CMS Proposes Skilled Nursing Facility FY 2020 PPS Update

CMS has issued a proposed rule to update the Medicare payment rates and the quality programs for skilled nursing facilities (SNFs) for FY 2020. CMS will begin using a new case-mix model, the Patient Driven Payment Model (PDPM), which focuses on the patient’s condition and resulting care needs rather than on the amount of care provided in order to determine Medicare payment. CMS proposes to revise the definition of group therapy under the SNF PPS, and to implement a subregulatory process for updating the code lists (International Classification of Diseases, Tenth Version (ICD-10) codes) used under PDPM. The rule also finalizes updates to the SNF Quality Reporting Program (QRP) and the SNF Value-Based Purchasing (VBP) Program. CMS says that the overall economic impact of this proposed rule is an estimated increase of $887 million in aggregate payments to SNFs during FY 2020. However, the SNF VBP program would save an estimated $213.6 million in aggregate payments to SNFs during FY 2020. As required by statute, the program reduces SNFs’ Medicare payments by 2.0 percentage points, then redistributes only 60 percent of those funds as incentive payments. For more details, see today’s fourth Financial Feature.

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