Scoring Methodology & Payment Adjustment

For the FY 2025 SNF VBP Program year, the SNF VBP Program will use the SNF 30-Day All-Cause Readmission Measure (SNFRM), which evaluates the risk-standardized readmission rate (RSRR) of unplanned, all-cause hospital readmissions. SNFs' RSRRs in the performance period are compared to two metrics to determine the performance score:

1. The SNF's own past performance during the baseline period, used to calculate an improvement score (scores range from 0 to 90; higher is better)
2. National SNF performance during the baseline period, used to calculate an achievement score (scores range from 0 to 100; higher is better)

CMS compares a SNF’s achievement and improvement scores; whichever score is higher becomes the SNF’s performance score.

For more in-depth information on how achievement and improvement scores are calculated, please see the FY 2017 SNF PPS final rule (pages 52000–52005) and the SNF VBP Program: FY 2025 Incentive Payment Multiplier Calculation Infographic (PDF).

Incentive Payment Calculation Methodology

Each SNF’s performance score is transformed into an incentive payment multiplier (IPM) using a logistic (or S-shaped) exchange function, which is applied to your SNF's adjusted federal per diem rate for services provided during the applicable SNF VBP Program year. When CMS makes payments for a SNF’s Medicare fee-for-service Part A claims, the adjusted federal per diem rate is multiplied by the SNF’s IPM. Please see the SNF VBP Program Exchange Function Methodology Report (PDF) for more information about why the logistic exchange function was selected and how SNF performance scores are used to derive incentive payments.

For more information on how performance standards, performance scores, and IPMs are calculated, please see the SNF VBP Program: FY 2025 Incentive Payment Multiplier Calculation Infographic (PDF).

Case Minimum Policy and Scoring Policy for SNFs Without Sufficient Baseline Period Data

In the FY 2023 SNF PPS final rule (pages 47585–47588), CMS finalized a case minimum policy for the SNFRM and removed the existing low-volume adjustment (LVA) policy. Starting with the FY 2023 Program year, SNFs must have a minimum of 25 eligible stays for the SNFRM during the applicable performance period in order to be eligible to receive a performance score on that measure.

For the FY 2025 Program year, SNFs that do not meet the SNFRM’s case minimum (25 or more eligible stays) in the performance period (FY 2023) are excluded from the SNF VBP Program. Payments to these SNFs are not affected by the SNF VBP Program and these SNFs will not receive an incentive payment multiplier for the FY 2025 Program year; instead, these SNFs will receive their adjusted federal per diem rate.

SNFs with fewer than 25 eligible stays during only the baseline period (FY 2019) are included in the SNF VBP Program for FY 2025 but are scored on achievement only. These SNFs will not be scored on improvement, so their achievement score will equal their performance score.

Resources

• SNF VBP Program: FY 2025 Incentive Payment Multiplier Calculation Infographic (PDF)
• SNF VBP Program Exchange Function Methodology Report (PDF)