Pay for Performance

How Value-Based Purchasing Improves Quality

One in seven Medicare patients experience some kind of adverse event during a hospital stay.

In order to transform Medicare from a passive payer of claims to an active purchaser of quality health care for its beneficiaries, in 2011, the Centers for Medicare and Medicaid Services passed the Hospital Inpatient Value-Based Purchasing Program.

Since 2012, as an added incentive for hospitals to become safer, the Affordable Care Act has paid hospitals based on their performance in key quality measurements and how much their performance has improved compared to the previous fiscal year.

How Payment Is Determined

The higher a hospital's performance or improvement during the performance period for a fiscal year, the higher the hospital's value-based incentive payment for the fiscal year will be.

You can find additional information about the program on the Centers for Medicare and Medicaid Services website.