Blog » Post-Acute Care Eyes Value-Based Purchasing

Post-Acute Care Eyes Value-Based Purchasing

Created Jan 25 2017, 07:00 PM by Lippincott Solutions
  • pay-for-performance
  • VBP
  • Center for Medicare & Medicaid Service
  • SNF
  • Medicare Post-Acute Care Value-Based Purchasing Act of 2015
  • skilled nursing facilities
  • post-acute care
  • CMS
  • value-based purchasing

Thursday, January 26, 2017

Value-based purchasing may be coming to post-care care. The Centers for Medicare & Medicaid Services has already implemented pay-for-performance plans in hospitals and skilled nursing facilities. Now providers of post-acute care are eyeing the Medicare Post-Acute Care Value-Based Purchasing Act of 2015 and considering how the proposed legislation would affect the industry.  


The Medicare Post-Acute Care Value-Based Purchasing Act of 2015 was introduced by sponsor Rep. Kevin Brady (R-Texas), chairman of the House Committee on Ways and Means, in July 2015. The bill seeks to establish a post-acute care value-based purchasing program that provides performance-based incentive payments to skilled nursing facilities, inpatient rehab facilities, home health agencies, and long-term care hospitals.

The bill, which during the 114th Congress got as far as the House Committee on Ways and Means Subcommittee on Health, proposes that 5% of Medicare payments to post-acute care providers be withheld and redistributed to post-acute care organizations based on various value-based purchasing criteria.

Providers of post-acute care aren’t against the idea of value-based purchasing per se. But many do oppose the bill as it stands because of its proposed program design.

In a letter sent to Rep. Brady, health subcommittee chairman Rep. Pat Tiberi (R-Ohio), and Rep. Ron Kind (D-Wisconsin), a handful of major post-acute care organizations voiced their problems with proposed Medicare Post-Acute Care Value-Based Purchasing Act.

Here are three major issues, according to the post-acute care industry.


First, 5% of Medicare payments is too much to withhold for the value-based purchasing program, the letter explained. It added that no more than 2% of Medicare payments should be kept back from providers, and that should be phased-in over 5 years: 1% in year 1, 1.25% in year 2, 1.5% in year 3, 1.75% in year 4, and 2% in year 5.

The groups also pointed out that 2% would be consistent with the withhold percentage for both the hospital and skilled nursing facility value-based purchasing programs.

“We strongly urge you to bring fairness to the withhold percentage by making it consistent,” they wrote.


The proposed value-based program focuses too much on resource use, post-acute care opponents said, and not enough on patient outcomes.

“Under the proposed bill revisions ,“ they wrote, “for the first 2 years, post-acute care providers would be judged solely on resource use. In year 3, when the program in the bill is fully implemented, providers would be judged on just two scores: resource use and functional status. By comparison, the Hospital [Value-Based Purchasing Program] involves 17 measures: 8 process, 7 outcomes, 1 satisfaction and 1 resource use.”

No more than one-tenth of a provider’s value-based purchasing score should be affected by the resources used, they argued, and a narrow set of meaningful outcome measures should be added.


Value-based purchasing outcome measures should be informed by results from the Medicare Post-Acute Transformation (IMPACT) Act of 2014, which called for standardized quality measures across post-acute care settings.

“These analyses of the data could set the stage for significant future changes to post-acute care practices and existing post-acute payment policies. Specifically, patients could end up being served in different care settings than they are today, and it is important that the value-based purchasing model not be based on outdated practices that might no longer exist,” the groups explained. “That is why we believe it is important for the process required under the IMPACT Act to be carried out in accordance with the law’s specified timeline.”

The Medicare Post-Acute Care Value-Based Purchasing Act should be amended to adhere to the IMPACT Act’s timeline, the organizations wrote. Consideration of the IMPACT Act timeline will make sure, they continued, that any outcomes measures used in the value-based purchasing program will be “fully developed, validated and vetted.”