Value-Based Purchasing: Why SNFs Need to Stay Prepared
Value-based purchasing (VBP) continues to play an important role in how skilled nursing facilities (SNFs) are measured and reimbursed by CMS. Through VBP, facilities are evaluated on quality and performance measures that can directly influence their Medicare reimbursement.
But what works for your organization today may not be enough tomorrow. A facility can be performing well under the current requirements while still facing new measures, scoring changes or reporting requirements that could affect future performance.
Changes to value-based purchasing can happen quickly, so understanding the program and keeping up with its evolving requirements can help providers identify opportunities, address potential risks, and prepare for what comes next.
How Value-Based Purchasing Works
According to Joel Van Eaton, Executive Vice President of PAC Regulatory Affairs and Education at Broad River, CMS withholds 2% of participating SNFs’ Medicare fee-for-service Part A payments to fund the VBP program. CMS currently redistributes 60% of that withhold to SNFs as incentive payments, while the remaining 40% is retained in the Medicare Trust Fund.
Congress authorized CMS to add up to nine additional measures beginning in FY 2024, and eight additional measures have now been approved. These measures broaden the areas of performance that can influence a facility’s VBP results.
That means performance is no longer about a single quality metric. Providers must understand how multiple measures contribute to their overall VBP performance and how changes to those measures could affect their results from year to year.
Understanding CMS Scoring
CMS evaluates SNFs based on both achievement and improvement. Facilities are compared with national performance benchmarks, while improvement over time can also earn points. For each measure, CMS awards the higher of the facility’s achievement or improvement score, provided the applicable requirements are met.
CMS then combines the points earned across measures and normalizes the total to create a final SNF Performance Score ranging from 0 to 100. This approach allows CMS to continue adding measures while maintaining a consistent scoring scale.
Beginning with FY 2027, SNFs must meet the minimum case requirements for at least four of the eight applicable measures during the performance period to receive a Performance Score and value-based incentive payment. This makes it increasingly important for facilities to understand not only how they are performing, but also whether they have enough qualifying cases to be evaluated on each measure.
As additional measures and requirements are introduced, staying familiar with the scoring methodology can help providers better understand their performance and prepare for potential changes in reimbursement.
Staying Ahead of VBP Changes
One of the biggest takeaways from Van Eaton’s insights is the importance of staying ahead of change. A strong VBP position today does not guarantee the same results tomorrow.
New measures, scoring changes and reporting requirements can affect performance and reimbursement. Providers that regularly evaluate their data, identify opportunities for improvement, and understand upcoming changes are better positioned to respond.
HAP helps post-acute care providers navigate the complexities of value-based care with practical expertise, data-driven insights and strategies designed to support stronger performance. If you're looking for a clearer view of your VBP performance and opportunities for improvement, contact HAP to learn how we can help.