CMS updates SNF payments in new rule
There will be a net increase of 4.2%, or approximately $1.4 billion, in Medicare Part A payments to SNFs next year.
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The Centers for Medicare and Medicaid Services has issued a final rule updating Medicare payment policies and rates for skilled nursing facilities under the Skilled Nursing Facility Prospective Payment System for fiscal year 2025, resulting in a net increase of 4.2%, or approximately $1.4 billion, in Medicare Part A payments to SNFs next year.
The 4.2% increase is calculated based on the SNF market basket percentage increase of 3%, plus a 1.7 percentage point forecast error adjustment, minus a 0.5 percentage point productivity adjustment.
Those figures don't incorporate the SNF Value-Based Purchasing (VBP) reductions for certain SNFs subject to the net reduction in payments under the SNF VBP; those adjustments are estimated to total $196.5 million in FY 2025.
On top of the SNF PPS rate update, CMS is rebasing and revising the SNF market basket to reflect a 2022 base year. The rule also finalizes the proposal to update the SNF PPS wage index using the Core-Based Statistical Areas (CBSAs) to improve the accuracy of wages and wage-related costs for the area in which the facility is located.
WHAT'S THE IMPACT? ICD-10 CODES
The PDPM utilizes the International Classification of Diseases, 10th Revision, Clinical Modification (ICD‑10) codes in several ways, including using the person's primary diagnosis to assign patients to clinical categories.
CMS is finalizing several changes to the PDPM ICD-10 code mappings to allow providers to provide more accurate, consistent and appropriate primary diagnoses that meet the criteria for skilled intervention during a Part A SNF stay.
NURSING HOMES
The rule changes CMS' enforcement policies to impose what it sees as more equitable and consistent civil monetary penalties (CMPs) for health and safety violations. The White House announced in February a push for quality care for all residents living in Medicare- and Medicaid-certified nursing homes; this included reexamining how CMPs were applied and using existing nursing home enforcement authority.
CMS is expanding its ability to impose financial penalties in a push to drive sustained correction of health and safety deficiencies. These revisions, the agency said, will provide flexibility in determining the mix and number of penalties in response to situations that put residents' health and safety at risk – thereby encouraging facilities to promptly correct and maintain lasting compliance with CMS' health and safety requirements.
In the rule, CMS is revising the regulation to expand the type of CMPs that can be imposed to allow for more per-instance and per-day CMPs to be imposed, as appropriate.
SNF QRP
CMS is finalizing updates to the SNF Quality Reporting Program (QRP) to better account for adverse social conditions that negatively impact individuals' health or healthcare. CMS is adding four new social determinants of health (SDOH) items and modifying one SDOH assessment item for the SNF QRP. CMS is also finalizing a policy requiring SNFs included in the SNF QRP to participate in a process to validate data submitted under the QRP beginning with the one in 2027.
The SNF QRP is a pay-for-reporting program. SNFs that do not meet reporting requirements are subject to a 2-percentage-point reduction in their Annual Payment Update. Additionally, CMS publicly reports each SNF's performance on measures adopted into the SNF QRP on the Care Compare website.
SNF VBP
For the SNF VBP program, CMS is finalizing several operational and administrative proposals as part of this year's rule. Operationally, this includes adopting a measure selection, retention and removal policy for the SNF VBP program, as well as a technical measure update policy and a review and correction policy update.
The SNF VBP program is a pay-for-performance program. As required by statute, CMS withholds 2% of SNFs' Medicare fee-for-service Part A payments to fund the SNF VBP Program. This 2% is referred to as the "withhold." CMS is then required to redistribute between 50% and 70% of this withhold to SNFs as incentive payments depending on their performance in the program.
Jeff Lagasse is editor of Healthcare Finance News.
Email: jlagasse@himss.org
Healthcare Finance News is a HIMSS Media publication.
