What’s new: This week DMAS published the SFY 2027 Nursing Facility Value-Based Purchasing (VBP) Methodology. The updated methodology reflects several changes to the program metrics relative to the first four years of the program. 

Of note, CMS approval is required for many aspects of the program’s methodology. Because CMS’s review and approval process will not take place until the second half of the SFY 2027 performance period (i.e., Federal Fiscal Year 2026), the SFY 2027 program methodology described may be modified at a later date in order to secure CMS approval.

Highlights of the methodology changes:

• The RN and UTI measures have been dropped from the program due to overall very good performance.
  • The RN metric has been replaced by the Total Nurse Staffing Turnover metric.
  • The UTI metric has been replaced by the Percentage of Long-Stay Residents with One or More Falls with Major Injury metric.
• The ER and Hospitalization metrics have been suspended for Year 5 due to an increased incidence of non-calculation by CMS due to the exclusion of Medicare Advantage residents resulting in too small sample sizes; an alternative approach or replacements will be considered in the interim for Year 6.
  • The 15 percent each in funding that would have been allocated to these two metrics will be allocated to the two quality (non-staffing) metrics, increasing their share of funding to 30 percent each for Year 5.
• DMAS has modified the staffing ratio thresholds to set the minimum attainment level back at the (yet to be implemented) state staffing mandate level of 3.08 and has increased both the “Better” and “Best” thresholds by a like percentage amount.
• Even though all four metrics should have full year data available in the late January / early February timeframe, DMAS will still be making two lump sum payments by moving the two staffing metrics (40 percent of funding) to the June/July payment cycle.
• In Year 5, a facility that is designated as a Special Focus Facility (SFF) or is on the SFF candidate list at the end of the performance period (as in CMS’s Provider Information dataset published in October 2026) will be excluded from participation in the VBP program (i.e., ineligible for attainment and improvement payments).
• Language in the document references pending approval from CMS about how to address performance declines at any facility from the previous year to Year 5.
  • Once CMS provides guidance on how Virginia should handle such situations, DMAS will be required to implement those changes to the program. As a result, specifics are not yet known, but DMAS is indicating that adjustments will likely be necessary before the actual payment cycle.

If you have any questions, please direct them to either April Payne or Steve Ford or both of them as appropriate.