Decoding the TPS: How Your IPR Impacts Your Final Payment Adjustment

The Home Health Value-Based Purchasing (HHVBP) Model has transformed the way home health agencies (HHAs) are evaluated and reimbursed by Medicare. It introduces a performance-based system where agencies are financially rewarded or penalized based on the quality and efficiency of care they provide. At the heart of this model lies the Total Performance Score (TPS) — a composite score that serves as the ultimate driver of payment adjustments.

One key, but often misunderstood, factor that influences TPS — and consequently the final payment — is the Improvement in Performance Ratio (IPR). In this post, we’re going to unpack how TPS is calculated, what role IPR plays, and how these metrics directly impact your bottom line.

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Understanding the HHVBP Model: A Brief Overview

The HHVBP Model, which expanded nationwide in 2023 after successful pilot programs, is designed to incentivize high-quality, efficient care. Instead of being paid solely on the volume of services delivered, agencies now receive Medicare payment adjustments based on their performance across several quality domains.

The potential payment adjustment started at 5% in 2023 and is projected to increase up to 7% by 2025. That’s a sizable swing that can dramatically impact an agency’s revenue.

So, how does CMS determine whether your agency earns a bonus or faces a penalty?

Enter the Total Performance Score (TPS).

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What is the Total Performance Score (TPS)?

The TPS is a weighted score out of 100 that reflects an agency’s overall performance in a given year across specific quality measures. These measures fall into four main categories:

1. OASIS-based Measures

2. Claims-based Measures

3. HHCAHPS Survey Measures

4. Quality Improvement Measures (IPR)

Each measure within those categories is scored based on how well the agency performs relative to others (Achievement Score) and how much it improves over time (Improvement Score). The better score of the two is used in the TPS calculation.

The TPS, in essence, becomes a rank that determines where your agency falls on the performance spectrum compared to other agencies in your cohort (usually categorized by size and state). Based on this ranking, CMS assigns a payment adjustment — upward or downward — on a sliding scale.

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TPS Formula: The Nuts and Bolts

The TPS is not a simple average. It’s a weighted composite that gives more significance to certain measures. Here’s a simplified breakdown of the approximate weightings:

• OASIS-based Measures: ~35-40%

• Claims-based Measures: ~30-35%

• HHCAHPS (Patient Satisfaction Surveys): ~25-30%

• IPR (Improvement in Performance Ratio): Acts as a multiplier, enhancing scores if performance is improving significantly.

Each individual measure within those categories is scored from 0–10, and then the scores are summed and weighted to arrive at the TPS.

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How TPS Impacts Final Payment Adjustment

Once all agencies in your cohort receive their TPS for the performance year, CMS ranks them from highest to lowest. Based on these rankings, payment adjustments are applied on a linear scale, with the highest-performing agencies receiving the maximum positive adjustment and the lowest-performing receiving the maximum penalty.

Let’s say the maximum adjustment for the year is ±6%. Here’s how the TPS affects your payment:

• If your TPS is in the top 10%: You might get the full +6%.

• If your TPS is average: You might see no adjustment at all (0%).

• If your TPS is in the bottom 10%: You could face the full -6% reduction.

Clearly, every point in your TPS matters. Which brings us to a critical element: the Improvement in Performance Ratio (IPR).

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What is the IPR and Why Does It Matter?

The Improvement in Performance Ratio (IPR) is a powerful but often overlooked component of HHVBP scoring. It rewards agencies not just for high achievement, but also for getting better over time.

Here’s how it works:

Each measure in HHVBP has two scores:

• Achievement Score: How your agency compares to the national median and top decile.

• Improvement Score: How much your agency has improved from its baseline year.

The IPR acts like a turbocharger — it highlights and enhances the progress you’ve made. The higher your improvement, the more it can boost your TPS, especially if your absolute performance is still catching up.

