On July 31, 2023, CMS released the fiscal year (FY) 2024 final rule (CMS-1779-F) for skilled nursing facilities (SNFs).
This final rule addresses payment updates and quality program changes for Medicare policies and rates, the SNF Quality Reporting Program (QRP), and the SNF Value-Based Purchasing (VBP) Program.
Key highlights from the SNF FY 2024 final rule are summarized below:
Payment Rate Updates
For FY 2024, CMS predicts there will be a total increase of $1.4 billion in the Medicare payments made to SNFs. This increase is equivalent to a 4% raise in payments and is composed of these factors:
- A 3% rise in the market basket, which is a measure of the costs of goods and services needed to run SNFs.
- An additional 3.6% adjustment to account for any inaccuracies in the previous predictions.
- A 0.2% reduction is applied to account for any improvements in productivity within the SNFs.
The resulting increase in the market basket is 6.4%. However, this is further decreased by 2.3% to align with the second phase of the Patient-Driven Payment Model (PDPM) parity adjustment. This adjustment was introduced in the previous fiscal year and is being phased in over two years.
PDPM ICD-10 Mapping
PDPM clinical mapping for five ICD-10 codes newly implemented last October 1, 2022 reflects the following changes for FY 2024:
- D75.84 Other platelet-activating anti-platelet factor 4 (PF4) disorders was remapped from Return to Provider to Medical Management.
- F43.81 Prolonged grief disorder and F43.89 Other reactions to severe stress were remapped from Medical Management to Return to Provider.
- G90.A Postural orthostatic tachycardia syndrome (POTS) was remapped from Acute Neurologic to Medical Management.
- K76.82 Hepatic encephalopathy was remapped from Return to Provider to Medical Management.
Clinical mapping changes also include the movement of 168 Unspecified Substance Use Disorder (SUD) codes from Medical Management to Return to Provider and the making of pathological fractures to weight-bearing bones and 45 codes for displaced fractures eligible for one of two orthopedic surgery categories.
Effective January 1, 2024, services provided by marriage and family therapists (MFTs) and mental health counselors (MHCs) will be excluded from the Medicare Part A SNF payment and services may be billed separately to Medicare by MFT and MHC providers.
SNF Quality Reporting Program (QRP)
One SNF QRP measure is modified for FY 2025:
- The COVID-19 Vaccination Coverage among Healthcare Personnel (HCP) measure has been expanded from reporting HCP with only the primary vaccination series to reporting the cumulative number of HCP who are “up to date” with the vaccinations in accordance with the Centers for Disease Control and Prevention’s (CDC) most recent guidance (including boosters). HCP are up to date if vaccinated, according to CDC guidance available on the first day of the applicable reporting quarter. Vaccination data for this measure is submitted to the National Healthcare Safety Network Long-Term Care Facility (NHSN LTCF) Component. Facilities should report HCP who are “up to date” beginning in the fourth quarter of 2023.
Two SNF QRP measures are being adopted for FY 2025 and FY 2026:
- FY 2025: The Discharge Function Score measure reports the percentage of SNF residents with a discharge score that is equal to or exceeds an expected discharge score calculated from selected mobility and self-care section GG Minimum Data Set (MDS) items.
- FY 2026: The COVID-19 Vaccine: Percent of Patients/Residents Who Are Up to Date measure reports the percent of Medicare Part A resident stays with “up to date” COVID-19 vaccinations per the CDC’s latest guidance. Data will be collected with a standardized item on the MDS assessment.
Three SNF QRP measures are removed in FY 2025:
- Application of Percent of Long-Term Care Hospital Patients with an Admission and Discharge Functional Assessment and a Care Plan That Addresses Function
- Change in Self Care Score for Medical Rehab Patients
- Change in Mobility Score for Medical Rehab Patients
In addition, the SNF QRP Data Completion thresholds are increased from the current 80% of MDS items to a 90% threshold. Failure to submit complete SNF QRP Quality Measure data on 90% or more MDS assessments to CMS will subject the provider to a 2% reduction to the annual payment update starting in FY 2026.
After consideration of public comments, CMS is not adopting the CoreQ: Short Stay Discharge (CoreQ: SS DC) measure for inclusion in the SNF QRP as was previously proposed.
Value-Based Purchasing (VBP) Program
Four new quality measures will be implemented in the VBP program in FY 2026–FY 2027 with one additional measure replaced in FY 2028.
- FY 2026: The Nursing Staff Turnover measure currently used in calculation of the Five-Star Staffing rating also will be incorporated into the VBP program. Reporting of Payroll-Based Journal (PBJ) data for this measure begins in FY 2024, impacting payments in FY 2026.
- FY 2027: Discharge Function Score. This SNF QRP measure also is being added to the VBP program.
- FY 2027: Long-Stay Hospitalization per 1000 Resident Days measuring the hospitalization rate of long-stay residents.
- FY 2027: Percent of Residents Experiencing One or More Falls with Major Injury.
- FY 2028: Skilled Nursing Facility Within-Stay Potentially Preventable Readmissions (SNF WS PPR) is the SNF 30-Day All-Cause Readmission Measure (SNFRM).
CMS also is adopting a Health Equity Adjustment in the SNF VBP program that will reward SNFs that perform well and whose resident population during applicable performance periods include at least 20% of residents with dual eligibility status. This adjustment will begin with the FY 2027 program year.
An audit portion of the validation process for MDS-based measures used in the SNF VBP will begin with the FY 2027 program year also.
Civil Monetary Penalty (CMP) Appeals
Providers facing CMPs will no longer be required to actively waive their right to a hearing in writing to receive the 35% penalty reduction. If a provider does not contest the CMP within the 60-day period from the notification of the CMP, the new waiver process will automatically apply the 35% penalty reduction without a separate written request to waive the hearing.
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