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 AHCA Raises Concerns With CMS Final Rule on New SNF Payment System

The final rule released on July 31 by the Centers for Medicare & Medicaid Services (CMS) covering a new payment system for skilled nursing facilities (SNFs) starting in Fiscal Year (FY) 2020, the so-called Patient-Driven Payment Model (PDPM), has raised concerns in the SNF profession for its overall tone and specific provisions for therapy payments, according to a statement by the American Health Care Association (AHCA).

The specifics on PDPM were part of a FY 2019 Medicare payment rule for the SNF Prospective Payment System (PPS). The SNF PPS maintained the 2.4 percent payment increase proposed in the April draft rule, but listed the total aggregate payment at $820 million. This dollar amount is $30 million below the $850 million aggregate payment increase outlined in the CMS Notice of Proposed Rulemaking.

AHCA sources said they are seeking information from CMS on this difference.

Meanwhile, the final rule for the PDPM, which is set to become the new SNF payment system starting Oct. 1, 2019, for FY 2020, brought questions and concerns from Mark Parkinson, AHCA president and chief executive officer.

He said while the SNF profession welcomes a new payment model, the “tone of the rule itself and many of the specific comments related to therapy and the new payment model are cause for concern.”

PDPM replaces the previous CMS proposal for a new SNF payment system, the Resident Classification System, Version 1, or RCS-1. CMS said the change could save providers $2 billion a year.

Specifically, Parkinson said the therapy provisions in the rule criticizes skilled nursing providers for providing therapy when CMS has promulgated rules over the last 20 years that encourage therapy. “Providing therapy to residents in our centers has been a good thing and it has resulted in millions of residents getting better and returning home,” he said.

In addition, Parkinson said instead of focusing on outcomes associated with therapy delivery as AHCA requested, “this rule micromanages patient care and therapy minutes at a time when providers are already overburdened by unnecessary regulation.”

“For example, the rule sets an arbitrary 25 percent limit on concurrent and group therapy. Decisions about how much therapy is provided should not be made from a government office. Clinicians and patients should make those decisions together.”
Finally, he said the final rule goes against the grain of how CMS has worked with the profession on regulations. 

“We have been encouraged by our collaboration with CMS in recent months to create smart regulations that truly aim to improve care. This final rule and the tone of the language within it seem to indicate a different direction,” Parkinson said. “AHCA hopes to collaborate with CMS on the new payment model to make the transition as smooth as possible.”

Inside the rule, CMS finalized several core PDPM elements, including that the new model is still is a per diem payment system. PDPM per diem payments are the sum of five independently determined case mix adjusted payment components plus a non-case mix component, rather than a single hierarchical RUG (Resource Utilization Group) case-mix group.

Other parts of the final rule confirm that the PDPM is patient characteristics-based and therapy minutes are no longer relevant to payment, that PDPM eliminates most scheduled SNF PPS and OMRA (Other Medicare Required Assessment) assessments required under RUG-IV, and interim payment assessment is now optional. 

Separate from the PDPM and SNF PPS, CMS also included in the final rule release that the overall economic impact of the SNF Value-Based Purchasing Program is an estimated reduction of $211 million in aggregate payments to SNFs during FY 2019.
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