1. Skilled Nursing Facility Value-Based Purchasing Greater Los Angeles Care Coordination Learning and Action Network
Lindsay Holland, MHA, Director, Care Transitions Health Services Advisory Group (HSAG)
July 14, 2017

2. Objectives
Describe the skilled nursing facility (SNF) Value-Based Purchasing (VBP) Program
Compare the hospital and skilled nursing facility readmission penalties
Identify how the penalty impacts your facility
QIN-QIOs in every state and territory are united in a network administered by the Centers for Medicare & Medicaid Services (CMS).
The QIN-QIO program is the largest federal program dedicated to improving health quality at the community level.

3. Hospital Readmission Penalties
Section 3025 Affordable Care Act of 2010
2017: 139 California hospitals were penalized ALL 5 years for excess readmissions
Congestive heart failure
Coronary artery bypass graft
Acute myocardial infarction
Pneumonia
Chronic obstructive pulmonary disease
Total knee and hip arthroplasty

4. Nursing Home Readmission VBP Program
H.R Protecting Access to Medicare Act of 2014
October 2017
Readmission rates go public on Nursing Home Compare
October 2018
VBP program for nursing homes begins
Example: If a hospital’s base operating DRG amount is $1,000 and the payment penalty is 1 percent, then the amount reduced by the penalty is $10 and the payment made to the hospital is $990.
Risk Adjustments: age, gender, comorbidities
Exclusions:
Planned readmissions
Patient self-discharge against advice
Same day admit/discharge
Transfer to another acute care facility
Patients without at least 30 days post-discharge enrollment in FFS Medicare
Patients who died during the index hospitalization
As part of the FY 2015 IPPS final rule, CMS finalized an updated method to account for planned readmissions.
CMS will add readmissions for coronary artery bypass graft (CABG) surgical procedures to the list for FY 2017.

5. SNF Readmission Penalty Timeline
2014
Passed
Oct. 2015
All-cause readmission measure defined
Oct. 2016
“Potentially preventable” adjusted rate
Oct. 2017
Public reporting of SNF readmissions
October 2018
Oct. 2018
2% withhold of SNF payments begin
Incentive/ penalty goes live
$2B Savings/ 10 years
50–70% of the withhold will go to incentive payments to SNFs
30–50% of the withhold will go to Medicare for savings
40% of SNFs nationally will receive a penalty
Passed in 2014
All cause readmission measure defined (by October 2015)
“Potentially preventable” adjusted rate (October 2016)
Public reporting of SNF readmissions (October 2017)
Ranked score provided to SNFs (October 2018)
2% withhold of SNF payments (October 2018)
50-70% of the withhold will go to incentive payments to SNFs
30-50% of the withhold will go to Medicare for savings
Incentive/ penalty goes live (October 2018)
40% of SNFs nationally will receive a penalty
Estimated to save Medicare $2B over next 10 years

6. Nursing Home Readmission VBP Program
Reduction amount: 2%
Lowest performers may lose 2% of Medicare funding
Program is designed to save money for CMS*
Top performers’ incentive payments 50–70% of the reduction amount (1.0–1.4%)
SNFs will be ranked
Bottom 40% will be in the penalty-eligible range
CMS provides reports on the measure
So SNFs can review and plan for action
Began 10/1/2016
40%
The reduction amount will be 2%, meaning that lowest performers may lose 2% of Medicare funding.
The program is designed to save money for CMS: incentive payments (those for top performers) will be between % of the reduction amount (between 1.0 and 1.4%)
SNFs will be ranked such that the bottom 40% will be in the penalty-eligible range
CMS will provide reports on the measure beginning 10/1/2016 so that SNFs can review and plan for action
*Centers for Medicare & Medicaid Services

