Ramp up Reimbursements with Rewards from the Skilled Nursing Facility Value Based Purchasing Program

Key Takeaways

• The Centers for Medicare & Medicaid Services (CMS) withholds 2% of all fee-for-service (FFS) payments made to skilled nursing facilities (SNFs) to fund the SNF Value-Based Purchasing (VBP) program.
• It re-distributes 60% of program funds to SNFs who show achievement or improvement on a single value-based care quality measure: unplanned hospital readmissions within 30 days.
• The readmission window opens on the day an acute patient is discharged from a hospital and admitted to an SNF.
• The window closes in 30 days or when the patient is readmitted to the hospital, whichever comes first.
• The CMS provides quarterly confidential, secure feedback reports to SNF VBP program participants.
• SNF VBP program performance is reported publicly at the facility level and in aggregate at the national level.

As you’ve been exploring ways to increase your reimbursement from the Centers of Medicare & Medicaid Services (CMS), you may have noticed a common theme. The rewards are increasingly tied to providing value-based care. The more you can shift your services from volume to value, the more reimbursement opportunities like the SNF VBP will open up for you.

How the SNF VBP program works

CMS withholds 2% of all fee-for-service FFS payments made to SNFs to fund the SNF VBP program. It then re-distributes 60% of program funds to SNFs that show improvement or achievement on a single value-based-care quality measure: unplanned hospital readmissions within 30 days.

Improvement is measured against a facility’s baseline, and achievement is measured against the national average.

The official name of the measure is: SNF 30-Day All-Cause Readmission Measure (SNFRM).

If your SNF receives reimbursement through the Medicare Prospective Payment System (PPS), you’re enrolled in the SNF VBP program automatically.

The next step is to establish a baseline for your hospital readmissions. First, the CMS will pull a baseline for your facility from a timeframe in the past. You’ll have a chance to review it and ask for adjustments. Then, the performance period begins, and you’ll have an opportunity to improve and achieve.

Key Dates: SNF VBP Baseline and Performance Periods

Fiscal year vs. calendar year

A fiscal year is a budget year for financial accounting and reporting, not necessarily a calendar year.  

The CMS fiscal year begins October 1^st and ends September 30.^th

The baseline and performance timelines follow the fiscal year.

Understand the readmission window

When does it open and close? The window opens on the day an acute patient is discharged from a hospital and admitted to an SNF. The window closes in 30 days or when the patient is readmitted to the hospital, whichever comes first.

Unplanned readmissions vs. planned readmissions

Unplanned hospital readmissions are acute and may indicate a problem with the quality of care provided by an SNF. Planned readmissions are not acute and not reflective of SNF care. Examples of planned readmissions are chemotherapy treatment and organ transplant.

CMS feedback reports can keep you on track

The CMS provides quarterly confidential, secure feedback reports to SNF VBP program participants.

Performance Score Reports (PSR) include a reimbursement forecast to help you see your progress, spot gaps and change your strategies as needed.

You have 30 days from receiving a PSR to review and submit corrections before the information is made public.

Be prepared for public reporting

SNF VBP program performance is reported publicly at the facility level and in aggregate at the national level.

Facility-level data includes:

• Facility CMS Certification Number (CCN)
• Facility name and address
• SNF VBP program ranking
• Baseline
• Performance period risk-standardized readmission rates (RSRRs)
• Achievement scores
• Improvement scores
• Performance scores
• Incentive payment multipliers

National data includes:

• Unadjusted national average RSRRs for the baseline and performance periods
• Achievement thresholds and benchmarks
• Range of performance scores
• Total number of SNFs receiving SNF VBP program incentives
• Range of incentive payment multipliers
• Range of payment amounts in dollars
• Total value-based incentive payments in dollars

Exceptions for extraordinary circumstances

If your SNF participates in the SNF VBP program and experiences a natural disaster or other catastrophic event, you may be eligible for an Extraordinary Circumstance Exception (ECE). With an ECE, performance data during the time of the disruption is excluded from reporting.

