Skilled nursing facility final payment rates updated to reflect impact of COVID-19
CMS is finalizing the 4.6% decrease to the SNF payment, but is spreading that out over two years.
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Skilled nursing facilities are getting a 2.7% payment rate increase for 2023, and a recalibration of a 4.6% pay decrease proposed in April.
Skilled nursing facilities are getting a market basket increase of 3.9%, the agency's highest market basket update for SNFs.
The increase is due to stakeholder feedback received during rulemaking on the effects of the COVID-19 public health emergency on skilled nursing facility spending, CMS said.
For FY 2023, CMS is finalizing a net increase of 2.7%, or approximately $904 million, in Medicare payments to SNFs. This estimate reflects a $1.7 billion increase resulting from a 5.1% update to the payment rates for SNFs, which includes a 3.9% market basket increase, plus a 1.5 percentage point market basket forecast error adjustment, and less a 0.3 percentage point productivity adjustment, as required by law.
This compares to the proposed rule in April, when CMS proposed a 2.8% market basket update plus a 1.5% adjustment, less a 0.4 percentage point productivity adjustment, as well as the 4.6% decrease. The decrease was due to unintended increases in previous years. Since initiating the patient-driven payment model in 2019, CMS' initial analysis of FY 2020 and FY 2021 data found an unintended increase of approximately 5%, or $1.7 billion, in Medicare Part A SNF spending per year.
WHY THIS MATTERS
CMS is finalizing the adjustment factor of 4.6% to skilled nursing facility payment rates, but will phase that in over two years, decreasing SNF spending by 2.3% in 2023 and 2.3% in 2024.
This is due to a recalibration of the patient-driven payment model parity adjustment factor of 4.6% using a combined methodology of a subset population that excludes those patients whose stays utilized a COVID-19 public health emergency-related waiver, or who were diagnosed with COVID-19, and control period data using months with low COVID-19 prevalence from FY 2020 and FY 2021, CMS said.
CMS said it also recognizes that the ongoing COVID-19 PHE provides a basis for taking a more cautious approach to mitigate the potential negative impacts to the more than 15,000 nursing homes serving approximately 1.3 million people – such as facility closures or disproportionate impacts on rural and smaller facilities.
In addition, the final rule includes updates for the SNF Quality Reporting Program and the SNF Value-Based Purchasing Program for FY 2023 and future years.
The proposed rule included a Request for Information seeking input on establishing minimum staffing requirements for long-term care facilities. CMS received a significant response to the RFI from a wide range of interested parties. While CMS is continuing to review the comments, many commenters focused on the overall approach for establishing staffing standards, recommendations for implementing a minimum staffing requirement, factors for consideration (such as payment, cost, barriers, etc.), and input on the forthcoming staffing study.
The Biden-Harris Administration is committed to issuing the proposed rule on staffing standards within one year of President Biden's State of the Union announcement.
THE LARGER TREND
The Centers for Medicare and Medicaid Services issued the final rule Friday that updates Medicare payment policies and rates for skilled nursing facilities under the Skilled Nursing Facility Prospective Payment System.
These actions further the Biden-Harris Administration's commitment to ensuring the safety of both nursing home residents and staff, and improving the quality of services, as President Biden called for in his State of the Union address, CMS said.
ON THE RECORD
"Today's action is an important step in fulfilling our goal to protect people living in nursing homes and staff," said CMS Administrator Chiquita Brooks-LaSure. "We are continuing our work to focus on staffing and value, making sure that Medicare nursing home residents can receive high-quality care based on the needs of the whole person, rather than focusing on the volume of certain services provided to them."
Twitter: @SusanJMorse
Email the writer: SMorse@himss.org
