The Financial Effect of Value-Based Purchasing and the Hospital Readmissions Reduction Program on Safety-Net Hospitals in 2014: A Cohort Study.
BACKGROUND
Medicare's value-based purchasing (VBP) and the Hospital Readmissions Reduction Program (HRRP) could disproportionately affect safety-net hospitals.


OBJECTIVE
To determine whether safety-net hospitals incur larger financial penalties than other hospitals under VBP and HRRP.


METHODS
Cross-sectional analysis.


METHODS
United States in 2014.


METHODS
3022 acute care hospitals participating in VBP and the HRRP.


METHODS
Safety-net hospitals were defined as being in the top quartile of the Medicare disproportionate share hospital (DSH) patient percentage and Medicare uncompensated care (UCC) payments per bed. The differences in penalties in both total dollars and dollars per bed between safety-net hospitals and other hospitals were estimated with the use of bivariate and graphical regression methods.


RESULTS
Safety-net hospitals in the top quartile of each measure were more likely to be penalized under VBP than other hospitals (62.9% vs. 51.0% under the DSH definition and 60.3% vs. 51.5% under the UCC per-bed definition). This was also the case under the HRRP (80.8% vs. 69.0% and 81.9% vs. 68.7%, respectively). Safety-net hospitals also had larger payment penalties ($115 900 vs. $66 600 and $150 100 vs. $54 900, respectively). On a per-bed basis, this translated to $436 versus $332 and $491 versus $314, respectively. Sensitivity analysis setting the cutoff at the top decile rather than the top quartile decile led to similar conclusions with somewhat larger differences between safety-net and other hospitals. The quadratic fit of the data indicated that the larger effect of these penalties is in the middle of the distribution of the DSH and UCC measures.


CONCLUSIONS
Only 2 measures of safety-net status were included in the analyses.


CONCLUSIONS
Safety-net hospitals were disproportionately likely to be affected under VBP and the HRRP, but most incurred relatively small payment penalties in 2014.


BACKGROUND
Patient-Centered Outcomes Research Institute.
Matlin
M
Gilman
Jason M
JM
Hockenberry
E Kathleen
EK
Adams
Arnold S
AS
Milstein
Ira B
IB
Wilson
Edmund R
ER
Becker
D015331:Cohort Studies; D003430:Cross-Sectional Studies; D006801:Humans; D006278:Medicare / Q000191:economics*; D010359:Patient Readmission / Q000191:economics*; D064876:Safety-net Providers / Q000191:economics*; D017664:Uncompensated Care / Q000191:economics; D014481:United States; D062505:Value-Based Purchasing