On July 29, 2021, the Centers for Medicare and Medicaid Services (CMS) issued Final Prospective Payment System Rule for fiscal year ending 2022. The rule included updates to the Quality Reporting Program and the Value-Based Program.
Impact to Providers:
Increase of approximately $410 million in Medicare Part A payments to skilled nursing facilities (1.2%), which is based on numerous factors including that of a 2.7% market basket update.
Difference Between the Actual and Forecasted Market Basket Increase
Since the inception Patient Driven Payment Model (PDPM), this new payment model, meant to be budget neutral, resulting in the unintended increase in Medicare payments to providers of approximately 5% in fiscal year ending 2020. CMS acknowledged that this data may have been skewed due to the COVID19 public health emergency, and therefore, will not, as it was originally intended to do, implement any Patient Driven Payment Model (PDPM) “parity adjustment”.
Skilled nursing facilities who do not meet the quality reporting mandate will be subject to a 2% reduction. CMS finalized their proposal to account for the COVID-19 impacting hospital readmission rates and fewer admissions. CMS agreed to suppress and not publicly disclose SNF 30-day all cause readmissions measure for fiscal year ending 2022 of the value-based program year because of circumstances caused by the COVID-19 pandemic.
- For SNFs with fewer than 25 applicable admissions in FY 2020, they will see no impact on their rates in accordance with the previously established Low Volume Adjustment policy.
- For SNFs with at least 25 admissions in FY 2020, CMS will apply an 8% cut.
American Healthcare Association also noted that, while “ the suspension of Two Percent Sequestration was not discussed in the final rule, the 2% sequestration suspension is slated to be further extended based on current Congressional discussions.”