On April 8, 2021, the Centers for Medicare & Medicaid Services (“CMS”) issued a proposed rule that would update Medicare payment policies and rates for skilled nursing facilities under the Skilled Nursing Facility (“SNF”) prospective payment system (“PPS”) for fiscal year (“FY”) 2022 (the “Proposed Rule”). In addition, the Proposed Rule includes proposals for the SNF Quality Reporting Program and the SNF Value-Based Program for FY 2022.
This article reviews the major provisions of the Proposed Rule.
Proposed Updates to the SNF Payment Rates for FY 2022
The Proposed Rule includes an increase in Medicare Part A payments to SNFs in FY 2022. This reflects a $445 million increase from the update to the payment rates of 1.3%, which is based on a 2.3% SNF market basket update, less a 0.8 percentage point forecast error adjustment and a 0.2 percentage point multifactor productivity adjustment.
Forecast Adjustments
Presently, the forecast error adjustment uses a 0.5% threshold. As a result, adjustments are made if the difference between the forecasted and actual market basket indices exceeds 0.5%. CMS is considering updating this methodology in future rulemaking, either (1) eliminating the forecast error adjustment, or (2) increasing the threshold from 0.5 to 1.0% and is soliciting feedback on this issue.
Recalibrating the PDPM Parity Adjustment
On October 1, 2019, CMS implemented a new case-mix classification model, called the Patient Driven Payment Model (“PDPM”). When finalizing PDPM, CMS stated that the payment model would be implemented in a budget-neutral manner, meaning that it would not result in an increase or decrease in aggregate SNF spending. Since PDPM implementation, CMS reported an unintended increase in payments of approximately 5%, or $1.7 billion in FY 2020. CMS recognizes that the COVID-19 public health emergency could have affected the PDPM data. In the Proposed Rule, CMS is soliciting comments on a potential methodology for recalibrating the PDPM parity adjustment that would account for the potential effects of the public health emergency. CMS is also asking for comments on whether any necessary adjustment should be delayed or phased in over time.
Skilled Nursing Facility Quality Reporting Program Updates
- Skilled Nursing Facility Health Care-Associated Infections Requiring Hospitalization Measure
CMS proposes the adoption of a new claims-based measure, SNF Healthcare‑Associated Infections (“HAI”), to the SNF Quality Reporting Program (“SNF QRP’), beginning with the FY 2023 SNF QRP. Typically, HAIs result from inadequate patient management following a medical intervention, such as surgery or device implementation, or antibiotic stewardship guideline issues. In the Proposed Rule, CMS would target all HAIs serious enough to require hospitalization.
- COVID-19 Vaccination Coverage among Health Care Personnel Measure
CMS proposes the adoption of the “COVID-19 Vaccination Coverage among Healthcare Personnel Measure” beginning with the FY 2023 SNF QRP. This would require SNFs to report on COVID-19 health care staff vaccination in order to assess whether SNFs are taking steps to limit the spread of COVID-19 among their health care staff, reduce the risk of transmission within facilities and help sustain the ability of SNFs to continue serving their communities throughout the COVID‑19 public health emergency and beyond. Under this proposal, SNFs would report the vaccination data through the Centers for Disease Control and Prevention National Healthcare Safety Network beginning October 1, 2021. This is in line with interim final regulations recently released by CMS on vaccination reporting. See the Hall Render summary here.
- Transfer of Health Information to the Patient-Post Acute Care Quality Measure
CMS proposes to update the existing Transfer of Health Information to the Patient-Post Acute Care quality measure by excluding from the denominator SNF residents that are discharged under the care of home health agency or hospice provider.
Skilled Nursing Facility Value-Based Purchasing Program
- Proposal to Suppress the SNF Readmission Measure in the SNF VBP Program
In an effort to address the possible distortion of performance scores and incentive payment multipliers under the SNF Value Based Purchasing (“SNF VBP”) Program caused by the public health emergency, CMS is proposing to assign a performance score of zero to all participating SNFs, regardless of how the SNFs performed using the previously finalized value-based scoring methodology.
The SNF VBP Program must withhold 2% of SNF Medicare Part A FFS payment and redistribute 50–70% of the withholding to SNFs in the form of incentive payment(s). CMS is proposing to reduce the applicable federal per diem rate for each SNF by 2% and award SNFs 60% of that withhold, resulting in a 1.2% payback percentage to those SNFs.
- Expanded SNF Value-Based Purchasing Program
The Consolidated Appropriations Act, 2021 included a provision allowing CMS to expand the SNF VBP program and apply up to ten measures with respect to payments beginning in FY 2024, which may include measures of functional status, patient safety, care coordination or patient experience. CMS is soliciting input from stakeholders on which quality measures should be considered under an expanded SNF VBP.
In expanding the SNF VBP measure set, CMS is also considering measures that it already requires from both SNFs and nursing facilities, to collect and report under other initiatives such as Nursing Home Compare. Specifically, CMS seeks comments on the measures listed in the Proposed Rule, including measures to assess residents’ views of their health care and measures assessing staff turnover.
Comment Period
CMS will be accepting comments until June 7, 2021.
If you have any questions, would like additional information or need assistance submitting a comment, please contact:
- Sean Fahey at (317) 977-1472 or sfahey@hallrender.com; or
- Your primary Hall Render contact.
More information about Hall Render’s Post-Acute and Long-Term Care services can be found here.
Hall Render blog posts and articles are intended for informational purposes only. For ethical reasons, Hall Render attorneys cannot—outside of an attorney-client relationship—answer specific questions that would be legal advice.
