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From Health Law Daily, April 22, 2016

Proposal pays SNFs $800M more in 2017, update quality and value programs

By Bryant Storm, J.D.

CMS proposes an $800 million increase in aggregate Medicare payments to skilled nursing facilities (SNFs) in fiscal year (FY) 2017 as a result of a 2.1 percent rate increase from the FY 2016 rates. CMS announced the update in an advanced release of a Proposed rule, which also proposes updates to the SNF quality reporting program (QRP), value based purchasing (VBP) program, and otherwise facilitates the agency’s push away from volume based services to value and quality oriented care. The Proposed rule is set for publication in the Federal Register on April 25, 2016 and the agency is accepting comments on its proposals through June 20, 2016.

Payment rates. The proposed payment rate changes, under Section 1888(e)(4)(E) of the Social Security Act (SSA), are based upon a 2.6 percent market basket increase, which was reduced by 0.5 percentage points, to account for a multifactor productivity adjustment required by Section 3401(b) of the Patient Protection and Affordable Care Act (ACA) (P.L. 111-148).

QRP. CMS proposes to adopt four new quality and resource use measures for the SNF QRP. The Proposed rule also proposes the adoption of review and correction procedures for SNF performance data, which would be publically reported. The proposed measures include a drug regimen review measure, a spending measure, a discharge to community measure, and a preventable readmission measure. The agency is proposing to use a CY schedule for measure and data submission requirements. Additionally, CMS proposes to base the quality data review and correction process on the Hospital Inpatient Quality Reporting (IQR) review and correction processes. Specifically, CMS proposes to adopt the IQR reporting timeframes and review and correction periods.

VBP. To update the VBP program, created under Section 3006(a) of ACA, CMS proposes to specify a potentially preventable readmission measure, define performance standards, and adopt a scoring methodology. The Protecting Access to Medicare Act of 2014 (PAMA) (P.L. 113-93) added Sections 1888(g) and (h) to the Social Security Act, requiring the adoption of an SNF all-cause all-condition hospital readmission measure and an all-condition risk-adjusted potentially preventable hospital readmission rate for SNFs. CMS adopted an SNF all-cause all-condition hospital readmission measure in the FY 2016 PPS Final rule (80 FR 46390, August 4, 2015) and now proposes to adopt an all-condition risk-adjusted potentially preventable hospital readmission measure for SNFs.

Preventable readmissions measure. The new measure would assess the facility-level risk-standardized rate of unplanned, potentially preventable hospital readmissions for SNF patients within 30 days of discharge from a prior admission to an inpatient prospective payment system (IPPS) hospital, critical access hospital (CAH), or psychiatric hospital. Because the measure would be claim based, it would require no additional data collection or submission for SNFs. The measure is designed to reduce the proposed $12 billion in Medicare spending that result from potentially preventable hospital readmissions.

VBP performance standards. The Proposed rule also includes VBP program performance standards, as mandated by Section 1888(h)(3)(A). CMS proposes to set the achievement performance standard under the SNF VBP program as the 25th percentile of national SNF performance on the quality measure during the applicable baseline period. However, the agency is requesting comments as to whether the 50th or 15th percentile would be a more appropriate threshold. CMS also proposes to set a “benchmark” for high performance as the mean of the top 10 percent of SNF performance on the quality measure during the applicable baseline period. Additionally, CMS proposes to give SNFs achievement points based upon achievement along the range between the low threshold and the high benchmark. CMS plans to publish performance standards for the VBP program in the annual SNF PPS rule. The agency proposes to use calendar year (CY) 2015 as the baseline period and CY 2017 as the performance period for the FY 2019 SNF VBP Program.

PMR. The Proposed rule also provides an update on the status of the SNF Payment Models Research (PMR) project and describes the development of the agency’s current ideas for potential SNF PPS replacements.

MainStory: TopStory NewsStory AgencyNews ReimbursementNews IPPSNews CMSNews CoPNews CAHNews PaymentNews PartANews ProgramIntegrityNews QualityNews SNFNews

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