On April 4, 2023, CMS issued proposed rules for Fiscal Year (FY) 2024 to update Medicare payment policies for skilled nursing facilities (SNFs) and inpatient psychiatric facilities (IPFs). CMS notes these rules are intended to improve safety and quality of care in nursing homes and to increase access to essential inpatient psychiatric services and available beds.

SNF Proposed Rule

The SNF Proposed Rule includes changes and updates to the payment rates, quality reporting program (QRP), Value-Based Purchasing (VBP) Program, and waiver of hearing under Civil Monetary Penalties (CMP). CMS is reviewing the comments to the minimum staffing requirements in its proposed rule for FY 2023 but did not issue an update in the Proposed Rule for FY 2024.

Proposed Updates to the SNF Payment Rates

CMS estimates that the updates to the payment policies would result in a net increase of 3.7%, or approximately $1.2 billion, in Medicare Part A payments to SNFs in FY 2024. This increase reflects a $2 billion increase resulting from the 6.1% net market basket update to the payment rates, which is based on a 2.7% market basket update plus a 3.6% point increase to counter the agency’s market basket error in FY 2022, minus a 0.2% point productivity decrease. It also includes a proposed 2.3% point cut in FY 2024 to the SNF prospective payment system rates.

Proposed Updates to the SNF QRP

The SNF Proposed Rule includes addition, deletion, and modification of performance measures to the SNF QRP, under which SNFs are subject to a 2% point reduction in their annual payment update if they fail to meet reporting requirements.

• Proposed additions include:
  • Discharge Function Score: assesses a facility’s status by assessing the percentage of SNF residents who meet or exceed an expected discharge function score and uses mobility and self-care items already collected on the Minimum Data Set.
  • CoreQ: Short Stay Discharge: calculates the percentage of residents whose length of stay is under 100 days and who are satisfied with their SNF stay.
  • COVID-19 Vaccine: assesses the percentage of stays in which residents in an SNF are up to date with COVID-19 vaccinations.

• Proposed deletions include:
  • Application of Functional Assessment/Care Plan: the Discharge Function measure discussed above is more strongly associated with desired resident functional outcomes.
  • Application of the IRF Function Outcome and Change in Mobility Score: the costs associated with these measures outweigh the benefits of their use in the program.

• Proposed modification includes:
  • COVID-19 Vaccination Coverage Among Healthcare Personnel (HCP): the proposed modification would require SNFs to report the cumulative number of healthcare personnel (HCP) who are considered up to date with recommended COVID-19 vaccines, as opposed to reporting only on whether HCP had received the primary vaccines as required by the prior version of the measure.

Proposed Changes to the SNF VBP Program

The SNF Proposed Rule includes additions of four new quality measures to the VBP Program, which awards SNFs with incentive payments based on the quality of care they provide. The proposed additions include:

• Nursing Staff Turnover: assesses the stability of the staffing within an SNF using nursing staff turnover.
• Discharge Function Score: this is the same measure discussed above.
• Long Stay Hospitalization per 100 Residents: assesses the hospitalization rate for long-stay residents.
• Percent of Residents Experiencing One or More Falls with Major Injury (Long Stay): assesses the falls with major injury rates of long-stay residents.

Additionally, the SNF Proposed Rule includes replacing the Skilled Nursing Facility 30-Day All-Cause Readmission Measure (SNFRM) with the Skilled Nursing Facility Within Stay Potentially Preventable Readmissions (SN FWS PPR) measure beginning with the FY 2028 program year and FY 2025 performance year.

Proposed Changes to Waiver of Hearing under CMP

CMS also proposes to eliminate the requirement that SNFs facing a civil money penalty waive their right to a hearing in writing, and instead, to treat a failure to submit a timely request for a hearing as a constructive waiver.

IPF Proposed Rule

The IPF Proposed Rule includes updates to the payment rates and QRP.

Proposed Updates to the IPF Payment Rates

CMS expects total payments to IPFs to increase by 1.9%, or $55 million, in FY 2024 relative to IPS payments in FY 2023. The 1.9% payment update reflects a 3% increase based on a proposed 2021-based market basket update of 3.2%, minus a productivity adjustment of 0.2% points. CMS also proposes an update to the outlier threshold so that the outlier payments remain at 2% of total payments. CMS estimates this outlier threshold update to result in a 1% decrease to aggregate payments.

Proposed Updates to the IPF QRP

The IPF Proposed Rule includes addition, deletion, and modification of performance measures to the IPF QRP, under which IPFs are subject to a 2% point reduction in their annual payment update if they fail to meet reporting requirements.

• Proposed additions include:
  • Facility Commitment to Health Equity: assesses an IPF’s commitment to health equity.
  • Screening for Social Drivers of Health (SDOH): assesses the percentage of patients, aged 18 years and over at the time of admission, who are screened for the five health-related social needs, including food security, housing instability, transportation needs, utility difficulties, and interpersonal safety.
  • Screen Positive Rate: assesses the percentage of patients who screen positive for each of the five health-related social needs under the Screening for SDOH Measure.
  • One Patient Experience of Care: assesses patient’s perspective of care.

• Proposed deletions include:
  • Patients Discharged on Multiple Antipsychotic Medications with Appropriate Justification: the measure no longer aligns with the updated clinical guidelines.
  • Tobacco Use Brief Intervention Provided or Offered and Tobacco Use Brief Intervention Provided: the measure is duplicative of another measure which will remain in the IPF QRP measure set.

• Proposed modification includes:
  • COVID-19 Vaccination Coverage Among Healthcare Personnel (HCP): this is the same measure discussed above.

The SNF Proposed Rule is available here and the IPF Proposed Rule is available here. The CMS fact sheets on the SNF Proposed Rule can be found here and on the IPF Proposed Rule can be found here.