HHS Releases Final Details of $2 Billion in Value-Based COVID Payments for Nursing Homes

The federal government this week released its exact framework for distributing $2 billion in relief funding to nursing facilities that can reduce COVID-19 infections and deaths.

The Department of Health and Human Services (HHS) will begin sending out payments to qualifying operators next month based on September performance, with three more monthly performance periods through the end of this year.

The payments themselves will come a month after the close of each performance period, with audits to follow the month after that. The vast majority — 80% — of available cash each month will go toward rewarding operators with positive results on the infection control domain, with the remaining 20% disbursed based on the mortality measure.

Source: HHS

To earn that extra money, each facility must first pass a pair of “gateway qualifications”:

  1. The building must have a rate of COVID-19 infections lower than that of the surrounding county. “This benchmark requirement for infection rate reflects the goal of the incentive program to recognize and reward facilities that establish a safer environment than the community in which they are located,” HHS noted.
  2. The facility must have a COVID-19 death rate that “falls below a nationally established performance threshold for mortality among nursing home residents infected with COVID.”

After passing through those gateways, facilities will be measured by HHS-developed formulas that will attempt to quantify just how well — or poorly — they stopped the spread of COVID-19, and prevented those who contracted the virus from dying.

For the infection measure, HHS will assess the degree to which a nursing home was able to lower rates below the community spread level, as well as the in-home infection prevalence — measured by comparing the total number of COVID-19 infections against the total number of resident-weeks.


Residents who arrive at a facility having already tested positive for the virus will not count toward that metric.

The mortality measure, meanwhile, will attempt to quantify an operator’s ability to prevent residents who contract COVID-19 within the nursing home from dying.

“Direct outreach will be conducted to facilities that have at least one death in the performance period and have a mixture of COVID admissions and in-facility infections,” HHS noted. “The goal of this outreach will be to ascertain how many of their reported COVID deaths were due to in-facility infections versus COVID admissions.”

The government will then run that information through a statistical model designed to determine an expected number of deaths, comparing each facility’s performance against that projected number.

“Facilities with a mortality rate significantly exceeding expectations will become ineligible for any incentive program payments in the performance period,” HHS announced. “Facilities with lower mortality than expected will be eligible for payment, which will be scaled up based on the amount by which they fall below the expected number of deaths.”

HHS announced the value-based competition model earlier this month, positioning the structure as a way to demand accountability for at least a portion of the billions in CARES Act funding that the industry has received so far.

“The Trump administration has focused resources throughout our response on protecting the most vulnerable, including older Americans in nursing homes,” HHS secretary Alex Azar said in a statement. “By tying these new funds for nursing homes to outcomes, while providing the support they need to improve quality and infection control, we will help support quality care, slow the spread of the virus, and save lives.