Proposed fiscal year 2016 payment and policy changes for Medicare Skilled Nursing Facilities
On April 15, 2015, the Centers for Medicare & Medicaid Services (CMS) issued a proposed rule [CMS-1622-P] outlining proposed Fiscal Year (FY) 2016 Medicare payment rates for skilled nursing facilities (SNFs). The FY 2016 proposals and other issues discussed in the proposed rule are summarized below.
The proposed rule proposes policies that continue a commitment to shift Medicare payments from volume to value. The Administration has set measurable goals and a timeline to move the Medicare program, and the health care system at large, toward paying providers based on the quality, rather than the quantity of care they give patients. The proposed rule includes policies that advance that vision and support building a health care system that delivers better care, spends health care dollars more wisely and results in healthier people.
Changes to Payment Rates under the SNF Prospective Payment System (PPS)
Based on proposed changes contained within this rule, CMS projects that aggregate payments to SNFs will increase by $500 million, or 1.4 percent, from payments in FY 2015. This estimated increase is attributable to a 2.6 percent market basket increase, reduced by a 0.6 percentage point forecast error adjustment and further reduced by 0.6 percentage point, in accordance with the multifactor productivity adjustment required by law.
SNF Quality Reporting Program
The Improving Medicare Post-Acute Care Transformation Act of 2014 (P.L. 113-185) (IMPACT Act), enacted on October 6, 2014, requires the implementation of a quality reporting program for SNFs.
In addition, the Act requires establishing a SNF quality reporting program. Beginning with FY 2018, the Act requires SNFs that fail to submit required quality data to CMS under the SNF Quality Reporting Program will have their annual updates reduced by two percentage points.
•For the FY 2018 SNF QRP and subsequent years, CMS is proposing to adopt three measures addressing three quality domains identified in the IMPACT Act: (1) skin integrity and changes in skin integrity; (2) incidence of major falls; and (3) functional status, cognitive function, and changes in function and cognitive function. The proposed measures satisfy the IMPACT Act requirement of standardized data reporting across four post-acute care settings, including home health agencies, inpatient rehabilitation facilities, skilled nursing facilities and long term care hospitals. The proposed measures are identified below in the Summary Table of Domains and Proposed Measures for the SNF QRP. CMS intends to propose additional quality measures and resource use measures in future rulemaking.
Summary Table of Domains and Proposed Measures for the SNF Quality Reporting Program
| Domain | Proposed Measures |
| Skin Integrity and Changes in Skin Integrity | Outcome Measure: Percent of Residents or Patients with Pressure Ulcers that are New or Worsened (Short-Stay) (NQF #0678; Measure Steward: CMS) |
| Incidence of Major Falls | Outcome Measure: Application of Percent of Residents Experiencing One of More Falls with Major Injury (Long Stay) (NQF #0674; Measure Steward: CMS) |
| Functional Status, Cognitive Function, and Changes in Function and Cognitive Function | Process Measure: Application of Percent of Patients or Residents With an Admission and Discharge Functional Assessment and a Care Plan that Addresses Function (NQF#2631) (Under NQF review Measure Steward: CMS) |
SNF VBP Program
Section 215 of the Protecting Access to Medicare Act of 2014 (PAMA) added new subsections (g) and (h) to section 1888 to the Social Security Act (Act) New Subsection 1888(h) authorizes establishing a Skilled Nursing Facility Value-Based Purchasing (SNF VBP) Program beginning with FY 2019 under which value-based incentive payments are made to SNFs in a fiscal year based on performance.
Measures
The rule proposes to adopt the Skilled Nursing Facility 30-Day All-Cause Readmission Measure, (SNFRM) (NQF #2510), as the all-cause, all-condition readmission measure that will be used in of the SNF VBP Program. The Skilled Nursing Facility 30-Day All-Cause Readmission 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 Act also requires CMS to replace this measure with an all-condition, risk-adjusted potentially preventable hospital readmission rate. CMS intends to address this topic in future rulemaking.
