SNF VBP Program and 2% Reductions in Medicare Payments

On October 1, 2018, CMS will implement the SNF Value-Based Purchasing Program (SNF VBP) as mandated by the Protecting Access to Medicare Act (PAMA). Per this statute, 2% of SNF’s Medicare payments will be withheld to fund incentive payments. Incentive payments will be based on a comparison of SNF hospital readmission rates between the base year of 2015 and the hospital readmission rates for the current year 2017.

Based on a comparison of the readmission rates for a particular SNF, CMS will determine an achievement score and an improvement score comparing the 2015 to the 2017 readmission rates. The higher of the two scores will be used to determine the amount of the incentive payments funneled back to the SNF. The SNF industry has already seen a decrease in hospital readmissions over the past several years and with a continued focus on this issue, this trend should continue.

• Identify regulatory requirements related to the SNF VBP.
• Distinguish between the improvement score and the achievement score and its impact on incentive payments.