CMS Changes in Nursing Home Reimbursement Will Impact Post-Acute Care

August 07, 2018

Significant changes in the methodology for skilled nursing facility reimbursement were finalized in a rule published by the Centers for Medicare and Medicaid Services (CMS) on July 31, 2018.

  • The first major change implemented in this rule is the Patient-Driven Payment Model (PDPM). The PDPM, which will take effect October 1, 2019, focuses on the patient’s condition and resulting care needs to determine Medicare payment, rather than on the amount of care provided. According to the Centers for Medicare & Medicaid Services (CMS), the PDPM adjusts Medicare payments based on each aspect of a resident’s care, most notably for NonTherapy Ancillaries, such as drugs and medical supplies. The goal is to more accurately address costs associated with medically complex patients. This change could respond to a concern of WHA’s Post-Acute Care Work Group, which found that transitions to post-acute care for medically complex patients can be hampered by the difficulty skilled nursing facilities (SNFs) incur in absorbing high costs for these patients. The PDPM model also limits the use of group and concurrent therapy to 25% of all therapy given. The therapy limits have been identified by some SNF providers as an area of concern.
  • The SNF Quality Reporting Program (QRP) applies to SNFs affiliated with acute care facilities, freestanding SNFs, and swing-bed rural hospitals (except for critical access hospitals). CMS did not add any new measures to the QRP in the final rule, but will implement one change when evaluating measures for removal from the SNF QRP measure set. The additional factor will consider costs associated with a measure and weigh them against the benefit of its continued use in the program.
  • The rule also implements an $820 million increase in Medicare payments to SNFs in fiscal year 2019, resulting from the SNF market basket update required to be 2.4% by the Bipartisan Budget Act of 2018.

WHA will monitor the impact of these proposed changes on Wisconsin SNFS, many of whom are important post-acute care providers for patients who are discharged from Wisconsin hospitals. For further information, contact Laura Rose, WHA Vice President for Policy Development.

This story originally appeared in the August 07, 2018 edition of WHA Newsletter