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GAO Recommends CMS Ensure Lower Quality Hospitals Do Not Receive Bonuses under HVBP Program

July 7, 2017—The U.S. Government Accountability Office (GAO) released a June 30 report on the Medicare Hospital Value-based Purchasing (HVBP) program, which aims to improve quality of care and efficiency by creating financial incentives for participating hospitals.

According to the report, some hospitals with high efficiency scores received bonuses, despite having relatively low quality scores under the HVBP. This contradicts the Centers for Medicare and Medicaid Service’s (CMS) intention to reward hospitals that provide high-quality care to Medicare beneficiaries at a lower cost. Further, hospitals missing one or more quality scores were more likely to receive bonuses than hospitals with complete scores because the methodology that CMS used compensates for missing scores by increasing the weights of all the non-missing scores.

To prevent lower quality hospitals from receiving bonuses, GAO recommends that CMS: 1) revise the formula for calculating a hospital’s total performance score or take other actions so that the efficiency score does not disproportionally affect the total performance score; and 2) revise its method of accounting for missing quality scores.

In response, CMS indicated that it would consider these recommendations.


Gayle Lee
Director, Physician Payment & Quality
Telephone: 202-741-6429


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Washington Highlights, a weekly electronic newsletter, features brief updates on the latest legislative and regulatory activities affecting medical schools and teaching hospitals.

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Jason Kleinman
Sr. Legislative Analyst, Govt. Relations
Telephone: 202-903-0806