While regulation offers an approach for enforcing a minimum standard of quality that nursing centers are expected to achieve, arguably there are other, better ways for policy to incentivize quality improvement. QIS, which uses standards based on the Institute of Medicine report and enacted in the Nursing Home Reform Act, provides metrics that can be used for more than survey and certification. And, ideally for providers, methods used in other policy initiatives like value-based purchasing (VBP) should use similar metrics to those used in survey and certification so that policies aimed at enhancing quality can be harmonized.

While regulation is based on a minimum threshold for quality using these metrics, VBP should encourage the highest levels of performance that can be achieved, adjusting for case mix or risk differences between facilities.

In an attempt to align the metrics used in VBP with those in QIS, I have worked as a contractor to both the Medicare Payment Advisory Commission (MedPAC) and the Centers for Medicare & Medicaid Services (CMS) in the development of their VBP programs.

In its March 2008 report to Congress, MedPAC said, “A pay-for-performance program for SNFs [skilled nursing facilities] should be established to tie payments to patient outcomes. Two well-accepted measures—risk-adjusted rates of community discharge and potentially avoidable rehospitalization—should be included in a starter measure set…”

The same rehospitalization measure was part of the CMS “Plan to Implement a Medicare Skilled Nursing Facility Value-Based Purchasing Program.”

The Admission Sample Record Review in the QIS includes a measure of all-cause hospitalization within 30 days of SNF admission.

For Stage 1 of QIS, the raw rate is used with a low threshold because in Stage 2 surveyors review cases to take acuity into consideration and determine whether these readmissions were preventable. But VBP needs to use a more refined measure as the basis for payment incentives. Thus, risk-adjusted rates of potentially avoidable readmissions were recommended for VBP.

Six years after the MedPAC recommendation, potentially avoidable measures have found their way into legislation requiring the establishment of a SNF VBP program.

In April of this year, the Protecting Access to Medicare Act of 2014 was signed into law, with Section 215 stating that “Not later than Oct. 1, 2016, the secretary shall specify a measure to reflect an all-condition, risk-adjusted potentially preventable hospital readmission rate for skilled nursing facilities.” Furthermore, the legislation says that “the SNF VBP Program shall apply to payments for services furnished on or after Oct. 1, 2018.” www.govtrack.us/congress/bills/113/hr4302

This VBP initiative is aligned with QAPI opportunities for skilled care because it is the preventable readmissions that SNFs can reduce with QAPI efforts. By reducing potentially preventable readmissions, which represent almost half of the readmissions from SNFs, providers will reduce their all-cause readmission rate such that it will likely be less than the QIS threshold. And even if the QIS raw rate threshold is exceeded, but there are no preventable readmissions, then surveyors should have no reason to cite deficient practice.