Center for Medicare & Medicaid Services (CMS) officials offered more clarity on the updates to the Value-Based Purchasing program for nursing homes, including insights into the usefulness of the facility-level early look reports and details on three new quality measures that will now be tied to incentive payments in fiscal 2025.  

These proposed changes to the VBP program are considered to be among the most important ones contained in CMS’ recently released Skilled Nursing Facility Prospective Payment System rule (SNF PPS) for next year.

In a webinar hosted by the Division of Value Incentives and Quality Reporting at CMS recently, officials delved into details of how CMS will now calculate performance scores and collect data on the new quality measures related to nursing staff turnover, infection prevention and control, and nursing care hours.

Christopher Palmer, SNF VBP program coordinator, and Nikkilyn Morrison, SNF VBP program researcher, provided an overview of the program’s new Early Look Performance Score Reports for 2026, which have been shared with facilities but are based on older data to allow a glimpse into how the facility might hypothetically perform. 

“We at CMS are all very excited about the expansion of the VBP program and believe that these early look reports will be beneficial in previewing the upcoming program expansion and the impact these may have on your facilities,” Palmer said.

Nursing home providers should note that the fiscal 2025 SNF PPS proposal is up for public comment right now through May 28, CMS officials said.

More measures, changes to scoring 

The SNF VBP program, initiated in fiscal year 2019, aims to enhance the quality of care delivered by nursing homes through incentivizing quality of care improvements. Morrison highlighted that all SNFs under Medicare’s SNF Prospective Payment System are automatically considered for inclusion in the program.

Under the guidance of the Protecting Access to Medicare Act of 2014 (PAMA), SNFs are assessed based on their performance on quality measures related to both improvement and achievement.

The program initially evaluated performance using a single measure of all-cause hospital readmissions, known as the SNF RM.

However, with the fiscal year 2026 expansion, three additional quality measures are being introduced: SNF Healthcare-Associated Infections Requiring Hospitalization, Total Nursing Staff Turnover, and Total Nursing Hours per Resident Day. These measures will be assessed using fiscal year 2022 as the baseline period and fiscal year 2024 as the performance period.

One of the notable changes in the scoring methodology is the combination of multiple measure scores to calculate an overall performance score for each SNF. This score, out of 100 points, will determine the incentive payment multiplier (IPM), which will be applied prospectively to SNF Medicare Fee-for-Service Part A claims throughout fiscal year 2026, Morrison said.

‘Informational’ early look report

The Early Look Performance Score Report for 2026, provided to SNFs for informational purposes only, offers a preview of the expanded program’s format and scoring methodology. It utilizes historical data from fiscal year 2021 as the baseline period and fiscal year 2022 as the performance period, providing SNFs with an approximation of their future performance.

So brand new SNFs that opened in December 2023, for example, wouldn’t have any data in their early look report because the report is based on data from fiscal year 2021 and fiscal year 2022.

Morrison also emphasized that while the early look report does not impact payments, it serves to familiarize SNFs with the upcoming changes and allows them to gauge their performance on the new measures. SNFs will continue to receive quarterly confidential feedback reports for the current fiscal year 2025 program, with the final report expected in August, Morrison said.

“For the actual fiscal 2026 program, your fiscal 2022 will be based on the baseline period and fiscal 2024 as the performance period for all four of the quality measures included,” said Morrison.

During the webinar, Morrison also addressed questions regarding eligibility, the distinction between the early look report and quarterly reports, and the inclusion of agency nurses in turnover calculations. She clarified that the incentive payment multiplier for the VBP program is only applied to Medicare Fee-for-Service claims.

“When CMS makes payments for a Medicare Fee-for-Service Part A claims in fiscal 2026, the adjusted federal per diem rate would be multiplied by the SNF’s official incentive payment multiplier,” she said.

As for the sources for the facilities data, Morrison said the nursing staff turnover measure is calculated using data from payroll-based journal (PBJ).

“The turnover measure only includes individuals who worked at least 120 hours and the 90-day period starts from the first workday observed across the baseline quarter,” Morrison said. Moreover, both regular employees and agency staff are included in the turnover measure if they worked sufficient hours to be eligible, she explained.

Meanwhile, the infection prevention measure, or officially called the Healthcare Associated Infection measure ( SNF HAI), is calculated using Medicare Fee-for-Service claims data.

CMS officials said that the expansion of the SNF VBP program for fiscal year 2026 marks a significant milestone in incentivizing quality improvement in SNFs. With the introduction of new measures and enhanced scoring methodologies, the officials said that SNFs should be on a path towards delivering higher standards of care to their residents. In the meantime, the early look reports for 2026 offer a valuable opportunity for SNFs to prepare for the program’s evolution and optimize their performance in the years ahead, officials said.