Penalties in 2024 in Medicare's Skilled Nursing Facility Value-Based Purchasing Program

The Medicare Skilled Nursing Facility (SNF) Value-Based Purchasing Program (VBP) provides incentive or penalty payments to SNFs based on their 30-day readmission rates. Our objective was to identify facility-level characteristics associated with penalties in the 2024 program.

This retrospective, cross-sectional analysis of 10,278 SNFs used publicly available CMS data for the 2024 SNF VBP program. Using logistic regression, we analyzed the relationship between patient makeup (proportion of Black or Hispanic patients), structural characteristics (facility size, profit status, Medicare or Medicaid certification, hospital affiliation, SNF operating margin, and total nursing staff hours per resident per day), and community characteristics (ZIP SDI, rural versus urban location, region, and state average home health quality rating) on receipt of maximum penalty.

Most SNFs participating in the 2024 SNF VBP were penalized (71.7%), with 33.1% of facilities receiving the maximum penalty of -1.98%. In multivariate regression models, facilities with a high proportion of Black residents (adjusted odds ratio [aOR] 1.14, 95% confidence interval [CI] 1.02-1.28) or Hispanic residents (aOR 1.42, 95% CI 1.26-1.60) and for-profit SNFs (aOR 1.42, 95% CI 1.26-1.61; vs. non-profit) were more likely to receive maximum penalties than their counterparts, as were those located in socioeconomically deprived ZIP codes (aOR 1.20, 95% CI 1.04-1.39), urban location (aOR 1.56, CI 1.35-1.81) or the South (aOR 2.32, 95% CI 1.98-2.71). Other measured characteristics were not associated with increased likelihood of maximum penalty.

Penalties under the Medicare Skilled Nursing Facility Value-Based Purchasing Program vary by key facility characteristics, including patient mix, ownership, and geography. This information may help inform policymakers on how to improve outcomes in new iterations of the SNF VBP program and identify areas where technical modifications or additional investments in facility support for quality improvement could be prioritized.