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What is staying the same from PYs 2024-2025?

Similar to the PY 2024-2025 cycle, hospitals will continue to be scored out of 10 points maximum. They will also continue to be evaluated on their risk-adjusted, price-standardized total episode spending for a selected condition; their rate for a selected value metric; and their engagement in MVC activities. Hospitals can continue to select coronary artery bypass graft (CABG), congestive heart failure (CHF), or chronic obstructive pulmonary disorder (COPD) for episode spending scoring. Similarly, most of the value metric options remain the same with changes in definition for only the preoperative testing and sepsis value metrics.

Each hospital’s episode spending and value metric selections will continue to be scored on improvement compared to the hospital’s own past performance as well as on achievement relative to an MVC cohort. Each hospital will continue to be awarded the greater of the two scores, either improvement or achievement, which are calculated using Z-scores. Cohort designation is still based on bed size, critical access status, and case mix index.

What is changing for PYs 2026-2027?

While the overall program structure will be scored to a maximum of 10 points (Figure 2), the scoring within the components varies from PY 2024-2025. The PY 2026-2027 cycle is made up of a maximum of three points from an episode spending metric, a maximum of four points from a value metric, a maximum of two points from engagement activities, and a maximum of one point from a health equity measure (a new component). For this cycle, hospitals will need to select an episode spending condition and a value metric. The health equity and engagement activities do not require selection. Eligibility for selections are determined based on case counts. To be eligible to select a condition or value metric, a hospital must have at least 20 cases in the full baseline year of 2023.

Although three episode spending conditions offered in PYs 2024-2025 will continue to be options in PYs 2026-2027 (i.e., CABG, CHF, COPD), MVC retired colectomy (non-cancer), joint replacement, and pneumonia from its episode spending menu. In addition, MVC is adding percutaneous coronary intervention (PCI) as an episode spending condition. The full menu of episode spending conditions for PYs 2026-2027 will be CABG, CHF, COPD, and PCI.

MVC is also modifying two of its value metrics. The sepsis value metric in PYs 2026-2027 will be 14-day follow-up after sepsis rather than 30-day risk-adjusted readmissions after sepsis. This change is more closely aligned with the HMS incentive for increasing post-discharge care coordination. The preoperative testing value metric definition will also be different in PYs 2026-2027. The first change is that all three included procedures (i.e., laparoscopic cholecystectomy, inguinal hernia repair, and lumpectomy) will be combined for scoring. Previously, each procedure was treated separately, and hospitals were scored on the best of the three. The second change is that lab testing will be included in the definition. Previously, preoperative lab tests such as complete blood count, metabolic panel, coagulation studies, and urinalysis were not included in calculating the testing rate prior to the three procedures. Going forward, MVC will identify preoperative testing that occurs in the 30 days prior to MVC-defined laparoscopic cholecystectomy, inguinal hernia repair, and lumpectomy for any of the following tests: complete blood count, basic metabolic panel, comprehensive metabolic panel, coagulation studies, electrocardiogram, echocardiogram, cardiac stress test, chest x-ray, pulmonary function test, and urinalysis.

Brand new in PY 2026-2027 will be the addition of a claims-based health equity measure, for which hospitals will be assessed using an index of disparity (Figure 3). The index of disparity (IOD) will measure the spread of 30-day risk-adjusted all cause readmission rates for medical conditions among different payer categories within their hospital. Scoring for this measure will begin in PY 2026, but hospitals will begin to see sample scoring for this measure on their PY 2025 scorecards. Hospitals can earn the health equity point through both improvement and achievement pathways, similar to their episode spending and value metric selections.

Figure 2 illustrates the breakdown of scoring on average by each program component (i.e., episode spending metric, value metric, engagement points). Hospitals could earn up to four points each for their episode spending and value metric selections, and up to two points for engagement activities. Across the collaborative, the average points scored was higher for value metrics (2.7) than for episode spending (2.5).

Figure 3 illustrates the breakdown of average points by episode spending condition. Consistent with previous years, joint replacement was the highest scoring condition with an average of 3.1 points. Much of the recent success observed for the joint replacement condition could be attributed to the shift from post-acute care in skilled nursing facilities (SNF) to home health and the move towards outpatient surgeries; however, with most joint replacements now occurring in outpatient settings there is less savings to be achieved from such shifts going forward. Congestive heart failure and pneumonia were the lowest scoring conditions with hospitals earning less than two points on average for each.

Figure 4 illustrates the breakdown of average points by value metric. The highest scoring value metric was preoperative testing with 3.4 points followed by 90-day cardiac rehab utilization after percutaneous coronary intervention (PCI) with 2.8 points. For both of these value metrics, hospitals have access to additional support and resources via MVC’s value-based improvement initiatives, including the RITE-Size (Right-Sizing Testing before Elective Surgery) initiative and the Michigan Cardiac Rehab Network (MiCR) offerings. The lowest scoring value metric was 7-day follow-up rates after pneumonia (2.1).

Figure 2 below illustrates the breakdown of average points by condition. Hospitals could earn up to five points for each condition. Consistent with previous years, joint replacement was the highest scoring condition with an average of 4.6 points. Much of the success observed for the joint replacement condition can be attributed to the shift from post-acute care in skilled nursing facilities (SNF) to home health and the move towards outpatient surgeries. Pneumonia was the lowest scoring condition with hospitals earning less than two points on average.

The MVC Component of the BCBSM P4P Program evaluates each participating hospital’s average 30-day, risk-adjusted, price-standardized episode payments for their two selected conditions through two methods. One way that hospitals earn points is by reducing their payments from the baseline period (which included index admissions in 2019) to the performance period (which included index admissions in 2021). These are termed “improvement points.” Alternatively, hospitals can earn points by being less expensive than the other hospitals in their cohort. These are referred to as “achievement points.” The MVC cohorts are groups of hospitals determined to be peers using bed size and case mix index.

While participants are scored on both improvement and achievement, members receive the higher of the two scores for each condition. Hospitals were also eligible to receive a bonus point for each condition by completing a questionnaire designed to inform MVC of member hospital quality improvement practices. While 12 points were available, a maximum of 10 points were awarded to participating members. Figure 2 shows the distribution of total points earned by hospitals for PY 2022.

On average, hospitals earned 7.7 points total, a nearly one-point increase from the average of 6.8 points in PY 2021. A majority (98.7%) of hospitals earned at least one of the two possible participation bonus points. The condition with the highest average point total was joint replacement at 4.6 points with spine coming in second at 3.4 points (Figure 3).