Policy and Regulation News

CMS Proposes Value-Based Payment for Skilled Nursing Facilities

CMS proposed to move skilled nursing facilities into a value-based payment model and suggested additional payment model reforms.

CMS proposed value-based payment in skilled nursing facilities.

Source: Thinkstock

By Thomas Beaton

- CMS has proposed to implement value-based payment reforms for skilled nursing facilities (SNFs) and other Medicare inpatient facilities in order to reduce fraud and create higher quality healthcare experiences for beneficiaries.

The proposed payment updates to the Skilled Nursing Facilities Prospective Payment System (SNF PPS) would increase payments to participating providers, reduce regulatory burdens for payment administration, and create new transparency requirements.

The most significant proposed change to the SNF PPS is the implementation of the Patient-Driven Payment Model (PDPM). The PDPM adjusts Medicare payments to skilled nursing facilities based on the medical results of services provided.

CMS Administrator Seema Verma emphasized that changes to the SNF PPS will help the agency utilize innovation technology and payment reforms to support high quality healthcare options.

“We envision all elements of CMS’ healthcare delivery system working to reward value over volume and decisively focus on patients receiving quality care from their Medicare benefits,” Verma said.

“For skilled nursing facilities, we are taking important steps through proposed payment improvements that will reduce administrative burden, and foster innovation to improve care and quality for patients,” Verma continued. “As people face rising healthcare costs in other clinical settings, we need to leverage advances in technology that help to modernize our programs in a way that benefits patients.”

 CMS explained that the PDPM would effectively update Medicare payment administration to reduce regulatory of providers. CMS leaders estimate regulatory reduce will save the program $2 billion over the next ten years.

The agency also proposed new changes within two SNF payment programs to decrease redundant administrative tasks.

CMS plans to update performance measures and remove redundant measures in the SNF Quality Reporting Program (QRP). In addition, the proposed changes would extend performance periods and scoring methodology of the SNF Value-Based Purchasing Program (VBP).

Payment redesign and policy changes would increase Medicare payments to SNFs by 2.4 percent ($850 million) during FY 2019, CMS estimates.

The proposed updates would also redesign how payments are administered within the Inpatient Rehabilitation Facilities Prospective Payment System (IRF PPS), Hospice Wage Index and Payment Rate Update, and Inpatient Psychiatric Facility Prospective Payment System (IPF PPS).

One major change to the IRF PPS includes removing performance measures related to antibiotic-resistant staph infections and influenza vaccination.

The agency argued that the cost of recording these measures outweighs the potential benefits to Medicare quality. CMS expects to increase payments to inpatient rehab facilities by 1.35 percent and will have a final payment estimate based on possible changes in a final rule.

Proposed changes to the Hospice Wage Index and Payment Rates would increase hospital payments by 1.8 percent to a total of $340 million in FY 2019. CMS plans to set annual hospital payment caps of $29,205.44 per organization.

The changes would require hospices to publicly report performance measures on CMS’s comparison tool, Hospice Compare. The changes would take effect on January 1st, 2019 and give hospitals four and a half months after each fiscal quarter to correct performance data.

CMS also plans to remove redundant and cost-burdened measures from the IPF PSS. These measures include monitoring flu shots among healthcare personnel, recording alcohol and tobacco use screening, and monitoring EHR use. Payments to inpatient psychiatric facilities would only increase by 0.98 percent ($50 million) in FY 2019 under the changes.

These reforms align with the MyHealthEData initiative, CMS said. The agency specifically asked stakeholders to suggest provider interoperability improvements through a Request for Information (RFI).

The agency is seeking case studies and examples that may enhance electronic data sharing between providers within CMS programs. The RFI is just one of CMS’s efforts to scale data sharing and transparency changes in order to support agency-wide adoption of value-based care.

“In responding to the RFI, commenters should provide clear and concise proposals that include data and specific examples,” CMS concluded.

“CMS will not respond to RFI comment submissions in the final rule, but rather will actively consider all input in developing future regulatory proposals or future sub-regulatory guidance.”