Harmony Healthcare International (HHI) Blog

SNF Value-Based Purchasing: Hospital Readmissions Incentive Payment Multiplier



Compliance • Audits/Analysis • Reimbursement/Regulatory • Education/Efficiency

Empty background of modern  factory environmentEffective October 1, 2018 (Fiscal Year 2019) Skilled Nursing Facilities across the country will be subject to the first metric of Value-Based Purchasing, Hospital Readmissions. Value-Based Purchasing is comprised of 3 components:  Measurement, Report and Reward. 

  1.  Measurement

    SNFRM (Skilled Nursing Facility Hospital Readmission) score for the individual SNF measure performance rate information is based on SNF performance on the Skilled Nursing Facility 30-Day All-Cause Readmission Measure (SNFRM) during calendar year (CY) 2015. The National Average is 19.002%.

    In the Fiscal Year (FY) 2016 SNF Prospective Payment System (PPS) Final Rule, CMS adopted the SNFRM as the first measure for the Skilled Nursing Facility Value-Based Purchasing (SNF VBP) Program. The measure is defined as the risk-standardized rate of all-cause, unplanned hospital readmissions of Medicare beneficiaries within 30 days of discharge from their prior hospitalization.  Hospital readmissions are identified through Medicare hospital claims (not SNF claims) so no readmission data is collected from SNFs and there are no additional reporting requirements for the measure.
  2. Report

    SNF RM QIES Report which is accessible at the facility level through the Quality Improvement and Evaluation System Report. A Sample SNF’s Performance on the Skilled Nursing Facility 30-Day All-Cause Readmission Measure (SNFRM) in 2015 is below: 


Your SNF’s Number of Eligible Stays

Your SNF’s Number of Unplanned Readmissions*

Your SNF’s Risk – Standardized Readmission Rate **

National Average Readmission Rate ***






Source: Medicare claims and eligibility data from calendar year 2015 

* The number of stays at your SNF that were followed by an unplanned hospital readmission within 30 days of discharge from a prior proximal hospitalization. 

** The risk-standardized readmission rate is your SNF’s risk-adjusted rate of unplanned readmissions. 

*** The national average readmission rate reported here is the average unadjusted unplanned readmission rate for all eligible SNF stays nationally.

  1. Reward

    The concept is to incentivize healthcare organizations to improve in certain areas with an ultimate link to payment. The hospital readmission payment adjustment is a 2% cut or potentially a 1% increase in SNF Part A rates for 1 year (fiscal year) based on SNF’s rehospitalization score.

    For Example: 
  • If you bill out $1,000,000 per month in Medicare Part A and your hospital readmissions are greater than the national average of 19.002%, expect to pay 2% which equates to $240,000 October 1, 2018. 

Skilled Nursing Facility Providers have access to their SNF VBP metrics and financial impact.  Contact your Harmony HealthCARE Specialist to review your performance and achievement scores.  It is possible that incorrect data may impact the scores and a reconsideration must be submitted.  It is important to review the Incentive Payment Multiplier depicted by the red arrow below.


Incentive Payment Multiplier

The Incentive Payment Multiplier is confusing.  It calculates based on the inverse of the metric.  A score of 1 (one) or higher is auspicious.  

For Example: 

  • Incentive payment multiplier X rate
  • 9800 x $100 = $98.00
  • 0000 x $100 = $100.00
  • 0165 x $100 = $101.65 

Please note, the threshold for Skilled Nursing Facility Value-Based Purchasing Year 2 for the Rehospitalization Score is lowering as seen in the second bullet below: 

  • Better of your achievement or improvement score 
  • Achievement score Year 2
    • SNFRM Rate < 3%, achievement score = 100.
    • SNFRM Rate > 8%, achievement score = 0. 

This means that Skilled Nursing Facility Providers must continuously refine the Hospital Readmission Process to ensure the highest quality of care for its senior population. 

Harmony Healthcare International (HHI) performs monthly compliance audits. During this time, we assess and monitor all aspects of Value-Based Purchasing.  Harmony Healthcare International (HHI) is available to assist with any questions or concerns that you may have.  You can contact us by clicking here.  

Looking to train your staff?  Join us in person at one of our our upcoming Competency/Certification Courses.  Click here to see the dates and locations. 

harmony20 October 29-30 2020 Encore Boston Harbor

Topics: Value-Based Purchasing, hospital readmissions

Kris Mastrangelo, OTR/L, LNHA, MBA


Kris Mastrangelo, OTR/L, LNHA, MBA

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