CMS Proposed Rule: PPS and Consolidated Billing for Skilled Nursing Facilities for FY 2016

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The CMS has issued a proposed rule outlining tentative Fiscal Year (FY) 2016 Medicare payment rates for skilled nursing facilities (SNFs).

The CMS projects that aggregate payment rates to SNFs will increase by $500 million, or 1.4%, from payments in FY 2015. The estimated increase resulted from a 2.6% market basket increase. The market basket increase is adjusted by the applicable forecast error correction, a reduction of 0.6 percent, and by the multifactor productivity adjustment, a reduction of 0.6 percent, as required by law. The new Medicare SNF rates are effective October 1, 2015.

In addition to the update in payment rates, the proposed rule includes a SNF all-cause all-condition hospital readmission measure and a proposal to adopt that measure for a new SNF Value-Based Purchasing (VBP) Program. The proposed rule also addresses the requirements to implement the provision in the Affordable Care Act regarding the submission of staffing information based on payroll data.

The SNF VBP was included in the Protecting Access to Medicare Act of 2014 (PAMA). The Act established a 2% withhold to SNF Part A payments that can be partially earned back based on a SNF’s rehospitalization  rate and level of improvement. The PAMA requires CMS to select a risk adjusted rehospitalization measure and to calculate a score for every SNF, taking into account both relative performance and degree of improvement from a baseline period.

CMS would specify a 30-day SNF all-cause all-condition hospital readmission measure and would adopt the measure for the new SNF VBP. The measure assesses the risk-standardized rate of all-cause all-condition, unplanned inpatient hospital readmissions of Medicare fee-for-service (FFS) SNF residents within 30 days of discharge from an inpatient prospective payment system hospital, critical access hospital, or psychiatric hospital. The measure is claims-based requiring no additional data collection or submission burden for SNFs.

The proposed rule would implement the new quality reporting program for SNFs as specified in the Improving Medicare Post-Acute Care Transformation Act of 2014 (IMPACT Act). The IMPACT Act requires CMS to specify standard assessment tools along with cross-setting quality measures by October, 2015 in three domains:

  • Functional status, cognitive function and changes in cognition;
  • Skin integrity and changes in skin integrity; and
  • Incidence of major falls.

CMS is proposing to adopt three measures meeting these requirements for payment determinations beginning with FY 2018:

  1. New or worsened pressure ulcers;
  2. Falls with major injury; and
  3. Assessment and care planning for functional status.

The proposed rule would incorporate the provisions in the Affordable Care Act and IMPACT Act regarding submission of payroll-based staffing data, including the category of work performed and the hours of work provided by each category per resident per day. The data to be submitted is similar to the current CMS staffing form 671.

CMS has developed a system for facilities to submit staffing and census information – Payroll-Based Journal (PBJ). This system will allow staffing and census information to be collected on a regular and more frequent basis than currently collected. It also will be auditable to ensure accuracy. All long-term care facilities will have access to this system at no cost to facilities.

CMS intends to collect staffing and census data through the PBJ system on a voluntary basis beginning October 1, 2015, and on a mandatory basis beginning July 1, 2016.  Registration for voluntary submission will begin in August 2015, and CMS will communicate more information at that time. Training also will be provided on registration and for both voluntary and mandatory submissions.

The PBJ Policy Manual (V1.0) DRAFT and PBJ Data Submission Specifications (V1.00.0) are posted on the CMS Nursing Home Quality Initiative website at:

CMS Proposed Rule: Medicare Program; Prospective Payment System and Consolidated Billing for Skilled Nursing Facilities for FY 2015, published in [4/20/15] Federal Register.


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