Tag: prospective payment system

CMS Releases FY 2023 Final Rule to Update Skilled Nursing Facilities PPS

Member News

The Centers for Medicare and Medicaid Services (CMS) recently released a final rule to update the Medicare fee-for-service (FFS) prospective payment system (PPS) for skilled nursing facilities (SNF) for fiscal year (FY) 2023. Key updates include:

  • A negative 2.3% parity adjustment to the Patient Driven Payment Model (PDPM) case mix indices following implementation of the PDPM to maintain budget neutrality with the prior RUG-IV case-mix system. The CMS finalized a 2-year phase-in of the proposed 4.6% negative adjustment despite opposition from the MHA, the American Hospital Association and others.
  • A 5.1% net rate increase after the market basket update and other adjustments, up from the proposed 4% net increase. SNFs that fail to comply with CMS quality reporting program (QRP) requirements are subject to a 2%-point reduction to the federal rate update. Facilities should note that the 5.1% increase will be offset by the negative 2.3% parity adjustment described above.
  • Adopting one new quality measure in the SNF quality reporting program (QRP) beginning in FY 2024: The Influenza Vaccination Coverage among Healthcare Personnel (HCP) (NQF # 0431) measure.
  • Revising the compliance date for certain measures and data reporting that were delayed due to the COVID-19 public health emergency (PHE). Specifically, beginning Oct. 1, 2023, SNFs will be required to collect data on certain standardized patient assessment data elements (SPADEs) and two new quality measures, which are:
    • Transfer of Health Information to the Patient
    • Transfer of Health Information to the Provider
  • Updating the SNF value-based purchasing (VBP) program including continued suppression of the SNF 30-day all-cause readmission measure for the FY 2023 SNF VBP program year for scoring and payment adjustment purposes.
  • Adding new measures to the SNF VBP program starting with the “Skilled Nursing Facility Healthcare Associated Infections Requiring Hospitalizations and “Total Hours per Resident Day Staffing” measures in FY 2026 and the “Discharge to Community” measure in FY 2027.
  • Establishing a permanent policy to limit annual wage index decreases to 5%.
  • Implementing a slight increase in the labor-related share of the federal rate from the current 70.4% to 70.8% which will result in a slight payment increase for SNFs with a wage index greater than 1.0.

The MHA will provide members with an updated impact analysis and additional detail on the final rule in the near future. Members with questions should contact Vickie Kunz at the MHA.

CMS Releases FY 2023 Final Rule to Update Long-term Care Hospital PPS

Member News

The Centers for Medicare and Medicaid Services (CMS) recently released a final rule to update the Medicare fee-for-service (FFS) long-term care hospital (LTCH) prospective payment system (PPS) for fiscal year (FY) 2023, which begins Oct. 1, 2022. The rule will:

  • Increase the standard federal rate by a net 3.8% for cases that meet LTCH criteria for services provided by LTCHs in compliance with CMS quality program reporting requirements.
  • Continue paying cases that fail to meet the required LTCH criteria (diagnosis-related group (DRG), intensive care unit, or ventilator criteria) at the site-neutral rate under the dual-rate payment system implemented in FY 2016.
  • Establish a high-cost outlier (HCO) threshold of $38,518 for cases paid based on the LTCH standard rate, up 17% from the current $33,015 threshold, resulting in fewer cases qualifying for an outlier payment. The CMS adjusts this threshold annually to maintain outlier payments at the targeted 8% of aggregate LTCH payments. Cases paid at the site neutral rate are subject to the inpatient PPS HCO, finalized at $38,859 for FY 2023.
  • Set a permanent cap to limit annual wage index decreases at 5%.
  • Calculate Medicare Severity-Long Term Care-DRG relative weights using an averaging approach, with COVID-19 cases included and excluded and then averaging the two sets of relative weights.
  • Set a permanent cap on annual decreases at 10% for MS-LTC-DRG relative weights to mitigate negative impacts of significant weight decreases.

The MHA is continuing to review the final rule and will provide hospitals with an updated impact analysis in the near future. Members with questions should contact Vickie Kunz at the MHA.