7. Nursing Home Readmission VBP Program (cont.)
One measure: an all-condition, risk-adjusted, potentially avoidable hospital readmission rate
Payment differentials begin fiscal year (FY) 2019.
Payments on or after 10/1/2018
Calculation of VBP amount will use the “achievement/improvement” methodology used for hospital VBP.
Rates will be compared to thresholds and benchmarks
SNFs will be awarded points for either achievement or improvement, whichever is higher
One measure, an all-condition, risk-adjusted, potentially avoidable hospital readmission rate
Payment differentials will begin with FY 2019 (payments on or after 10/1/2018)
Calculation of VBP amount will use the “achievement/improvement” methodology used for hospital VBP
Rates will be compared to thresholds and benchmarks
SNFs will be awarded points for either achievement or improvement, whichever is higher.

8. 30-Day All-Cause SNF Readmission Measure (SNF-RM)
FY 2016 SNF Prospective Payment System (PPS) final rule, CMS adopted the SNF-RM as the first measure for the SNF VBP Program.
The measure is the risk-standardized rate of all-cause, unplanned hospital readmissions of Medicare beneficiaries within 30 days of discharge from their prior hospitalization.
Hospital readmissions are identified through Medicare hospital claims (not SNF claims).
Readmission data are not collected from SNFs and there are no additional reporting requirements for the measure.
Fiscal Year (FY) 2016 SNF Prospective Payment System (PPS) final rule, CMS adopted the SNF-RM as the first measure for the SNF VBP Program.
The measure is the risk-standardized rate of all-cause, unplanned hospital readmissions of Medicare beneficiaries within 30 days of discharge from their prior hospitalization.
Hospital readmissions are identified through Medicare hospital claims (not SNF claims)
Readmission data is not collected from SNFs and there are no additional reporting requirements for the measure.

9. 30-Day All-Cause SNF-RM (cont.)
Readmissions to a hospital within the 30-day window are counted if:
The beneficiary is readmitted directly from the SNF, or
After discharge from the SNF
As long as the beneficiary was admitted to the SNF within 1 day of discharge from a hospital stay
Excludes planned readmissions
Is risk-adjusted based on:
Patient demographics
Principal diagnosis from the prior hospitalization
Comorbidities
Other health status variables that affect probability of readmission
Readmissions to a hospital within the 30-day window are counted if
The beneficiary is readmitted directly from the SNF OR
after discharge from the SNF as long as the beneficiary was admitted to the SNF within 1 day of discharge from a hospital stay.
The measure excludes planned readmissions
The measure is risk-adjusted based on:
patient demographics
principal diagnosis from the prior hospitalization,
Comorbidities
other health status variables that affect probability of readmission.

10. 30-Day SNF Potentially Preventable Readmission (SNF-PPR) Measure
July 29, 2016, CMS adopted the SNF-PPR measure for future use in the SNF VBP Program
The SNF-PPR measure assesses:
Risk-standardized rate of unplanned, potentially preventable readmissions
Medicare FFS SNF patients
Within 30 days of discharge from a prior hospitalization
On July 29, 2016, CMS adopted the SNF-PPR measure for future use in the SNF VBP Program.
The SNF-PPR measure assesses the risk-standardized rate of unplanned, Potentially Preventable Readmissions (PPRs) for Medicare Fee-For-Service SNF patients within 30 days of discharge from a prior hospitalization.

11. 30-Day SNF-PPR Measure (cont.)
The key difference between the SNF-RM and SNF-PPR measures:
CMS will replace the SNF-RM with the SNF-PPR “as soon as practicable.”
SNF-RM All-Cause
Readmissions
SNF-PPR
Potentially Preventable Readmissions
The key difference between the SNF-RM and SNF-PPR measures is that the SNF-PPR focuses on potentially preventable readmissions rather than all-cause readmissions.
CMS will replace the SNF-RM with the SNF-PPR “as soon as practicable.”

