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 CMS Issues Preliminary Outline of SNF Value-Based Purchasing Program

A report issued to Congress yesterday by the Centers for Medicare & Medicaid Services (CMS) sketches out a preliminary framework for implementing a Medicare value-based purchasing (VBP) program for skilled nursing facilities (SNFs). Included in the 80-page report is a road map for implementation and eight elements the agency will consider as it designs the program.

A primary theme of the report is the need for appropriate timing and an incremental approach to phase in the VPB program so that stakeholders will have time to adjust to the new system.

Also under consideration as the program is designed is information gathered by CMS from “expert interviews” and the results of the agency’s monthly SNF Open Door Forums (ODFs).

“Experts and ODF participants expressed their opinions on a variety of topics. Experts consulted stated that the process of developing a plan should include substantial opportunities for provider, consumer, and researcher input,” CMS said in the report.

Results of the Nursing Home VBP Demonstration, which is currently under way and scheduled to conclude this December, will also be taken into consideration as the program takes shape, CMS said.

The first of the eight elements recommended in the report is a continuous quality improvement framework that uses existing tools and quality measures. Notably, the report mentions the possibility of CMS using its Nursing Home CAHPS survey to measure patient experience of care.

Also mentioned is the role that the Nursing Home Five-Star Quality Rating System and health-inspection citations would have in a SNF VBP program. “The potential adoption of staffing measures, potentially avoidable hospitalizations and discharge-to-the-community measures, and potential new composite measures based on the final results from the Nursing Home VBP Demonstration” are also under consideration, according to the report.

Funding the VBP program could come from payment withholds from “poor-performing SNFs or by holding back a portion of the base payment rate or the annual update for all SNFs,” the report said.

Deriving payment incentives from either a small reduction in the base Medicare payment rate or in the annual payment update factor drawn from the entire pool of Medicare SNF payments would create an immediate funding mechanism, CMS asserts in the report. “CMS could then determine the amount available for payment incentives in advance and subsequently distribute such payments relatively quickly once the agency measured and calculated performance.”

The use of public reporting, coordination across the Medicare payment system, and timing are also suggested by CMS as the agency develops the program.

Also foreseen as a challenge during the development and roll out of the VPB program are the length of time involved with respect to developing any necessary new measures, soliciting additional multi-stakeholder input, seeking endorsement of the quality measures by the consensus group, subjecting the measures to the pre-rulemaking process, if applicable, and publishing a proposed and final rule to implement the program.

“An incremental phased-in approach for SNF VBP program implementation could allow stakeholders time to adjust under the new system,” CMS says in the report.

Stay tuned for an in-depth analysis of the report.

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