CMS Proposes 2.1 Percent Increase to SNF Rates
On April 25th the Centers for Medicare and Medicaid Services (CMS) published the Skilled Nursing Facility (SNF) Prospective Payment System (PPS) Proposed Rule for FY 2017 which recommends SNF Part A Medicare rate updates and includes proposals for the SNF Value-Based Purchasing Program, the SNF Quality Reporting Program, as well as SNF Payment Models Research. CMS will accept comments on the proposed rule until June 20th and usually publishes the final rule in Aug. Rates established by the final rule go into effect for cost reporting periods beginning on or after Oct. 1, 2016.
Medicare Part A Rates
The proposed rule would increase payments to SNFs by an estimated $800M for Federal Fiscal Year (FFY) 2017, which runs from Oct. 1, 2016 to Sep. 30, 2017. This represents a market basket increase of 2.6 percent reduced by 0.5 percentage point productivity adjustment established by the Affordable Care Act for a net 2.1 percent increase. There is no forecast error adjustment proposed because the difference between the 2015 forecasted and 2015 actual market basket (i.e., inflation index) was 0.2 percentage points. The forecast error adjustment only applies when this difference exceeds half of a percentage point.
Tables showing proposed updates to the wage index are available here. For FFY 2017, 68.9 percent of the rate is related to labor and therefore subject to the wage index adjustment. Whether a provider’s rate will increase by slightly more or slightly less than the 2.1 percent market basket will be determined by the change in their region’s wage index.
Along with soliciting comments on any of the proposed provisions, CMS specifically invites comments identifying HCPCS codes representing recent medical advances that might meet criteria for exclusion from consolidated billing. To be eligible for exclusion, the codes must be in one of these service categories: chemotherapy items, chemotherapy administration services, radioisotope services or customized prosthetic devices.
Value-Based Purchasing Program (VBP)
The Protecting Access to Medicare Act of 2014 (PAMA) requires that VBP apply to SNF payments beginning in Oct. 2018. CMS specified the initial hospitalization measure, a 30-day all-cause readmission measure, as the basis of SNF VBP in last year’s SNF PPS Final Rule. Legislation requires CMS to specify a more refined hospitalization measure as soon as practicable. In the proposed rule, CMS specifies a SNF 30-day Potentially Preventable Readmission Measure as the refined measure.
The primary difference between the two measures is that the former focuses on all-cause unplanned readmissions, the proposed one focuses on readmissions that are potentially preventable. For readmissions during a SNF stay, “preventable” is defined as “avoidable with sufficient medical monitoring and appropriate treatment.” For individuals discharged from a SNF but still within the 30-day window, “preventable” is when “the probability of occurrence could be minimized with adequately planned, explained and implemented post discharge instructions including the establishment of appropriate follow-up ambulatory care.” Both measures use the same statistical approach, both would target the 30-day window after hospital discharge and both utilize a similar set of patient characteristics for risk adjustment. The measure would be calculated using a full year’s worth of data and be calculated using claims data thus requiring no additional data submission.
In the proposed rule CMS details the scoring methodology which would consider performance and improvement, and proposes to use 2015 Calendar Year (CY) claims as the baseline period for calculating performance standards for the FFY 2019 SNF VBP. CY 2017 would be the measured performance period for the FFY 2019 SNF VBP.
Quality Reporting Program (QRP)
To meet the requirements enacted in the Improving Medicare Post-Acute Care Transformation Act of 2014 (IMPACT) CMS previously proposed quality measures to include in the SNF QRP. In this publication the agency further defines reporting requirements, sets out review and correction timeframes and proposes four additional measures (the top three to be used in FFY 2018 QRP, the final one, Drug Regimen Review, to be used in 2020):
· Discharge to Community: This proposed measure assesses successful discharge to the community from a SNF setting, with successful discharge to the community including no unplanned re-hospitalizations and no death in the 31 days following discharge from the SNF.
· Medicare Spending per Beneficiary: The MSPB-PAC SNF measure holds SNF providers accountable for the Medicare payments within an “episode of care” (episode), which includes the period during which a patient is directly under the SNF's care, as well as a defined period after the end of the SNF treatment, which may be reflective of and influenced by the services furnished by the SNF.
· Potentially Preventable Readmission: The proposed measure assesses the facility-level risk-standardized rate of unplanned, potentially preventable hospital readmissions for Medicare FFS beneficiaries in the 30 days post-SNF discharge.
· Drug Regimen Review: This proposed measure assesses whether PAC providers were responsive to potential or actual clinically significant medication issue(s) when such issues were identified.
Beginning in payment year 2018, SNFs that fail to submit data required by the QRP will face a two percentage point reduction in their annual rate update.
The text of the proposed rule is available here. CMS background information on SNF VBP is posted here. QRP background is here. Please contact us if you have any questions or comments on the proposed rule.
Contact: Darius Kirstein, dkirstein@leadingageny.org, 518-867-8841