On November 14, 2008, CMS issued a letter to state Medicaid directors to gauge interest in the upcoming “Medicare Nursing Home Value-Based Purchasing” demonstration. The three-year “pay-for-performance” initiative seeks to assess the quality of care in nursing homes, based on selected measures of quality, and then make additional payments to those nursing homes with higher quality performance. States interested in hosting the demonstration are asked to provide certain information to CMS by January 9, 2009. CMS expects to select up to five demonstration states in February 2009, and then CMS will solicit nursing homes within those states to participate in the demonstration.