Performance and Penalties in Year 1 of the Skilled Nursing Facility Value-Based Purchasing Program

Area of Science:

• Health Services Research
• Gerontology
• Health Policy

Background:

• Medicare's Skilled Nursing Facility Value-Based Purchasing (SNF VBP) program, initiated in October 2018, imposes financial penalties on facilities with high 30-day readmission rates.
• Understanding the characteristics associated with SNF performance is crucial for optimizing the program's effectiveness and mitigating unintended consequences.

Purpose of the Study:

• To identify specific structural and patient-related characteristics of skilled nursing facilities (SNFs) that correlate with their performance under the SNF VBP program.
• To analyze how factors such as facility size, location, ownership, staffing, and patient demographics influence penalties related to readmission rates.

Main Methods:

• A retrospective cross-sectional analysis was conducted using Nursing Home Compare data from 2019.
• Facility-level regressions examined the association between SNF structural attributes (size, rurality, profit status, etc.) and patient characteristics (income, race, dual eligibility, etc.) with VBP performance scores and penalties.
• A total of 14,558 SNFs were included in the analysis.

Main Results:

• Nationwide, 72% of SNFs received penalties, with 21% incurring the maximum penalty.
• Rural SNFs and those with higher Star Ratings were less likely to be penalized, while smaller facilities (≤120 beds) and those with lower nurse staffing levels were more likely to be penalized.
• Nonprofit and government-owned SNFs faced lower penalties compared to for-profit facilities. SNFs serving low-income areas or a high proportion of frail patients had higher odds of penalization.

Conclusions:

• SNF structural characteristics and patient population demographics significantly influence performance under the Medicare Value-Based Purchasing program.
• Findings highlight the need for policy adjustments to address disparities and ensure equitable performance evaluation within the SNF VBP framework.
• These insights are vital for policymakers and clinical leaders aiming to enhance SNF quality and avoid adverse outcomes associated with value-based purchasing initiatives.