CMS issues Skilled Nursing Facility Prospective Payment System Final Rule

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The Centers for Medicare and Medicaid Services has issued the final rule updating Medicare payment policies and rates for skilled nursing facilities under the Skilled Nursing Facility Prospective Payment System for fiscal year 2024.

The final rule also includes updates to the SNF Quality Reporting Program and the SNF Value-Based Purchasing Program for FY 2024 and future years, including the adoption of a measure intended to address staff turnover, as outlined in President Biden's executive order Increasing Access to High-Quality Care and Supporting Caregivers.

Finally, the rule finalizes a constructive waiver process to ease administrative burdens for CMS related to processing Civil Monetary Penalty (CMP) appeals.

WHAT'S THE IMPACT? SNF PAYMENT RATE UPDATES

CMS estimates that the aggregate impact of the payment policies in this rule would result in a net increase of 4%, or approximately $1.4 billion, in Medicare Part A payments to SNFs in FY 2024. This estimate reflects a $2.2 billion increase resulting from the 6.4% net market basket update to the payment rates.

On October 1, 2019, CMS implemented a new case-mix classification system, the PDPM, in a budget-neutral manner, meaning that the transition from the prior case-mix classification model, the Resource Utilization Group, Version 4, would not result in an increase or decrease in aggregate SNF spending. But since PDPM implementation in FY 2020, CMS' initial data analysis showed an unintended increase in payments of approximately 5%, or $1.7 billion annually. 

After considering the stakeholder feedback received on the proposed rule – and to balance mitigating the financial impact on providers of recalibrating the PDPM parity adjustment with ensuring accurate Medicare Part A SNF payments – CMS finalized a PDPM parity adjustment factor of 4.6% in the final rule with a two-year phase-in period, resulting in a 2.3% reduction in FY 2023 and a 2.3% reduction in FY 2024 to the payment rates.

CHANGES TO SKILLED NURSING FACILITY QUALITY REPORTING PROGRAM

The SNF QRP is a pay-for-reporting program. SNFs that do not meet reporting requirements are subject to a two-percentage-point reduction in their Annual Payment Update (APU).

CMS is adopting the Discharge Function Score (DC Function) measure beginning with the FY 2025 SNF QRP. This measure assesses functional status by assessing the percentage of SNF residents who meet or exceed an expected discharge function score and uses mobility and self-care items already collected on the Minimum Data Set (MDS).

Also being adopted is the COVID-19 Vaccine: Percent of Patients/Residents Who Are Up to Date (Patient/Resident COVID-19 Vaccine) measure beginning with the FY 2026 SNF QRP. This measure reports the percentage of stays in which residents in an SNF are up to date with recommended COVID-19 vaccinations in accordance with the Centers for Disease Control and Prevention's most recent guidance. Data will be collected using a new standardized item on the MDS.

CMS is modifying the COVID-19 Vaccination Coverage among Healthcare Personnel (HCP COVID-19 Vaccine) measure beginning with the FY 2025 SNF QRP. This measure tracks the percentage of healthcare personnel (HCP) working in SNFs who are considered up to date with recommended COVID-19 vaccination in accordance with the CDC's most recent guidance. The prior version of this measure reported only on whether HCP had received the primary vaccination series for COVID-19.

Meanwhile, CMS is removing the Application of Percent of Long-Term Care Hospital (LTCH) Patients with an Admission and Discharge Functional Assessment and a Care Plan that addresses function measures beginning in 2025. CMS is removing this measure for two reasons. First, the Application of Functional Assessment/Care Plan measure meets the conditions for removal: Measure performance among SNFs is so high and unvarying that meaningful distinctions in performance improvements can no longer be made, said CMS. Second, this measure meets the conditions for measure removal factor six: There is an available measure (the DC Function measure) that is more strongly linked to the desired outcomes.

At the same time, CMS is removing the Application of the IRF Functional Outcome Measures: Change in Self-Care Score for Medical Rehabilitation Patients (Change in Self-Care Score) measure and the Application of the IRF Functional Outcome Measures: Change in Mobility Score for Medical Rehabilitation Patients (Change in Mobility Score) measure beginning with the FY 2025 SNF QRP. CMS is removing these two measures because the costs associated with a measure outweigh the benefits of its use in the program, the agency said. Additionally, these measures are similar to or duplicative of other measures within the SNF QRP.

