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

SNF VBP Program Overview

The SNF VBP Program is a Centers for Medicare & Medicaid Services (CMS) program that awards skilled nursing facilities (SNFs) with incentive payments based on the quality of care they provide to Medicare beneficiaries, as measured by performance on a measure of hospital readmissions.

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 of the Department of Health and Human Services to establish a SNF VBP Program. The Program began affecting SNF payments on October 1, 2018.

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) are included in the SNF VBP Program. Participation in the SNF VBP Program does not require any action on the part of SNFs.

Section 111 of the Consolidated Appropriations Act of 2021 amended Section 1888(h) of the Social Security Act to allow the Secretary to apply up to nine additional measures determined appropriate by the Secretary to the SNF VBP Program for payments for services furnished on or after October 1, 2023 (fiscal year [FY] 2024). 

SNF VBP Program Funding

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

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 website.



2019 Novel Coronavirus (COVID-19) Pandemic

On March 27, 2020, CMS announced a national 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) on September 2, 2020, which revised the FY 2022 SNF VBP Program performance period as a result of the PHE for COVID-19 on pages 5483554837. Most recently, as finalized on pages 42503–42516 of the FY 2022 SNF PPS final rule, CMS suppressed the use of SNF readmission measure data for purposes of scoring and payment adjustments in the FY 2022 SNF VBP Program year because the effects of the COVID-19 PHE on the data used to calculate the SNF 30-Day All-Cause Readmission Measure (SNFRM) inhibited CMS’s ability to make fair national comparisons of SNFs’ performance. Under the suppression policy, CMS calculated a risk-standardized readmission rate (RSRR) for both the baseline and performance period and then suppressed the use of SNF readmission measure data for purposes of scoring. CMS instead assigned each SNF a performance score of zero to mitigate the effect that the COVID-19 PHE would otherwise have had on SNFs’ performance scores and incentive payment multipliers. Per this policy, each SNF received an identical incentive payment multiplier, and SNFs did not receive an achievement score, improvement score, or rank. CMS then applied the low-volume adjustment policy as previously finalized on pages 39278–39280 of the FY 2019 SNF PPS final rule; SNFs subject to the low-volume adjustment policy were assigned a net-neutral incentive payment multiplier.

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 the SNF VBP Program Help Desk at should you have additional questions.

Page Last Modified:
04/15/2022 01:32 PM