Volume Decrease Adjustment

A Volume Decrease Adjustment (VDA) is a payment adjustment granted by Medicare to hospitals defined as either Sole Community Providers (SCP) or Medicare Dependent Hospitals (MDH) 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 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 Testimonial

“During our partnership, HPS effectively demonstrated knowledge of the laborious VDA filing process. Their research proved that the reduction in discharges of nearly 2,500 was out of our control. Without HPS’s assistance, we feel we would not have been granted the $7 million. I would recommend HPS to any facility seeking a thorough and experienced team for their VDA review.” — Reimbursement Specialist, Mid-Atlantic Hospital