Health Reform WK-EDGE FINAL RULES: 2018 changes to increase SNF payments by $370M
Wednesday, August 16, 2017

FINAL RULES: 2018 changes to increase SNF payments by $370M

By Bryant Storm, J.D.

Skilled nursing facilities (SNFs) will receive an estimated increase of $370 million, in aggregate, under finalized changes to the SNF payment rate for fiscal year (FY) 2018, according to an advance release of the SNF prospective payment system (PPS) Final rule. The Final rule also makes updates to the SNF Quality Reporting Program (QRP) and the SNF Value-Based Purchasing (VBP) Program and clarifies the requirements for the structure of survey teams (Final rule, 82 FR 36530, August 4, 2017).

Payment update. CMS revised and rebased the market basket index for FY 2018 and subsequent FYs by changing the market basket index base year from 2010 to 2014. After the application of a forecast error adjustment and the multi-factor productivity adjustment, required by Section 3401(b) of the Patient Protection and Affordable Care Act (ACA) (P.L. 111-148), the change of the market basket was determined to be 2.6 percent—a $370 million payment increase over FY 2017. The increase is $20 million lower than the estimate reached in the Proposed rule (see CMS proposes SNF PPS payment changes for 2018 and beyond, May 4, 2017). The agency also added a new cost category for Installation, Maintenance, and Repair Services.

QRP. The Final rule finalizes polices, measures, and data reporting requirements for the SNF QRP. The changes include a new exchange function to translate performance scores into incentive payments. CMS is continuing to seek public comment on whether it should account for social risk factors in QRP measures, and, if so, what method would be most appropriate to account for social risk factors. CMS is continuing its consideration on QRP measures for future years regarding patient- and caregiver-centered care, health and well-being, patient safety, and communication and care coordination. In 2018, CMS will begin publically reporting on the following assessment and claims measures:

  • Application of Percent of Long-Term Care Hospital (LTCH) Patients With an Admission and Discharge Functional Assessment and a Care Plan That Addresses Function;
  • Percent of Residents or Patients with Pressure Ulcers That Are New or Worsened;
  • Application of Percent of Residents Experiencing One or More Falls with Major Injury
  • Medicare Spending Per Beneficiary;
  • Discharge to Community; and
  • Potentially Preventable 30-Day Post-Discharge Readmission Measure.

VBP. The Final rule finalizes requirements for the SNF VBP Program. The VBP will apply to payments for services furnished on or after October 1, 2018. The scoring and operation policies established by the Final rule for FY 2019 include: (1) a limitation to one readmission measure each year; (2) a reduction of the total amount of Medicare payments to SNFs in a fiscal year by 2 percent; (3) incentive payments limited to between 50 percent and 70 percent of the total reduction in overall Medicare payments to SNFs; (4) a requirement that HHS must pay SNFs ranked in the lowest 40 percent less than the amount they would otherwise be paid without the VBP program; and (5) both confidential and public facility performance reporting.

Survey teams. The Final rule clarifies that surveys, conducted under sections 1819(g)(2) and 1919(g)(2) of the Social Security Act, must be conducted by an interdisciplinary team that includes a registered nurse. However, surveys teams investigating complaints or monitoring compliance on-site do not require a registered nurse.

FederalRegisterIssuances: FinalRules AgencyNews MedicarePartANews QualityNews ReportingTransparencyNews VBPNews TrumpAdministrationNews FedTracker HealthCare

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