What’s happening: The Centers for Medicare & Medicaid Services (CMS) issued its final payment rules for inpatient rehabilitation facilities (IRFs), skilled-nursing facilities (SNFs), and hospices for federal fiscal year (FFY) 2025. CHA has issued members-only summaries of each rule.
What else to know: In general, the payment updates were slightly higher than proposed, but still inadequate relative to input price inflation.
The final rules provide payment updates, continued refinement of quality reporting programs (QRPs), and other policy changes for IRFs, SNFs, and hospices.
- Updates the IRF prospective payment system (PPS) payment rates by 3% based on the final IRF market basket update of 3.5%, less a 0.5 percentage point productivity adjustment
- Finalizes adoption of four new items in the IRF-PAI (patient assessment instrument) as social determinants of health (SDOH) standardized patient assessment data elements beginning with patients admitted on Oct. 1, 2026 (FFY 2028 payment determination)
- Modifies the IRF-PAI transportation item under the SDOH category in IRF QRP beginning with patients admitted on Oct. 1, 2026 (FFY 2028 payment determination)
- Removes the “Admission Class” assessment item from the IRF-PAI item set
- Updates the SNF PPS rates by 4.2% based on the final SNF market basket of 3%, plus a 1.7% market basket forecast error adjustment, and a negative 0.5% productivity adjustment
- Finalizes changes to Patient-Driven Payment Model (PDPM) ICD-10 code mappings to allow more accurate primary diagnoses that meet the criteria for skilled intervention during a Part A SNF stay
- Reduces SNF PPS payments by $165 million nationally for certain SNFs based on the value-based purchasing program
- Finalize revisions to CMS’ existing nursing home enforcement authority, including expanding its ability to impose financial penalties
- Add four new SDOH items for the SNF QRP beginning with residents admitted on Oct. 1, 2025 (FFY 2027 payment determination)
- Modifies the transportation item under the SDOH category in the SNF QRP beginning with residents admitted on Oct. 1, 2025 (FFY 2027 payment determination)
- Requires SNFs participating in the SNF QRP to participate in a minimum data set validation process beginning in FFY 2027
- Adopts a measure retention and removal policy to the SNF value-based purchasing program, updates the case-mix methodology for the total nurse staffing measure and a review and correction policy update
Hospice Final Rule
- Finalizes a payment increase of 2.9% based on a final rule market basket update of 3.4%, reduced by a 0.5% productivity adjustment
- Finalizes a hospice cap of $34,465.34
- Adds two new process measures to the hospice QRP, expected to begin in FFY 2028
- Adopts and implements the Hospice Outcomes and Patient Evaluation patient-level data collection tool, beginning with FFY 2025, and functionally replace the existing Hospice Item Set structure upon implementation
- Changes the Hospice Consumer Assessment of Healthcare Providers and Systems Survey based on the results of a mode experiment conducted in 2021
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