CMS always uses the higher of the Achievement or Improvement Score for each measure when calculating your TPS. That means even if you’re not at the top of your peer group yet, significant improvement over time can still result in a strong TPS — and thus a positive payment adjustment.

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Decoding the IPR: A Closer Look

Let’s dig deeper into how the IPR is calculated and how it feeds into the final TPS.

Step 1: Establishing the Baseline

Your baseline year is typically the year two years prior to the performance year. For example, the 2023 performance year uses data from 2021 as the baseline.

Step 2: Measuring Improvement

CMS calculates how much each quality measure has improved from that baseline. The improvement is then normalized across all agencies to determine the percentile ranking of your agency’s improvement.

Step 3: Translating into Points

For each measure, CMS gives an Improvement Score from 0 to 10, depending on where your improvement ranks nationally. If your Improvement Score is higher than your Achievement Score for that measure, the Improvement Score is used in the TPS.

Step 4: Weighting and Summing

Once each measure is scored, they are weighted according to their category (e.g., OASIS, HHCAHPS) and added to calculate the final TPS out of 100.

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IPR in Action: A Real-World Example

Let’s say your agency struggled with hospital readmissions in the past, but over the last two years, you’ve implemented a robust transitional care program that drastically reduced 30-day readmissions.

• Your Achievement Score might still be in the middle of the pack — let’s say a 6 out of 10.

• But your Improvement Score is high — say, 9 out of 10.

CMS will use the 9 for that measure in your TPS calculation.

Now multiply that kind of improvement across several measures, and you can see how the IPR can significantly boost your overall TPS, even if you’re not yet a top-tier agency in terms of raw outcomes.

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The Financial Translation: From TPS to Dollars

Let’s talk money.

Imagine your agency has $5 million in Medicare payments at risk under HHVBP.

• A +4% adjustment would net you $200,000 extra.

• A -4% adjustment would cost you $200,000.

Now consider that small changes in TPS — even 2-3 points — can swing your ranking enough to move you from a negative adjustment to a positive one. If your IPR lifts your TPS above the median, that’s potentially a six-figure swing in revenue.

It’s not just about being the best agency — it’s about getting better, year over year.

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Best Practices to Improve IPR and TPS

To improve your IPR and maximize your final payment adjustment, consider these strategies:

1. Baseline Your Data Now

Know where you started and where you’re trending. Identify which measures have room for meaningful improvement.

2. Target High-Impact Measures

Focus on measures with the highest weightings (e.g., hospitalizations, functional improvement). Small gains here mean bigger boosts to TPS.

3. Involve Frontline Staff

Educate clinicians on how their actions influence quality metrics. Their documentation and care delivery directly affect OASIS and claims-based scores.

4. Monitor Progress Monthly

Track real-time performance and compare it to your baseline. Look for opportunities to intervene early and make course corrections.

5. Leverage Technology

Use predictive analytics, EMR alerts, and automated patient outreach to drive improvements in care transitions, adherence, and outcomes.

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Common Pitfalls to Avoid

• Ignoring the Baseline: Agencies often focus on raw scores but overlook where they started. Improvement from a low baseline can still yield big gains.

• Focusing Only on Achievement: Agencies in competitive markets may think they can’t “win” on achievement alone. IPR offers a second path to a higher TPS.

• Overlooking Patient Satisfaction: HHCAHPS measures are heavily weighted. Even strong clinical outcomes can’t make up for poor patient experience scores.

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Final Thoughts: TPS, IPR, and Your Financial Future

The Total Performance Score is more than just a metric — it’s a direct line to your agency’s Medicare reimbursement. And the IPR is your secret weapon in climbing that performance ladder.

In a world where healthcare is rapidly shifting toward value-based care, understanding and leveraging TPS and IPR is critical not only to survive but to thrive. Agencies that invest in continuous improvement, data-driven decision-making, and staff engagement will be best positioned to capture the rewards of HHVBP — and avoid its penalties.

Your journey to better care — and better pay — starts with decoding your data.