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 CMS Calls for Net 2.5 Percent SNF Payment Increase in Proposed 2020 Payment Rule

The Centers for Medicare & Medicaid Services (CMS) on April 19 issued a proposed rule (CMS-1718-P) for Fiscal Year (FY) 2020 Medicare payments that includes a net 2.5 rate increase for skilled nursing facilities (SNFs). On an aggregate basis, SNFs would over the course of 2020 receive some $887 million more in Medicare program reimbursement, the agency said.
 
The proposed rule, “Medicare Program; Prospective Payment System and Consolidated Billing for Skilled Nursing Facilities; Updates to the Quality Reporting Program and Value-Based Purchasing (VBP) Program for Federal Fiscal Year 2020,” also said the VBP program would reduce payments to SNFs by $213.6 million in FY 2020.
 
In response to the CMS proposed rule, Mark Parkinson, president and chief executive officer of the American Health Care Association/National Center for Assisted Living, said, “We applaud CMS for issuing this SNF PPS proposed rule. The 2.5 percent market basket increase is critical for multiple reasons. We are transitioning to a new payment system, and the sector is on the financial brink.” 
 
Parkinson added, “MedPAC just reported that our all-in margin is only 0.5 percent, and many skilled nursing providers are facing devastating closures, particularly in rural areas. This increase doesn’t solve these problems, but it gets us headed in the right direction. We thank Administrator Verma and the Administration for this action.”
 
CMS noted that the FY 2020 draft rule comes ahead of the Oct. 1 transition to the Patient Driven Payment Model (PDPM), the new case-mix payment model that focuses on a patient’s condition and resulting care needs rather than on the amount of care provided in order to determine Medicare payment. 
 
There were minor changes to PDPM in the draft CMS released tied to coding adjustments. In addition, the agency also is seeking to align the definition of group therapy in the SNF payment rule with that of other post-acute care settings. 
 
In the proposed rule, CMS said “for more fair and consistent therapy definitions across care settings, we are proposing to adopt the definition of group therapy that is used in the IRF [Inpatient Rehabilitation Facilities] PPS: group therapy consists of two to six patients doing the same or similar activities.”
 
CMS said it believes aligning the group therapy definition serves to improve the agency’s consistency in payment policies across PAC settings, and to create opportunities for site-neutral payments.
 
On payments, CMS said it projects aggregate payments to SNFs will increase by $887 million, or 2.5 percent, for FY 2020 compared to FY 2019. “This estimated increase is attributable to a 3.0 percent market basket increase factor with a 0.5 percentage point reduction for multifactor productivity adjustment,” CMS said.
 
For the SNF VBP program, in the FY 2020 proposed rule, the SNF VBP Program is changing the name of the program’s measure to the “Skilled Nursing Facility Potentially Preventable Readmissions after Hospital Discharge” measure. 

CMS said the measure would retain the same abbreviation (SNFPPR). The proposed rule also includes an update to the public reporting requirements to ensure that CMS publishes accurate performance information for low-volume SNFs.
 
Public comments on the CMS draft rule are due by June 18. Read the proposal at https://s3.amazonaws.com/public-inspection.federalregister.gov/2019-08108.pdf.
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