Understanding the Impact of FY27’s SNF VBP Program

The Scores Are In

The SNF FY 2027 VBP Performance Score Reports are now available to facilities in iQlES as of July 31, 2026. The reports contain facility performance information for the FY 2027 SNF VBP program year, including the Incentive Payment Multiplier (IPM), which will adjust the federal per diem rate for Medicare Part A fee-for-service claims from Oct. 1, 2026, through Sept. 30, 2027.

Background on SNF VBP Incentive Payment Multiplier

The IPM determines how a facility's Medicare Part A payments are adjusted during the applicable fiscal year. CMS withholds 2 percent of each SNF's adjusted federal per diem rate, then redistributes a portion of those funds based on the facility's VBP performance and converts the facility's performance score into an IPM. To determine the IPM, facilities are scored on both achievement relative to nursing homes nationwide and improvement over their own baseline performance, with the higher score used to determine the payment adjustment. A multiplier below 1.0 reduces the payment; a multiplier equal to 1.0 is net-neutral; and a multiplier above 1.0 allows the facility to earn back more than the original 2 percent withholding.

From Readmissions to a Broader Performance Program

The SNF VBP program began in FY 2019 with a single all-cause hospital readmission measure. Since then, the program has evolved to include eight measures, many of which are used in other quality programs. Data for the measures comes from claims, the Minimum Data Set (MDS), and Payroll-Based Journal (PBJ) submissions. For FY 2027, the program includes:

• SNF 30-Day All-Cause Readmission Measure (SNFRM)

• SNF Healthcare-Associated Infections Requiring Hospitalization (SNF HAI)

• Discharge to Community—Post-Acute Care Measure for SNFs (DTC PAC SNF)

• Number of Hospitalizations per 1,000 Long Stay Resident Days (LS)

• Total Nursing Staff Turnover

• Total Nurse Staffing Hours per Resident Day

• Discharge Function Score

• Percent of Residents Experiencing One or More Falls with Major Injury (LS)

Today's Payment Reflects Yesterday's Performance

Data for the FY 2027 VBP program is not based on current performance. MDS, claims, and PBJ data for the baseline comparison are from four fiscal years before the VBP payment period, and the performance period data are from two fiscal years before the VBP payment period. Poor performance cannot be corrected after the final report is issued; by the time the IPM affects claim payments, the performance period has already closed. Facilities may submit requests to correct their performance score and ranking up to 30 days after the performance report is made available in iQIES, before the information is publicly reported on the CMS Provider Data Catalog; however, this is limited to errors made by CMS or its contractors in calculating a SNF's measure result. Errors in claims data, MDS, or PBJ data cannot be corrected through this process. Facilities don't have to outperform every other SNF in the country to improve their results, but they must understand whether CMS rewards them more for achievement or for improvement.

Data periods for the eight measures used in the FY 2027 program year are as follows:

Baseline Period: FY 2023 (10/1/22 – 9/30/23)

Performance Period: FY 2025 (10/1/24 – 9/30/25)

Finding the Story Behind the Score

As with any quality program report, root causes of lower or poor performance should be investigated. Although, as stated above, changes cannot be made to the data once the data submission period has passed, looking into the root causes can impact future years.

Common VBP Management Mistakes

Some common mistakes facilities encounter when managing their VBP outcomes are noted below.

• Reviewing results only when the annual report is released

• Assigning sole responsibility to the MDS department

• Focusing on the multiplier without examining individual measures

• Failing to validate PBJ, claims, and MDS data or meet submission deadlines

• Treating every hospital transfer as unavoidable

• Waiting until immediately before or after discharge to address transition risks

• Failing to connect turnover with clinical and financial outcomes

• Using current data to explain a score generated from an earlier performance period

Building a Prospective VBP Strategy

The measures used in the VBP program are used across other quality programs, such as the SNF Quality Reporting Program (QRP) and Five-Star Quality Measures, as well as in survey compliance and some state Medicaid quality incentive programs. They may use overlapping data, but the measures may use different data, have different time frames, and have different financial consequences, which is important to understand when looking at performance across those programs. A proactive versus reactive approach to managing the measures is more effective than chasing down data from previous years. Recommendations include:

• Review hospital transfers in real time

• Track infections resulting in hospitalization

• Reconcile staffing schedules, payroll, and PBJ submissions

• Analyze turnover by role, unit, shift, tenure, and supervisor

• Conduct post-discharge follow-up and trend unsuccessful community discharges

SNF VBP is no longer simply a retrospective readmission penalty. It is a multifaceted performance program connecting staffing stability, clinical outcomes, data integrity, successful transitions, and Medicare reimbursement. The facilities best positioned for success will use today's report not merely to explain October's payment but to influence the payment adjustments that follow.

Alicia Cantinieri, MBA, BSN, RN, CHC, RAC-MT, RAC-CTA, DNS-CT, QCP, is the managing director, clinical reimbursement and regulatory compliance, Zimmet Healthcare Services Group.

Questions or comments on the article? Contact Patrick Connole at pconnole@parkplacelive.com.