The MVC Coordinating Center administers the MVC Component of the BCBSM P4P Program, which scores participating hospitals on their improvement compared to baseline and achievement relative to peers for selected MVC metrics. As a general rule, MVC has historically provided estimates rather than frozen performance targets for specific episode spending and value metric point thresholds. This page seeks to provide clarity on the rationale for using shifting rather than frozen targets.
1. MVC Data Changes Over Time
New data from Medicare or other payers may result in changes to standardized prices or risk adjustments. Similarly, improvements in billing practices or claims adjustments may necessitate methodology improvements after metric selection.
For episode spending metrics, price standardization "levels the playing field" across all providers using the Medicare Fee-for-Service (FFS) Fee Schedule and all available Medicare data. Therefore, the reported episode spending values are not equal to the payments received by hospitals and can be impacted by changes to the FFS schedule over time.
$1 on the Registry
$1 Paid to the Hospital
$1 on the Registry
1 Unit of Utilization
2. Avoiding Apples-to-Oranges Comparisons
Allowing performance payments/rates to vary while holding baseline payments/rates constant runs the risk of comparing a hospital's performance calculated with different methodologies from baseline calculations that can penalize hospitals.
To see how such comparisons can harm hospitals, review the impact of shifting vs. frozen targets in the following pricing change example.
Hospital A
- Baseline Total Episode Payment = $20,000
- MVC All Standard Deviation (SD) from Baseline = $6,000
In order to earn maximum improvement points, Hospital A needs a performance year total episode payment of $18,800 (value determined using below formula).
[BASELINE Total Episode Payment – (MVC All SD from Baseline*0.2)]
During the program year, MVC learns that CMS changed how skilled nursing facility claims are billed and has to alter its price standardization methodology to account for the CMS policy change, causing both the baseline payment and the performance payment to increase by $1,000.
Shifting Targets Example
Before Data Update
After Data Update
Shifting Targets Result
Maximum Improvement Target = $20,000 - ($6,000)(0.2) = $18,800
Performance Year Payment = $18,500
Maximum Improvement Target = $21,000 - ($6,000)(0.2) = $19,800
Performance Year Payment = $19,500
With shifting targets, Hospital A is not penalized because of this data update, and the maximum available improvement points are earned.
Frozen Targets Example
Before Data Update
After Data Update
Frozen Targets Result
Maximum Improvement Target = $20,000 - ($6,000)(0.2) = $18,800
Performance Year Payment = $18,500
Maximum Improvement Target = $20,000 - ($6,000)(0.2) = $18,800
Performance Year Payment = $19,500
With frozen targets, the baseline stays the same, but the performance year is subject to the data update. Hospital A must meet a greater reduction in utilization and does not earn the maximum available improvement points.