CMS Issues Final Rule Implementing Major Changes to SNF PPS

August 2, 2018
Policy Snapshot

On July 31, the Centers for Medicare & Medicaid Services (CMS) issued a final rule outlining fiscal year (FY) 2019 Medicare payment updates and quality program changes for skilled nursing facilities (SNFs) and implementing sweeping payment changes known as the Patient Driven Payment Model (PDPM). The Society has been actively engaged with other stakeholders on the development of this new model and just last week joined a letter to CMS Administrator Seema Verma asking CMS to establish a panel to advise on the implementation of PDPM. In short, the PDPM will be effective October 1, 2019, using a new case-mix model that focuses on the patient’s condition and resulting care needs rather than on the amount of care provided in order to determine Medicare payment.

The Society will analyze the impact of the new PDPM model in the coming weeks.

Two other major provisions in the rule include implementation for the SNF Value-Based Purchasing Program (VBP) and the SNF Quality Reporting Program (QRP)

Based on changes contained within this final rule, we estimate that the FY 2019 aggregate impact will be an increase of $820 million in Medicare payments to SNFs, resulting from the FY 2019 SNF market basket update—which is required to be 2.4% by the Bipartisan Budget Act of 2018. Absent the application of this statutory requirement, the FY 2019 market basket update factor would have been 2%; this reflects the SNF FY 2019 market basket index of 2.8%, reduced by the multifactor productivity adjustment of 0.8%. The 2% update would have resulted in an estimated aggregate increase of $670 million in Medicare payments to SNFs.

Find more information in the CMS fact sheet.