Medicare Value-Based Payment Programs Raise Hospital Administrative Costs, Study Finds
A study published August 7 in JAMA Health Forum found that participation in mandatory CMS value-based payment programs is associated with significantly higher annual administrative costs for hospitals. Researchers at Brown University School of Public Health analyzed Medicare cost report data from 2006 to 2020 covering 4,332 hospitals, including 2,820 participating in value-based arrangements. The findings suggest that administrative burden from quality reporting, performance tracking, and program compliance may offset financial benefits hospitals seek from value-based contracting.
The study provides quantifiable evidence that value-based payment administrative requirements impose measurable cost burdens on hospitals, a consideration for Medicaid managed care organizations and state agencies designing performance-based contracting arrangements.
Managed Care
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