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Final rule for FY 2020 SNF PPS and consolidated billing

10.02.19

Rates, Patient Driven Payment Model, Value-Based Purchasing, and much more!

CMS has issued the final rule for the Prospective Payment System (PPS) and Consolidated Billing for Skilled Nursing Facilities (SNFs) for FY 2020 (published in the Federal Register on August 7, 2019). Here is what you need to know. The rule:

  • Updates the PPS payment rates for SNFs for FY 2020 effective October 1, 2019.
  • Finalizes minor revisions to the regulation text to reflect the revised assessment schedule under the Patient Driven Payment Model (PDPM) which replaces the current Resource Utilization Groups, Version IV (RUG-IV) model beginning on October 1, 2019. Specifically, to revise the prescribed PPS assessment schedule to reflect the elimination of all scheduled assessments after the initial assessment which is due no later than the 8th day of post hospital SNF care and to allow for any such interim payment assessments as the SNF determines are necessary to account for changes in patient care needs.  
  • Finalizes revisions to the definition of group therapy under the SNF PPS, to state qualified rehabilitation therapist or therapy assistant treating two to six patients at the same time who are performing the same or similar activities. 
  • Finalizes implementation of a subregulatory process for updating the code lists (International Classification of Diseases, Tenth Version (ICD-10) codes) used under PDPM beginning with the updates for FY 2020. The subregulatory process will consist of posting updated code mappings and lists on the PDPM website. More specifically, nonsubstantive changes to the codes included on code mappings and lists under PDPM will be applied through the subregulatory process and substantive revisions to the codes on the code mappings and lists used under PDPM will be proposed and finalized through notice and comment rulemaking.
  • Finalizes updates to the requirements for the SNF Quality Reporting Program (SNF QRP) as follows:
    • Adopts two Transfer of Health Information quality measures; Transfer of Health Information to the Provider-Post-Acute Care and Transfer of Health Information to the Patient-Post-Acute Care.
    • Updates the specifications for the Discharge to Community Measure to exclude baseline nursing facility residents from the measure.
    • Adopts the standardized patient assessment data elements that SNFs will be required to begin reporting with respect to admissions and discharges that occur on or after October 1, 2020, to begin collection in FY 2022, in satisfaction of the Improving Medicare Post-Acute Care Transformation Act of 2014 (IMPACT Act). 
    • Adopts public display of the quality measure, Drug Regimen Review Conducted with Follow-Up for Identified Issues-Post Acute Care Skilled Nursing Facility Quality Reporting Program.
    • Revises references in regulation text to reflect enhancements to the system user for submission of data.
  • Finalizes updates to certain policies for the SNF Value-Based Purchasing Program (SNF VBP) which implemented a 2% withhold to SNF Part A payments that can be earned back based on a SNF’s rehospitalization rate and level of improvement in FY 2019 as follows: 
    • Changes the name of the Skilled Nursing Facility 30-Day Potentially Preventable Readmission Measure to the Skilled Nursing Facility Potentially Preventable Readmissions after Hospital Discharge.
    • Adopts FY 2020 as the performance period for the FY 2022 program year and FY 2018 as the baseline period. 
    • Published numerical values for performance standards.
    • Suppresses the SNF information available for public display on the Nursing Home Compare website as follows:
      • SNFs with fewer than 25 eligible stays during the baseline period for a Program year will not have the baseline Risk-Standardized Readmission Rate (RSRR) or improvement score displayed, though the performance period RSRR, achievement score and total performance score will be displayed if the SNF had sufficient data during the performance period.
      • SNFs with fewer than 25 eligible stays during the performance period for a Program year and receives an assigned SNF performance score as a result, will report the assigned SNF performance score and not display the performance period RSRR, the achievement score or improvement score.
      • SNFs with zero eligible cases during the performance period for a Program year will not display any information.
    • Adopts a 30-day deadline for Phase One correction requests.

2020 PPS rate calculations
CMS projects that aggregate payments in FY 2020 to SNFs will increase $851 million. In addition, CMS projects the overall impact of the SNF VBP as a reduction of $527.4 million (which is prior to the redistribution of incentive payments) in aggregate payments to SNFs during FY 2020. The projected overall impact to providers in urban and rural areas is an average increase of 1.7% and 6.2%, respectively, in estimated payments compared with FY 2019. Providers in rural New England will experience an estimated increase in payments of approximately 6.3% while urban New England providers will experience an estimated increase in payments of 4.0%. Providers in rural Middle Atlantic will experience an estimated increase in payments of approximately 4.8% while urban Middle Atlantic providers will experience the largest estimated decrease of .8% (actual impact will vary depending on the provider’s CBSA). 

The updated rates reflect:

  • A 2.4% net market basket increase for FY 2020―results from a 2.8% market basket increase reduced by the multifactor productivity adjustment of 0.4%. This is not adjusted to account for the forecast error correction as the difference between the estimated and actual amount of change in the market basket index does not exceed the 0.5 percentage point threshold.  
  • An increase in the labor-related weight from 70.5% for FY 2019 to 70.9% for FY 2020.
  • Implementation of the new case-mix classification system called PDPM.

The applicable wage index continues to be based on the hospital wage data, unadjusted for occupational mix and rural floor, (from FY 2016) in the absence of SNF specific data.

Patient Driven Payment Model
As discussed in the FY 2019 SNF PPS final rule, PDPM will completely replace RUGs for Medicare Part A Fee-For-Service payment to SNFs effective October 1, 2019. The implementation of PDPM was finalized in a budget neutral manner. Payment will be based on patient characteristics associated with six care components (five case-mix adjusted: physical therapy, occupational therapy, speech language pathology, nursing and non-therapy ancillaries; and one non-case-mix adjusted component), using clinical data from the MDS to assign case-mix classifiers to each patient that are then used to calculate a per diem payment under the SNF PPS. 

BerryDunn has calculated the FY 2020 SNF Medicare PPS rates under PDPM based on the final rule for urban and rural areas of Maine, Massachusetts, New Hampshire, Vermont, Pennsylvania, Virginia, Connecticut and Rhode Island. However, due to the continued delay in the issuance of the final FY 2020 SNF VBP incentive payment multipliers by CMS, the rates per our calculator are PRIOR to any VBP adjustment. 

Access this version of the PPS rate calculator now. When CMS releases the final VBP incentive payment multipliers for FY 2020, BerryDunn will update the interactive rate calculator as necessary.

Dowload BerryDunn's PPS rate calculator

If you have any specific questions about the final rule or how it might impact your facility, please contact Kevin Ware or Ashley Tkowski.

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