§ 412.160 Definitions for the Hospital Value-Based Purchasing (VBP) Program. As used in this section and in §§ 412.161 through 412.168: *Achievement threshold (or achievement performance standard)* means the median (50th percentile) of hospital performance on a measure during a baseline period with respect to a fiscal year, for Hospital VBP Program measures other than the measures in the Efficiency and Cost Reduction domain, and the median (50th percentile) of hospital performance on a measure during the performance period with respect to a fiscal year, for the measures in the Efficiency and Cost Reduction domain.
*Applicable percent* means the following: ( 1 ) For FY 2013, 1.0 percent;
( 2 ) For FY 2014, 1.25 percent;
( 3 ) For FY 2015, 1.50 percent;
( 4 ) For FY 2016, 1.75 percent; and
( 5 ) For FY 2017 and subsequent fiscal years, 2.0 percent.
*Base operating DRG payment amount* means the following: ( 1 ) With respect to a subsection (d) hospital (as defined in section 1886(d)(1)(B) of the Act), the wage-adjusted DRG operating payment plus any applicable new technology add-on payments under subpart F of this part. This amount is determined without regard to any payment adjustments under the Hospital Readmissions Reduction Program, as specified under § 412.154. This amount does not include any additional payments for indirect medical education under § 412.105, the treatment of a disproportionate share of low-income patients under § 412.106, outliers under subpart F of this part, or a low volume of discharges under § 412.101.
( 2 ) With respect to a Medicare-dependent, small rural hospital that receives payments under § 412.108(c) or a sole community hospital that receives payments under § 412.92(d), the wage-adjusted DRG operating payment plus any applicable new technology add-on payments under subpart F of this part. This amount does not include any additional payments for indirect medical education under § 412.105, the treatment of a disproportionate share of low-income patients under § 412.106, outliers under subpart F of this part, or a low volume of discharges under § 412.101. With respect to a Medicare-dependent, small rural hospital that receives payments under § 412.108(c) (for discharges occurring in FY 2013) or a sole community hospital that receives payments under § 412.92(d), this amount also does not include the difference between the hospital-specific payment rate and the Federal payment rate determined under subpart D of this part.
*Benchmark* means the arithmetic mean of the top decile of hospital performance on a measure during the baseline period with respect to a fiscal year, for Hospital VBP Program measures other than the measures in the Efficiency and Cost Reduction domain, and the arithmetic mean of the top decile of hospital performance on a measure during the performance period with respect to a fiscal year, for the measures in the Efficiency and Cost Reduction domain.
*Cited for deficiencies that pose immediate jeopardy* means that, during the applicable performance period, the Secretary cited the hospital for immediate jeopardy on at least three surveys using the Form CMS-2567, Statement of Deficiencies and Plan of Correction. CMS assigns an immediate jeopardy citation to a performance period as follows: ( 1 ) If the Form CMS-2567 only contains one or more EMTALA-related immediate jeopardy citations, CMS uses the date that the Form CMS-2567 is issued to the hospital;
( 2 ) If the Form CMS-2567 only contains one or more Medicare conditions of participation immediate jeopardy citations, CMS uses the survey end date generated in ASPEN; and
( 3 ) If the Form CMS-2567 contains both one or more EMTALA-related immediate jeopardy citations and one or more Medicare conditions of participation immediate jeopardy citations, CMS uses the survey end date generated in ASPEN.
*Domain* means a grouping of measures used for purposes of calculating the Total Performance Score for each hospital with respect to a fiscal year.
*Domain score* means the total number of points awarded to a hospital for a domain.
*Health equity adjustment bonus points* means the points that a hospital can earn for a fiscal year based on its performance and proportion of inpatient stays for patients with dual eligibility status.
*Hospital* means a hospital described in section 1886(d)(1)(B) of the Act, but does not include a hospital, with respect to a fiscal year, for which one or more of the following applies: ( 1 ) The hospital is subject to the payment reduction under section 1886(b)(3)(B)(viii)(I) of the Act for the fiscal year;
( 2 ) The Secretary cited the hospital for deficiencies that pose immediate jeopardy to the health or safety of patients during the performance period that applies with respect to the fiscal year;
( 3 ) There are not a minimum number of measures that apply to the hospital for the performance period for the fiscal year; or
( 4 ) There are not a minimum number of cases for the measures that apply to the hospital for the performance period for the fiscal year.
*Immediate jeopardy* has the same meaning as that term is defined in § 489.3 of this chapter.
*Improvement threshold* (or improvement performance standard) means an individual hospital's performance level on a measure during the baseline period with respect to a fiscal year.
*Linear Exchange Function* is the means to translate a hospital's total performance score into a value-based incentive payment percentage such that: ( 1 ) Each eligible hospital's value-based incentive payment percentage is based on its total performance score; and
( 2 ) The total amount of value-based incentive payments to all hospitals in a fiscal year is equal to the total amount available for value-based incentive payments in such fiscal year.
*Measure performance scaler* means the sum of the points awarded to a hospital for each domain for the fiscal year based on the hospital's performance on the measures in those domains.
*Performance period* means the time period during which data are collected for the purpose of calculating hospital performance on measures with respect to a fiscal year.
*Performance standards* are the levels of performance that hospitals must meet or exceed in order to earn points under the Hospital VBP Program, and are calculated with respect to a measure for a fiscal year no later than 60 days prior to the start of the performance period for that measure for that fiscal year. The performance standards for a measure may be updated as follows: ( 1 ) To make a single correction to correct a calculation error, data issue, or other problem that would significantly change the performance standards; or
( 2 ) To incorporate nonsubstantive technical updates made to the measure between the time that CMS first displays the performance standards for that measure for a fiscal year and the time that CMS calculates hospital performance on that measure at the conclusion of the performance period for that measure for a fiscal year.
*Total Performance Score* means the numeric score awarded to each hospital based on its performance under the Hospital VBP Program with respect to a fiscal year.
*Underserved multiplier* means the mathematical result of applying a logistic function to the number of hospital inpatient stays for patients in the underserved population out of the hospital's total Medicare inpatient population during the calendar year that is 2 years prior to the applicable fiscal year.
*Underserved population,* as used in this section, means hospital inpatients who are Medicare beneficiaries and also dually eligible for full Medicaid benefits during the month of discharge or, if a patient died during that month, during the previous month.
*Value-based incentive payment adjustment factor* is the number that will be multiplied by the base operating DRG payment amount for each discharge from a hospital, during a fiscal year, in order to adjust the hospital's payment as a result of its performance under the Hospital VBP Program.
*Value-based incentive payment percentage* means the percentage of the base operating DRG payment amount for each discharge that a hospital has earned with respect to a fiscal year, based on its Total Performance Score for that fiscal year.
*Wage-adjusted DRG operating payment* is the applicable average standardized amount adjusted for— ( 1 ) Resource utilization by the applicable MS-DRG relative weight;
( 2 ) Differences in geographic costs by the applicable area wage index (and by the applicable cost-of-living adjustment for hospitals located in Alaska and Hawaii); and
( 3 ) Any applicable payment adjustment for transfers under § 412.4(f).
[77 FR 53674, Aug. 31, 2012, as amended at 78 FR 50967, Aug. 19, 2013; 79 FR 50354, Aug. 22, 2014; 81 FR 57268, Aug. 22, 2016; 86 FR 45520, Aug. 13, 2021; 88 FR 59333, Aug. 28, 2023]