CMS Issues Proposed 2019 Payment Rule for SNFs and Hospice

Regulation | April 28, 2018 | by Nicole Fallon

On April 27, 2018, the Centers for Medicare and Medicaid Services (CMS) released proposed updates to the Skilled Nursing Facility (SNF) and Hospice Medicare Prospective Payment Systems, the annual rules controlling payment and updating policy related to these providers. Both rules contain extensive quality provisions. The Proposed SNF rule also includes changes to the Value Based Purchasing and Quality Reporting Program.

The proposed PPS rules both include requests for feedback on ideas to achieve interoperability, promoting the sharing of electronic health information.

“LeadingAge is pleased to see that the 2.4% market basket increase required by the Bipartisan Budget Act will increase SNF payments by $850 million, and that CMS heard our message loud and clear that the new classification system needed significant changes,” said Katie Smith Sloan, LeadingAge President and CEO. “We hope it better recognizes the costs of providing quality care for the medically complex individuals that nonprofit providers serve.”

Preliminary Details

Proposed SNF PPS: As required by the Bipartisan Budget Act, SNF payments will increase in aggregate by $850 million, based on the 2.4% SNF market basket update. Absent the BBA, the increase would have been 1.9%. The rule reflects CMS’s intention to shift Medicare payments from “volume to value,” with continued implementation of the SNF Value Based Purchasing (VBP) program and the SNF Quality Reporting Program (QRP).

Changes to the SNF VBP program would make updates to the baseline periods and scoring methodology and would put in place an Extraordinary Circumstances Exception. The SNF QRP requires that free standing SNFs, those affiliated with acute care facilities and certain swing bed SNFs, submit quality data to CMS; failure to do so would result in a 2% payment reduction. Measures include making care safer, increasing person and family engagement, promoting coordination of care, promoting effective treatment and prevention, and making care affordable. This proposed update adds a factor to take into consideration the costs that are associated with a measure and weighs them against the benefit of its continued use.

CMS had announced earlier this spring that it would be replacing the Resource Utilization Group, Version IV (RUG-IV) – the classification system to put patients into payment groups – with the Resident Classification System, Version I (RCS-I). Based on extensive stakeholder input, including LeadingAge comments, CMS has significantly revised and renamed the RCS-I. Friday’s proposed update includes a “modernized” system, the Patient-Driven Payment Model (PDPM). The PDPM focuses on the unique care needs of each patient, most notably non-therapy ancillaries (such as drugs and medical supplies).

Additionally, CMS released a Request for Information for feedback on solutions to achieve interoperability or the sharing of healthcare data by providers.

Proposed Hospice PPS: Hospices would see a 1.8% increase in payments for FY 2019 ($340 million). The Hospice payment system includes a statutory aggregate cap; the proposed rule increases the cap by 1.8%.

The proposed Hospice PPS would also make changes to the Hospice Quality Reporting Program (QRP), including adding an 8th factor to consider when removing a quality measure: determining if the costs associated with a measure outweigh the benefits of its continued use.

Comments on both the SNF and the Hospice proposed PPS updates will be accepted until June 26, 2018, leaving enough time for the final rules to be effective on October 1, 2018.

LeadingAge will develop comments and information to assist members in commenting.