A panel advising Congress on Medicare policy recommended Tuesday eliminating and replacing the skilled nursing facility value-based purchasing program, arguing it is fundamentally flawed.
Congress passed the VBP program in 2014 to improve quality in skilled nursing facilities, but the Medicare Payment Advisory Commission says the program's single measure of performance — hospital readmissions — doesn't fully capture healthcare quality or address variations between facilities in patient populations.
Under the program, MedPAC found that SNFs treating higher shares of dual-eligible beneficiaries or facilities with more medically complex patients were more likely to be penalized under the program.
"The current program disadvantages SNFs that treat lower-income populations," MedPAC executive director Jim Mathews said in a call with reporters.
While CMS withholds 2% of SNF's fee-for-service Part A Medicare payments to fund the program, MedPAC found some of that money is retained by CMS as program savings instead of being distributed to providers.
"Our analysis found that payments were lowered for almost three-quarters of providers and the rewards and penalties were relatively small," the report reads. "Analyzing these flaws, the commission concluded that the current SNF VPB program should be immediately eliminated and a replacement program established as soon as feasible."
The replacement should include small set of performance measures and account for differences in patients' social risk factors, the MedPAC report states. It should also distribute the entire provider-funded pool of dollars as rewards based on provider performance, MedPAC recommended.
MedPAC estimated that these changes would result in increased payments for SNFs with better performance while reducing payments to those with worse performance.
The new program could also result in more equitable payments across SNFs while reducing the incentive to avoiding admitting beneficiaries with high social risk factors of complex medical needs, MedPAC claims.
