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Many of our clients, colleagues, and contacts have asked us recently – what the heck just happened with VBP, and how will our reimbursements be affected in the coming year?  For that reason, here are explanations and resources to help you understand VBP.


 With fiscal year 2019 upon us, skilled nursing facilities in Michigan and across the country are feeling the effects of Value-Based Purchasing (VBP).  At first glance, the statistics look gloomy – 73% of SNFs did not receive the full payback of the 2% of Medicare dollars withheld in 2018. Only 27% will receive a bonus.


Penalties and bonuses were determined by CMS calculations based on SNF 30-Day All-Cause Readmission Measure statistics from 2015 to 2017. (Yes that’s right – the data is 1.5-2 years old, and your facility has likely developed a different approach to reducing readmissions since then!) In the VBP calculation, each SNF received scores based on their own individual performance and improvement, as well as a performance score based on their comparison to other SNFs in the country.


Results – How did your SNF do compared to others?


 You can look at your CASPER for your SNF’s Incentive Payment Multiplier, or you can download the SNF VBP Facility-Level Dataset for the entire US here.  (If you want data for only Michigan, send me a note, and I’ll send you an Excel file that shows you how you stacked up in the state.)


If your Incentive Payment Multiplier is… 


  • .98 or less – then you don’t get any money back from the 2% withheld
  • .985 – you get 0.5% back
  • .99 – you get 1% back
  • 1.0 – you get the full 2% back
  • Greater than 1.0 – you get up to 1% bonus, so you get up to 3% back


If all of that is too complicated, you can look up your bonus or penalty here.


Going forward, how will your SNF be affected?


 SNF VBP is not just a one-time penalty or payback. It will affect your reimbursements all year long. Beginning on Oct 1, 2018 through the end of September 2019, top performing nursing homes will receive 1.6% more for each Medicare patient (than they would have otherwise), while those with the lower incentive payment multipliers will lose up to nearly 2% of each payment. Depending on your SNF’s performance, the reimbursement will fall in between those numbers.


Here is a resource to help you understand how your RUG categories will be reimbursed in 2019. In addition, the experts at AHCA/NCAL have developed this FY 2019 Medicare SNF PPS Rate Calculator Tool where you can enter your facility-specific inputs, and the tool provides estimated SNF PPS rates and revenues based on tables from the final rule.


 In future years, the previous year’s readmissions data will determine VBP payment adjustments, so with that logic, FFY 2018 will be the performance year for calculating VBP payment adjustments to rates effective October 2019, and so on.


Now that we understand the initial impact of VBP, what can SNFs do? 


 Simple – reduce your 30-day hospital readmissions. No big whoop, right? Hah! If only reducing readmissions were simple, but alas, it is not due to the complex interdependencies between so many parts of the system, and the innumerable interconnections between patients, medical providers, and informal caregivers.


(And if your readmission rate is already as low as it can safely go, then what else can be done?!)


Our next post will provide answers and cover many tasks, interventions, and practices that can improve care transitions and outcomes, including reducing preventable readmission rates. And of course, we will chime in about how your therapy provider can be an integral part of the team and process.


In the meantime, if you’d like to discuss VBP, your SNFs 2019 PPS rate, your therapy program, or anything else, we are just a phone call or email away.