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Participation in mandatory value-based payment programs is tied to higher annual administrative costs for hospitals, according to a comparative study published in JAMA Health Forum.
The analysis reviewed Medicare cost report data for different types of hospitals that did and did not participate in three mandatory programs initiated by the Centers for Medicare and Medicaid Services (CMS) under the Affordable Care Act—the Hospital Value-Based Purchasing (HVBP) program, Hospital Readmissions Reduction Program (HRRP) and Hospital-Acquired Condition Reduction Program (HACRP).
Also compared were hospitals that did or didn’t participate in the Comprehensive Care for Joint Replacement (CJR) model, for which CMS just the other week finalized an industry-opposed nationwide expansion for 2028.
From 2008 through 2020, researchers found more than $3 billion in aggregated additional administrative costs across more than 2,800 hospitals that participated in the programs, with hundreds of thousands to millions of additional average annual per-facility costs, depending on hospital type and programs participated in.