August 2, 2021

Legislative Update for Fiscal Year 2022

Legislative Update for Fiscal Year 2022 Healthcare

Over the last few weeks, CMS and the related national associations have had numerous commentaries associated with payment policies for the fiscal year 2022. On July 29, 2021 the result of these discussions were issued in the form of “final rules”. The following intends to provide a brief summary of the impact of the SNF Prospective Payment System Final Rule and will outline the effect on payments made to Skilled Nursing Facility (SNF) providers. Please consider the following:

Skilled Nursing Facilities

In addition to influencing reimbursement paid to SNF’s the final rule includes the following:

  • Policy updates associated with the SNF Quality Reporting Program (QRP) and
  • Policy updates associated with the SNF Value-Based Purchasing Program (VBP)

Payment Rates

CMS has announced a 1.2% update to payments rates, which equates to over $410 million in Part A payments. This will result from a 2.7% increase in the overall SNF market basket. The market basket has then been adjusted down by 1.5% to account for a point forecast error adjustment and point productivity adjustment. It is also worth noting that these impacts do not incorporate the SNF VBP reduction, which at this point are estimated to be $184 million. Further details of these calculations can be found on the CMS website.

SNF Quality Reporting

What is SNF Quality Reporting? In simplistic terms, it’s a pay for reporting program. Failure to meet QRP requirements may result in 2% reduction in a provider’s annual update. Further details of these two measures can be found on the CMS website.

SNF Value-Based Purchasing

The VBP program offers incentive payments to SNF’s in direct correlation with the quality of care provided and directly related to the hospital readmission rate. The following outlines some changes:

  • Suppression of Special Scoring Policies associated with 30-day readmission and as a direct cause of COVID -19.
  • Expansion of VBP to include nine additional measures beginning in FY 2024.

Further details of the SNF Final Rule can be found on the CMS website.