CMS is also increasing the SNF QRP Data Completion thresholds for the Minimum Data Set (MDS) Data Items beginning with the FY 2026 SNF QRP. SNFs must report 100% of the required quality measure data and standardized resident assessment data collected using the MDS on at least 90% of the assessments they submit to CMS. Any SNF that does not meet the requirement will be subject to a reduction of two percentage points to the applicable FY annual payment update beginning with FY 2026.

Lastly, CMS is beginning the public reporting of the Transfer of Health Information to the Provider-PAC Measure and the Transfer of Health Information to the Patient-PAC Measure with the October 2025 Care Compare refresh, or as soon as technically feasible. These measures report the percentage of patient stays with a discharge assessment indicating that a current reconciled medication list was provided to the subsequent provider or the patient/family/caregiver at discharge or transfer. 

In response to the COVID-19 Public Health Emergency, CMS initially delayed the compliance date for the collection and reporting of these two measures in the SNF QRP; data collection will begin with patients discharged on or after October 1.

CHANGES TO SKILLED NURSING FACILITY VALUE-BASED PURCHASING PROGRAM

The Skilled Nursing Facility Value-Based Purchasing (SNF VBP) Program rewards SNFs with incentive payments based on the quality of care they provide. All SNFs paid under Medicare's SNF PPS are included in the SNF VBP Program.

In the final rule, CMS is adopting four new quality measures, replacing one quality measure, and finalizing several policy changes in the SNF VBP Program. 

For one, CMS is adopting the Nursing Staff Turnover Measure for the SNF VBP program beginning with the FY 2026 program year. This is a structural measure that has been collected and publicly reported on Care Compare. It assesses the stability of the staffing within an SNF using nursing-staff turnover. CNM said it's part of the administration's focus on ensuring adequate staffing in long-term care settings. Facilities would begin reporting for this measure in FY 2024, with payment effects beginning in FY 2026.

CMS is adopting the Discharge Function Score Measure beginning with the FY 2027 program year. This measure is also being adopted for the SNF QRP and assesses functional status by assessing the percentage of SNF residents who meet or exceed an expected discharge function score and use mobility and self-care items already collected on the MDS.

CMS is adopting the Long Stay Hospitalization Measure per 1,000 Resident Days beginning with the FY 2027 program year. This measure assesses the hospitalization rate of long-stay residents. It's also adopting the Percent of Residents Experiencing One or More Falls with Major Injury (Long Stay) beginning with the FY 2027 program year. This measure assesses the falls with major injury rates of long-stay residents.

Also, CMS is replacing the Skilled Nursing Facility 30-Day All-Cause Readmission Measure (SNFRM) with the Skilled Nursing Facility Within Stay Potentially Preventable Readmissions (SNF WS PPR) measure beginning with the FY 2028 program year.

In a bid to promote health equity and reduce disparities in outcomes, CMS is adopting a Health Equity Adjustment in the SNF VBP Program. This adjustment rewards SNFs that perform well and whose resident population during the applicable performance period includes at least 20% of residents with dual eligibility status. This adjustment will begin with the FY 2027 program year. CMS is adjusting the scoring methodology to provide bonus points to high-performing facilities that provide care to a higher proportion of duals.

In addition, CMS is increasing the payback percentage policy under the SNF VBP program from the current 60% to a level such that the bonuses provided to the high-performing, high duals SNFs do not come at the expense of the other SNFs. The estimated payback percentage for the FY 2027 program year is 66%.

CMS is adopting the audit portion of the validation process for MDS-based measures beginning with the FY 2027 program year.

CHANGES TO CIVIL MONETARY PENALTIES

The agency said it's streamlining an administrative procedure by adopting a constructive waiver process that will consider a facility to have waived its hearing when CMS does not receive a request for a hearing within the requisite timeframe. The accompanying 35% penalty reduction would remain unchanged, though CMS is committing to review the appropriateness of this policy and the reduction amount in the future.

CMS said the revision will reduce administrative burden and allow the agency to shift resources toward bolstering other oversight and enforcement activities, including providing additional focus on nursing home compliance.
 

Twitter: @JELagasse
Email the writer: Jeff.Lagasse@himssmedia.com