April 3, 2024  – The Centers for Medicare & Medicaid Services (CMS) announced a set of proposed updates to the Skilled Nursing Facility Prospective Payment System (SNF PPS) that aim to bolster payment rates, boost nursing home oversight, and enhance the quality reporting framework. These proposals are for fiscal year 2025 and shine a light on a concerted effort to improve the financial and operational landscape for skilled nursing facilities across the nation.

The proposal includes a 4.1% hike in SNF payment rates, a move that represents a combination of a 2.8% increase tied to the SNF market basket index, a 1.7% adjustment to correct for past market basket forecast inaccuracies, and a slight 0.4% deduction for productivity. This adjustment aims to support SNFs in delivering higher-quality care without incorporating reductions associated with the SNF Value-Based Purchasing (VBP) program. The changes reflect payment reductions totaling approximately $196.5 million in the coming fiscal year.

To ensure more precise and effective care delivery, the proposed rule also seeks to change the Patient-Driven Payment Model (PDPM) with updates to ICD-10 code mappings. This adjustment allows for more accurate identification of primary diagnoses the require skilled intervention to promote consistent and appropriate care during SNF stays. CMS is also soliciting feedback on potential enhancements to the Non-Therapy Ancillary component of the PDPM.

An expansion of the agency’s enforcement authority is also on the table. CMS is proposing the ability to levy both per instance and per day financial penalties concurrently for health and safety violations. This approach aims to more accurately reflect serious infractions and encourage timely compliance corrections by SNFs. The goal is to prioritize resident safety and well-being.

The rule also introduces significant changes to the SNF Quality Reporting Program (QRP), including the addition of four new items to the Minimum Data Set (MDS) covering vital social determinants of health such as living situation, food, and utilities. An amendment to the Transportation item seeks to enhance clarity and simplicity, facilitating better assessment of residents’ needs upon admission. In addition, CMS proposes mandating SNF participation in an MDS validation process starting from fiscal year 2027, underscoring the importance of accurate and reliable data in assessing facility performance.

Updates to the SNF VBP program include the introduction of a measure retention and removal policy, ensuring the continued relevance and efficacy of quality assessment measures within the SNF setting. Additionally, administrative policy revisions are proposed to allow for more comprehensive review and correction opportunities for Payroll-Based Journal (PBJ) and MDS data.

These proposed updates are now available for public access and commentary. To view the entire proposed rule, click here.