12. Performance Scoring
CMS has adopted these scoring methodologies to measure SNF performance that include levels of achievement and improvement:
Achievement scoring
Compares an individual SNF’s performance rate in a performance period against all SNFs’ performance during the baseline period
Improvement scoring
Compares a SNF’s performance during the performance period against its own prior performance during the baseline period
CMS has adopted these scoring methodologies to measure SNF performance that includes levels of achievement and improvement:
Achievement scoring
Compares an individual SNF’s performance rate in a performance period against all SNFs’ performance during the baseline period
Improvement scoring
Compares a SNF’s performance during the performance period against its own prior performance during the baseline period

13. Definitions for SNF VBP Program
Term
Proposed Definition
Achievement Threshold
The 25th percentile of national SNF performance on the quality measure during calendar year (CY) 2015
Benchmark
The mean of the best decile of national SNF performance on the quality measure during CY 2015
Improvement Threshold
The specific SNF’s performance on the measure
Performance Period
CY 2017
Baseline Period
CY 2015

14. Performance Standards
Like mortality rates, the lower the readmissions rate, the better.
As with the Hospital VBP Program, mortality rates are inverted to a “survivability” rate so that higher is better (1 – mortality rate).
Since a lower readmissions rate is better, every SNF’s readmissions rate is inverted using (1 – readmissions rate) for the purposes of the performance standards (i.e., benchmark and threshold) and performance scoring.
Standard
2013
2014
2015
25th Percentile
20.8%
20.54%
20.41%
Threshold
79.2%
79.46%
79.59%
Mean of the Best Decile
16.76%
16.6%
16.4%
Benchmark
83.24%
83.4%
83.6%

15. Calculating SNF Performance for SNF VBP
Performance scores will be calculated under the SNF VBP Program by first inverting SNF-RM rates using the following calculation:
SNF-RM Inverted Rate = 1 – Facility’s SNF-RM Rate
Example: SNF readmissions rate of %
SNF-RM Inverted Rate = 1 –
SNF-RM Inverted Rate =

16. SNF VBP Scoring Methodology Achievement Scoring
Achievement Score: For FY 2019, points awarded by comparing the facility’s rate during the performance period (CY 2017) with the performance of all facilities nationally during the baseline period (CY 2015)
CY 2017
Performance Period
CY 2015
Baseline Period
Time
Achievement Score: Points awarded by comparing the facility’s rate during the performance period (CY 2017) with the performance of all facilities nationally during the baseline period (CY 2015)
Rate better than or equal to benchmark: 100 points
Rate worse than achievement threshold: 0 points
Rate between the two: 1–99 points, awarded according to the formula described in the final rule.
Rate better or equal to benchmark
100 points
Rate worse than achievement threshold
points
Rate between the two (formula in final rule)
1–99

17. SNF VBP Scoring Methodology Improvement Scoring
Improvement Score: Points awarded by comparing the facility’s rate during the performance period (CY 2017) with its previous performance during the baseline period (CY 2015)
Me!
CY 2017
Performance Period
CY 2015
Baseline Period
Time
Awarded according to the formula described in the final rule
1–89 points

18. Accessing Your SNF VBP Report CMS QIES* Systems Welcome Page
*Quality Improvement and Evaluation System (QIES)

19. CASPER* Login Page
*Certification and Survey Provider Enhanced Reports

20. CASPER Topics Page

21. CASPER Reports Page

22. Additional Information
For more information about the SNF VBP Program:
Initiatives-Patient-Assessment-Instruments/Value- Based-Programs/Other-VBPs/SNF-VBP.html
Refer to: FY 2016 SNF-PPS final rule and FY 2017 SNF-PPS final rule
For additional questions,

23. Lindsay Holland Director, Care Transistions, HSAG Lholland@hsag.com
Thank you!
Lindsay Holland Director, Care Transistions, HSAG

24. This material was prepared by Health Services Advisory Group, the Medicare Quality Improvement Organization for California, under contract with the Centers for Medicare & Medicaid Services (CMS), an agency of the U.S. Department of Health and Human Services. The contents presented do not necessarily reflect CMS policy. Publication No. CA-11SOW-C