David C. Grabowski, PhD is the principal investigator and contact person for this grant. The Nursing Home Value Based Purchasing (NHVBP) demonstration is part of a CMS initiative to improve the quality of care for Medicare beneficiaries in nursing homes. Beginning in the summer of 2009, the demonstration is a 3-year effort in Arizona, New York and Wisconsin nursing homes. To facilitate evaluation of the NHVBP effort, facilities volunteering to participate were randomly assigned to treatment and control groups. Each participating facility will receive a composite performance score from 0-100 based on selected quality measures. Within each state, rankings of providers on these scores will determine the distribution of performance-based payments at the end of each year. Reflecting the budget neutrality requirement for the demonstration, performance payments in each state are contingent on facilities’ ability to generate a cost savings pool through reducing avoidable hospitalizations.

Our evaluation will analyze a range of issues including the amount of performance payments received and subsequent impacts on nursing homes’ quality improvement and financial status. We will also examine the impact of the demonstration on incidence of avoidable hospitalization and quality of care levels in participating nursing homes. We will assess the impact of the demonstration on nursing home management, organization and delivery of services. Finally, we will assess the impact of the demonstration on Medicare and Medicaid program expenditures and savings, and evaluate the overall cost-effectiveness of the demonstration. The evaluation will comprise a multi-method data collection approach that integrates demonstration-generated administrative, cost, quality and performance data with qualitative information solicited through direct interviews with nursing home staff. Data collection will follow the course of the 3-year demonstration.