Skilled nursing sector talk about how the Centers for Medicare and Medicaid Services (CMS) is conducting initial audits under the Skilled Nursing Facility Validation Program with special attention to skin and functional assessments (GG tasks) should be part of the overall awareness of the new program, experts say.

The "new" SNF QRP/VBP Data Validation process began in January 2026 following publication of the Fiscal Year (FY) 2025 Final Rule, which established that the Secretary of Health and Human Services would implement a formal data validation process for both the Skilled Nursing Facility Quality Reporting Program (SNF QRP) and the Skilled Nursing Facility Value-Based Purchasing (SNF VBP) Program beginning with the FY 2025 performance period/FY 2027 program year.

Alicia Cantinieri, managing director, clinical reimbursement and regulatory compliance, Zimmet Healthcare Services Group, said all SNFs that submitted at least one MDS assessment record during the previous calendar year and at least one MDS assessment during the current fiscal year are eligible for selection.

Audit Ground Rules

For facilities selected for audit, the contractor will request 10 MDS assessment records, and each facility will have 45 days to upload the requested documentation. Failure to meet the submission deadline — even if only one requested record is missing — results in the facility being deemed to have "failed" the audit, she said.

Facilities that fail the audit are subject to a 2 percent reduction to the Annual Payment Update (APU) for the applicable program year. For this initial audit cycle, which reviews FY 2025 data, the penalty would apply to FY 2027 APU.

“Currently, the penalty is tied to data submission compliance rather than the accuracy of the validated data itself. However, this does not mean the process could not evolve in future program years to include direct consequences related to data validation findings,” Cantinieri said.

In addition, many of the MDS items required to meet QRP data completion thresholds and calculate QRP and/or VBP measures are also used to determine Medicare Part A reimbursement.

Section GG and Skin Care

She said examples include the aforementioned Section GG Self-Care and Mobility items and M0300A-F Skin Conditions. Measures associated with these MDS sections include:

• Changes in Skin Integrity Post-Acute Care: Pressure Ulcer/Injury

• Discharge Function Score (also a SNF VBP measure beginning in FY 2027)

• Application of the Inpatient Rehabilitation Facility (IRF) Functional Outcome Measure: Discharge Self-Care Score for Medical Rehabilitations Patients

• Application of the IRF Functional Outcome Measure: Discharge Mobility Score for Medical Rehabilitation Patients

All four measures compare a resident's status at admission and discharge to evaluate improvement and achievement of expected functional outcomes.

“It also remains unclear whether findings from future SNF QRP/VBP Data Validation audits identifying inaccurate MDS coding could trigger additional reimbursement-focused audits,” Cantinieri said.

What to Do, Now

Notification letters and results reports are uploaded to the iQIES MDS 3.0 Provider Preview Reports folder. She said facilities that have not yet been selected should consider monitoring this folder at least weekly, as the 45-day submission time frame begins on the date the notification letter is uploaded.

Results reports are expected to be posted within approximately three months following the record submission deadline.

“Facilities should carefully review audit results to identify coding trends, documentation gaps, or misunderstandings related to MDS coding guidance,” Cantinieri said.

“Organizations should also implement corrective action processes and consider initiating a Quality Assurance and Performance Improvement [QAPI] project to evaluate whether similar coding concerns exist in additional records, given that a sample size of 10 is small relative to the number of assessments completed each year. Inaccurate coding can affect reimbursement, quality measures, Five-Star ratings, and survey outcomes.”

As with any audit or survey process, success ultimately depends on strong supporting documentation and accurate MDS coding. “As we often say, it is all connected,” she said.

Comments or questions? Contact Patrick Connole at pconnole@parkplacelive.com.