2017 Final Rules Skilled Nursing

AN ANALYSIS AND COMMENTARY ON FEDERAL HEALTH CARE ISSUES BY LARRY GOLDBERG

CMS Updates FY 2017 Skilled Nursing Facility PPS

The Centers for Medicare and Medicaid Services (CMS) have issued a final rule that will update the payment rates used under the prospective payment system (PPS) for skilled nursing facilities (SNFs), for fiscal year (FY) 2017. In addition, the rule specifies a potentially preventable readmission measure for the Skilled Nursing Facility Value-Based Purchasing Program (SNF VBP), and implements requirements for that program, including performance standards, a scoring methodology, and a review and correction process for performance information to be made public, aimed at implementing value-based purchasing for SNFs. Additionally, this final rule includes additional polices and measures in the Skilled Nursing Facility Quality Reporting Program (SNF QRP). The document is currently on display at the Federal Register office. Publication is scheduled for August 5th. A copy of the 278-page document is at: https://s3.amazonaws.com/public-inspection.federalregister.gov/2016-18113.pdf. This link will be superseded upon publication.

Market Basket and Rate of Increase
For FY 2017, the SNF market basket is 2.7 percent. This market basket percentage is reduced 0.3 percent by the Affordable Care Act’s (ACA) multifactor productivity adjustment (MFP) adjustment. The resulting MFP-adjusted SNF market basket update is equal to 2.4 percent, or 2.7 percent less 0.3 percent. CMS projects that aggregate payments to SNFs will increase in FY 2017 by $920 million.

Forecast error correction
The SNF PPS is the only PPS that requires a market basket forecast for errors. However, CMS’ rule only makes corrections if the error is 0.5 percent or more. There will be no corrections in FY 2017 for the estimates made for FY 2015.

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