Skilled Nursing Facility Prospective Payment System Proposed Rule Released

The Centers for Medicare & Medicaid Services (CMS) released a proposed rule to update the Medicare fee-for-service prospective payment system (PPS) for skilled nursing facilities (SNFs) for fiscal year (FY) 2022, which begins Oct. 1, 2021.

Key provisions of the proposal would:

  • Increase the standard federal rate by a net 1.3% for SNFs that comply with the quality reporting program (QRP) requirements. SNFs that fail to submit data are subject to a 2 percentage point reduction in their annual update.
  • Update the diagnosis code mappings in the Patient Driven Payment Model case-mix system implemented in FY 2021.
  • Reduce the labor-related share of the federal rate from 71.3% to 70.1%.
  • Modify the denominator for the Transfer of Health Information to the Patient – Post-acute Care measure in the SNF QRP to exclude patients discharged home under the care of a home health or hospice provider and add two new quality measures beginning with the FY 2023 QRP:
    • The SNF Healthcare Associated Infection Requiring Hospitalization measure.
    • The COVID-19 Vaccination Coverage among Healthcare Personnel measure.
  • Suppress the SNF 30-Day All-cause Readmission Measure for the FY 2022 SNF value-based purchasing program year due to the public health emergency (PHE), which significantly impacted the measure and resulting performance scores.
  • Reduce the number of quarters for publicly reporting SNF QRP measures due to the PHE.

The CMS is working to make healthcare quality more transparent to consumers and providers. Included in the proposed rule is a request for input on ways to attain health equity for all patients through policy solutions as demonstrated through the adoption of the standardized patient assessment data elements (SPADEs) in the FY 2020 SNF final rule. These elements include several social determinants of health. The CMS seeks feedback on the possibility of expanding measure development and the collection of other SPADEs that address gaps in health equity in the SNF PPS. The CMS also seeks input on the potential use of Fast Healthcare Interoperability Resources in support of Digital Quality Measurement in QRPs, aligning with other quality programs where possible.

The CMS will accept comments on the proposed rule until June 7. The MHA will provide SNFs with an estimated impact analysis and summary of the proposed rule soon. Members with questions should contact Vickie Kunz at the MHA.