The Fiscal Year (FY) 2024 Skilled Nursing Facility (SNF) Prospective Payment System (PPS) proposed rule was released on April 4. The rule includes payment updates and several changes to the SNF Quality Reporting Program (QRP) and Value-Based Purchasing (VBP) program but does not include the highly anticipated staffing standards announced by the Biden Administration in February 2022. While these staffing standards are still expected sometime this spring, they will be published in a separate proposed rule. The FY 2024 SNF PPS rule will be published to the Federal Register on April 10 and comments are due June 5.

Payment Updates

For FY 2024, CMS proposes an aggregate $1.2 billion increase in Medicare A payments to SNFs. This 3.7% increase is the result of a 2.7% market basket increase, plus a 3.6% forecast error adjustment, less a 0.2% productivity adjustment. This results in a 6.1% market basket update, which is then decreased by 2.3% for phase 2 of the Patient-Driven Payment Model (PDPM) parity adjustment 2-year phase-in, finalized in FY 2023, and a 0.1% budget neutrality factor.

SNF Quality Reporting Program

CMS proposes several updates to the SNF Quality Reporting Program (QRP) including the addition of 3 measures, the removal of 3 measures, modification of one measure, public reporting of 4 measures, and a change to data completion thresholds. 

For FY 2025, CMS proposes to modify the COVID-19 Vaccination Coverage among Healthcare Personnel measure by measuring healthcare personnel who meet the Centers for Disease Control & Prevention’s (CDC) definition of “up to date” with COVID-19 vaccination rather than those who have completed the primary series. Data collection would begin in the fourth quarter of 2023 and public reporting on Care Compare would begin with the October 2024 refresh.

Also for FY 2025, CMS proposes to adopt the Discharge Function Score measure that would replace the current SNF QRP measure Application of Percent of Long-Term Care Hospital Patients with an Admission and Discharge Functional Assessment and a Care Plan that Addresses Function, adopted in the FY 2016 SNF PPS final rule. This risk-adjusted assessment-based outcome measure would evaluate the percentage of SNF patients that meet or exceed an expected discharge function score. Collection of MDS data for this measure would begin on October 1, 2023. Public reporting on Care Compare for this measure would begin with the October 2024 refresh.

Lastly for FY 2025, CMS proposes to remove the Application of Percent of Long-Term Care Hospital Patients with an Admission and Discharge Functional Assessment and a Care Plan That Addresses Function measure (Application of Functional Assessment / Care Plan),  the Application of Inpatient Rehabilitation Facility (IRF) Functional Outcome Measure: Change in Self-Care Score for Medical Rehabilitation Patients measure (Change in Self-Care Score), and the Application of IRF Functional Outcome Measure: Change in Mobility Score for Medical Rehabilitation Patients measure (Change in Mobility Score). CMS proposes to remove Application of Functional Assessment / Care Plan because consistently high and unvarying scores on the measure result in a lack of distinction in SNF performance. Change in Self-Care Score and Change in Mobility Score would be removed due to costs and burden of the measure outweighing benefit.

For FY 2026, CMS proposes to adopt the CoreQ: Short Stay Discharge measure that would calculate the percentage of short-stay residents discharged in a 6-month period who are satisfied with their SNF stay. The measure is based on data from a 4-item self-report survey completed by SNF patients within 2 months of discharge from the SNF. SNFs would be required to contract with an independent, CMS-approved third-party vendor to administer the surveys and report data to CMS on behalf of the SNF.

CMS also proposes to adopt the COVID-19 Vaccine: Percent of Patients/Residents Who Are Up to Date measure for FY 2026. This assessment-based measure would collect data from a new item on the Minimum Data Set (MDS) and would report the percentage of SNF stays in which residents were up to date with COVID-19 vaccination based on CDC’s definition during the reporting year. SNFs would begin reporting MDS data for residents discharged on October 1, 2024. Data would be publicly reported on Care Compare with the October 2025 refresh.

In addition to public reporting on COVID-19 Vaccination Coverage among Healthcare Personnel and Discharge Function Score with the October 2024 refresh, CMS additionally proposes to begin public reporting in October 2024 on Transfer of Health Information to the Provider – Post Acute Care and Transfer of Health Information to the Patient – Post Acute Care. Data collection on these assessment-based measures begins with patients discharged from the SNF on or after October 1, 2023.

