MHA Comments on Medicare Fee-for-Service Proposed Rules

The MHA recently submitted comments to the Centers for Medicare and Medicaid Services (CMS) regarding the proposed rule to update the Medicare fee-for-service (FFS) inpatient rehabilitation facility (IRF) prospective payment system (PPS) for fiscal year (FY) 2024. These comments were due to the CMS June 2.

The MHA has also drafted comments regarding the FY 2024 Medicare FFS proposed rule to update the inpatient psychiatric facility (IPF) and the proposed rule to update the skilled nursing facility (SNF) PPS.  Comments on these rules are due June 5.

The CMS is expected to release final rules to update the IRF, IPF and SNF PPS around Aug. 1, for the Oct. 1, 2023, effective date. The MHA will provide members with an updated Medicare FFS impact analysis following release of the final rules.

Members with questions should contact Vickie Kunz at the MHA.

CMS Releases FY 2024 Skilled Nursing Facility Proposed Rule

The Centers for Medicare & Medicaid Services (CMS) recently released a proposed rule to update the Medicare fee-for-service prospective payment system for skilled nursing facilities (SNF) for fiscal year (FY) 2024, beginning Oct. 1, 2023. The CMS did not propose new minimum staffing requirements for SNFs in this rule but restated the agency’s intention to propose such requirements in separate rulemaking this spring. Key provisions of the proposal include:

  • Continuation of the 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 two-year phase-in of the proposed 4.6% negative adjustment for FY 2023 and 2024 despite opposition from the MHA, the American Hospital Association and others.
  • A 3.7% net increase to the SNF federal per diem base rate for providers that comply with the CMS IPF quality reporting program (QRP) requirements. Facilities should note that the 3.7% net increase will be offset by the negative 2.3% parity adjustment described above.
  • A slight increase in the labor-related share from the current 70.8% to 71%.
  • Changes to the SNF QRP including:
    • Adopting one new quality measure: The Discharge Function Score (DC Function).
    • Modifying the COVID-19 Vaccination Coverage Among Health Care Personnel measure.
    • Removing three measures:
      • Application of Percent of Long-Term Care Hospitals Patients with an Admission and Discharge Functional Assessment and a Care Plan that Addresses Function.
      • The Application of the IRF Functional Outcome Measure: Change in Self-Care Score for Medical Rehabilitation Patients.
      • The Application of the IRF Functional Outcome Measure: Change in Mobility Score for Medical Rehabilitation Patients.
    • Adopting four new measures for the SNF Value-based Purchasing (VBP) program:
      • Nursing Staff Turnover Measure.
      • Discharge Function Score Measure.
      • Long Stay Hospitalization Measure per 100 residents.
      • Percent of Residents Experiencing One or More Falls with Major Injury (Long-Stay).
    • Replacing the 30-Day All Cause Readmission Measure with Within Stay Potentially Preventable Readmissions Measure.
    • Adoption of Health Equity Adjustment.

The MHA will provide SNFs with a facility-specific impact analysis and additional details on the proposed rule in the near future. The MHA also encourages members with SNF operations to review the proposed rule, provide comments to Vickie Kunz at the MHA by May 25 and submit comments to the CMS by June 5. The CMS is expected to release a final rule around Aug. 1, for an Oct. 1, 2023, effective date.  Members with questions should contact Vickie Kunz at the MHA.

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.