On April 11, 2022, CMS issued its FY 2023 Skilled Nursing Facility (SNF) Prospective Payment System (PPS) proposed rule updating Medicare payment policies and rates for SNFs. The proposed rule also includes proposals for the SNF Quality Reporting Program (QRP) and the SNF Value-Based Program (VBP) for FY 2023 and future years, and it seeks feedback on addressing staffing constraints and turnover in nursing homes and health equity disparities. Comments are due to CMS by June 10, 2022. The key highlights of the proposed rule are summarized below.

SNF PAYMENT RATE UPDATES

The proposed rule includes an overall SNF payment rate decrease of approximately $320 million in FY 2023 as compared to FY 2022, which includes an annual payment update of 3.9% and the implementation of a 4.6% cut to maintain budget neutrality from the implementation of the Payment-Driven Payment Model (PDPM). Further, the proposed rule would include a permanent 5% cap on annual wage index decreases to limit year-to-year changes in SNF payments associated with index changes. The proposed rule also contains several changes to the PDPM ICD-10 code mappings and coding guidelines for improved consistency.

SNF QRP UPDATES

The proposed rule would adopt the Influenza Vaccination Coverage among Healthcare Personnel measure to evaluate the percentage of health care personnel who are physically present at the facility who received an influenza vaccine. The proposed rule would also postpone the collection of two new quality measures—the Transfer of Health Information to the Patient and Transfer of Health Information to the Provider, as well as certain standardized patient assessment data elements — to October 1, 2023.

SNF VBP PROGRAM MEASURE ADDITIONS

Additional measures have been added to the SNF VBP Program, including: (1) the SNF Healthcare Associated Infections Requiring Hospitalization (HAI) measure, which is an outcome measure assessing SNF performance on infection prevention and management in FY 2026; (2) the Total Nursing Hours Per Resident Day measure in FY 2026; and (3) the adoption of the Discharge to Community measure, which is an outcome measure assessing the rate of successful discharges to the community from SNFs in FY 2027.

REQUESTS FOR COMMENT

The proposed rule also solicits input on several topics, including establishing minimum staffing requirements needed to ensure the provision of safe and high-quality care, developing strategies to improve measurement of disparities in health care outcomes, and stakeholder input on a measure to examine staff turnover levels in nursing homes for possible inclusion in the SNF VBP Program in the future.

A CMS fact sheet on the proposed rule can be found here, and the full proposed rule can be found here.