CMS Releases Results of First Year of Value-Based Purchasing

Posted on December 12, 2018 by Jeff Bostic

The Centers for Medicare & Medicaid Services (CMS) recently released individual Skilled Nursing Facilities results from the first year of Value-Based Purchasing (VBP). Under VPB, rates are adjusted based on Skilled Nursing Facility-specific hospital readmission rates. 

The federal fiscal year that started Oct. 1 marks the first year of implementation of VBP for skilled nursing facilities. The hospital readmission data used for the first year of VBP was from calendar year 2017. View results for Minnesota Skilled Nursing Facilities on our new Medicare PDPM page.  

In VBP, CMS calculates how readmission rates compare to the national average and, using those results, each Skilled Nursing Facility’s rates are adjusted by an incentive payment multiplier. The multiplier is designed to capture the two financial aspects of VBP in one number - the 2 percent withheld from all Skilled Nursing Facility payments and the amount paid back to the specific Skilled Nursing Facility based on their readmission performance. More funding was withheld than is paid back, so most Skilled Nursing Facilities across the country receive a negative rate impact from VBP. 

In Minnesota, 21 percent of facilities received a rate increase under VBP and 69 percent received a rate decrease, meaning we did slightly worse than the national figures of 26 percent receiving an increase and 72 percent receiving a decrease. Minnesota is lower on both figures because we had an unusually high rate of facilities that were given no adjustment due to not having enough stays to calculate the measure (10 percent vs. 2 percent nationally). This difference is probably due to Minnesota’s high rate of Medicare Advantage participation, because the VBP data is based only on Medicare fee-for-service stays. 

Best Practice – Track Readmissions, Prevent Readmissions

VBP is ongoing in future years and remains based on the single readmission rate measure, so members should be tracking their readmissions and working on interventions to prevent them. When the Medicare system converts to the new Patient Driven Payment Model (PDPM) next Oct. 1, the intended provider focus on shorter stays and quality outcomes under that payment model needs to include a focus on preventing readmissions as well.