SNFs: Final FY 2017 Payment and Policy Changes

On July 29, the Centers for Medicare & Medicaid Services (CMS) issued a final rule (CMS-1645-F) outlining FY 2017 Medicare payment policies and rates for the Skilled Nursing Facility (SNF) Prospective Payment System (PPS), the SNF Quality Reporting Program (QRP), and the SNF Value-Based Purchasing (VBP) Program. CMS projects that aggregate payments to SNFs will increase in FY 2017 by $920 million, or 2.4 percent, from payments in FY 2016. This estimated increase is attributable to a 2.7 percent market basket increase reduced by 0.3 percentage points, in accordance with the multifactor productivity adjustment required by law.

Changes to the SNF QRP:

• Adopts three measures to meet the resource use and other measure domains and one measure to satisfy the domain of medication reconciliation
• SNFs that fail to submit the required quality data to CMS will be subject to a 2 percentage point reduction to the annual market basket percentage update factor for fiscal years beginning with FY 2018
• Policies and procedures associated with public reporting are being finalized, including the reporting timelines, preview period, review and correction of assessment-based and claims-based quality measure data, and the provision of confidential feedback reports to SNFs

SNF VBP Program:

• Specifies the SNF 30-Day Potentially Preventable Readmission Measure, (SNFPPR), as the all-cause, all-condition risk-adjusted potentially preventable hospital readmission measure as required by law
• Finalized additional policies, including establishing performance standards, establishing baseline and performance periods, adopting a performance scoring methodology, and providing confidential feedback reports to SNFs

For More Information:

• Final Rule will become effective on October 1, 2016
• See the full CMS fact sheet