Nearly One In Five Skilled Nursing Facilities Awarded Positive Incentives Under Value-Based Purchasing

Area of Science:

• Health Policy
• Geriatric Care
• Healthcare Economics

Background:

• Medicare's Skilled Nursing Facility Value-Based Purchasing (SNF VBP) Program incentivizes facilities based on performance.
• The program uses hospital readmission rates to determine incentive payments.
• The first two program years (FY 2019-2020) established baseline performance and payment structures.

Purpose of the Study:

• To analyze the distribution and characteristics of incentive payments in the initial phases of the SNF VBP program.
• To identify facility types and staffing levels associated with positive or negative incentive outcomes.
• To provide insights for potential program refinements and monitoring.

Main Methods:

• Analysis of incentive payment data from Medicare's SNF VBP program for fiscal years 2019 and 2020.
• Calculation of achievement or improvement scores to determine incentive payment percentages.
• Statistical comparison of incentive outcomes across different facility characteristics (size, location, ownership, staffing).

Main Results:

• A majority of skilled nursing facilities received negative incentive payments in both FY 2019 (72%) and FY 2020 (65%).
• Positive incentives ranged from +1.6% to +3.1%, while negative incentives reached -2.0% in both years.
• Larger, rural, not-for-profit facilities, and those with higher registered nurse staffing were more likely to achieve positive incentives.

Conclusions:

• The SNF VBP program shows potential for rewarding high-quality care but requires close monitoring.
• Unintended consequences and disproportionate impacts, especially post-COVID-19, necessitate careful program evaluation.
• Further refinements may be needed to ensure equitable and effective value-based purchasing in skilled nursing facilities.