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CMS Skilled Nursing Facility FY2022 -Payment Rules and Other Changes

Shasta McClary

April 14, 2021

The Centers for Medicare & Medicaid Services (CMS) issued the FY2022 proposed rule for Skilled Nursing Facility (SNF) prospective payment systems (PPS).

The rule released April 8, 2021 could update the Medicare payment rates under the prospective payment system for SNFs starting October 1, 2021, and apply several changes to the new Patient-Driven Payment Model (PDPM), SNF Quality Reporting Program (QRP), and Value-Based Purchasing Program (VBP).

Key provisions of the proposal:

  • An increase to the standard Federal rate by a net 1.3% for SNFs that comply with the quality reporting program (QRP) requirements. CMS regularly updates the SNF market basket index to include the most used cost categories for routine and ancillary services, and capital-related expenses.
    • CMS is proposing to rebase and revise the SNF market basket to improve payment accuracy under the SNF PPS by proposing a 2018-based SNF market basket to update the PPS payment rates, vs. the 2014-based SNF market basket.
  • CMS is soliciting broad public comments on a potential methodology for recalibrating the PDPM parity adjustment that would account for potential effects of the COVID-19 PHE, without compromising the accuracy of the adjustment.
    • The transition from RUG-IV to PDPM was to be implemented in a budget-neutral manner so CMS applied a parity adjustment to the PDPM Case Mix Indices (CMIs). CMS affirms since the PDPM’s implementation, current data suggests an unintended increase in payments of $1.7 billion or 5% in FY2020. CMS believes decreasing the originally applied parity adjustment from 46% to 37% would achieve the intended budget-neutral transition. If implemented, this methodology could result in a reduction of $1.7 billion in SNF payments. CMS is soliciting comments on this proposed adjustment, as well as the need for a phased implementation of such adjustment.
  • CMS is proposing several changes to the PDPM ICD-10 code mappings affecting areas of sickle-cell disease, esophageal conditions, multisystem inflammatory syndrome, neonatal cerebral infarction, vaping-related disorder, and anoxic brain damage.
  • The proposed rule plans to add ten quality measures starting in Federal FY 2024, as part of the Consolidated Appropriations Act of 2021. These new measures may assess functional status, patient safety, care coordination, or patient experience, as well as long-term care facility quality as many facilities, are dually certified as both SNF and nursing facilities.
  • Suppress the SNF 30-Day All-cause Readmission Measure for the FY 2022 SNF value-based purchasing program year due to the public health emergency (PHE), which significantly impacted the measure and resulting performance scores.
    • Under this proposal, ALL nursing homes would be assigned a performance score of zero and the following would apply:
      • SNFs with fewer than 25 eligible stays during FY2020, would receive a net-neutral incentive payment multiplier (IPM). This is consistent with the Low-Volume Adjustment policy.
      • SNFs with 25 or more eligible stays during FY2020 would receive a 0.8 percent payment cut.
  • CMS is proposing two new measures and an update to one measure under the Skilled Nursing Facility (SNF) Quality Reporting Program (QRP).
    • **New** The Skilled Nursing Facility (SNF) Healthcare-Associated Infections (HAI) Requiring Hospitalization Measure would use Medicare fee-for-service claims data to estimate the risk-standardized rate of HAIs that are acquired during SNF care and result in hospitalization.
    • **New** COVID-19 Vaccination Coverage among Healthcare Personnel (HCP) Measure would require SNF’s to report staff vaccination data through the Centers for Disease Control and Prevention National Healthcare Safety Network beginning October 1, 2021.
    • **Update** The proposed update to the Transfer of Health (TOH) Information to the Patient-PAC Quality Measure would update the denominator to only discharges to a private home/apartment, board and care home, assisted living, group home, or transitional living. This change would remove patient discharges to home under home health or hospice, as they are reported under the TOH-Provider Quality Measure.

CMS will accept public comments and feedback on the proposed rule through June 7, 2021, on the Federal Register Forum.

Please contact us with any questions.

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