§412.162. Process for reducing the base operating DRG payment amount and applying the value-based incentive payment amount adjustment under the Hospital Value-Based Purchasing (VBP) Program.
42 C.F.R. § 412.162
General. If a hospital meets or exceeds the performance standards that apply to the Hospital VBP Program for a fiscal year, CMS will make value-based incentive payments to the hospital under the requirements and conditions specified in this section.
Value-based incentive payment amount.
Available amount. The value-based incentive payment amount for a discharge is the portion of the payment amount that is attributable to the Hospital VBP Program. The total amount available for value based incentive payments to all hospitals for a fiscal year is equal to the total amount of base-operating DRG payment reductions for that fiscal year, as estimated by the Secretary.
Calculation of the value-based incentive payment amount. The value-based incentive payment amount is calculated by multiplying the base operating DRG payment amount by the value-based incentive payment percentage.
Calculation of the value-based incentive payment percentage. The value-based incentive payment percentage is calculated as the product of all of the following:
The applicable percent as defined in § 412.160.
For fiscal years before FY 2026, the hospital's Total Performance Score divided by 100; or
Beginning with FY 2026, the hospital's Total Performance Score divided by 110; and
The linear exchange function slope.
Methodology to calculate the value-based incentive payment adjustment factor. The value-based incentive payment adjustment factor for each discharge is determined by subtracting the applicable percent as specified in § 412.160 from the value-based incentive payment percentage and then adding that difference to one.
Notes, amendments, and revision history
Amendments
[77 FR 53674, Aug. 31, 2012, as amended at 88 FR 59333, Aug. 28, 2023]
Source
Source: 77 FR 53674, Aug. 31, 2012, unless otherwise noted.
Authority
Authority: 42 U.S.C. 1302 and 1395hh.
Source
Source: 50 FR 12741, Mar. 29, 1985, unless otherwise noted.
Amendments
[77 FR 53674, Aug. 31, 2012, as amended at 88 FR 59333, Aug. 28, 2023]