Future Policy Considerations
In the proposed rule, CMS is seeking public comments on numerous issues related to the SNF VBP Program’s policies. CMS intends to propose additional details of the SNF VBP in the FY 2017 SNF PPS proposed and final rules, and is currently seeking comments on:
•Performance standards
•Measuring improvement
•Appropriate baseline and performance periods
•Performance scoring methodology
•Public reporting of performance information
On April 15, 2015, the Centers for Medicare & Medicaid Services (CMS) issued a proposed rule [CMS-1622-P] outlining proposed Fiscal Year (FY) 2016 Medicare payment rates for skilled nursing facilities (SNFs). The FY 2016 proposals and other issues discussed in the proposed rule are summarized below.
The proposed rule proposes policies that continue a commitment to shift Medicare payments from volume to value. The Administration has set measurable goals and a timeline to move the Medicare program, and the health care system at large, toward paying providers based on the quality, rather than the quantity of care they give patients. The proposed rule includes policies that advance that vision and support building a health care system that delivers better care, spends health care dollars more wisely and results in healthier people.
Changes to Payment Rates under the SNF Prospective Payment System (PPS)
Based on proposed changes contained within this rule, CMS projects that aggregate payments to SNFs will increase by $500 million, or 1.4 percent, from payments in FY 2015. This estimated increase is attributable to a 2.6 percent market basket increase, reduced by a 0.6 percentage point forecast error adjustment and further reduced by 0.6 percentage point, in accordance with the multifactor productivity adjustment required by law.
SNF Quality Reporting Program
The Improving Medicare Post-Acute Care Transformation Act of 2014 (P.L. 113-185) (IMPACT Act), enacted on October 6, 2014, requires the implementation of a quality reporting program for SNFs.
In addition, the Act requires establishing a SNF quality reporting program. Beginning with FY 2018, the Act requires SNFs that fail to submit required quality data to CMS under the SNF Quality Reporting Program will have their annual updates reduced by two percentage points.
•For the FY 2018 SNF QRP and subsequent years, CMS is proposing to adopt three measures addressing three quality domains identified in the IMPACT Act: (1) skin integrity and changes in skin integrity; (2) incidence of major falls; and (3) functional status, cognitive function, and changes in function and cognitive function. The proposed measures satisfy the IMPACT Act requirement of standardized data reporting across four post-acute care settings, including home health agencies, inpatient rehabilitation facilities, skilled nursing facilities and long term care hospitals. The proposed measures are identified below in the Summary Table of Domains and Proposed Measures for the SNF QRP. CMS intends to propose additional quality measures and resource use measures in future rulemaking.
Summary Table of Domains and Proposed Measures for the SNF Quality Reporting Program
| Domain | Proposed Measures |
| Skin Integrity and Changes in Skin Integrity | Outcome Measure: Percent of Residents or Patients with Pressure Ulcers that are New or Worsened (Short-Stay) (NQF #0678; Measure Steward: CMS) |
| Incidence of Major Falls | Outcome Measure: Application of Percent of Residents Experiencing One of More Falls with Major Injury (Long Stay) (NQF #0674; Measure Steward: CMS) |
| Functional Status, Cognitive Function, and Changes in Function and Cognitive Function | Process Measure: Application of Percent of Patients or Residents With an Admission and Discharge Functional Assessment and a Care Plan that Addresses Function (NQF#2631) (Under NQF review Measure Steward: CMS) |
SNF VBP Program
Section 215 of the Protecting Access to Medicare Act of 2014 (PAMA) added new subsections (g) and (h) to section 1888 to the Social Security Act (Act) New Subsection 1888(h) authorizes establishing a Skilled Nursing Facility Value-Based Purchasing (SNF VBP) Program beginning with FY 2019 under which value-based incentive payments are made to SNFs in a fiscal year based on performance.
Measures
The rule proposes to adopt the Skilled Nursing Facility 30-Day All-Cause Readmission Measure, (SNFRM) (NQF #2510), as the all-cause, all-condition readmission measure that will be used in of the SNF VBP Program. The Skilled Nursing Facility 30-Day All-Cause Readmission 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 Act also requires CMS to replace this measure with an all-condition, risk-adjusted potentially preventable hospital readmission rate. CMS intends to address this topic in future rulemaking.
Future Policy Considerations
In the proposed rule, CMS is seeking public comments on numerous issues related to the SNF VBP Program’s policies. CMS intends to propose additional details of the SNF VBP in the FY 2017 SNF PPS proposed and final rules, and is currently seeking comments on:
•Performance standards
•Measuring improvement
•Appropriate baseline and performance periods
•Performance scoring methodology
•Public reporting of performance information