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SNF PPS Proposed Rule Effective Thurs., Oct.1, 2015

The Centers for Medicare and Medicaid Services (CMS) posted the notice of proposed rule-making for the federal fiscal year (FY) 2016 Medicare Skilled Nursing Facility (SNF) Prospective Payment System (PPS). This includes a $1.4 percent increase to the nursing home Medicare Part A rates effective Thurs., Oct. 1, 2015. CMS posted a fact sheet online entitled, Proposed Fiscal  Year 2016 Payment and Policy Changes for Medicare Skilled Nursing Facilities. The associated wage index file is available on the Wage Index website.

Payment Update

CMS projects that aggregate payments to SNFs will increase by $500 million, or 1.4 percent as compared to FY 2015. This estimated increase is based on a 2.6 percent market basket increase, reduced by a 0.6 percentage point forecast error adjustment and further reduced by 0.6 percentage point in accordance with the multifactor productivity adjustment required by law.

Policy Update

CMS is proposing policy changes that continue an overall program of shifting towards Value Based Payments (VBP) in line with the goals and timelines to shift the overall Medicare program at large towards VBP. This shift includes a SNF quality reporting program that would require that quality data be reported to CMS under the SNF Quality Reporting Program (QRP).

For the FY 2018 SNF QRP and subsequent years, CMS is proposing to adopt three measures addressing the following quality domains: (1) skin integrity and changes in skin integrity; (2) incidence of major falls; and (3) functional status, cognitive function, and changes in function and cognitive function. These proposed measures are based on the statutory requirements under the Improving Medicare Post-Acute Care Transformation Act of 2014 (IMPACT Act), enacted on October 6, 2014.

In addition, Section 215 of the Protecting Access to Medicare Act of 2014 (PAMA) authorizes establishing a SNF VBP Program beginning with FY 2019. The NPRM proposes a Skilled Nursing Facility 30-Day All-Cause Readmission Measure as the all-cause, all-condition readmission measure that will be used in the SNF VBP Program. The SNF 30-Day all-cause readmission measure estimates the risk-standardized rate of all-cause, unplanned, hospital readmissions for SNF Medicare beneficiaries within 30 days of their most recent short-stay acute hospital discharge. PAMA also eventually requires CMS to replace this measure with an all-condition, risk-adjusted potentially preventable hospital readmission rate. CMS intends to address this topic in future rulemaking.

Future Policy Considerations

In the proposed rule, CMS is seeking public comments on numerous issues related to the SNF VBP Program’s policies. CMS intends to propose additional details of the SNF VBP in the FY 2017 SNF PPS proposed and final rules, and is currently seeking comments on:

  • Performance standards
  • Measuring improvement
  • Appropriate baseline and performance periods
  • Performance scoring methodology
  • Public reporting of performance information
  • Feedback reports

The notice also ties the collection of staffing data to the overall quality initiative. CMS intends to begin collecting nursing home staffing data through the new Payroll-Based Journal (PBJ) reporting system. CMS has set up a PBJ web page and posted a draft manual and vendor software specifications. The initial Oct. 1 start date is for those facilities seeking to participate in the data submission on a voluntary basis in anticipation of a mandatory start date of July 1, 2016. 

Further resources are also available on the SNF PPS Payment Model Research web page. Public comments on the proposed rule will be accepted until June 19, 2015. The full rule is available by clicking here; you may click on DATES for details on submitting comments. 

Contact: Patrick Cucinelli, pcucinelli@leadingageny.org, 518-867-8827