Skilled Nursing Facility Value-Based Purchasing (SNF VBP) Program Overview of the SNF VBP Program Stephanie Frilling, MBA MPH SNF VBP Program Lead Division of Value, Incentives and Quality Reporting; CMS April 14, 2016

Basic Demographics Skilled Nursing Facilities Urban SNFs: 10,848 Number of Urban and Rural Skilled Nursing Facilities 2

CMS Quality Strategy 3

Transform Medicare from a passive payer of SNF claims to active purchaser of quality health care for beneficiaries Linking payments to performance on identified quality measures Other VBP programs – Hospital VBP Program (HVBP) – End-Stage Renal Disease Quality Incentive Program (ESRD QIP) – Physician Value-Based Payment Modifier – Hospital Readmissions Reduction Program (HRRP) – Hospital-Acquired Conditions Reduction Program (HACRP) – Merit-based Incentive Payment System (MIPS) CMS Objectives for SNF Value-Based Purchasing 4

CMS Objectives for Value-Based Purchasing (VBP) Administration’s goals for health care payment reform: 30% of Medicare payments tied to quality or value through alternative payment models by the end of 2016, and 50% by the end of % of all Medicare FFS payments are tied to quality or value by the end of 2016, and 90% by the end of

Section 215 of the “Protecting Access to Medicare Act of 2014” (PAMA), enacted on April 1, 2014, added subsections (g) and (h) to Section 1888 of the Social Security Act Section 1888(g) authorizes new quality measures for skilled nursing facilities (SNFs) based on the rate of hospital readmissions of Medicare beneficiaries discharged to a SNF Section 1888(h) authorizes a VBP program in which Medicare payments to SNFs will be adjusted based on their performance scores on the quality measures established in Section 1888(g) The only legislative requirement implemented in the FY 2016 rule is adoption of the all cause, all condition hospital readmission measure for the FY 2019 Program year Legislative Basis 6

Linking Medicare Payments to Performance: Performance standards on quality measures include both achievement and improvement SNF Performance Score must include a ranking of SNFs from low to high 2% of Medicare payments will be withheld to fund incentive payments Incentive payments must total 50-70% of amount withheld Legislative Requirements 7

“The Secretary shall reduce the adjusted Federal per diem rate determined under subsection (e)(4)(G) otherwise applicable to a skilled nursing facility for services furnished by such facility during a fiscal year (beginning with fiscal year 2019) …… The Secretary shall make such reductions for all skilled nursing facilities in the fiscal year involved, regardless of whether or not the skilled nursing facility has been determined by the Secretary to have earned a value-based incentive payment under paragraph (5) for such fiscal year.” Legislative Basis Funding for Value-Based Incentives – Section 1888(h)(6): 8

Measure estimates risk-standardized rate of all-cause, unplanned hospital readmissions of Medicare SNF beneficiaries within 30 days of discharge from their prior proximal acute hospitalization Hospital readmissions are identified through Medicare claims Readmissions within 30-day window are counted regardless of whether the beneficiary is readmitted directly from SNF or had been discharged from SNF Risk-adjusted based on patient demographics, principal diagnosis in prior hospitalization, comorbidities, and other health status variables that affect probability of readmission Excludes planned readmissions since these are not indicative of poor quality SNF Readmission Measure: Definition 9

Patients who were hospitalized for medical treatment of cancer Patients who do not have Medicare Part A coverage for the full 30-day window and those who do not have Part A coverage for the 12 months preceding the prior hospital discharge SNF stays with: – An intervening post-acute care admission within the 30-day window – More than 1 day between the hospital discharge and the SNF admission – Patient discharge from the SNF against medical advice – Principal diagnosis in prior hospitalization was for rehabilitation, fitting of prosthetics, adjustment of devices – Prior hospitalization for pregnancy SNF Readmission Measure: Exclusions 100

Improvement vs. Achievement Achievement: My SNF’s current performance compared to the baseline period performance of all SNFs Improvement: My SNF’s current performance compared to my baseline period Time Me! All SNFs 111

Achievement 2014 Readmission rates There is a higher percentage in 2014 at the lower readmission rates… 122

Improvement Rural SNFs – 2013 vs There is a higher percentage in 2014 at the lower readmission rates… 133

Providing quarterly confidential feedback reports on performance Approaches for establishing performance standards, including how to incorporate improvement in performance scores Performance scoring methodologies and how to translate performance scores into value-based incentive payments Posting of individual SNF and aggregate performance information on Nursing Home Compare or other website Milestones to Implementation 144

For information, please visit our CMS SNFVBP page at: Patient-Assessment-Instruments/Value-Based- Programs/Other-VBPs/SNF-VBP.html For additional questions, contact: Questions? 155