Bill Would Bring New Quality Measures to Skilled Nursing Value-Based Purchasing Program

A bipartisan pair of U.S. representatives late last week submitted legislation that would potentially bring new quality measures to the federal Value-Based Purchasing (VBP) program.

HR 3406, introduced in the House of Representatives last Friday, would empower the Centers for Medicare & Medicaid Services (CMS) to roll out up to 10 additional metrics for inclusion in the Skilled Nursing Facility VBP program, a new payment model designed to increase care quality in nursing homes.

Under the current model, SNFs automatically lose 2% of their Medicare reimbursements, which they can win back by sufficiently reducing hospital readmissions; in some cases, the highest-performing operators can actually take in more than the cut amount. The first round of results, however, saw 73% of the nation’s more than 15,000 nursing homes lose at least some amount of money, with just 27% pulling in a bonus payment.


The legislation — introduced by House Ways and Means Committee chairman Rep. Richard Neal, Democrat of Massachusetts, and Texas Rep. Kevin Brady, the committee’s lead Republican — would allow CMS to consider a wider array of quality-based measures in the VBP program, including patient safety, care coordination, functional status, and patient experience.

Should the legislation pass, the new quality measures would take effect no sooner than fiscal 2023, which begins October 1, 2022; the law would also only apply to skilled nursing facilities that meet a certain minimum number of cases related to each of the measures as of October 1, 2021.

LeadingAge, the national trade group representing non-profit skilled nursing facilities, both publicized the legislation and expressed support for its contents in an e-mailed statement to Skilled Nursing News.


“Measures in the proposed legislation address issues that beneficiaries care about, such as patient safety, care coordination, and patient experience,” Ruth Katz, LeadingAge’s senior vice president of policy and advocacy, said. “We appreciate that the legislation is discretionary, limits the number of measures that may be used at any given time, and only applies to nursing homes with a minimum number of relevant cases.”

The American Health Care Association, which represents for-profit senior care and housing operators, was more measured.

“We are reviewing the specific language in this bill to assure it helps improve quality and outcomes for residents in nursing homes,” Clif Porter, the group’s senior vice president of government relations, said in a statement. We look forward to working with Congress on this bill.”

Though operators remain focused on reducing readmissions under VBP, some have argued that the 2% cut isn’t enough to move the needle on provider behavior: Vincent Fedele, director of analytics at consulting firm Zimmet Healthcare Services Group, noted last fall that most providers saw less than a 1% drop in Medicare fee-for-service revenue.

“I think everyone can get behind that we need to reduce our hospital readmissions, and I think most of the providers are doing that,” Fedele told Skilled Nursing News at the time. “[But] if your penalty’s only going to be $25,000, how much are you going to invest in technology or additional staff in order to effectuate change under VBP?”

The Neal-Brady bill also allots $5 million for the institution of the new VBP quality measures between fiscal 2022 and fiscal 2024, and requires the Medicare Payment Advisory Commission (MedPAC) to develop a plan for a value-based payment model under a unified prospective payment system (PPS) for post-acute care — long a goal of MedPAC’s.

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