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Be Rewarded: Build a Surgical Home to Reap Value Based Purchasing Incentives

Posted by Barbara McClenathan on Jan 31, 2019 11:00:00 AM
Barbara McClenathan
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Traditionally, hospitals were paid by insurance providers or government agencies based on volume; i.e., the number of services or procedures provided. Every test, visit, treatment or hospital stay equaled reimbursement in a fee-for-service model, regardless of patient outcome.

Today the healthcare consumer demands outstanding care and the industry is rapidly shifting to a system that reward providers and hospitals based upon value not quantity.  Value-based care encourages providers to deliver quality care, and an ideal patient experience at a reasonable cost.

What Is Hospital Value Based Domains?

CMS outlined 2019 hospital quality performance in four domains: Clinical Care, Person and Community Engagement, Safety, and Efficiency and Cost Reduction.

  1. The Clinical Care Domain is comprised of three mortality measures and one surgical complication measure that are weighted together at 25% of the TPS (Total Performance Score)
  2. The Person and Community Engagement Domain is comprised of eight dimensions of the Hospital Consumer Assessment of Healthcare Providers and Systems (HCAHPS) patient experience and survey that are weighted together at 25% of the TPS
  3. The Safety Domain is comprised of five healthcare-associated (HAI) measures and one perinatal care measure that are weighted together at 25% of the TPS
  4. The Efficiency and Cost Reduction Domain is comprised of one Medicare spending measure that is weighted at 25% of the TPS (CMS Centers for Medicare and Medicaid Services, 2018)

 How Are Hospitals Paid in A Value Based Payment (VBP) Model?

The CMS Hospital VBP Program incentive payments are funded through a reduction in Medicare payment amounts for each hospital inpatient discharge by 2%. Funds are redistributed based on Total Performance Scores (TPS), comparing other hospitals. A hospital may achieve its 2% reduction, plus additional incentive payment, maintain a 2% reduction or have additional reductions. Hospitals that achieve high levels of patient satisfaction and exemplary outcomes are rewarded through VPB reimbursement incentives. (CMS Centers for Medicare and Medicaid Services, 2018)

What Can Hospitals Do to achieve Value-Based Care?

A comprehensive Surgical Home Program is one of the best conduits for hospitals, physicians, nurses and support personnel in implementing the best high-value practices in a patient care continuum. This new model must have a well defined structure, with emphasis on providing proven, cost- efficient, and outcomes driven solutions. A service line-based Surgical Home standardizes care within the three phases of a care episode; pre-operative preparation, inpatient care and post-acute care.  All phases of care should be carefully measured from a quality, cost and satisfaction perspective.

Here are recommended steps in implementing a successful Surgical Home:

  • Pre-surgical preparation
    • Employ a dedicated Nurse Navigator to coordinate services across the continuum of care, from the point of scheduling to post-acute follow up
    • Initiate discharge activities that include both pre-habilitation and proactive discharge planning for home recovery or post-acute admission
    • Anesthesia providers and nursing staff should develop an consistent evidence-based patient optimization and evaluation system based on the patient's medical conditions and planned procedure; this includes reaching consensus on co-morbidity driven protocols for managing specific patient conditions (such as diabetes or anemia)
    • Establish evidence-based care pathways that outline procedure-based, standardized service and care plans.
    • Patients should be provided an individualized comprehensive plan that includes education to achieve optimal health prior to surgery as well as education for self-care post operatively


  • Perioperative and Inpatient Care
    • Carefully chosen surgeons, anesthesioligist, hospitalists, nurses and support staff should collaborate and gain consensus on intra- and postoperative care protocols.
    • Implement a navigator-led Daily Huddle that provides oversight and management of this patient care continuum; this includes review of patient readiness for surgery, intra-operative and post operative management (continuous coordination of care).
    • Develop procedure-based, measured care protocols, that includes standardized enhanced recovery (ERAS), the use of multimodal pain management techniques, early post-operative feeing and ambulation, etc.
  • Post-acute care
    • Careful coordination for transition of care following discharge, initiated during the pre-operative planning phase; avoids costly complications, i.e., readmission, SSIs, etc.
    • Developing a variety of appropriate pathways following discharge; 1) discharge home with physical therapy, home health nursing follow-up and continual patient monitoring by the surgeon and his staff, 2) Specialized nursing facility (SNF) care, with continual oversight of progress, etc

This comprehensive surgical home approach has enabled many organizations to achieve dramatic improvements in quality, patient satisfaction, outcomes and costs, facilitating high total performance scores that drive value-based care.


CMS Centers for Medicare and Medicaid Services. (2018, July). Understanding the Fiscal Year 2019 Hospital Value-Based Purchasing Program. Retrieved from CMS.gov: https://www.cms.gov/newsroom/fact-sheets/cms-hospital-value-based-purchasing-program-results-fiscal-year-2019


Tags: Value-based incentive payment, Value-based care, Surgical Volume, provider

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