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CMS released the skilled nursing facility (SNF) proposed rule for fiscal year (FY) 2023 on April 11, 2022. Key items addressed include updates for Medicare payment rates—including a proposed parity adjustment—along with proposals for the SNF Quality Reporting Program (QRP) and SNF Value-Based Purchasing (VBP) Program for FY 2023 and future years.

Highlights of the proposed rule include:

Proposed Updates to SNF Payment Rates

For FY 2023, Medicare is proposing a net market basket increase of 3.9 percent. However, it also is proposing a parity adjustment, which would decrease payments by 4.6 percent. The aggregate of these policies is estimated to be a decrease of $320 million. This does not include the impact of VBP reductions, which is estimated to be $186 million. The parity adjustment, which was proposed in FY 2022, is the result of higher-than-anticipated spending under the Patient-Driven Payment Model (PDPM), which was intended to be budget neutral. The FY 2023 proposed adjustment would be an immediate 4.6 percent decrease, to be applied equally across all PDPM case mix indexes, with no transition period.
The proposed unadjusted per diem components of the rates are listed below for both urban and rural providers. Of these rates, the proposed labor-related portion would be 70.7 percent, which is the portion adjusted by the wage index. CMS also is proposing a permanent 5 percent cap on annual wage index decreases to lessen the impact of changes from year to year.

Nursing NTA PT OT SLP Non-case-mix
$113.91 $85.94 $65.34 $60.83 $24.39 $102.01
Nursing NTA PT OT SLP Non-case-mix
$108.83 $82.10 $74.48 $68.41 $30.74 $103.89

SNF VBP Updates

Due to circumstances caused by the public health emergency (PHE) for COVID-19, CMS is proposing to suppress the SNF 30-Day All Cause Readmission Measure for another year. With this policy, SNFs with 25 or more eligible stays during FY 2021 would receive a 0.8 percent payment cut and those with fewer than 25 eligible stays would not be impacted.

Three new measures are proposed for adoption into the SNF VBP program for the FY 2026 and FY 2027 expansion years:

  • Healthcare Associated Infections Requiring Hospitalization – This is a claims-based outcome measure that would be used to assess SNF performance on infection management and prevention. 
  • Total Nursing Hours Per Resident Day – This measure would use electronic data from payroll-based journal (PBJ) reporting. 
  • Discharge to Community – This is a claims-based measure that would assess the rate of successful discharges to the community from a SNF setting. 

CMS also seeks input on implementation of a Nursing Home Staff Turnover Measure. This measure would use PBJ reporting to measure the annual turnover of total nursing staff (RNs, licensed nurses, and nurse aides).

SNF QRP Updates

CMS is proposing adopting a new process measure beginning with FY 2025, the Influenza Vaccination Coverage Among Healthcare Personnel (HCP). This measure will report the percentage of HCP who receive an influenza vaccine any time from when it first becomes available through March 31 of the following year. If adopted, SNFs will submit measure data through the CDC’s National Healthcare Safety Network (NHSN) with an initial submission period from October 1, 2022, through March 31, 2023.

CMS is proposing to revise the compliance date for certain SNF QRP reporting requirements, including the transfers of health information measures and standardized patient assessment data elements (race, ethnicity, preferred language, heath literacy, etc.) to October 1, 2023. Due to the PHE, these and the revised MDS, which would be used to collect the data, had been delayed from October 1, 2020, to October 1 of the year that is at least two full fiscal years after the end of the PHE.
In addition, CMS seeks input for two future measures:

  • Functional Outcome Measure for self-care and mobility items 
  • COVID-19 Vaccination Coverage Measure to assess whether SNF residents were up to date on COVID-19 vaccinations

Proposed Changes in ICD-10 Mapping

Several changes are proposed for the PDPM ICD-10 code mappings, including:

  • Multiple codes are being assigned to “Return to Provider” as CMS feels there are more specific codes that should be used to address certain conditions, including: Thrombocytosis, unspecified (D75.839); Depression, unspecified (F32.A); Unspecified toxic encephalopathy (G92.9); and others.  
  • Multiple diagnoses that include gastrointestinal tract ulcers, i.e., esophageal, gastric, or duodenal, with bleeding and/or perforation are proposed to be moved from “Return to Provider” to “Medical Management.”

Requests for Information

CMS is seeking input on establishing minimum staffing requirements for long-term care facilities that will meet resident needs, including maintaining or improving resident function and quality of life.

CMS also seeks input on the degree to which the current criteria for coding infection isolation should be expanded to allow cohorted residents to be included and to help ensure that the payment impact of isolation is consistent with the cost associated with the care of these residents.

Stakeholders are invited to submit comments to CMS on this proposed rule by June 10, 2022.

If you have questions or need more information, please reach out to your advisor or submit the Contact Us form below.

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