Overview of The SNF VBP Program
The Skilled Nursing Facility Value-Based Purchasing program (SNF VBP) is a Medicare pay-for-performance program that is intended to encourage SNFs to improve the quality of care they provide to their residents. All SNFs paid under Medicare Prospective Payment System (PPS) are included in SNF VBP program – enrollment is not optional, and data used for the SNF VBP quality measure (QM) calculations comes primarily from Medicare SNF Fee-For-Service (FFS) Part A Claims, CMS’ Payroll-Based Journal (PBJ) system, and Minimum Data Set (MDS) assessments. This program is funded through a Centers for Medicare and Medicaid (CMS) withhold of 2% of SNFs’ Medicare Fee-For-Service (FFS) Part A payments. CMS is required to redistribute between 50% and 70% of this withhold to SNFs as incentive payments, and the remaining 40% is retained in the Medicare Trust Fund.
Each SNF VBP program QM has a specific baseline period, specific performance period, and specific measure case number minimums to allow CMS to calculate the measure. After calculating measure results during a baseline period and a performance period for each measure, CMS calculates achievement and measure scores for each measure for each SNF. CMS then “normalizes” (or recalculates) each measure score, then adds all the normalized measure scores together. This allows CMS to confirm that all SNFs’ performance scores are on a 100-point scale, with higher scores on this scale indicating better QM performance. CMS then transforms the performance score using a logistical exchange function. Using this information and an estimated incentive payment pool, CMS calculates each SNF’s incentive payment multiplier. When payments are made for a SNF’s Medicare FFS Part A claims in FY2027, the adjusted federal per diem rate is multiplied by the SNF’s incentive payment multiplier. Facilities can anticipate notification of their incentive payment multiplier award for FY2027 sometime around the end of July 2026.
Changes Over Time
As part of an expansion of the SNF VBP Program, the FY2027 SNF VBP program year is the first to assess performance on eight quality measures rather than four measures. For the FY2026 Program year, performance in the SNF VBP Program was based on the following four measures:
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- SNF 30-Day All-Cause Readmission Measure (SNFRM) – from Medicare FFS Part A claims
- Skilled Nursing Facility Healthcare-Associated Infections Requiring Hospitalization (SNF HAI) – from Medicare FFS Part A claims
- Total Nursing Staff Turnover (Nursing Staff Turnover) – from CMS’ PBJ system
- Total Nurse Staffing Hours per Resident Day (Total Nurse Staffing) – from CMS’ PBJ system
For the FY2027 Program year, these additional measures are also in play:
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- Discharge to Community – Post-Acute Care Measure for SNFs (DTC PAC SNF) – from Medicare FFS Part A claims
- Number of Hospitalizations per 1,000 Long Stay Resident Days (Long Stay Hospitalization) – from Medicare FFS Part A claims
- Discharge Function Score for SNFs (Discharge Function Score) – from MDS assessments
- Percent of Residents Experiencing One or More Falls with Major Injury (Long-Stay) (Falls with Major Injury (Long-Stay)) – from MDS assessments
In the FY2028 Program year, the SNF 30-Day All-Cause Readmission Measure (SNFRM) will be replaced with the Skilled Nursing Facility Within-Stay Potentially Preventable Readmissions (SNF WS PPR) measure. The other seven measures will be retained.
SNF VBP and the Five-Star Ratings Measures
Four of the eight SNF VBP program QM are also utilized to calculate the facility Five-Star ratings, including:
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- Number of Hospitalizations per 1,000 Long-Stay Resident Days
- Discharge to Community – Post Acute Measure for SNFs
- Percent of Residents Experiencing One or More Falls with Major Injury (long stay)
- Discharge Function Score for SNFs
Strategies to Improve
When evaluating your facility’s SNF VBP program performance and incentive payment multiplier, your facility Five-Star QM ratings, and potential QM areas that may be improved, providers should recognize that the FY2027 SNF VBP measures and Five-Star calculations are not based on recent facility data. The data used in these calculations is from 2025 and prior, and the window for facilities to correct MDS and PBJ data used to calculate those measures is closed. However, today is a great day to evaluate your current facility processes that will impact your future QM and SNF VBP program incentive payments.
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- Support accurate MDS data capture – what is coded now will impact how future QM calculated (Falls with Major Injury LS and Discharge Function Score).
- Capture falls and falls with injuries on the MDS per the definitions in the correct Resident Assessment Instrument (RAI) manual.
- Develop a reliable process for assessment of GG on every PPS assessment – IDT evaluation of usual performance on initial Med A PPS assessment and end of Med A PPS assessment is imperative.
- The IDT members need a clear understanding of each GG item – may necessitate printing definitions from the RAI manual and reviewing as a team.
- Root cause analysis of missing MDS data (dash codes) – CMS cannot calculate QM accurately without all the data.
- Root cause analysis of hospitalizations – examine each unplanned readmission/hospitalization and healthcare associated infections that lead to hospitalization.
- Develop discharge planning to support and maintain successful discharge to the community.
- Ensure PBJ data is reported timely and accurately.
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