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

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 Seeks Comment on Rural Emergency Hospital Proposed Rule

The Centers for Medicare and Medicaid Services (CMS) recently released a proposed rule to obtain comment on potential Conditions of Participation (CoPs) for critical access hospitals (CAHs) and certain rural hospitals seeking to convert from their current status to be designated as a Rural Emergency Hospital (REH). REHs are a new provider type authorized by the Consolidated Appropriations Act passed Dec. 27, 2020, to address concern regarding the closure of rural hospitals across the country. This new designation provides an opportunity for CAHs and rural hospitals with 50 or fewer beds to continue providing essential services in their communities effective Jan. 1, 2023. REHs would be required to:

  • Discontinue providing acute care inpatient services.
  • Provide 24-hour emergency services, observation care and can choose to offer additional outpatient services.
  • Have an annual per patient average stay of 24 hours or less.
  • Have a transfer agreement with a Level I or II trauma center but not precluded from having agreements with Level III or IV trauma centers.

The CMS recently included payment policies related to the new REH in the 2023 Medicare outpatient prospective payment system (OPPS) proposed rule. Medicare outpatient services provided by a REH will be paid 105% of the Medicare OPPS rate with the REH also receiving a monthly facility payment. The CMS proposes a monthly payment of $268,294 for each REH in 2023, with this amount increased annually based on the hospital market basket change.

The CMS proposes that REHs may provide outpatient services that are not paid under the OPPS such as laboratory services paid under the Clinical Lab Fee Schedule (CLFS), which would be paid at the CLFS rate. REHs can also provide distinct part skilled nursing facility (SNF) services which would be paid based on the SNF prospective payment system. Services paid outside of the OPPS such as lab and SNF would not receive the additional 5% payment. The CMS also seeks input on quality measures recommended by the National Advisory Committee on Rural Health and Human Services, and additional suggested measures for the REH quality reporting program. The CMS is seeking additional comments on behavioral and mental health, rural virtual care and maternal health services.

Comments on the proposed CoP rule are due Aug. 29, while comments regarding payment provisions included in the OPPS proposed rule are due Sept. 13. The CMS is expected to release a final OPPS rule around Nov. 1. Members with questions should contact Lauren LaPine at the MHA.

Expansion of Skilled Nursing Services for Aging Population Explored in Webinar

Hospitals and health systems are experiencing a decrease in routine inpatient admissions, prompting development of other services. One of these services is post-acute care, which is expected to grow as the population ages and skilled nursing facilities (SNFs) are expanded and created. To build skilled nursing growth, providers use data focused on referral patterns to develop specialized programs based on patient needs, then promote those specialized services.

The MHA webinar Using Data to Grow Skilled Nursing Facility Admissions will explain each step of this strategic process, including real-world success stories demonstrating the value of this approach.

The webinar is scheduled from 10 to 11 a.m. Nov. 18, and MHA members can register for a $195 connection fee. Members with questions should contact Erica Leyko at the MHA.

MHA Monday Report June 14, 2021

MHA Monday Report logo

Combating the Novel Coronavirus (COVID-19): Weeks of June 7

The Michigan First-Dose Tracker indicates that, as of June 10, 60% of Michiganders ages 16 and over had received a COVID-19 vaccine. By June 12, more than 892,000 cases of COVID-19 had been confirmed in the state since the pandemic began; but more than 852,000 …

MHA Provides Testimony in Senate on Newly Introduced Legislation

The Michigan Legislature addressed several bills impacting hospitals during the week of June 7, including legislation that would create new statewide systems of care for two time-sensitive emergency medical conditions, modernize scope of practice for …

Association Submits Comments on Medicare Post-acute Care Proposed Rules

The MHA recently submitted comments to the Centers for Medicare & Medicaid Services regarding the proposed rules to update the Medicare fee-for-service prospective payment systems for fiscal year 2022 for several post-acute care …

Community Benefit Reporting and the COVID-19 Pandemic Discussed in Webinar

The COVID-19 pandemic has had significant impacts on communities, patients and the hospitals that serve them and has severely affected hospital finances. Questions have arisen regarding how pandemic-related expenses, revenues and …

MHA and MHA Keystone Center Events Focus on Diversity, Equity and Inclusion

To act deliberately and purposefully to ensure outcomes across all patient populations are equitable, leaders should know where disparities exist, ways to prevent disparities and how to create a culture and system that reduces disparities to improve quality and …

Chief Medical Officer Debunks COVID-19 Vaccine Myths on MiCare Champion Cast

The MHA released a new episode of the MiCare Champion Cast, which features interviews with healthcare policy experts in Michigan on key issues that impact healthcare and the health of communities. …

High Reliability Leads to Safe Work Environment

Creating a highly reliable hospital requires a commitment to a just culture, continuous learning and designing care improvement. The webinar High Reliability in the Time of COVID-19, scheduled from noon to 1 p.m. EDT June 24, will review high reliability principles proven …

CyberForce|Q Offers Continuous, Collective Approach to Cybersecurity Assessments

The MHA’s newest Endorsed Business Partner, CyberForce|Q, offers a new approach to cybersecurity for healthcare organizations. CEO Eric Eder described a situation where a rural healthcare system’s CEO shared his organization’s experience …

Headline Roundup: Week of June 6 for COVID-19 in Michigan

The MHA has compiled a collection of media stories that include references to the MHA related to the last COVID-19 surge and vaccines. …

The Keckley Report

Post Pandemic, Affordability Looms as the Big Challenge in Healthcare — This Time, It’s Different

“Pre-pandemic, polls showed healthcare costs were a major concern to U.S. consumers. Post-pandemic, indications are it will re-surface as the industry’s biggest challenge, particularly affordability. But this time, consumers are likely to act differently on their concerns.”

Paul Keckley, June 8, 2021

MHA in the News

Modern Healthcare published an interview with MHA CEO Brian Peters June 7 discussing the new administrative rules requiring implicit bias training for licensure or registration of healthcare professionals in Michigan.

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.