A recent clarification from the Centers for Medicare & Medicaid Services (CMS) could make it easier for nursing homes to fall short of federal quality reporting requirements — and face financial penalties as a result.
Under updated guidance for the Skilled Nursing Facility (SNF) Quality Reporting Program (QRP), the Prospective Payment System (PPS) 5-day and PPS End-of-Stay assessments will now be counted as two separate submissions. Previously, they were treated as a single assessment for compliance purposes.
That seemingly small change carries significant consequences. If part of one assessment is incomplete, facilities could lose credit for one or both submissions. As a result, providers face a higher risk of dipping below the 90% data completion threshold required to avoid a 2% annual payment update penalty.
According to clinical reimbursement consultant Pat Newberry of SimpleLTC, missing data shared across both assessments could result in what she described as a “double hit” to a facility’s compliance rate. Even a few overlooked items — such as hearing or vision documentation — could cause the entire assessment to be deemed incomplete.
The data being collected now will influence payment years as far out as fiscal 2028, making accuracy critical.
VBP Program Expands Beyond Readmissions
At the same time, CMS is broadening its SNF Value-Based Purchasing (VBP) Program. What began as a single 30-day all-cause hospital readmission measure has expanded significantly.
As of October 2025, four new quality measures were added. Four more are scheduled for October 2026, bringing the total to eight. By 2028, the original readmission metric will be replaced with a 30-day potentially preventable readmission measure.
The expanded measures include infection-related hospitalizations, staffing hours per resident day, staff turnover, discharge to community, falls with major injury, discharge function scores, hospitalizations per 1,000 long-stay resident days, and preventable readmissions.
Unlike QRP, which penalizes noncompliance, the VBP program withholds 2% of Medicare payments from all facilities and redistributes the funds based on performance or improvement.
Many of the measures affecting 2028 payments are currently in their data collection phase. Meanwhile, states are increasingly aligning their own quality incentive programs with federal value-based purchasing models, pooling funding from CMS, state agencies, and participating facilities.
Heightened Oversight and SFF Changes
CMS oversight is also intensifying. Roughly 1,500 nursing homes have been selected for Minimum Data Set (MDS) validation audits, with notifications sent electronically through the iQIES system. Facilities must respond within five days and submit documentation within 45 days to avoid noncompliance status.
In addition, the Office of Inspector General has ramped up scrutiny of Patient-Driven Payment Model (PDPM) billing after audits uncovered widespread documentation deficiencies. CMS reported an 11.8% SNF claim error rate in 2025, signaling continued audit activity.
Finally, CMS revised its Special Focus Facility (SFF) selection criteria, placing greater weight on long-stay fall prevalence rather than staffing levels. Complaint allegations tied to data discrepancies during the transition from ASPEN to iQIES have been removed from public reporting for now, though substantiated complaints remain available.
Together, the changes underscore a broader shift toward stricter documentation standards and performance-based reimbursement — with financial stakes rising for providers that fall short.
