FY 2023 SNF PPS Final Rule (CMS 1765-F) Issued

Posted in INDUSTRY NEWS, Long-Term Care

Mary Madison, RN, RAC-CT, CDP
Clinical Consultant – Briggs Healthcare

Late afternoon on Friday, July 29, 2022, CMS issued a final rule (CMS-1765-F) that provides updates to the SNF Quality Reporting Program (QRP) for FY 2023. The FR is 348 pages in length. It will be published in the Federal Register on Wednesday, August 3, 2022.

This rule includes the adoption of one new measure: the Influenza Vaccination Coverage among Healthcare Personnel (HCP) (NQF #0431) beginning with the FY 2024 SNF QRP. SNFs will submit the measure data through the CDC National Healthcare Safety Network with an initial data submission period from October 1, 2022 through March 31, 2023.

In addition, CMS is revising the compliance date for the updated version of the Minimum Data Set (MDS) 3.0 assessment instrument to October 1, 2023, including the Transfer of Health Information measures and certain standardized patient assessment data elements including race, ethnicity, preferred language, health literacy, social isolation.

Finally, CMS is revising regulatory text that pertains to data submission requirements for the SNF QRP and summarizing comments from stakeholders on SNF QRP measures under consideration for future years, inclusion of the CoreQ: Short Stay Discharge measure in a future SNF QRP program year, as well as the CMS health equity strategy for the SNF QRP.

To view the FY 2023 SNF PPS final rule, please visit: https://www.federalregister.gov/public-inspection/current. The unpublished PDF version is found here.

The July 29, 2022 CMS Press Release regarding the Final Rule is found here.

The Fact Sheet on the FY 2023 SNF PPS final rule is found https://www.cms.gov/newsroom/fact-sheets/fiscal-year-fy-2023-skilled-nursing-facility-prospective-payment-system-final-rule-cms-1765-f. This fact sheet discusses the major provisions of the final rule, including:

  • Estimates that the aggregate impact of the payment policies in this final rule would result in an increase of 2.7%, or approximately $904 million, in Medicare Part A payments to SNFs in FY 2023 compared to FY 2022.
  • The recalibrated parity adjustment is being phased in over two years. These impact figures do not incorporate the SNF VBP reductions for certain SNFs. These reductions are estimated to be $186 million in FY 2023.
  • After considering the stakeholder feedback received, and to balance mitigating the financial impact on providers of recalibrating the PDPM parity adjustment with ensuring accurate Medicare Part A SNF payments, CMS is finalizing the recalibration of the PDPM parity adjustment factor of 4.6% with a two-year phase-in period that would reduce SNF spending by 2.3%, or approximately $780 million, in FY 2023 and 2.3% in FY 2024.
  • CMS is finalizing a permanent 5% cap on annual wage index decreases to smooth year-to-year changes in providers’ wage index payments.
  • CMS is finalizing several changes to the PDPM ICD-10 code mappings. The ICD-10 code mappings and lists used under PDPM are available on the PDPM Website at https://www.cms.gov/Medicare/MedicareFee-for-Service-Payment/SNFPPS/PDPM.
  • CMS is revising regulation text to include a new paragraph to reflect all the data completion thresholds required for SNFs to meet the compliance threshold for the annual payment update.
  • The rule finalizes a proposal to suppress (not apply) the Skilled Nursing Facility 30-Day All-Cause Readmission Measure (SNFRM) as part of the performance scoring for the FY 2023 SNF VBP Program Year. While performance on this measure will be reported publicly, it will not affect payment.
  • CMS will reduce the otherwise applicable federal per diem rate for each SNF by 2% and award SNFs 60% of that withhold, resulting in a 1.2% payback to those SNFs. Any SNFs that do not meet the finalized case minimum for FY 2023 will be excluded from the Program for FY 2023.
  • CMS is finalizing the adoption of three new measures into the SNF VBP Program — two claims-based measures and one payroll-based journal staffing measure.

    – FY 2026 program year: Adoption of the Skilled Nursing Facility Healthcare Associated Infections Requiring Hospitalization (SNF HAI) and Total Nursing Hours per Resident Day measures. SNF HAI is an outcome measure that assesses SNF performance on infection prevention and management. The Total Nursing Hours per Resident Day is a structural measure that uses auditable electronic data to calculate total nursing hours per resident day.
    – FY 2027 program year: Adoption of the Discharge to Community – Post Acute Care Measure for SNFs (DTC). The DTC is an outcome measure that assesses the rate of successful discharges to community from a SNF setting.
  • CMS is also finalizing a number of updates to its SNF VBP scoring methodology.
  • The proposed rule included an RFI seeking input on establishing minimum staffing requirements for long-term care (LTC) facilities. CMS received a significant response to the RFI from a wide range of interested parties. While CMS is continuing to review the comments, many commenters focused on the overall approach for establishing staffing standards, recommendations for implementing a minimum staffing requirement, factors for consideration (such as payment, cost, barriers, etc.), and input on the forthcoming staffing study. CMS will continue to review the comments — all of which the agency anticipates will be used to help inform future rulemaking within one year on minimum staffing requirements for long-term care facilities.
  • CMS sought stakeholder input on other measures under consideration for the SNF VBP Program, including a Staffing Turnover Measure and a National Healthcare Safety Network (NHSN) COVID-19 Vaccination Coverage Among Healthcare Personnel Measure. The Staffing Turnover Measure consists of the percent of total nurse staff that have left the SNF over the last year. The final rule also acknowledges input that CMS received.
  • CMS is finalizing a proposal, with some modifications, to revise the existing qualification requirements for the Director of Food and Nutrition Services in LTC facilities. Currently, the Director of Food and Nutrition Services must meet specific educational requirements or hold certain certifications. CMS is revising the required qualifications for a Director of Food and Nutrition Services to provide that those with several years of experience performing this specific role in a facility may continue to do so. Specifically, CMS added to the current requirements that individuals with two or more years of experience in the position of a Director of Food and Nutrition Services and who have also completed a minimum course of study in food safety that includes topics integral to managing dietary operations (such as, but not limited to: foodborne illness, sanitation procedures, food purchasing/receiving, etc.) can continue to qualify for this position. We believe that this will help address concerns related to the lack of access to qualified staff as well as the costs associated with training for existing staff.
  • CMS is updating the physical environment requirements to allow facilities to avoid unnecessary renovation expenses and prevent access to care issues associated with the potential closure of LTC facilities. Specifically, CMS is allowing LTC facilities that were participating in Medicare before July 5, 2016 and that previously used the Fire Safety Evaluation System (FSES) to determine equivalent fire protection levels to continue to use the 2001 FSES mandatory values when determining compliance for containment, extinguishment and people movement requirements. This will allow existing LTC facilities that previously met the FSES requirements to continue to do so without incurring great expense to change construction type, essentially undertaking an effort to completely rebuild to maintain compliance, while maintaining resident health and safety.

The Final Rule as well as the Fact Sheet are must-reads for your team. Please take the time to review and consider the implications for your facility.