The SNF PPS FY 2021 final rule was announced July 31 and published in the federal register on August 5. The new rule will go into effect with the beginning of the fiscal year on October 1 and includes a 2.2% increase. LeadingAge submitted comments on the proposed rule and a summary of the final rule, including our comments, follows below.

Rate Adjustments

CMS initially proposed a market basket update of 2.7% with a multifactor productivity (MFP) adjustment of 0.4%, resulting in a net update of 2.3%. This was based on the IHS Global Insight, Inc. (IGI) first quarter forecast, which was developed prior to the economic impacts of the COVID-19 pandemic. The second quarter forecast, driven by slower-than-anticipated growth due to the pandemic and resulting economic recession, was used to adjust the update to 2.2% for the final rule, with a 0.0% MFP adjustment.

Administrative Level of Care Presumption

The administrative level of care presumption remains unchanged for FY 2021. The case mix qualifiers designated for this purpose under the patient-driven payment model can be accessed here: (https://www.cms.gov/Medicare/Medicare-Fee-for-Service-Payment/SNFPPS/index.html.

Consolidated Billing

In the LeadingAge comments on the proposed rule, we urged CMS to consider the impact of COVID-19 in excluding certain services from consolidated billing. Specifically, we requested that COVID-19 testing of residents be excluded to allow separate billing for these services. CMS noted that many commenters requested considerations of the COVID-19 pandemic; however, such exclusions that do not otherwise meet statutory conditions for exclusion (high cost and low probability within the SNF setting and falling into 1 of 4 specific service categories: chemotherapy items, chemotherapy administration services, radioisotope services, and customized prosthetic devices) would require congressional action. Therefore, COVID-19 testing will not be excluded from consolidated billing.

Labor Market Area Delineations

As noted in our analysis of the proposed rule, CMS proposed a series of updates to the labor market area delineations used for determining the SNF PPS wage index. These proposals were finalized as follows:

  • Micropolitan Statistical Areas will continue to be treated as rural and be included in the rural wage index.
  • 34 urban counties will become rural under the proposal and CMS would apply the rural unadjusted per diem rates
  • 47 currently rural counties (and county equivalents) would become urban and would apply the urban unadjusted per diem rates.
  • Some urban counties (19) will shift from one urban CBSA to another urban CBSA and may experience either a positive or negative rate impact associated with the move.

These specific areas and counties are listed in Tables 11, 12, and 14 in the final rule. CMS will adopt a 1-year transition for FY 2021, that would apply a 5% cap on any decrease in wage index compared to FY 2020. The final wage index applicable to FY 2021 is available on the CMS Website at http://www.cms.gov/Medicare/Medicare-Fee-for-ServicePayment/SNFPPS/WageIndex.html.

ICD-10 Code Mappings

Changes to ICD-10 code mappings were finalized as proposed. This list can be accessed on the SNF PDPM website https://www.cms.gov/Medicare/Medicare-Feefor-Service-Payment/SNFPPS/PDPM. Recall that substantive changes continue to require notice and comment rulemaking but non-substantive changes may be made through a sub-regulatory process to ensure consistency with ICD-10 medical code data set updates. Non-substantive changes will be posted biannually according to the ICD-10 medical code data set updates and will be available at the SNF PDPM website noted above.

SNF Value-Based Purchasing (VBP) Program

CMS finalized changes to the definition of “SNF Readmission Measure” under the SNF Value-Based Purchasing (VBP) Program to reflect the updated name of this measure that was finalized in FY 2020. CMS also finalized changes to the definition of “Performance Standards” at § 413.338(a)(9) as proposed, and finalized the addition at § 413.338(e)(3)(i), (ii), and (iii) to suppress from public reporting the data on SNFs that do not meet the thresholds for the measure. Additionally, the rule updates the 30-day Phase One Review and Correction deadline to the baseline period quality measure quarterly report.

In our comments on the proposed rule, LeadingAge urged CMS to consider the impact of the COVID-19 pandemic and public health emergency on claims data utilized for the measure. CMS announced in March that they would exclude qualifying claims data for the period January 1 – June 30, 2020; however, this could potentially result in CMS using and comparing a partial data set to a complete baseline year in determining a SNFs performance and associated value-based incentive payment (VBIP) in future years. No changes were made in the final rule and CMS will maintain the processes and policies adopted for FY 2021.