Understanding The Role Played By Medicare's Patient Experience Points System In Hospital Reimbursement

In 2015 the Medicare Hospital Value-Based Purchasing (VBP) program paid hospitals $1.4 billion in performance-based incentives; 30 percent of a hospital's VBP Total Performance Score was based on performance on Hospital Consumer Assessment of Healthcare Providers and Systems (HCAHPS) measures of the patient experience of care. Hospitals receive patient experience points based on three components: achievement, improvement, and consistency. For 2015 we examined how the three components affected reimbursement for 3,152 hospitals, including their impact on low-performing and high-minority hospitals. Achievement accounted for 96 percent of the differences among hospitals in total HCAHPS points. Although achievement had the biggest influence on payments, payments related to improvement and consistency were more beneficial for low-performing hospitals that disproportionately served minority patients. The findings highlight the important inducement that paying for improvement provides to initially low-performing hospitals to improve care and the role this incentive structure plays in minimizing resource redistributions away from hospitals serving minority populations. Additional emphasis on improvement points could benefit hospitals serving disadvantaged patients.