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CMS Issues 2023 Skilled-Nursing Facility PPS Final Rule

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The Centers for Medicare & Medicaid Services (CMS) has released its final rule on payments to skilled-nursing facilities (SNFs) for federal fiscal year (FFY) 2023.  

For FFY 2023, CMS finalizes a 2.7% update to payment rates, based on a 3.9% SNF market basket update plus a 1.5 % market basket forecast error adjustment, minus a 0.3 % productivity adjustment. CMS also proposes a 2.3% recalibration of the parity adjustment for the Patient Driven Payment Model (PDPM) to achieve budget neutrality. CMS estimates that the aggregate impact of the payment policies in this final rule would result in an increase of approximately $904 million in Medicare Part A payments to SNFs in FFY 2023 compared to FFY 2022.    

CMS finalizes a revised analysis methodology to better account for the effects of the COVID-19 public health emergency (PHE) and now finds that implementation of the PDPM has resulted in an untended increase in payments of approximately 4.6%. In the final rule, CMS implements the recalibration of the PDPM using a two-year phase-in period that reduces SNF spending by 2.3%, or approximately $780 million, in FFY 2023 and 2.3% in FFY 2024. 

CMS adopts a new process measure— Influenza Vaccination Coverage Among Health Care Personnel Measure — to the data set for the SNF Quality Reporting Program (QRP), beginning with the FFY 2025 SNF QRP. CMS also revises the compliance date for certain SNF QRP reporting requirements, including the Transfer of Health Information Measure and certain standardized patient assessment data elements that would begin Oct. 1, 2023, to align with other post-acute care settings that will begin on Oct 1, 2022.   

For the SNF Value-Based Purchasing (VBP) Program, CMS suppresses the SNF 30-day All-Cause Readmission Measure due to the continuing impact of the COVID-19 PHE. CMS will reduce the federal per diem rate for each SNF by 2% and award SNFs 60% of that withhold, resulting in a 1.2% payback to those SNFs. Any SNFs that do not meet the finalized case minimum for FFY 2023 will be excluded from the program for FFY 2023. CMS also adopts three new measures. For VBP Program year 2026, CMS adopts SNF Healthcare Associated Infections Requiring Hospitalization and Total Nursing Hours Per Resident Day. For VBP Program year 2027, CMS adopts Discharge to Community – Post-Acute Care for SNFs.    

Additional information on the final rule is available in a CMS fact sheet