CMS Releases FY 2023 Proposed Rule for Inpatient Psychiatric Facilities

Member News

The Centers for Medicare & Medicaid Services (CMS) recently released a proposed rule to update the Medicare fee-for-service (FFS) prospective payment system (PPS) for inpatient psychiatric facilities (IPFs) for fiscal year (FY) 2023, which begins Oct. 1, 2022. Key highlights of the proposal include:

  • A 2.9% increase to the IPF federal per diem base rate for providers that comply with the CMS IPF quality reporting program (QRP) requirements, resulting in a proposed rate of $856.80, up from the current $832.94.
  • A 2.9% increase to the electroconvulsive therapy per diem payment rate from the current $358.60 to $368.87 for providers that comply with the CMS IPFQRP requirements.
  • A permanent policy to smooth the impact of year-to-year IPF payment reductions related to decreases in the wage index. The CMS is proposing that an IPF’s wage index for FY 2023 and subsequent years would not be less than 95% of its prior year wage index.
  • A slight increase in the labor-related share from the current 77.2% to 77.4%, which will increase payments for IPFs with a wage index greater than 1.0.
  • A 51% increase in the outlier threshold amount from the current $16,040 to $24,270 to maintain estimated outlier payments at 2% of total estimated aggregate IPF PPS payments. This will result in fewer cases qualifying for an outlier payment.
  • No changes to the IPFQRP, but the CMS included a request for information on several quality reporting-related topics:
  • General framework that could be used across the CMS QRPs, including principles for selecting quality measures for stratified reporting and a discussion of the benefits and drawbacks of various reporting methods.
  • Approaches that could be used in the IPFQRP to address health equity, including statistical methods to identify specific drivers of inequities and quality measures assessing facility performance in addressing health equity.
  • The concepts described in the previous sections and thoughts about disparity measurement or stratification guidelines for the CMS QRPs.

The MHA will review details of the proposed rule and provide IPFs with an estimated impact analysis for Medicare FFS patients soon. The CMS is accepting comments until May 31. Members with questions should contact Vickie Kunz at the MHA.

Skilled Nursing Facility Prospective Payment System Final Rule Released for FY 2022

Member News

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

Key provisions of the rule will:

  • Increase the standard federal rate by approximately 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 used to classify patients into case-mix groups in the Patient Driven Payment Model system implemented in FY 2021.
  • Establish a new category of exclusions for the SNF Consolidated Billing policy that specifically creates a new category for blood-clotting factors for the treatment of patients with hemophilia and other bleeding disorders and related items and services.
  • Reduce the labor-related share of the federal rate from 71.3% to 70.4%.
  • Update 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, which significantly impacted the measure and resulting performance scores.

The CMS continues to review input received on the agency’s Requests for Information on Closing the Health Equity gap and the Fast Healthcare Interoperability Resources in support of Digital Quality Measurement in QRPs, aligning where possible with other quality programs.

The MHA will provide SNFs with an updated impact analysis and summary of the final rule soon. Members with questions should contact Vickie Kunz at the MHA.

Comments Due Aug. 27 on Home Health Proposed Rule

Member News

The Centers for Medicare & Medicaid Services (CMS) recently released a proposed rule to update the Medicare fee-for-service prospective payment system for home health (HH) agencies effective Jan. 1, 2022. Key aspects of the proposal include:

  • Expanding the HH value-based purchasing model nationally to replace the pilot that began in nine states (AZ, FL, IA, MD, MA, NE, NC, TN, WA) in 2016.
  • Increasing the national, standardized 30-day HH payment rate by 5.9% from $1,901.12 to $2,013.43 for HH agencies that submit the required quality data.
  • Recalibrating the Patient-driven Groupings Model (PDGM) case-mix weights for the 432 payment groups using 2020 data.
  • Updating the HH quality reporting program to:
    • Remove the Outcome and Assessment Information Set (OASIS)-based Drug Education on All Medications Provided to Patient/Caregiver During All Episodes of Care measure.
    • Replace two claims-based measures, the Acute Care Hospitalization During the First 60 Days of Home Health (NQF #0171) measure and Emergency Department Use without Hospitalization During the First 60 days of Home Health (NQF #0173), with one claims-based measure, Home Health Within Stay Potentially Preventable Hospitalization.
  • Modifying HH aide supervision requirements to make permanent the regulatory blanket waivers related to HH aide supervision that were issued during the COVID-19 pandemic.
  • Implementing a provision of the Consolidated Appropriations Act that would allow occupational therapists to perform the initial and comprehensive patient assessment.
  • Continuing the 4.36% behavioral adjustment reduction to the standardized 30-day payment rate implemented in 2020 when the new PDGM was adopted.
  • Consistent with other recent proposed rules, the CMS included two requests for information:
    • The use of fast healthcare interoperability resources in support of digital quality measurement in quality reporting programs.
    • Closing the health equity gap on ways to attain health equity for all patients.

Members are encouraged to review the proposed rule and submit comments to the CMS by Aug. 27. The MHA will provide members with an estimated impact analysis within the next few weeks. Those with questions should contact Vickie Kunz at the MHA.