Code of Federal Regulations Title 42. Public Health § 42.412.162 Process for reducing the base operating DRG payment amount and applying the value-based incentive payment amount adjustment under the Hospital Value–Based Purchasing (VBP) Program

(1) Available amount. The value-based incentive payment amount for a discharge is the portion of the payment amount that is attributable to the Hospital VBP Program. The total amount available for value based incentive payments to all hospitals for a fiscal year is equal to the total amount of base-operating DRG payment reductions for that fiscal year, as estimated by the Secretary.

(2) Calculation of the value-based incentive payment amount. The value-based incentive payment amount is calculated by multiplying the base operating DRG payment amount by the value-based incentive payment percentage.

(3) Calculation of the value-based incentive payment percentage. The value-based incentive payment percentage is calculated as the product of:  the applicable percent as defined in § 412.160, the hospital's Total Performance Score divided by 100, and the exchange function slope.