SNF VBP + SNF QRP = Dash for Dollars

As you know, Phase Two of the Skilled Nursing Facility Value-Based Purchasing (SNF VBP) Program’s Review and Corrections process is upon us. Phase Two provides SNFs with the opportunity to review and request corrections to the performance score and ranking information contained in the Annual Performance Score Report.

The deadline to submit Phase Two Review and Corrections Requests is Friday, August 31, 2018 11:59pm Pacific Time. 

Download a PDF from CMS regarding the SNF VBP Program FAQs

Leadership Considerations:

Medicare withheld 2% of overall Medicare reimbursement for FY 2018. A reduction in hospital readmissions can earn back up to 1.75% of the amount withheld based on the facility’s overall readmission score. To calculate a SNF’s final rate under the VBP program, CMS simultaneously reduces the SNF PPS rate by 2% (as called for by the statute) and then applies the SNF-specific value-based incentive payment (SNF VBIP) adjustment to arrive at the final rate. This is for traditional Medicare Part A only and is based on claims data.

There is one SNF VBP Quality Measure: 30-Day All-Cause, All Condition Hospital Readmission Rate Score which is calculated based on two data sources:

  1. Improvement of the facility’s 2017 readmission rate compared to 2015 facility readmission rate.


  1. Comparison of facility’s readmission rate to all other nursing facilities in the country.

Scores are risk adjusted and calculated using statistical analysis and percentile ranking. The score used by CMS for this measure will not match the facility’s observed readmission rate.

As reported in the final FY2019 SNF PPS payment rule, the net effect of the application of these calculations on SNFs’ FY2019 Medicare Part A claims will range from a 1.97% rate reduction to as much as a 2.33% rate increase (or an additional 0.33%).

Pay attention to the payment “Dash”…

CMS established the Skilled Nursing Quality Reporting Program (SNF QRP) to capture quality data across the post-acute care continuum. There is also significant financial impact related to the QRP. CMS will withhold the annual Payment Update of 2% starting Oct. 1, 2018. Each facility must submit “useable data” in all Medicare MDS fields needed to calculate the quality measures, including fields used for risk-adjustment. Each field must be filled in correctly. If not, there will be a 2% penalty applied to every Medicare claim for the fiscal year.

Common reasons for the 2% deduction:

  1. Use of a dash (-) in an MDS items used to calculate the quality measures. A dash on the MDS usually means that there is no information available to code the item. A dash in the Performance column of Section GG is a typical issue that interferes with QRP compliance.
  2. No End of Medicare Part A PPS Discharge MDS. Unlike regular MDS discharge codes, there is a Yes/No box at A0310H that needs to be coded Yes at the end of every Medicare Part A stay. If the resident had a Medicare stay that ended and they remain in the facility, there needs to be a stand-alone Part A PPS Discharge MDS.
  3. Combining the OBRA Admission and PPS 5-day MDS and submitting this MDS for Medicare Advantage stays. The Admission MDS must be separate from the 5-day MDS for Medicare advantage stays. Submit the Admission MDS and do not submit the 5-day MDS as it is used only for calculating the RUG to be billed to the HMO.
  4. FY 2019 QRP compliance is based on FY 2017 MDS data. Once a Medicare resident is discharged, the facility is not permitted to open a new MDS for that stay or correct an MDS completed during that stay.

Suggested actions to avoid future penalties:

  • Submit all MDS assessment needed for Medicare stays and Correction Requests by Friday, August 31, 2018 at 11:59pm Pacific Time.
  • Monitor all returns to the hospital for admissions and observation stays.
  • Implement an evidence-based quality improvement program, like INTERACT to improve nurse assessment skills and facilitate managing resident illness in the facility to reduce rehospitalizations.
  • Monitor the MDS validation reports and the SNF Review and Correct reports on the CASPER website.
  • Implement coding accuracy audits for PPS MDS assessments to assure that each Section GG performance item has a code rather than a dash.
  • Although the PPS Discharge MDS is not required for billing, it is critical to complete it in a timely manner to allow the correct number of Medicare stays to be used in the QRP Measures.
  • Implement a coding accuracy and timely completion audit system for MDS assessments to monitor timely completion of PPS Discharge MDS.

Pathway Health can support and assist your facility understanding the various reports for monitoring SNF QRP measures, provide an analysis of MDS systems and processes to facilitate coding compliance and data validation and design custom education to meet your organization’s needs. 

Contact us to learn how.


Karolee Alexander,
Director of Reimbursement and Clinical Consulting,
Pathway Health