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 Fact Sheet & FAQs



Hospital readmissions not only have the potential for negative physical, emotional, and psychological impacts on individuals in skilled nursing care, but also cost the Medicare program billions of dollars.

Preventing these events whenever possible is beneficial to patients and has been identified as an opportunity to reduce overall health care system costs by improving quality. The issue has become a top priority for the Centers for Medicare & Medicaid Services (CMS) and managed care programs. 


The Protecting Access to Medicare Act of 2014 (PAMA) required CMS to implement the Skilled Nursing Facility (SNF) Value-Based Purchasing (VBP) Program, an effort that links Medicare Part A payments to a SNF’s rehospitalization rate.

Starting October 1, 2018, all SNFs will receive a payment adjustment to their SNF Medicare Part A claims ranging from a 2 percent cut to potentially a 1.5​ percent increase based on rehospitalization rates in prior years. CMS will recalculate the payment adjustment annually every fiscal year (FY) thereafter for the next ten years.

The program works by:

  • Calculating the SNFs rehospitalization rate in the prior year and also the amount of improvement from two years before using Medicare Claims for only Medicare Beneficiaries in Fee-For-Service program (e.g. Managed care are excluded).
  • SNFs earning a score based on their rehospitalization rate and amount of improvement.
  • CMS ranking all SNFs based on their score. Top-ranked SNFs may receive an increase in Medicare payments while the lowest ranked SNFs will receive a 2 percent cut.
    • NOTE: While the exact formula that translates VBP scores into a payment percentage adjustment cannot be finalized until CMS determines the distribution of scores across the nation, AHCA can obtain a reasonable estimate of the financial impact for centers through its LTC Trend Tracker SNF VBP Prediction Tool available to members today.

For more information about the program, visit the CMS website. And download AHCA's fact sheet and Frequently Asked Questions.


Data collected for the first year of the program, which will impact payment starting Oct 1st, 2018, has already been collected by CMS, but there are still several reasons providers should continue to focus on the program and their SNF RM rehospitalization rates:

  • Data used to calculate SNF RM rates in CY 2017 have been collected but not finalized. CMS posts Quarterly Confidential Feedback reports via the Quality Improvement Evaluation System (QIES) and the CASPER reporting application. Providers are encouraged to review these reports and alert CMS to any potential errors pertaining to their SNF RM rates by emailing . Correction requests must be submitted before March 31st, 2018.
  • In August of 2018, CMS will be posting Annual Confidential Feedback reports that contain SNF RM rates for CY 2017 and the corresponding performance scores. Providers have 30 days from the posting of their annual report on the QIES reporting application to alert CMS of any issues.
  • While the performance window for the first year of SNF VBP (CY 2017) has passed, the performance window for the second year of SNF VBP (FY 2018) has already begun. Now is the time to improve rehospitalization rates that will impact payment starting on Oct 1, 2019.  Providers should know how they are trending and put plans in place to improve their scores by:
    • Tracking quality metrics to understand their performance.
    • Comparing rates to state and national benchmarks to have a better understanding of performance relative to others.
    • Improving performance through implementation of quality improvement programs (e.g., INTERACT).
    • Reviewing confidential feedback quarterly reports using the CMS QIES System.

AHCA encourages member centers to access the following free resources and tools to get started.