FFY 2024 IPPS Proposed Rule: Value-Based Purchasing (VBP)
On April 10, the Centers for Medicare & Medicaid Services (CMS) published the FFY 2024 IPPS Proposed Rule (effective for discharges on or after October 1, 2023).” Toyon is pleased to provide our summary of Section 10: FFY 2024 IPPS Proposed Rule: Value-Based Purchasing (VBP) Program.
Unlike FFY 2023, CMS does not propose to suppress the VBP adjustment in FFY 2024. Therefore, providers should prepare to receive the VBP adjustment (positive or negative) for inpatient discharges in FFY 2024. CMS published proxy VBP adjustment factors13 in Table 16A of the Proposed Rule (available here) using historical baseline and performance periods for the FY 2023 VBP program. These proxy factors will not be used for FFY 2024, and CMS will update the proxy VBP factors in Table 16A with more current data14 with the Final Rule release in August. The actual VBP factors will be published subsequently in the Fall 2023 as Table 16B.
All IPPS hospitals are subject to a two percent contribution to the VBP pool, which is estimated to be $1.7B for FFY 2024. CMS is also proposing to modify the VBP scoring methodology beginning in FFY 2026 (based on 2024 activity) to provide an opportunity for 16 Health Equity Adjustment (HEA) bonus points (4 for each domain) based on hospitals’ quality performance with dual-eligibility status (Medicare-Medicaid) beneficiaries. The goal of the HEA bonus points is to provide incentive to hospitals aimed at improving the quality of care in underserved populations.
For more information, please contact Robert Howey at robert.howey@toyonassociates.com.
13 VBP proxy factors were calculated using the December 2022 update to the FY 2022 MedPAR file.
14 VBP updates will use the March 2023 update to the FY 2022 MedPAR file.
Comments are due to CMS by Friday, June 9 via https://www.regulations.gov/ (see instructions under the “submit a comment” tab and reference file code “CMS-1785-P”). Toyon will share our comment letter in the coming weeks.