Comorbidity(MCC) the MSPB average grew by 65% from $40,777 in 2018 to $67,179 in 2019. Index hospitalization(66%), post-30 day index hospitalization(63.5%), and SNF(31.2%) had the expenses of $44,339, $13, 700 and $6,727 respectively.