July 13, 2016

CMS Issues SNF Proposed Rule

By Janet Potter, Senior Manager, Advisory Services

CMS Issues SNF Proposed Rule

On April 25, 2016, the Centers for Medicare and Medicaid Services (CMS) published in the Federal Register the skilled nursing facility (SNF) prospective payment system (PPS) proposed rule for fiscal year 2017, which begins on October 1, 2016. The comment period for this proposed rule was open through June 20, 2016, and the final rule is expected to be published on or about August 1, 2016.

The proposed rule includes a 2.1 percent increase in SNF payments, or an aggregate of $800 million. This includes a 2.6% market basket increase, reduced by a 0.5% productivity adjustment factor. There is no forecast error adjustment for FY2017, as the actual market basket index increase for FY2015 was within 0.2% of the estimated increase, which is itself within the allowable threshold to avoid an adjustment per statute.

It is interesting to note that SNFs are to receive proposed rate increase, although in March the Medicare Payment Advisory Commission (MedPAC) recommend to Congress that the market basket increase be eliminated for SNFs for FY 2017 and 2018, and the payment system rebased. This has been the theme of MedPAC’s recommendations since 2012, with the Commission repeatedly expressing frustration with Congress’ disregard of its proposals. “Last year, the Commission expressed its growing impatience with the lack of progress in redesigning and rebasing the SNF payment.”(CMS)

When the final rule is published, we will make available rate sheets for FY2017.

CMS also requested comments on HCPCS codes that are not currently excluded from consolidated billing for SNFs, but should be considered for future exclusion. As you are aware, SNF consolidated billing requires that substantially all services received by a beneficiary while in a Medicare Part A stay in a SNF be paid by the SNF from the PPS per diem. There are specific exclusions which are determined at the HCPCS level. As medical technology develops and improves, more codes may be appropriate for exclusion. CMS specifically requested comments on the major category 3 services of chemotherapy, chemotherapy administration, radioisotopes and customized prosthetic devices.

In the proposed rule, CMS also addressed various aspects of the SNF value-based purchasing and quality reporting programs.

Under value-based purchasing, the proposed rule specifies the SNF 30-Day Potentially Preventable Readmission Measure (SNF PPR) as the all-cause, all-condition, risk-adjusted potentially preventable hospital readmission measure required by the Protecting Access to Medicare Act of 2014 (PAMA). Since this is a claims-based measure, CMS expects no further data collection burden to fall on SNFs. The proposed rule describes the measure in great detail, including the rationale for the selection of that measure and the calculation of performance measurements.

Beginning in FY 2019, SNFs will have a 2% withholding, with the opportunity to receive incentive payments for the quality care provided. As early as this summer, SNFs will receive quality feedback reports on their value-based purchasing measure performance, and in October 2016 this performance will be posted on Nursing Home Compare. CMS proposes to use calendar year 2015 as the baseline period for the calculation of the measure, and performance in calendar year 2017 as the performance year. The differences in the SNF PPR measure between those two periods will be used to determine the SNF’s performance score. CMS will use the better of the achievement score (based on CY2017 only) or the improvement score (based on the change between CY2015 and CY2017) to determine the performance score. SNFs will be ranked according to their performance scores, and the ranking will determine the value-based incentive payment or payment reduction the SNF will receive. The feedback reports will be available to SNFs through the QIES system CASPER files and will allow SNFs an opportunity to review their measurement data and submit corrections, if appropriate. CMS is soliciting comments on the value-based purchasing proposals.

CMS also addressed the SNF quality reporting program as required by the IMPACT Act in its proposed rule. SNFs that do not furnish the required quality data will be subject to a 2% reduction in their market basket percentage beginning with fiscal year 2018, which starts on October 1, 2017. CMS has proposed four new quality measures:

  • Medicare spending per beneficiary – claims-based measure.
  • Discharge to community – claims-based measure.
  • Potentially preventable 30-day post-discharge readmission – claims-based measure.
  • Drug regimen review conducted with follow-up for identified issues – assessment-based measure.

The claims-based measures are proposed to be for the FY2018 payment determination and subsequent years. The drug regimen review measure is proposed for the FY2020 payment determination and subsequent years. The proposed rule discusses in detail the performance measure calculations, as well as the timeline for data collection for each payment determination and reporting year.

Finally, the proposed rule summarizes the process being undertaken by Acumen to reassess and evaluate the current SNF PPS rate system used to pay for therapy services. Acumen is working to develop a proposal for a new payment model and has been hosting meetings with stakeholders. CMS and Acumen will continue to do so for the remainder of this calendar year.

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