Lastly, CMS proposes to increase data completion thresholds for the SNF QRP from 80% to 90% beginning with the FY 2026 SNF QRP program year. This means that SNFs would be required to complete 100% of the data on at least 90% of submitted MDSs in a year to be in compliance with SNF QRP reporting requirements.

SNF Value-Based Purchasing Program

CMS proposes several changes to the SNF Value-Based Purchasing (VBP) program including modification of one measure to replace one measure, adoption of 4 measures, increase of the payback percentage and adoption of a health equity payment incentive, and new data validation processes.

CMS proposes to modify the SNF Potentially Preventable Readmissions After Hospital Discharge measure (SNFPPR) to change the outcome observation window from a fixed 30-day window following acute care hospital discharge to within the SNF stay and to change the time allowed between a qualifying prior proximal inpatient discharge and SNF admission from one day to 30 days. With these changes, the SNFPPR would be renamed the SNF Within-Stay Potentially Preventable Readmissions measure (SNF WS PPR). CMS then proposes to replace the SNF All-Cause 30-Day Potentially Preventable Readmissions measure (SNFRM) with the SNF WS PPR beginning with the FY 2028 SNF VBP program year.

CMS proposes to continue SNF VBP program expansion by adding one new measure in FY 2026 program year and 3 new measures in FY 2027 program year. The Total Nursing Staff Turnover measure will be added in FY 2026 program year with data collection beginning in FY 2024 performance year and impacting SNF payment beginning in FY 2026 performance year.

For FY 2027 program year, CMS proposes adopting Percent of Residents Experiencing One or More Falls with Major Injury (Long-Stay), Discharge Function Score, and Number of Hospitalizations per 1,000 Long-Stay Resident Days. Data collection on these measures would begin with FY 2025 performance year impacting payment in FY 2027 program year.

CMS proposes adopting a variable payback percentage effective with the FY 2027 program year that would include a Health Equity Adjustment incentive bonus. SNFs that perform in the top third of a given measure and also serve a resident population that includes at least 20% of SNF patients with dual-eligible status would receive a Health Equity Adjustment. In order to accommodate this new incentive, a variable payback percentage is proposed to ensure all value-based payments are at least 60% and none exceed the 70% maximum.

With the expansion of the SNF VBP, CMS proposes 3 processes for validating claims-based, PBJ-based, and assessment-based measures. A validation process already exists for the SNFRM in which Medicare claims data is validated by the Medicare Administrative Contractors (MACs). CMS proposes to adopt this validation process for all finalized, proposed, and future claims-based measures. CMS conducts quarterly audits on PBJ data and proposes adopting this process for validation of all finalized, proposed, and future PBJ-based measures.

For assessment-based measures, CMS does not feel that current MDS audit processes would be appropriate and proposes a validation process that would include auditing of medical records from approximately 1,500 randomly selected SNFs each year by a CMS contractor. Penalties would be applied to SNFs that do not sufficiently participate in audits or that do not meet certain validation thresholds. Penalties and processes for this audit would be further outlined in future rulemaking.

Changes to Enforcement Processes When Civil Monetary Penalties are Imposed

CMS proposes to change an enforcement process that requires SNFs to submit written requests to waive hearing rights when a civil monetary penalty has been imposed. CMS proposes to replace the written waiver process with a constructive waiver process in which a SNF is deemed to have waived its right to a hearing if the period for requesting a hearing has expired and no request for a hearing has been received. SNFs will retain the option of requesting a hearing to contest the noncompliance that led to imposition of the CMP and SNFs that do not request a hearing would, through the constructive waiver process, continue to receive the 35% reduction in penalty granted under the written waiver process.

Requests for Information  

CMS includes 2 Requests for Information (RFI) in the FY 2024 SNF PPS proposed rule. In the first RFI, CMS requests feedback on a proposed set of principles that could be used for selecting SNF QRP measures, identified measurement gaps, and measures that are available for immediate use or could be adapted or developed for use in the SNF QRP.

For the second RFI, CMS requests feedback on resident-level demographic and social risk indicators and geographic-level indices that could be used to assess health equity gaps; possible health equity approaches that could be included in the SNF VBP; and domains that could be adopted into the program to incorporate health equity.

Read the CMS Fact Sheet on the FY 2024 SNF PPS proposed rule here. LeadingAge will be providing a more detailed analysis of rule in the coming days. LeadingAge will also be soliciting feedback from members and providing resources to assist members in submitting comments on the rule ahead of the June 5 deadline.