Nearly one in five skilled nursing facilities awarded positive incentives under value-based purchasing

Abstract

Medicare’s Skilled Nursing Facility Value-Based Purchasing Program, which awards value-based incentive payments based on hospital readmissions, distributed its first two rounds of incentives during fiscal years 2019 and 2020. Incentive payments were based on achievement or improvement scores—whichever was better. Incentive payments were as low as −2.0 percent in both program years and as high as +1.6 percent in FY 2019 and +3.1 percent in FY 2020. In FY 2019, 26 percent of facilities earned positive incentives and 72 percent earned negative incentives, compared with 19 percent positive and 65 percent negative incentives in FY 2020. Larger, rural, and not-for-profit facilities were more likely to earn positive incentives, as were those with the highest registered nurse staffing levels. Although these findings indicate the potential to reward high-quality care at skilled nursing facilities, intended and unintended outcomes of this new value-based purchasing program should be monitored closely for possible program refinements, particularly in light of the disproportionate impacts of coronavirus disease 2019 (COVID-19) on nursing facilities.