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Essential Hospitals Face Larger VBP Penalties

Essential hospitals faced larger penalties and smaller bonuses than hospitals overall in the first three years of the Hospital Value-Based Purchasing (VBP) Program, according to a recently released report by the U.S. Government Accountability Office (GAO). While GAO found that essential hospitals providing significant care to the poor were able to narrow this gap over the course of the three-year study, there were no changes in overall hospital quality performance during the program’s initial years. And, bonuses and penalties amounted to less than 0.5 percent of Medicare payments each year.

GAO interviewed select hospital officials who described certain factors not specifically linked to the implementation of the VBP Program, such as information technology, as affecting their hospital’s quality improvement efforts. GAO also acknowledged that future trends may emerge as new quality measures are added and the weight assigned to clinical process measures is reduced.

If you have questions or concerns, please contact Erin O’Malley, director of policy, at or 202.585.0127.


About the Author

Matt Buechner is the policy and advocacy associate for America's Essential Hospitals.


MG: Erin, my edits are in PINK. My only other edit is the phrasing in last sentence "GAO also cautioned..." as I am not sure that's the best wording - looking to you to maybe fill in a better word for "cautioned" because it sounds a bit like a warning rather than a note that results may change in the future. Any suggested language would be great, thanks!

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