The Protecting Access to Medicare Act (PAMA) of 2014 was enacted on April 1, 2014 – this act authorized the Skilled Nursing Facility (SNF) Value-Based Purchasing (VBP) Program.  This law requires that the Centers for Medicare and Medicaid Services (CMS) adopt a VBP payment adjustment for SNF’s as of October 1, 2018 – PAMA also requires CMS to:  

•        Provide incentive payments to SNFs for services on or after 10/1/2018
•        Design a system for assessing and scoring SNF performance
•        Implement standards on a quality measure including achievement and improvement

SNFs will be ranked by performance scores. Highest ranked will receive highest payments, lowest ranked facilities will receive less

Also, as of 10/1/2018, CMS will withhold an additional 2% reimbursement from low performers – this reduction will help fund the incentive payments for the highest performers.

Skilled Nursing Facility 30-Day All-Cause Readmission Measure

In the 2016 Final Rule, CMS enacted the first measure for the SNF VBP program based on hospital readmission rates – the Skilled Nursing Facility 30-Day All-Cause Readmission Measure (SNFRM). Acute care providers have been subject to the readmission penalties, and now SNF’s will be sharing the risk. CMS will identify unplanned hospital readmissions within thirty (30) days of hospital discharge from the HOSPITAL claims, not the SNF claims – there are no reporting requirements from the SNF. The readmission is counted whether the beneficiary is readmitted from the SNF or after discharge from the SNF (as long as the beneficiary was admitted to the SNF within one (1) day of the hospital discharge). Planned readmissions are excluded as they are not an indicator of poor care. There are certain adjustments based on patient history and diagnosis (among other issues) that potentially affect the likelihood of readmission.

There are exclusions to every rule, of course. For this Rule, exclusions include when:

•        Beneficiary was hospitalized for treatment of cancer
•        Beneficiary was not eligible for Medicare Part A for the twelve (12) months prior to the hospital discharge
•        Beneficiary was admitted to another SNF or post-acute provider within the 30-day window
•        Beneficiary leaves the SNF against medical advice (AMA)
•        The principal diagnosis for the hospitalization was rehabilitation, fitting of prosthetics or adjustment of devices (hospital admissions for these conditions do not usually involve acute care)

The CMS website has a plethora of resources available to SNFs including easy to follow fact sheets.  

The more you know, the better prepared you will be for the future of VBP reimbursement methodology. Stay informed!