Nurse and Patient

In early August, the Centers for Medicare & Medicaid Services (CMS) distributed the first annual Skilled Nursing Facility Value-Based Purchasing (SNF VBP) performance report to SNFs nationwide, which will affect Medicare Part A reimbursement rates starting October 1, 2018. The confidential performance report was distributed via the Certification and Survey Provider Enhanced Reports (CASPER) portal as an Excel document and provides the SNF’s score for the Medicare Part A 30-Day All-Cause Risk-Standardized Readmission Rate (RSRR) as well as the patient-level data for calendar year (CY) 2017. The following are important components of the performance score report:

Baseline period RSRR is the rehospitalization rate for CY 2015. This is the rate used in comparison to your performance period RSRR to calculate your improvement score.

Performance period RSRR is the rehospitalization rate for CY 2017, which determines your achievement score.

SNF VBP achievement score is the number of points received based on the facility’s performance period RSRR score. Facilities with a CY 2017 RSRR at 16.4 percent or lower received 100 points, and facilities with 20.41 percent and higher received zero points. All other facilities received points based on their ranking.

SNF VBP improvement score is based on the level of improvement from the baseline period RSRR to the performance period RSRR. Facilities with an achievement score of 16.4 percent or lower received 90 points, while those with a CY 2017 RSRR higher than CY 2015 received zero points. Those that showed some improvement were awarded points between zero and 100 based on a CMS calculation.

SNF VBP performance score is the greater of the achievement or improvement score.

SNF VBP program rank shows the facility’s ranking among the 15,421 SNFs nationwide that were eligible for the SNF VBP program.

Incentive payment multiplier (IPM) is the number that will be applied to the Medicare RUG-IV rates to determine your final payment for claims that are submitted for service dates starting October 1, 2018.

Financial Effect

The SNF VBP program was created as a budget-neutral incentive program based on a 2 percent withhold on Medicare payments to facilities. Rather than adjust the base rates for each of the RUG-IV groups, the IPM will apply the facility’s portion of the 2 percent withhold based on their performance score. The IPM can range from 0.98 (equivalent to the 2 percent withhold) to 1.0165, which reflects a 1.65 percent increase and is the highest incentive payment.

The IPM will be applied automatically when claims are submitted to the Medicare Administrative Contractor (MAC) for payment. Facilities will need to establish a process for recognizing the impact of the IPM on their revenue reconciliation.

FY 2020 Effect

CMS has addressed the VBP program for fiscal year (FY) 2020 in the recently published SNF final rule. The time frame for the performance and improvement periods is changing from a calendar year to a fiscal year. Therefore, the performance period for FY 2020 will be FY 2018, which is October 1, 2017, through September 30, 2018. The data provided for the fourth quarter of 2017 also will impact your scores in FY 2020.

Next Steps

It’s important for SNFs to start calculating their hospital readmission rates by payor to monitor the potential effect of the SNF VBP. While the measure is risk adjusted, knowing your raw data can provide a baseline to measure against your CY 2017 rate. Also, remember the 30-day all-cause measure is calculated based on the day of discharge from the hospital and patients may be discharged from the SNF before the 30-day risk period has ended. This may require some follow-up after discharge to enable you to project your readmission rate. Reviewing your current report data to determine when the patients are returning to the hospital can help you identify if there are potential issues within your facility or after discharge and help focus your improvement activities. Reviewing the reasons for readmission (hospital DRG) on your current report can help determine any need for improved clinical assessment skills or medical care coverage.

With the changes to the performance and improvement periods for FY 2020, the ability to influence the facility’s outcome in the SNF VBP incentive program for next year was minimal. The time frame for the performance period ended September 30, 2018. Reviewing the data and projecting the effect of SNF VBP on your Medicare revenue in addition to the implementation of the new reimbursement system will be critical for FY 2020.

If you have any questions or need assistance in understanding the impact of your SNF VBP report on your Medicare revenue, contact Joanne or your trusted BKD advisor.

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