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From Health Law Daily, July 31, 2015

SNF PPS rule brings $430 million payment increase, quality reporting, and value

By Bryant Storm, J.D.

CMS issued an advance release of the Final rule to update and revise payment rates used under the prospective payment system (PPS) for Skilled Nursing Facilities (SNFs) for calendar year (CY) 2016. CMS projects that the payment updates will result in an increase of $430 million in aggregate payments to SNFs in Fiscal Year (FY) 2016. The rule includes measures intended to transition SNF payments from volume to value as part of a new SNF Value-Based Purchasing (VBP) Program. Additionally, the rule establishes a SNF Quality Reporting Program (QRP), which, beginning in 2018, will lead to market basket update reductions for SNFs that fail to report required quality data. The Final rule is scheduled to be published in the Federal Register on August 4, 2015.

Payment update. Section 1888(e)(4)(E) of the Social Security Act (SSA) requires annual rate updates to the SNF PPS methodology—the prospective, case-mix adjusted per diem payment rates applicable to all covered SNF services. CMS reached its rate update through a 2.3 percent market basket increase, which was reduced by a 0.6 percentage point forecast error adjustment and further reduced by 0.5 percentage point, in accordance with the multifactor productivity adjustment required by law. The impact of the adjustments is an estimated 1.2 percent or $430 million increase in aggregate payment to SNFs in FY 2016.

Quality reporting program. The Improving Medicare Post-Acute Care Transformation Act of 2014 (IMPACT Act) (P.L. 113-185), which was enacted on October 6, 2014, requires CMS to implement a new QRP for SNFs. The QRP is designed to standardize data reporting across four post-acute care settings: home health agencies, inpatient rehabilitation facilities, SNFs, and long-term care hospitals. Starting in FY 2018, SNFs that fail to report to CMS the quality data required by the QRP will experience a 2 percent reduction in their market basket increase. As part of the QRP, and as required under the IMPACT Act, CMS proposed and is finalizing three new measures for the QRP related to: (1) skin integrity and changes in skin integrity; (2) incidence of major falls; and (3) functional status, cognitive function, and changes in function and cognitive function.

SNF VBP. Section 3006(a) of the Patient Protection and Affordable Care Act (ACA) (P.L. 111-148) required HHS to develop a plan to implement a VBP program for SNFs. Subsequently, under Section 215 of the Protecting Access to Medicare Act of 2014 (PAMA) (P.L. 113-93) Sections 1888(g) and (h) were added to the Social Security Act, requiring the adoption of an SNF all-cause all-condition hospital readmission measure, an all-condition risk-adjusted potentially preventable hospital readmission rate for SNFs, and a SNF VBP program under which value-based incentive payments are made in a FY to SNFs. The SSA requires that the VBP program apply to payments for services furnished on or after October 1, 2018. CMS indicates that it intends to propose additional details for the SNF VBP program in the FY 2017 SNF PPS Proposed rule.

Staffing data. The ACA also added Section 1128I to the SSA, which requires greater staffing accountability for long-term care (LTC) facilities. Section 1128 defines LTC facilities to include SNFs. Under Section 1128I, HHS is obligated to require LTC facilities to “electronically submit to the Secretary direct care staffing information, including information for agency and contract staff, based on payroll and other verifiable and auditable data in a uniform format.” The required data submissions include information about the category of work an employee performs, employee tenure and turnover, and the hours of care provided by each category of employee each day.

The Final rule will appear in the Federal Register on August 4, 2015.

MainStory: TopStory ReimbursementNews SNFNews CMSNews HealthReformNews LTCHNews PaymentNews QualityNews ProgramIntegrityNews

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