Volume Decrease Adjustment

A Volume Decrease Adjustment (VDA) is a payment adjustment granted by Medicare to Sole Community Hospitals or Medicare-dependent Hospitals when these providers experience a decline in discharges greater than 5% in any given year due to an unusual circumstance or occurrence that is externally imposed and beyond the hospital’s control.

Qualifying for a VDA requires a thorough understanding of the relevant regulations and case law to establish eligibility and the analytical capabilities to determine the proper reimbursement amount.

Healthcare Payment Specialists offers the experience and analytics required to help hospitals become qualified for VDA. Through its efforts, HPS has helped hospitals across the country qualify for VDA reimbursement.

HPS Solution

  • Reviews current regulations and past case law to understand the hospital’s potential qualifications for a VDA
  • Collaborates with the hospital to understand the drivers behind the decrease in discharges to identify whether those drivers qualify the hospital for a VDA
  • Determines the eligible adjustment amount based on VDA regulations, such as calculating reasonable costs for maintaining the necessary core staff and services
  • Prepares all of the necessary documentation to submit the VDA request to Medicare

Case Study

Southeastern Facility — Granted Volume Decrease Adjustment of $7.2MM

A southeastern facility with a staff of over 250 physicians and 2,100 professionals; offers a wide range of leading-edge therapeutic, diagnostic and surgical services.

Opportunity / Challenge

Between 2008 and 2009, the system experienced a 9.8% decrease in total discharges. They contacted HPS to assist them in researching and preparing a VDA request for Medicare.


Through HPS, the system was granted a Volume Decrease Adjustment of $7.2M — a 13% increase over that year’s DRG payment.

Client Testimonials

“We are a 21-bed hospital and every dollar of reimbursement is important to help us deliver excellent patient care. HPS’s work recovered over $300,000 for us, exceeding our expectations. We couldn’t be more thrilled with the results.”

— Pam Gonzales, Controller, Anson General Hospital

“In 2014 and 2015, we experienced a significant decrease in discharges and felt the circumstances qualified us to receive Volume Decrease Adjustment (VDA) payments from CMS. Qualifying for these payments isn’t easy. It requires a thorough understanding of the regulations, gathering and integrating a wide range of data, and presenting a convincing case to CMS. This is where HPS’s experience and expertise made the difference.

HPS worked with our team to gather the data needed for the project, they performed extensive research and analysis to confirm our eligibility, and prepared the documentation needed for submission to our Medicare Administrative Contractor (MAC). After submission, they worked directly with the MAC to answer questions and to provide any additional information needed for the review process. Thanks to their efforts, we qualified for two separate VDA payments totaling $1.9MM.

We couldn’t have been happier with the results. Working with their experienced team made all the difference. I would highly recommend HPS for any hospital that feels it might be eligible for a VDA payment.”

— Whitney Patterson, CPA, CHFP, Chief Financial Officer, Fairmont Regional Medical Center