Health Reform WK-EDGE CMS proposes $887M rate hike for SNFs in 2020
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Tuesday, May 7, 2019

CMS proposes $887M rate hike for SNFs in 2020

By Bryant Storm, J.D.

Skilled nursing facilities can expect a 2.5 percent or $887 million payment increase in fiscal year 2020.

Aggregate payments to skilled nursing facilities (SNFs) will increase by $887 million in fiscal year (FY) 2020 as compared to FY 2019, CMS announced in a proposed rule to update SNF payment rates. The proposal also revises the definition of group therapy, the SNF Value-Based Purchasing Program (VBP), the SNF Quality Reporting Program (QRP), and the revised assessment schedule under the new Patient Driven Payment Model (PDPM), which takes effect October 1, 2019. CMS is accepting comments on the proposed rule through June 18, 2019 (Proposed rule, 84 FR 17620, April 25, 2019).

Payment changes. The SNF prospective payment system uses prospective, case-mix adjusted per diem payment rates, which are adjusted each year by final rule. For FY 2020, CMS is proposing a 2.5 percent raise, which is estimated to result in an $887 million increase in payments to SNFs. The estimated increase in SNF payments stems from a 3.0 percent market basket increase factor and a 0.5 percentage point reduction for the multifactor productivity adjustment required by Section 3401(b) of the Patient Protection and Affordable Care Act (ACA).

VBP. The SNF VBP awards SNFs for their performance on value based measures. For FY 2020, CMS is proposing to change the name of the VBP measure to "Skilled Nursing Facility Potentially Preventable Readmissions after Hospital Discharge" measure. Despite the name change, the measure will retain the previous abbreviation—SNFPPR.

QRP. Under the SNF QRP, SNFs are required to report quality data to CMS. Facilities that fail to submit that data face a 2 percentage point reduction from the applicable fiscal year’s annual market basket percentage update. CMS is proposing two new quality measures in FY 2020 to assess the sharing of health information. The proposed measures are: (1) Transfer of Health Information from the SNF to Another Provider, and (2) Transfer of Health Information from the SNF to the Patient.

PDPM. Effective October 1, 2019, CMS is formally replacing the Resource Utilization Group, Version IV (RUG-IV) with a new Skilled Nursing Facility (SNF) case mix classification system: the SNF Patient-Driven Payment Model (PDPM) (see CMS changes SNF case mix, finalizes PDPM, predicts $820M payment increase, August 1, 2018). Under the PDPM, SNFs will utilize the ICD-10 codes to classify SNF patients into payment groups. Due to the fact that the ICD-10 codes are a revised every year, CMS is proposing a subregulatory process to update the available code list to ensure that SNFs have access to the most appropriate codes.

Group therapy. CMS is proposing to redefine group therapy under the SNF to allow clinical therapists additional freedom to exercise judgment regarding the appropriate group size. The new definition would be used as part of the PDPM, effective October 1, 2019. The proposal defines group therapy in the SNF Part A setting as "a qualified rehabilitation therapist or therapy assistant treating two to six patients at the same time who are performing the same or similar activities."

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