CMS to Cut Medicare Payments for 73% of SNFs Under Value-Based Purchasing

Nearly three-quarters of skilled nursing facilities will see Medicare reimbursement penalties after failing to hit certain readmission improvement benchmarks, according to a new set of data from the Centers for Medicare & Medicaid Services (CMS)

Of the just under 15,000 facilities that reported sufficient data, 73% — or nearly 11,000 buildings — had incentive payment multipliers under 1, meaning they will see reduced Medicare payments. The remaining 27% had multipliers greater than 1, signifying a bonus payment from CMS for sufficiently reducing readmissions.

Modern Healthcare first reported the existence of the data late Wednesday.


Under the SNF Value-Based Purchasing Program, which took effect this October, nursing homes will automatically lose 2% of their Medicare reimbursements, which they can then earn back by improving their readmission statistics; a portion of the withheld money goes into a collective pool that is then redistributed as bonuses for the top performers.

CMS ranked the nation’s entire roster of Medicare-certified nursing homes, then used a formula to determine the incentive payment multipliers. For instance, a multiplier of .99 translates to a net payment reduction of 1%, according to an August explainer by trade group LeadingAge Ohio, while a multiplier of 1.01% would result in a 3% incentive payback — or the full return of the 2% cut plus an additional 1% bonus.

The highest multiplier awarded by CMS worked out to about 1.016, a figure earned by the 440 top-ranked facilities across the country. The lowest came in at around 0.98.


Written by Alex Spanko

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