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CMS Issues Final Rule Impacting Medicare Reimbursement for SNF and Hospice Providers

Tiffany Karlin

August 03, 2020

On July 31, 2020, the Centers for Medicare & Medicaid Services (CMS) issued a final rule for Fiscal Year (FY) 2021 that updates the Medicare payment rates for skilled nursing facilities (CMS 1737-F) and hospice agencies (CMS 1733-F).

Skilled Nursing:

CMS Link

Market Basket Update and Rate Increase: CMS projects that aggregate Medicare program payments to SNFs will increase by $750 million, which is a net market basket update of 2.2%, for FY 2021 compared to FY 2020.

Wage Index Caps: CMS is finalizing the adoption of the revised geographic delineations provided by the Office of Management and Budget, which are used to identify a beneficiary’s location to calculate the wage index and applying a 5% cap to wage index decreases from FY 2020 to FY 2021. Therefore, counties impacted will receive a 5% cap on any decrease in a geographic area’s wage index value from the wage index value from the prior fiscal year for FY 2021 effective October 1, 2020. 

PDPM: CMS finalized nominal changes to the ICD-10 code mappings used to map the primary reason for SNF stay diagnosis to appropriate PDPM clinical categories. Effective October 1, 2020.

Value-Based Purchasing: CMS finalized updates to the SNF VBP Program regulation and is also updating the 30-day Phase One Review and Correction deadline for the baseline period quality measure quarterly report.  CMS is also announcing performance periods and performance standards for the FY 2023 program year. CMS made no changes to the measures, SNF VBP scoring policies, or payment policies.

Hospice:

CMS Update and Final Rule

Market Basket Update and Rate Increase: CMS projects that aggregate Medicare program payments to hospice providers will increase by $540 million, which is a net market basket update of 2.4%, for FY 2021 compared to FY 2020.

Quality Reporting: Hospices that fail to meet quality reporting requirements receive a 2% reduction to the annual market basket percentage increase for the year.

Aggregate Cap: The final hospice cap amount for the FY 2021 cap year is $30,683.93, which is equal to the FY 2020 cap amount ($29,964.78) updated by the final FY 2021 hospice payment update percentage of 2.4%

Wage Index Caps: CMS is finalizing the adoption of the revised geographic delineations provided by the Office of Management and Budget, which are used to identify a beneficiary’s location to calculate the wage index and applying a 5% cap to wage index decreases from FY 2020 to FY 2021.   The wage index value is applied to the labor portion of the hospice payment rate based on the geographic area in which the beneficiary resides when receiving routine home care (RHC) or continuous home care (CHC).  The wage index value is applied to the labor portion of the payment rate based on the geographic location of the facility for beneficiaries receiving general inpatient care (GIP) or inpatient respite care (IRC).

The final wage index applicable to FY 2021 can be found on the CMS website.

Hospice Election Statement and the Addendum: CMS provided a model modified election statement and election statement addendum.  Hospices can develop their election statement and election statement addendum in any format that best suits their needs as long as the content requirements at § 418.24(b) and (c) are met.

Content for this post derived from CMS, NAHC, AHCA.

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