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Medicare Spending Per Beneficiary (MSPB) Measure Overview

Publicly reporting the price-standardized, risk-adjusted MSPB measure

The Hospital Value-Based Purchasing (VBP) program is designed to improve the efficiency and quality of care by providing financial incentives to hospitals based on their performance on selected quality measures. The Centers for Medicare & Medicaid Services (CMS) has finalized this measure for inclusion in the Hospital VBP Program beginning with the Fiscal Year (FY) 2015 program year.

As part of the Hospital VBP program, the Medicare Spending Per Beneficiary (MSPB) Measure assesses Medicare Part A and Part B payments for services provided to a Medicare beneficiary during a spending-per-beneficiary episode that spans from three days prior to an inpatient hospital admission through 30 days after discharge. The payments included in this measure are price-standardized and risk-adjusted. Price standardization removes sources of variation that are due to geographic payment differences such as wage index and geographic practice cost differences, as well as indirect medical education (IME) or disproportionate share hospital (DSH) payments. Risk adjustment accounts for variation due to patient health status.

By measuring cost of care through this measure, CMS hopes to increase the transparency of care for consumers and recognize hospitals that are involved in the provision of high-quality care at lower cost to Medicare.

Hospital-Specific Reports

Hospital-Specific Reports (HSRs) will be distributed to participating hospitals via the QualityNet Secure Portal for each data preview period prior to public reporting on Hospital Compare. Each hospital's report provides an overview of the hospital's performance on the MSPB measure and a summary of how hospitals in that hospital's state and in the nation performed. CMS will post updated results for this measure on the Hospital Compare website in October 2016.

Questions and Comments

CMS has contracted with Econometrica Inc. to support the implementation of this measure. Questions about the MSPB measure should be sent to Econometrica Inc. at:

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