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SNFs face Medicare value-based purchasing program penalties

On Behalf of | Mar 18, 2022 | Health Law Attorneys

One study shows that a value-based purchasing program, or VBP, isn’t offering sufficient incentives for nursing homes to improve care. The data shows that most nursing homes in underserved populations perform worse. Only 0.7% of facilities could improve enough to avoid a VBP penalty in Dallas, Texas. According to the study, there wasn’t a viable path for low-performing facilities to avoid the penalties because of poor readmission data.

Published VBP data

The study had 15,327 facilities and 14,959 skilled nursing facilities, or SNFs, across the country as of Feb. 28, 2020. The VBP checks improved patient outcomes to award financial incentives or penalties using 30-day hospital readmission rates. The SNFs set improvement and performance baselines to avoid a penalty. Under Medicare and Medicaid law, the program would withhold all FFS revenue or add bonus FFS revenue.

Expanding VBP quality measures

Medicare and Medicaid law is expanding VBP quality measures beyond hospital readmissions. Ways that the program is expanding include retaining staff, evaluating staff adequacy and assessing the resident experience. The measurement programs in other facilities already use additional methods. The VBP should have an improvement pathway to allow low-performing SNFs to improve. In reality, the program was only rewarding high-performing facilities.

High penalty rate of facilities

Evaluations of the program saw that 75% of facilities received a penalty during 2019. By 2020, the number of facility penalties increased. The most penalized SNFs were in vulnerable populations. The program gives all SNFs an improvement score and achievement score; the facility performance score is whichever score is higher. The program doesn’t consider the differences in facility baselines when selecting achievers. The VBP should reward the best performers but doesn’t track the levels of improvements a facility makes.

According to the study, 12.3% of the sample had a performance score made of their improvement score while 63.1% of facilities had a financial penalty, and 20.2% had a bonus. The improving facilities were all in the top half of the baselines from the start.