Harmony Healthcare Blog

Value-Based Purchasing: Evaluating Excellence in the SNF

Posted by Kris Mastrangelo, OTR/L, LNHA, MBA on Wed, Apr 27, 2016

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Edited by Kris Mastrangelo

VBP.jpgThere has been lots of discussion on all of the looming changes loaded and ready to fire in payment reform.  The terms and verbiage are not only overwhelming, but downright confusing. Let's take a moment and "chunk" what lies ahead and focus on the concept of "Value-Based Purchasing" (VBP).  By definition, value based purchasing is a demand side strategy to measure, report and reward excellence in healthcare. In essence, if effectively implemented, it acts as an external motivator for providers to improve the quality of care rendered to its patients.

The SNF VBP program promotes better clinical outcomes for skilled nursing facility patients and makes their care experience better during skilled nursing facility stays.   CMS willl pay skilled nursing facilities for their services based on the quality of care, not just quantity of the services they provide in a given performance period.  

As stated above the VBP program is a strategy to measure, report and reward

Measure: The measurement needs to gauge performance by showing if the care was: Safe, Timely, Efficient, Effective, Equitable and Patient Centered.

Report: The above performance measure needs to be transparent and public for purchasers, payers and consumers to make informed decisions.

Reward: In turn, when a provider is successful in meeting the performance measure, they are rewarded with improved reputations because of the public reporting, enhanced payments and increased market share.

Valued-Based Purchasing in Skilled Nursing Facilities: How Will it Work?

Measure (SNF RM means Skilled Nursing Facility Re-admission Measure):

  • Re-hospitalizations during a 30 day window from admission to the SNF During and after the SNF stay (if discharged home prior to 30 days)
  • The current National Average for hospital readmissions is 21.1%
  • The Better of Achievement Score (Ranking) or Improvement Score
    The Achievement Score based on SNF’s ranking on their rate
    Performance period based on Calendar Year (Jan 2017 to Dec 2017)
  • The Improvement Score based on SNF’s improvement over 2 years
    Compares re-hospitalization rates Calendar Year 2015 to Calendar Year 2017 

Request a Free HHI Five-Star Quality Measure Analysis with 5 NEW MEASURES

Either way, the goal of the facility is to start with improving re-hospitalization percentages immediately.  The focus prior to 2017 is to evaluate the current hospital readmission rates and how the facility can progress.  A drill down analysis of the causes of hospital re-admissions assessing the types of patients, times and causes is essential for SNF success. 

(Proposed New Measure to be mindful of:  CMS Proposed a "potentially preventable re-hospitalization" measures -that counts re-hospitalizations with a diagnosis on hospital claims that is considered potentially preventable--including COPD, CHF).   This is something to keep an eye on over the next few months.


  • It is important to provide confidential feedback reports quarterly via QIES system starting October 2016
  • Information will be public in 2018
  • This measurement will be different than the Five-Star


  • The government is using a "withhold approach"
  • The amount of money impacted is 2% of total Medicare Revenue. This amount will be "withheld" and given back to the facility if they meet the measure.
  • If your hospital readmission rate is above 20% hospital readmission level, there is a high likelihood you will lose the 2%.
  • The 2% withhold of SNF Medicare Part A payments is effective October 1, 2018 - based on performance calendar year 2017 
Please note there is difference between fiscal year and calendar year:
  • Calendar Year:  January-December
  • Fiscal Year:  October 1-September 30th 

If you have questions about Value-Based Purchasing, please contact Harmony Healthcare International by clicking here or calling our office at (800) 530-4413.  If you would like a free Five-Star Quality Analysis with 5 New Measures, click here.  


Tags: Value-Based Purchasing

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