Health Reform WK-EDGE SNF PPS payment changes for 2018 and beyond
Wednesday, May 17, 2017

SNF PPS payment changes for 2018 and beyond

By Bryant Storm, J.D.

Proposed changes to the payment rates for Skilled Nursing Facilities (SNFs) would result in an aggregate payment increase of $390 million in Fiscal Year (FY) 2018, according to a CMS Proposed rule. CMS also released an Advance Notice of Proposed Rulemaking requesting public comments on potential revisions to the SNF prospective payment system (PPS) case-mix methodology for the FY 2019 payment update (ANPRM, 82 FR 20980, May 4, 2017). The Proposed rule also furthers CMS’ transition from volume to value with proposed updates to the SNF value-based purchasing (VBP) program and proposed changes the SNF quality reporting program (QRP) (Proposed rule, 82 FR 21014, May 4, 2017).

Payment update. In accordance with the Social Security Act (SSA) and the multifactor productivity adjustment mandated by the Patient Protection and Affordable Care Act (ACA) (P.L. 111-148), the market basket update would have been 2.3 percent. However, the Medicare Access and CHIP Reauthorization Act of 2015 (MACRA) (P.L. 114-10) amended Section 1888(e) of the SSA to establish a special rule for the SNF PPS in FY 2018, which requires the market basket percentage to be 1.0 percent. CMS projects the proposed increase would result in an aggregate payment increase of $390 million to SNFs.

QRP. SNF Payment is dependent on participation in the SNF QRP. Facilities that fail to submit required quality data under the program are subject to a 2 percent reduction in the otherwise applicable market basket percentage increase for that FY. The Proposed rule proposes to improve the program by updating the current pressure ulcer measure for 2018 and adding an additional four functional outcome measures for FY 2020. In Fall 2018, CMS is also proposing to begin publically reporting facility performance on six new measures. In FY 2019, SNFs are obligated to begin reporting standardized patient assessment data. To facilitate this reporting requirement, CMS is proposing to utilize data submitted on the existing pressure ulcer measure. In 2020, CMS is proposing to begin publically reporting standardized patient assessment data with respect to: (1) functional status; (2) cognitive condition; (3) special services, treatments and interventions; (4) medical conditions and comorbidities; and (5) impairments.

VBP. The SNF VBP’s first year is FY 2019. The program has previously adopted scoring and operational policies. The FY 2018 Proposed rule includes additional program proposals. The scoring and operation policies set 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. The new proposals include performance and baseline periods to be effective in FY 2020.

ANPRM. CMS is requesting comments on proposed revisions to the current SNF PPS methodology. Specifically, CMS is seeking comments on the possibility of replacing the existing case-mix classification model—Resource Utilization Group (RUG)-IV—with the Resident Classification System, Version I (RCS-I) case mix model. The new model was developed during the SNF payment models research (PMR) project. The current RUG-IV payment methodology assigns SNF Part A residents to payment groups reflecting their varying levels of resource intensity. The RCS-I model would increase the number of case-mix adjusted components from two—therapy and nursing—to four—physical therapy/occupational therapy (PT/OT), speech language pathology (SLP), nursing, and non-therapy ancillary (NTA)—in order to provide a more resident-based case-mix adjustment. The new model was designed in part to address concerns that service provisions are sometimes predicated, under the current model, based upon financial considerations rather than resident need.

Comments. The ANPRM requests comments on the RCS-I model, generally, and with respect to the implementation of the revisions—whether it should be budget neutral and how much time providers should be given before changes are implemented. To ensure that CMS considers comments on the ANPRM, comments must be received electronically, or by mail, no later than 5 p.m. on June 26, 2017.

FederalRegisterIssuances: ProposedRules NewsFeed AgencyNews InpatientFacilityNews MedicarePartANews ProviderPaymentNews ProgramIntegrityNews QualityNews VBPNews

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