Alert

CMS Publishes Proposed Rule for Fiscal Year 2023 Skilled Nursing Facility Payments

On April 15, 2022, the Centers for Medicare and Medicaid Services (CMS) published the proposed rule in the Federal Register for fiscal year (FY) 2023 Skilled Nursing Facility Prospective Payment System (SNF PPS). If finalized, the regulations take effect October 1, 2022.

Each year, CMS publishes updates to the regulations for inflation factors, wage index adjustments, and other patient-care related payment adjustments. Below is an overview of the FY 2023 SNF PPS, including proposed changes and other relevant updates.

Key Proposed Changes

The proposed rule includes the following key changes:

  • An overall proposed 2.8% increase in rates
  • Wage index cap
  • Code mapping classifications for the Patient Driven Payment Model (PDPM) case-mix
  • Updates to the SNF Value-Based Purchasing (VBP) Program

Proposed Rate Changes

The 2.8% increase in rates is based on the market basket change from FY 2022.

CMS will also add another 1.5% to adjust for the error in the market basket estimate in 2021 and apply a 0.4% reduction due to productivity, for a net change of 3.9%. Payments will increase by $1.4 billion.

However, CMS will also reduce payments by 4.6% for a $1.7 billion decrease in payments as a parity recalibration adjustment to account for the payment increase in 2020 when the system converted to the current PDPM system.

Below are the unadjusted case-mix updates for FY 2023, compared to those of the prior year, and the detailed listing of case-mix adjusted rates for FY 2023 by PDPM group.

The PDPM updates incorporate the proposed recalibration of the PDPM parity adjustment.

FY 2023 Unadjusted Federal Rate Per Diem—Urban

Table of the FY 2023 Unadjusted Federal rate Per Diem, Urban

FY 2023 Unadjusted Federal Rate Per Diem—Rural

Table of the FY 2023 Unadjusted Federal rate Per Diem, Rural

FY 2022 Unadjusted Federal Rate Per Diem—Urban

Table of the FY 2022 Unadjusted Federal Rate Per Diem, Urban

FY 2022 Unadjusted Federal Rate Per Diem—Rural

Table of the FY 2022 Unadjusted Federal Rate Per Diem, Rural

PDPM Case-Mix Adjusted Federal Rates and Associated Indexes—Urban (Including the Proposed Parity Adjustment Recalibration)

Table of the PDPM Case-Mix Adjusted Federal Rates and Associated Indexes—Urban (Including the Proposed Parity Adjustment Recalibration)

PDPM Case-Mix Adjusted Federal Rates and Associated Indexes—Rural (Including the Proposed Parity Adjustment Recalibration)

Table of the  PDPM Case-Mix Adjusted Federal Rates and Associated Indexes—Rural (Including the Proposed Parity Adjustment Recalibration)

Other Notable Updates

Wage Index Cap and Core-Based Statistical Area Designation

For FY 2023, CMS proposes to continue to use the FY 2022 SNF PPS final rule that adopted the most recent Office of Management and Budget (OMB) Core-Based Statistical Area (CBSA) delineations.

However, for FY 2023 and subsequent years, CMS proposes to apply a permanent 5% cap on any decreases to a provider's wage index from its wage index in the prior year, regardless of the circumstances causing the decline.

Patient-Driven Payment Model Clinical Diagnosis Mappings

In response to stakeholder feedback and to improve consistency between the International Classification of Diseases-10 (ICD-10) code mappings and current ICD-10 coding guidelines, CMS proposes several changes to the PDPM ICD-10 code mappings.

You can read the ICD-10 code mappings and lists used under PDPM.

SNF Value-Based Purchasing

Section 111 of Division CC of the Consolidated Appropriations Act, 2021 (CAA) authorizes the Department of Health and Human Services secretary to apply up to nine additional measures determined appropriate to the SNF VBP Program for payments for services furnished on or after October 1, 2023.

Due to the COVID-19 public health emergency and its effect on the readmission rates, CMS again chose to suppress the SNF 30-Day All-Clause Readmission Measure (SNFRM) from the 2023 reimbursement calculation.

Additional Provisions from CMS

CMS seeks input on establishing minimum staffing requirements for long-term care facilities.

CMS proposes the adoption of a new process measure, the Influenza Vaccination Coverage among Healthcare Personnel (HCP) measure for the SNF Quality Reporting Program (QRP), beginning with the FY 2025 SNF QRP.

CMS proposes to revise the compliance date for certain SNF QRP reporting requirements including the Transfer of Health Information measures and certain standardized patient assessment data elements—including race, ethnicity, preferred language, health literacy, social isolation—to October 1, 2023.

CMS seeks input on two future measure concepts including:

  • A functional outcome measure that includes both self-care and mobility items
  • A COVID-19 Vaccination Coverage measure that would assess whether SNF residents were up to date on their COVID-19 vaccine

Economic Impact

The overall economic impact of this proposed rule is an estimated $320 million in decreased payments from the US federal government to SNFs during FY 2023.

This estimated impact figure doesn’t incorporate the SNF VBP reductions for certain SNFs estimated to be $186 million in FY 2023.

Public Comments

Public comments can be submitted no later than 5:00 p.m. Eastern time on June 10, 2022. Reference CMS-1765-P in your comment submission.

Before submitting comments, consult with the rule’s submission instructions so you adhere to the proper method.

We’re Here to Help

For more information about the proposed rule or possible implications for you and your organization, contact your Moss Adams professional.

You can also visit our Provider Reimbursement Enterprise Services page for further insights.

Contact Us with Questions


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