Effect of post-acute care pay for performance in skilled nursing facilities on outcomes and disparities

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Project summary Post-acute care (PAC) is increasingly common and costly. One in five Medicare beneficiaries receives care after hospitalization in a skilled nursing facility at a cost of more than $28 billion annually. Unfortunately, more than 1 in 4 Medicare beneficiaries are readmitted to the hospital within 30 days, and these readmissions are associated with increased mortality. The Skilled Nursing Facility Value-Based Purchasing program (SNF VBP) ties Medicare reimbursements to SNF to their 30-day all-cause hospital readmission rates. Determining the effect of SNF VBP on patient outcomes is crucial for patients, health systems, and policymakers, and will inform the development and implementation of similar programs in other post-acute care settings. Evaluating potential unintended consequences of this policy is especially important because SNFs face significant financial pressure, and SNFs that care for large proportions of patients who are especially vulnerable to adverse outcomes (e.g. frail, cognitively impaired, poor, or racial and ethnic minority populations) are most likely to be penalized under the program, potentially leading to increased disparities. The COVID-19 pandemic may have magnified the effects of SNF VBP, acting as a second “stress” on SNFs already stressed by SNF VBP. There is an urgent need to determine the effect of SNF VBP on patient outcomes and on disparities, especially given the magnifying effect of COVID-19. Our long-term goal is to drive the delivery of high-value care for all older adults leaving the hospital. SNF VBP is among the first pay-for-performance programs in post- acute care settings. In order to improve the development and success of these policies, it is crucial to understand how their design and implementation influences outcomes. Our central hypothesis, based on preliminary data, is that SNF VBP achieves its intended effects at SNFs that were already high-performing, but has unintended and negative effects at low-performing SNFs. Our specific aims are to: 1) Determine the impact of SNF VBP on intended outcomes prior to the COVID-19 pandemic; 2) Determine the effect of SNF VBP on disparities in outcomes in vulnerable populations; 3) Determine how financial penalties from SNF VBP impacted COVID-19 readiness and outcomes; and 4) Assess key aspects of organizational context among SNFs that improved performance in SNF VBP and explore how this impacted their response to COVID-19. Accomplishing these aims will improve the design of future VBP initiatives, and lead to higher-value care for the growing number of vulnerable older adults receiving SNF care.