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.1



1CMS 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.

Page Last Modified:
11/19/2019 08:57 PM