Proposed fiscal year 2016 payment and policy changes for Medicare Skilled Nursing Facilities

Proposed fiscal year 2016 payment and policy changes for Medicare Skilled Nursing Facilities

On April 15, 2015, the Centers for Medicare & Medicaid Services (CMS) issued a proposed rule (CMS-1622-P) outlining proposed Fiscal Year (FY) 2016 Medicare payment rates for skilled nursing facilities (SNFs). The FY 2016 proposals and other issues discussed in the proposed rule are summarized below.

The proposed rule proposes policies that continue a commitment to shift Medicare payments from volume to value. The Administration has set measurable goals and a timeline to move the Medicare program, and the health care system at large, toward paying providers based on the quality, rather than the quantity of care they give patients. The proposed rule includes policies that advance that vision and support building a health care system that delivers better care, spends health care dollars more wisely and results in healthier people.

Changes to Payment Rates under the SNF Prospective Payment System (PPS)

Based on proposed changes contained within this rule, CMS projects that aggregate payments to SNFs will increase by $500 million, or 1.4 percent, from payments in FY 2015. This estimated increase is attributable to a 2.6 percent market basket increase, reduced by a 0.6 percentage point forecast error adjustment and further reduced by 0.6 percentage point, in accordance with the multifactor productivity adjustment required by law.

SNF Quality Reporting Program

The Improving Medicare Post-Acute Care Transformation Act of 2014 (P.L. 113-185) (IMPACT Act), enacted on October 6, 2014, requires the implementation of a quality reporting program for SNFs.

In addition, the Act requires establishing a SNF quality reporting program.  Beginning with FY 2018, the Act requires SNFs that fail to submit required quality data to CMS under the SNF Quality Reporting Program will have their annual updates reduced by two percentage points.

For the FY 2018 SNF QRP and subsequent years, CMS is proposing to adopt three measures addressing three quality domains identified in the IMPACT Act:  (1) skin integrity and changes in skin integrity; (2) incidence of major falls; and (3) functional status, cognitive function, and changes in function and cognitive function.  The proposed measures satisfy the IMPACT Act requirement of standardized data reporting across four post-acute care settings, including home health agencies, inpatient rehabilitation facilities, skilled nursing facilities and long term care hospitals.   The proposed measures are identified below in the Summary Table of Domains and Proposed Measures for the SNF QRP.   CMS intends to propose additional quality measures and resource use measures in future rulemaking.

Summary Table of Domains and Proposed Measures for the SNF Quality Reporting Program

SNF VBP Program

Section 215 of the Protecting Access to Medicare Act of 2014 (PAMA) added new subsections (g) and (h) to section 1888 to the Social Security Act (Act) New Subsection 1888(h) authorizes establishing a Skilled Nursing Facility Value-Based Purchasing (SNF VBP) Program beginning with FY 2019 under which value-based incentive payments are made to SNFs in a fiscal year based on performance.

Measures

The rule proposes to adopt the Skilled Nursing Facility 30-Day All-Cause Readmission Measure, (SNFRM) (NQF #2510), as the all-cause, all-condition readmission measure that will be used in of the SNF VBP Program. The Skilled Nursing Facility 30-Day All-Cause Readmission Measure  estimates the risk-standardized rate of all-cause, unplanned, hospital readmissions for SNF Medicare beneficiaries within 30 days of their prior proximal short-stay acute hospital discharge.

The Act also requires CMS to replace this measure with an all-condition, risk-adjusted potentially preventable hospital readmission rate.  CMS intends to address this topic in future rulemaking.

Future Policy Considerations

In the proposed rule, CMS is seeking public comments on numerous issues related to the SNF VBP Program’s policies.  CMS intends to propose additional details of the SNF VBP in the FY 2017 SNF PPS proposed and final rules, and is currently seeking comments on:

• Performance standards
• Measuring improvement
• Appropriate baseline and performance periods
• Performance scoring methodology
• Public reporting of performance information
• Feedback reports

Staffing Data Collection

Background and Statutory Authority

Section 1819(d)(1)(A) of the Act for SNFs and section 1919(d)(1)(A) of the Act for NFs each state that in general a facility must be administered in a manner that enables it to use its resources effectively and efficiently to attain or maintain the highest practicable physical, mental, and psychosocial well-being of each resident.  Sections 1819(d)(4)(B) and 1919(d)(4)(B) of the Act give the Secretary authority to issue rules for SNFs and NFs respectively, relating to the health, safety and well-being of residents, and concerning physical facilities.

Section 6106 of the Affordable Care Act of 2010 (Pub. L. 111-148, March 23, 2010) added a new section 1128I to the Act to promote greater accountability for LTC facilities (defined as skilled nursing facilities and nursing facilities pursuant to new subsection 1128I(a) of the Act).  Section 6106 of the Affordable Care Act added an additional subsection 1128I(g) pertaining to the collection of staffing data for LTC facilities.  Section 1128I(g) of the Act specifies that, after consulting with state long-term care ombudsman programs, consumer advocacy groups, provider stakeholder groups, employees and their representatives and other parties the Secretary deems appropriate, the Secretary shall require a facility to electronically submit to the Secretary direct care staffing information (including information with respect to agency and contract staff) based on payroll and other verifiable and auditable data in a uniform format (according to specifications established by the Secretary in consultation with such programs, groups, and parties).  Such specifications shall require that the information submitted specify the category of work a certified employee performs (such as whether the employee is a registered nurse, licensed practical nurse, licensed vocational nurse, certified nursing assistant, therapist, or other medical personnel), include resident census data and information on resident case mix, be reported on a regular schedule and include information on employee turnover and tenure and on the hours of care provided by each category of certified employee per resident per day.  Section 1128I(g) of the Act establishes that the Secretary may require submission of information with respect to specific categories, such as nursing staff, before other categories of certified employees.  Finally, section 1128I(g) of the Act requires that information with respect to agency and contract staff be kept separate from information on employee staffing.

For more information...

The proposed rule went on display on April 20 at the Federal Register’s Public Inspection Desk and will be available under “Special Filings,” at http://www.federalregister.gov/inspection.aspx.

For further information, see: http://www.cms.gov/Medicare/Medicare-Fee-for-Service-Payment/SNFPPS/Spotlight.html.  Public comments on the proposal will be accepted until June 19, 2015.

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