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Skilled Nursing Facilities CMS Proposed Rule for 2022

The Centers for Medicare and Medicaid Services (CMS) released the proposed rule for fiscal year (FY) 2022 that would update Medicare’s prospective payment system (PPS) rates for skilled nursing facilities (SNFs). CMS estimated that the proposal would impact payment to skilled nursing facilities (SNFs) Medicare Part A as an increase of around $444 million dollars in 2022. CMS’s proposed changes also included proposals to the SNF Value-Based Program (VBP) and the SNF Quality Reporting Program (QRP).

Market Basket Updates to Skilled Nursing Facilities

CMS is using FY 2018 data, and with the forecast error adjustment and multi-factor productivity update for FY 2022, there will be a 1.3% increase. This will be $444 million in combined payments to the skilled nursing facilities for FY 2022.

For more details, visit the CMS Fact Sheet.

FY 2022 Proposed Updates to Skilled Nursing Facilities Payments


Skilled Nursing Facilities CMS Changes

Items in Proposal that can Decrease Your Reimbursement

PDPM Parity Adjustment

The intention of the Patient-Driven Payment Model (PDPM) was to be a budget neutral change from the RUG system. CMS did not anticipate an increase with PDPM by 5% in the amount of $1.7 billion dollars. The organization intends on future adjustments to the PDPM model to balance out this inadvertent increase in payment.

While CMS acknowledges that the COVID-19 Public Health Emergency (PHE) impacted the data obtained from FY 2020, CMS states they recalibrated the data to account for the potential effects the PHE had and still reports a 5% increase. CMS is proposing a uniform adjustment to the case mix of all the PDPM payment categories to adjust for this increase. The possible approaches for this recalibration are a delayed roll out, phased-in over time, or a combination of both. CMS is currently soliciting public comments on this matter.

Skilled Nursing Facilities QRP

The QRP program subjects Skilled Nursing Facilities to a 2% reduction in their annual update. The CMS proposal includes the implementation of two new measures.

Healthcare-Associated Infection Requiring Hospitalization

This measure will estimate the related healthcare-acquired infections occurring while under the SNF’s care resulting in hospitalizations and comparing it to their peers and national average. The measure provides information about the SNF’s ability to prevent infections and manage the quality of care.

COVID-19 Vaccination Coverage Among Healthcare Personnel

This measure assesses whether the facility is taking measures to reduce the spread of COVID-19 and lowering the risk of transmission with staff vaccinations. The facility would report vaccine statistics to the Center for Disease Control and Prevention and the Healthcare Safety Network starting October 1, 2021. CMS stated this in the Q&A section of the SNF Open Door Forum on April 15, 2021 and this will factor into the 2% reduction.

CMS is also proposing a modification to the public reporting of several quality measures.

Transfer of Health Information to the Patient – Post-Acute Care

CMS wants to update the measure’s denominator. This would avoid counting a patient in both the transfer of health information to the patient measure and the provider measure.

Skilled Nursing Facilities VBP

30-Day All-cause Readmission Measure

Due to the COVID-19 PHE affecting the performance scores drastically, CMS wants to suppress this measure for FY 2022. They are suggesting assigning a score of zero to all SNFs, but to continue the payback policy. CMS is proposing to reduce the applicable federal per diem rate for each SNF by 2% and then giving the SNFs 60% of that withholding. This would result in a 1.2% decrease in reimbursement to those SNFs. SNFs that are subject to the Low Volume Adjustment Policy will be the exception to this.

Expanding VBP Program

CMS is seeking input from stakeholders on which quality measures should be considered when expanding the Value-Based Program. Under the Consolidated Appropriations Act, 2021, the Secretary can expand the program to include up to ten measures beginning in FY 2024. The expanded VBP measures would assess quality to all residents long-term and skilled regardless of payer.

What do these Changes Mean for Your Facility?

Use your voice, CMS will accept comments on the proposed rule through June 7. Comments from stakeholders can be submitted at Regulations.gov.

Skilled Nursing Facilities need to complete a review of their PDPM reimbursement, VBP, and QRP programs. Maximizing this reimbursement and these quality programs can help offset these possible reductions to future SNF reimbursement.

Let Our Team Help You be Proactive for the Skilled Nursing Facilities Changes Ahead

Blue & Co. can analyze your reimbursement and review for missed opportunities, and help you come up with a plan of action. Contact either your local Blue & Co. advisor or Landon Hackett to learn more about this proposed new rule.

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