What is the purpose of the Hospital Value-Based Purchasing (VBP) program?

• A. To set hospital salaries based on national averages.
• B. To reward hospitals with the highest patient satisfaction scores regardless of quality.
• C. To adjust hospital payments based on performance on selected quality and efficiency measures.
• D. To standardize DRG weights across hospitals.

Answer: (C)

Value-based payment ties what a hospital is paid to how well it performs on quality and efficiency. The Hospital Value-Based Purchasing program is a CMS initiative that adjusts Medicare payments to hospitals based on performance across a defined set of quality measures—covering clinical outcomes, patient safety, care coordination, and patient experience. A portion of the base payment is withheld and then redistributed to hospitals in proportion to their performance, so higher performers can receive larger increases while lower performers see smaller payments or withholds. This approach incentivizes delivering higher-value care rather than rewarding volume or satisfaction alone, and it’s distinct from setting salaries or standardizing DRG weights.