CMS Issues Proposed SNF PPS Rule, Seeks Payment Reform Ideas

Nursing homes will see a 1 percent increase in their Medicare Part A rates in October 2017, a nationwide increase of approximately $390 million. Although the customary methodology for calculating the "market basket" (i.e., Medicare inflation adjustment) would suggest a 2.3 percent increase, the Medicare Access and CHIP Reauthorization Act of 2015 (MACRA) established the 1 percent increase for this year to help fund other MACRA provisions. The information is part of the proposed nursing home Prospective Payment System (PPS) Rule CMS issued last week, which also proposes adjustments to the nursing home Quality Reporting Program (SNF-QRP) and the Value-Based Purchasing Program (SNF-VBP). The QRP will impact October 2017 Medicare Part A rates, while the VBP program will begin impacting rates one year later.

For the QRP, CMS is proposing to replace the current pressure ulcer measure with an updated version and to adopt four new outcome-based measures that address functional status and align with Inpatient Rehabilitation Facility (IRF) QRP starting in FY 2020:

• Application of IRF Functional Outcome Measure: Change in Self-Care Score for Medical Rehabilitation Patients 
• Application of IRF Functional Outcome Measure: Change in Mobility Score for Medical Rehabilitation Patients 
• Application of IRF Functional Outcome Measure: Discharge Self-Care Score for Medical Rehabilitation Patients
• Application of IRF Functional Outcome Measure: Discharge Mobility Score for Medical Rehabilitation Patients 

Beginning with the FY 2019 SNF QRP, SNFs must also report standardized patient assessment data, a requirement CMS proposes to satisfy for FY 2019 by using the data submitted on the existing pressure ulcer measure. For the FY 2020 program year, CMS is proposing that SNFs begin reporting standardized patient assessment data with respect to five specified patient assessment categories required by law that include:

1. functional status;
2. cognitive function;
3. special services, treatments, and interventions;
4. medical conditions and co-morbidities; and
5. impairments.

For the VBP program, CMS proposes a formula to calculate incentive payments based on facility performance, sets performance and baseline periods for the FY 2020 program year, updates values for performance standards for FY 2020, and provides additional details for the review and correction process for SNFs’ performance information that will be made public on Nursing Home Compare. 

Along with the proposed PPS Rule, CMS issued an advance notice of proposed rulemaking (ANPRM) to solicit public comments on potential options for revising certain aspects of the existing SNF PPS payment methodology. The goal is to improve payment accuracy based on the results of the SNF Payment Models Research (SNF PMR) project. CMS is specifically seeking comments on the possibility of replacing the SNF PPS’ existing case-mix classification model, the Resource Utilization Groups, Version 4 (RUG-IV), with a new model, the Resident Classification System, Version I (RCS-I). CMS has released a Technical Report on the development of RCS-I, which is available here.

The text of the proposed PPS Rule and the advanced rulemaking notice are published in the May 3, 2017 Federal Register and can be accessed here. LeadingAge NY is analyzing both publications and will provide more detailed summaries shortly. Comments are due to CMS by June 26, 2017.

Contact: Darius Kirstein, dkirstein@leadingageny.org, 518-867-8841