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CMS’ Final Rule for 2016 Medicare Skilled Nursing Facility Payment Rates

The Centers for Medicare and Medicaid Services (CMS) announced its final rule for 2016 Medicare skilled nursing facility payment rates on August 4, 2015.

The rule:

  • Revises the skilled nursing facility (SNF) prospective payment system’s payment rates for the 2016 fiscal year.
    CMS proposes that the total sum of payments in fiscal year 2016 to skilled nursing facilities will increase by 1.2% (an estimated $430 million) from payments in fiscal year 2015 due to the final changes issued by this final rule.
  • Mandates value-based purchasing provisions for SNFs, measured by hospital readmission rates.
    The SNF value-based purchasing provisions fall under the Protecting Access to Medicare Act of 2014 (PAMA). In addition to creating a value-based purchasing system and a hospital readmission reduction program for SNFs, this act prevents the Sustainable Growth Rate formula (that calculates Medicare reimbursement rates) from being implemented for one year in order to extend a variety of programs essential to Medicare beneficiaries, as well as the therapy cap exceptions procedure. This extension allows beneficiaries with chronic illnesses or who experience more than one health crisis in a year to receive therapy services critical for optimal recovery.  The value-based purchasing provisions allow a 2% withholding to SNF Part A payments.  SNFs can partially earn back these payments based on the level of improvement of their rehospitalization rates.  PAMA calls for CMS to identify a risk-adjusted rehospitalization measure and to score each SNF, taking into consideration both general performance and level of improvement from a starting period.  CMS is also called to disclose the measure and score reports for review to SNFs and for public display on public sites such as Nursing Home Compare.
  • Issues the 30-day SNF all-cause/all-condition hospital readmission measure and implements that measure into the new SNF value-based purchasing system.
    According to CMS, “This measure estimates the risk-standardized rate of all-cause, unplanned, hospital readmissions for SNF Medicare beneficiaries within 30 days of their prior proximal short-stay acute hospital discharge.” The measure is claims-based and does not require supplemental data collection or submission from SNFs.  However, CMS is required to nullify this measure and replace it with an all-condition, risk-adjusted potentially avoidable hospital readmission rate, which it intends to address in future legislation.
  • Enacts the 2014 IMPACT Act SNF quality reporting program and requires the submission of payroll-based staffing data by nursing homes, mandated by the Affordable Care Act (ACA).
    In accordance with the 2014 Improving Medicare Post-Acute Care Transformation (IMPACT) act, the final rule establishes the new SNF quality reporting program. CMS is required by the IMPACT act to identify standard assessment tools for four post-acute care settings—SNFs, home health, inpatient rehabilitation facilities (IRFs), and long-term care hospitals (LTCHs).  CMS is also required to implement cross-setting quality measures in three domains: condition of skin integrity, incidence of falls, and condition of physical and cognitive function.  These requirements will be fulfilled by three measures that will allow for payment determination at the start of the 2018 fiscal year: newly formed or worsened bedsores, falls that result in serious injury, and assessment and care planning of functional status.  Starting with the 2018 fiscal year, SNFs that fail to disclose mandated quality data to CMS in accordance with the SNF quality reporting program will be penalized—two percentage points will be dropped from their market basket percentage updates.
    The finalized measures of the SNF Quality Reporting Program according to their domains are specified below:
    Condition of skin integrity                                          
    Outcome measure
    : Percentage of short-stay residents/patients in SNFs/IRFs/LTCHs with bed sores (stages 2-4) that are newly developed or have worsened since admission (NQF #0678; Measure Steward: CMS). SNFs will only be responsible for submitting data pertaining to this measure once to meet the requirements. In the future, SNFs will also be required to report unstageable bedsores that include presumed deep tissue injuries.Incidence of falls                                                            
    Outcome measure
    : Percentage of long-stay residents who experience one or more falls resulting in serious injury (NQF #0674; Measure Steward: CMS). This measure will be determined for residents provided services under Medicare Part A.

    Physical and cognitive functional status
    Process measure: Percentage of residents/patients with a functional assessment at admission and discharge, as well as a care plan that aims to improve or maintain physical and cognitive function. (NQF #2631; Measure Steward: CMS).

  • Implements payroll-based staffing.
    The CMS final ruling amends the requirement for long-term care (LTC) facilities to implement the provisions of the Affordable Care Act (ACA) and the IMPACT act pertaining to the submission of staffing data based on payroll that includes the type of work performed and the hours of work given by each type per resident per day. The ruling adds a new paragraph titled
    Mandatory Submission of Staffing Information Based on Payroll Data in a Uniform Format which specifies that starting on July 1, 2016, SNFs must electronically submit complete and accurate information regarding direct care staffing to CMS that includes information regarding agency and contract staff based on payroll and data that can be verified and audited.  The staffing information that is submitted must detail each employee’s start date and end date (if applicable) and number of hours worked.  In addition, the information must detail whether the employee belongs to the facility or is employed by the facility under a contract or agency staff. The facilities must adhere to the CMS schedule when submitting direct care staffing information.  Direct care staff are those who provide direct care to residents in order to maintain or enhance physical and psychological wellbeing.

Long-term care facilities must provide the best quality of care to their older adult patients to protect and maintain their quality of life. As CMS continues to make new rules that are aimed to ensure this delivery of quality care, these facilities must adhere to them, as well as continue to maintain adequate staffing levels and prevent patients from experiencing adverse events such as falls, bed sores, dehydration and malnutrition.  If you or a loved one has been a victim of neglect or elder abuse in a SNF, please contact us today for a free consultation.  Ben Yeroushalmi and his associates are prepared to fight for elderly patients who have been wrongly treated and have been deprived of the care they are entitled to.