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

SNF VBP Program Overview

The Centers for Medicare & Medicaid Services (CMS) awards incentive payments to skilled nursing facilities (SNFs) through the SNF VBP Program to encourage SNFs to improve the quality of care they provide to Medicare beneficiaries. For the Fiscal Year (FY) 2024 Program year, performance in the SNF VBP Program is based on a single measure of all-cause hospital readmissions.

In Section 215 of the Protecting Access to Medicare Act of 2014 (PAMA), Congress added sections 1888(g) and (h) to the Social Security Act, which required the Secretary of the Department of Health and Human Services (HHS) 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 assessed on both improvement and achievement, and scored on the higher of the two;
  • 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. Inclusion in the SNF VBP Program does not require any action on the part of SNFs.

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

In the FY 2023 SNF PPS final rule (pages 47564–47580), CMS adopted two additional measures for use beginning in the FY 2026 SNF VBP Program year: 1) Skilled Nursing Facility Healthcare-Associated Infections (SNF HAI) Requiring Hospitalization measure; and 2) Total Nurse Staffing Hours per Resident Day (Total Nurse Staffing) (including Registered Nurse [RN], Licensed Practical Nurse [LPN], and Nurse Aide hours) measure. CMS also adopted one additional measure for use beginning in the FY 2027 SNF VBP Program year: Discharge to Community (DTC)—Post-Acute Care Measure for SNFs (National Quality Forum [NQF] #3481).

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 then 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, and the remaining 40% of the withhold is retained in the Medicare Trust Fund, as finalized in the FY 2018 SNF PPS final rule (pages 36619–36621).



2019 Novel Coronavirus (COVID-19) Pandemic

National Extreme and Uncontrollable Circumstances Policy:

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 (pages 5483554837).

FY 2023 Program Year:

Most recently, in the FY 2023 SNF PPS final rule (pages 47559-47562), CMS suppressed the use of SNF readmission measure data for purposes of FY 2023 scoring and payment adjustments in the FY 2023 SNF VBP Program year because the continuing effects of the COVID-19 PHE on the data used to calculate the SNFRM inhibited CMS’s ability to make fair national comparisons of SNFs’ performance. Under the suppression policy, CMS calculated an 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. SNFs that did not meet the SNFRM’s case minimum (25 or more eligible stays) in the performance period (FY 2021) are excluded from the SNF VBP Program for FY 2023; payments to these SNFs in FY 2023 will not be affected by the SNF VBP Program and instead these SNFs will receive their full federal per diem rate.

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:
03/08/2023 01:26 PM