Skilled Nursing Facility Value-Based Purchasing Failed To Achieve Hospital Readmission Reductions And Other Targets

Medicare's Skilled Nursing Facility Value-Based Purchasing (SNF VBP) Program is the largest pay-for-performance initiative ever implemented to improve care in SNFs. The program ties SNF performance in reducing thirty-day hospital readmissions among Medicare fee-for-service beneficiaries admitted from the hospital for postacute care to financial rewards or penalties of up to 2 percent of annual Medicare fee-for-service payments to SNFs. Using 2011-21 data from the Medicare Provider Analysis and Review files and other sources, we conducted a difference-in-differences analysis to determine whether the SNF VBP Program was successful in reducing thirty-day readmissions among the target population. Our analysis compared patient outcomes over time in SNFs in the highest quartile of Medicare-paid bed-days (which would be most sensitive to the financial impacts of the program) with those in the lowest quartile. We found that the program had no impact on thirty-day hospital readmissions, thirty-day mortality rates, SNF length-of-stay, or 100-day community discharge rates overall or in specific SNF subgroups during the period 2015-21. In light of changes made to the SNF VBP Program in fiscal year 2024, ongoing monitoring and additional research will be critical to efforts that assess the program's impact and inform SNF quality improvement policies and programs in the years ahead.