Is the Value Based Purchasing Program Changing?

The Centers for Medicare & Medicaid Services (CMS) issued its fiscal year (FY) 2022 proposed rule for the skilled nursing facility (SNF) prospective payment system (PPS) in April.

In addition to announcing a 1.3% payment update for FY 2022, the rule proposes multiple changes to the Value-Based Payment (VBP) program.


CMS believes that scores on the one quality measure used in the SNF VBP program (30-day All-cause Readmissions) have been impacted by the COVID-19 pandemic, which would result in unfair payment incentives and inequitable payments. In fact, CMS further commented that SNFs performance during the public health emergency under the Value-Based Purchasing (VBP) program would equate to a 0.8% cut for nearly all SNFs.

As a result, the agency proposes to adopt a policy for the duration of the public health emergency (PHE) to achieve the following:

  • Suppress the use of the readmission measure data for purposes of scoring and payment adjustments in the program.
  • Assign each eligible SNF an identical performance score (zero) and payment adjustment of 1.2 percent.
  • SNFs with fewer than 25 eligible stays during the performance period would receive a net-neutral payment incentive adjustment.
  • Use FY 2019 as the baseline period for the FY 2024 program instead of FY 2020
  • SNFRM performance won’t be used for incentive payment purposes. However, the measure will still be made public on Care Compare.

What does the future of the VBP program hold?

CMS plans to submit the SNF Potentially Preventable Readmission (SNFPPR) measure to the National Quality Forum in Fall 2021 for approval. NQF endorsement is needed for CMS to finally transition to the long-awaited SNFPPR measure for calculating the SNF VBP incentive payments.

CMS also requested input on potential future measures it might add to the SNF VBP. The Consolidated Appropriations Act of 2021 permits up to 9 measures to be added to the VBP, impacting payments for FY2024. The impacts of these VBP reforms will be significant for the nursing home industry this year and for years to come.


Find the FY 2022 SNF PPS proposed rule:

Find the link to Value Based Purchasing Manual at: