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Value Based Purchasing in Health Reform

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Value Based Purchasing (PPACA Section 3001/VBP) is a payment methodology that rewards quality of care through payment incentives and transparency. The Final Rule for the Hospital Value Based Purchasing Program, which is the focus of this article, states that the over¬arching goal of the demonstration projects and quality reporting programs is to transform Medicare from a passive payer of claims to an active purchaser of quality health care for its beneficiaries. The transition from payment for volume to payment for value is occurring, and the Medicare Inpatient Value Based Purchasing Program is the maiden voyage that will help chart the course of change.

As health reform continues to unfold, there will be an exponential increase in the number of quality metrics that providers are required to report, and increasingly perfor¬mance on these metrics will be tied to payment for services rendered. The Hospital Inpatient Value Based Purchasing Program is the maiden voyage for mandated value based payment methodologies, however the course it charts will quickly be followed by a fleet of similar programs including accountable care organizations (ACOs), the medical home, bundled payments, readmissions, and hospital acquired conditions (HACs).

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