What percentage of the withhold does CMS pay back to providers in incentive payments under SNF VBP quizlet?

The value-based purchasing program (VBP) available to skilled nursing facilities, while garnering the attention of the Biden administration in its sweeping reform initiatives, was already under the microscope with federal agencies.

The Centers for Medicare & Medicaid Services (CMS) already has been authorized to apply nine measures to the program in adherence with the Consolidated Appropriations Act of 2021 and had solicited commentary from stakeholders on potential measures ahead of what the Biden administration issued last month.

CMS can apply the measures for provider services rendered on or after Oct. 1, 2023.

But the program could expand even further. A fact sheet published by the White House outlines staff adequacy, retaining staff and the resident experience as additional measures to quantify SNF performance under the program.

State initiatives like the Compromise Rate Reform bill in Illinois also tie staffing measures to reimbursement, but via Medicaid and with state financial support.

“The topics that they’re talking about adding to the VBP are very interesting because it’s showing that the value-based purchasing program is now going to expand – right now, the SNF VBP is based on just one measure,” said Cynthia Morton, executive vice president of the National Association for the Support of Long-Term Care (NASL).

Currently, the SNF VBP program is designed to improve patient outcomes by awarding financial incentives or penalties based on 30-day hospital readmission rates; VBP sets a performance and improvement baseline for SNFs to meet in order to avoid a penalty.

VBP expansion in CMS hands

CMS already has the authority to add nine additional measures to the SNF VBP, Morton said. The agency was given the green light in the SNF Part A Final Rule last year.

CMS put out a request for comments on potential measures, asking stakeholders what they think those nine additional measures should be.

“They’re expanding value-based care for Part A under fee for service (FFS). It’s not being done really loudly,” said Morton. “[CMS] opened it up last year in the rule and said, ‘Give us some comments on some of the measures that we’re considering.’”

One measure under consideration concerns discharges, a self-care score that measures the functional change of the patient with respect to their self care. It measures how they’ve changed from when they were admitted to when they are discharged, in terms of functional gains, Morton said.

Another aligns with what has been mentioned in the Biden reforms: nurse staffing hours per resident per day.

“In some ways, CMS was already on this journey to add a staffing-related measure to the VBP. The president’s announcement expedites all that, amplified it, and the president’s announcement added a few other areas,” said Morton.

In terms of staffing adequacy and retainment measures, CMS would use the payroll-based journal (PBJ), Morton said. Data is submitted by operators to the PBJ.

“I want to keep an open mind on this, but these measures, they’re based on data, and they’re only going to be as good as the data that is submitted,” Morton said. “As stakeholders with CMS, we’re going to have to work pretty hard with CMS to create measures that present the data on staffing accurately.”

VBP as it stands is more punitive

In a study on the SNF VBP, medical journal JAMA found the program doesn’t offer facilities a viable path to avoid penalties using readmission rate data.

The statute that created VBP was designed with CMS cost savings in mind – “more SNFs are penalized than given a bonus by design,” JAMA researchers wrote.

Only 0.7% of poor-performing SNFs were able to improve enough to avoid a financial penalty under the program, JAMA found.

The study was published Feb. 28 and involved 14,959 SNFs across the country; there are 15,327 facilities in the country as of 2020, according to the Kaiser Family Foundation.

Brian Cloch, principal at SNF owner/operator Innovative Health, said the Biden administration’s approach to value-based care has been “inconsistent.”

Leadership with the prior administration understood the long-term solution to rising health care costs was making providers responsible for total cost of care, Cloch said.

“The abuses in our health care system come from a fee-for-service environment. They go away completely when one entity has total risk,” he added.

The current program withholds 2% of all Medicare fee-for-service (FFS) revenue and redistributes a portion of funds as incentive payments. Depending on readmission rates, a SNF could lose its 2% in withheld revenue, or get an additional 2% bonus on top of receiving its withheld revenue – these two examples are the worst and best-case scenarios.

A caveat – SNFs can only get 60% of the 2% in withheld revenue, Morton said; CMS keeps the rest of that withheld amount.

“In some ways it’s not altogether fair that they can’t earn their whole 2% back, especially if they have outstanding performance on the measure; that is set in statute,” added Morton.

Any changes to the 2% rule would have to be made by Congress, Morton explained.

CMS opened a technical expert panel (TEP) to look more closely at the 2% scoring methodology, Morton said, an indicator that CMS plans to look at potential changes to this aspect of VBP.

TEPs act as a pre-regulatory, off-the-record meeting between stakeholders and CMS to get feedback on policy ideas.

Still, Congress might not act on any changes offered up by CMS.

The Medicare Payment Advisory Commission (MedPAC) in June 2021 advised Congress to eliminate SNF VBP “as soon as possible” due to design flaws. MedPAC identified those flaws as including having only one measure, a failure to address social determinants of health, and a lack of incentives for SNFs to improve.

One thing is clear though – the SNF VBP had its own section in the White House reforms for nursing homes; it’s being closely examined by agencies that could change its trajectory in the industry.

“This whole proposal has really made this issue very prominent … when the president announces it, that’s about as high as you get, that’s as prominent as you can get,” added Morton. “We’re going to really need to work closely with CMS and work closely with stakeholders to get these formulas right, to measure the staffing information, the staffing data.”

State efforts mirror VBP expansion

At the state level, Illinois at the end of February pushed forward similar changes linking reimbursements to patient outcomes via the Compromise Nursing Home Rate Reform bill.

The proposed law sponsored by State Reps. Anna Moeller and Denyse Stoneback would tie Medicaid reimbursement rates to “demonstrated and sustained nursing home outcomes,” according to AARP Illinois.

Other aspects of the Illinois bill promote greater transparency of nursing home ownership and revenue, ending room crowding, addressing racial inequities and health disparities of Medicaid beneficiaries, and prioritizing accountability, quality of care and workforce development among long-term care facilities.

The state initiatives mirror other aspects of the Biden reforms.

“While this is not entirely new – it could be a precursor to revamping the current patient-driven payment model or PDPM – this is something we are monitoring during the next few months,” Mizuho said in an analyst note of the Illinois bill and Biden reforms. “Potential changes could carry risk, including re-introducing bundled payments.”

One glaring difference between the Illinois bill and Biden’s call to expand VBP measures is funding, according to Matt Hartman, executive director of the Illinois Health Care Association (IHCA).

While the amount is fluid right now, a tax tied to the bill would generate about $500 million for increased Medicaid reimbursements.

“Illinois has always been a low Medicaid state, we’ve been in the bottom handful for many years and just recently we’ve climbed into the mid 40s,” Hartman said. “The foundation for revenue is an adjustment to our tax system, to our provider taxes. We have two in Illinois, this would combine them into a singular tax on occupied beds, non-Medicare occupied beds, to generate some significant funding.”

Angela Schnef, president and CEO of LeadingAge Illinois, said the initial bill had almost doubled the amount of money coming into the state to help those who are on the Medicaid system.

“We believe in value-based reimbursement, we believe in paying for performance, but we also believe that putting that out there without a funding mechanism to support that is not going to lead to success,” Schnef said.

The Illinois bill combines funding and paying for performance together, Schnef added.

IHCA has been trying to get aspects of the bill in play for about six years now, Hartman said, and the association has been working with the state on different iterations of the bill for two years.

The Illinois legislature is due to make a decision on the bill by April 8, Hartman said.

“This isn’t just the legislature and the long-term care associations, but [it’s] resonating with the AARP, SEIU has a stake in this and has been a part of those talks as well as has members of the General Assembly and the administration,” he said. “I think we’re close. It’s not soup yet but I think we can get it done.”