The Skilled Nursing Facility Value-Based Purchasing (SNF VBP) Program

SNF VBP Program Overview

The SNF VBP Program rewards skilled nursing facilities (SNFs) with incentive payments based on the quality of care they provide to Medicare beneficiaries, as measured by a hospital readmissions measure.

Section 215 of the Protecting Access to Medicare Act of 2014 (PAMA) added sections 1888(g) and (h) to the Social Security Act, which required the Secretary to establish a SNF VBP Program.

PAMA specifies that under the SNF VBP Program, SNFs:

  • Are evaluated by their performance on a hospital readmission measure;
  • Are scored on both improvement and achievement;
  • Receive quarterly confidential feedback reports containing information about their performance; and
  • Earn incentive payments based on their performance.

All SNFs paid under Medicare’s SNF Prospective Payment System (PPS)  (PDF) are included in the SNF VBP Program.

SNF VBP Program Funding

As required by statute, CMS withholds 2% of SNFs’ fee-for-service (FFS) Part A Medicare payments to fund the program. This 2% is referred to as the “withhold”. CMS redistributes 60% of the withhold to SNFs as incentive payments.

CMS is required to redistribute between 50% and 70% of this withhold to SNFs as incentive payments. CMS redistributes 60% of the withhold to SNFs as incentive payments. This policy was finalized in the FY 2018 SNF PPS Final Rule, available in the “Resources” section of this web site.



2019 Novel Coronavirus (COVID-19) pandemic

CMS is implementing extreme and uncontrollable circumstances policy exceptions and extensions (PDF) for upcoming quality measure reporting and data submission deadlines, including for the SNF VBP Program, in response to the COVID-19 public health emergency (PHE). CMS also issued an interim final rule with comment period (IFC) which revised the FY 2022 SNF VBP Program performance period as a result of the PHE for COVID-19.

For more information on the temporary regulatory waivers and new rules for long term care facilities, reference the Long Term Care Facilities (Skilled Nursing Facilities and/or Nursing Facilities): CMS Flexibilities to Fight COVID-19 fact sheet (PDF)

For a complete and updated list of CMS actions, and other information specific to CMS, please visit the Current Emergencies Website, and Coronavirus Waivers & Flexibilities pages for up to date guidance, or contact should you have additional questions.


Page Last Modified:
10/27/2020 12:50 PM