Nursing Home Value-Based Purchasing Demonstration

Under this demonstration, CMS will assess the performance of participating nursing homes based on selected quality measures. CMS will then make incentive payment awards to those nursing homes that perform the best or improve the most in terms of quality.


The demonstration will be open to free-standing and hospital-based facilities and will include beneficiaries who are on a Part A stay as well as those with Part B coverage only. The demonstration will be conducted in 3 states: Arizona, New York and Wisconsin.

Each year of the demonstration, CMS will assess each participating nursing home's quality performance based on four domains: staffing, appropriate hospitalizations, minimum data set (MDS) outcomes, and survey deficiencies. CMS will award points to each nursing home based on how they perform on the measures within each of the domains. These points will be summed to produce an overall quality score. For each State, nursing homes with scores in the top 20 percent and homes that are in the top 20 percent in terms of improvement in their scores will be eligible for a share of that State's savings pool.

Initiative Details

A payment pool will be determined each year for each State based on Medicare savings that result from reductions in the growth of Medicare expenditures, primarily from reductions in hospitalizations. We anticipate that higher quality of care will result in fewer avoidable hospitalizations, resulting in decreases in Medicare-paid hospitalizations and subsequent skilled nursing home stays.

The demonstration began July 1, 2009. The number of participating nursing homes in each State is as follows: Arizona - 41 homes; New York - 79 homes; Wisconsin - 62 homes.


Latest Evaluation Report

Additional Information

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