Only between 2% and 3% of skilled nursing providers have received maximum increases in Medicare payments through the Skilled Nursing Facility Value-Based Payment (SNF VBP) Model. Under the SNF VBP program, nursing homes automatically lose 2% of Medicare reimbursements, which they can win back and possibly get a bonus if they reduce rehospitalization rates. Between 21% and 39% of SNFs haven’t earned back any of the withheld amount.

The majority of SNFs have actually lost money. Either way, a new Medicare Payment Advisory Commission (MedPAC) report suggests the gain or loss likely hasn’t been enough to drive intended changes in behavior.

MedPAC also determined that some providers were already positioned to receive higher incentive payments.  These included larger providers, those whose patients had lower risk scores, and those that treated fewer patients at high risk.

The MedPAC report backs up research suggesting that dangling possible rewards or threatening losses under VBP isn’t enough to incentivize much change. Several factors are associated with VBP success, including higher levels of registered nurses (RNs) on staff. However, it is unclear whether investment in more advanced practitioners would actually produce adequate payoffs for providers.

Legislation passed last December tweaked the program to expand allowable metrics and exclude facilities that don’t meet minimum volumes of data for each measure. Nonetheless, MedPAC leaders suggest that Medicare develop a more comprehensive VBP model for SNFs. Specifically, they have discussed the possibility of a “value incentive program” that includes hospitalizations, successful discharges, and Medicare spending in a more complex performance metric. This would make all money available as bonus cash.

Click here to read about the report.