A look ahead at program expansion

Additional quality measures—and more opportunities to earn incentives—we may see in the next few years include:

• Health-associated infections requiring hospitalization
• Number of hospitalizations per 1,000 long-stay resident days
• Falls leading to major injury
• Nursing staff turnover
• Sufficient staffing
• Resident experience
• Discharge to community

Stay up to date on program developments and reach out to the SNF VBP Program Help Desk with questions: SNFVBP@rti.org.

Frequently Asked Questions

Why was the SNF VBP program created?

Unplanned hospital readmissions take a heavy toll on residents physically, emotionally and psychologically. They also cost the CMS billions of dollars that could be better spent elsewhere.

How does the SNF VBP program work?

CMS withholds 2% of all FFS payments made to SNFs to fund the SNF VBP program. It then re-distributes 60% of program funds to SNFs who show improvement or achievement on a single value-based-care quality measure: unplanned hospital readmissions within 30 days.

Which score matters more—improvement or achievement?

Both scores carry equal weight. The CMS will go with your higher score.

Is the SNF VBP performance measure also used in the SNF Quality Reporting Program or the Five-Star Quality Rating System?

No. These programs use different measures.

The SNF QRP uses this measure: Potentially Preventable 30-Day Post-Discharge Readmission.

The Five-Star Quality Rating System uses these measures:

• Health inspection rating
• Staffing rating
• Quality measures rating

Is the SNF VBP program optional?

It’s optional unless you receive Medicare reimbursement through the SNF PPS program. If you receive PPS reimbursement, the SNF VBP program is mandatory.

What’s the difference between unplanned and planned hospital readmissions?Unplanned hospital readmissions are acute and may indicate a problem with the quality of care provided by an SNF. Planned readmissions are not acute and not reflective of SNF performance. Examples are chemotherapy treatment and organ transplant.

When does the hospital readmissions window open and close?

The window opens on the day an acute patient is discharged from a hospital and admitted to an SNF. The window closes in 30 days or when the patient is readmitted to the hospital, whichever comes first.

When will I receive feedback reports from the CMS?

The CMS provides confidential, secure feedback reports to SNF VBP program participants quarterly.

What can I do if I don’t agree with my Performance Score Report (PSR)?

Don’t worry. You’ll have 30 days to submit corrections before the information is made public.

Is the SNF VBP program performance reported publicly?

Yes. It’s reported publicly at an aggregate facility level and national all-facility level.

Where can I find the SNF PPS final rules?

• FY 2024 Final Rule
• FY 2023 Final Rule
• FY 2022 Final Rule
• FY 2021 Final Rule
• FY 2020 Final Rule
• FY 2019 Final Rule
• FY 2018 Final Rule
• FY 2017 Final Rule
• FY 2016 Final Rule

What is an Extraordinary Circumstance Exception (ECE)?

If your SNF participates in the SNF VBP and experiences a natural disaster or other catastrophic event, you may be eligible for an ECE. With an ECE, performance data during the time of the disruption is excluded from reporting.

What additional measures are on the horizon?

Additional quality measures—and more opportunities to earn incentives—we may see in the next few years include:

• Health-associated infections requiring hospitalization
• Number of hospitalizations per 1,000 long-stay resident days
• Falls leading to major injury
• Nursing staff turnover
• Sufficient staffing
• Resident experience
• Discharge to community

Who can I contact with questions about the SNF VBP program?

Email the SNF VBP Program Help Desk at SNFVBP@rti.org.

Who can I contact with questions about access to quarterly feedback reports?

Quarterly feedback reports are distributed through the Quality Improvement and Evaluation System (iQIES). Email the QIES/iQIES Service Center at iqies@cms.hhs.gov.

Abbreviations

CCN – CMS Certification Number

CMS – Centers for Medicare & Medicaid Services

ECE - Extraordinary Circumstance Exception

FFS – Fee-for-service

PPS – Prospective Payment System

PSR – Performance Score Reports

QIES - Quality Improvement and Evaluation System

RSRRs - Risk-standardized readmission rates

SNF – Skilled nursing facility

SNFRM – Skilled Nursing Facilities 30-Day All-Cause Readmission Measure

SNF VBP – Skilled Nursing Facility Value-Based Purchasing