2024 Skilled Nursing Facility Prospective Payment System Proposed Rule Released

April 7, 2023
Policy Snapshot

Last week, the Centers for Medicare & Medicaid Services (CMS) released its proposed rule that would update Medicare payment policies and rates for skilled nursing facilities (SNFs) under the Skilled Nursing Facility Prospective Payment System (SNF PPS) for fiscal year (FY) 2024. The proposed rule includes proposals for the SNF Quality Reporting Program (QRP) and the SNF Value-Based Purchasing (VBP) Program for FY 2024 and future years. Finally, this proposed rule would eliminate the requirement for facilities to actively waive their right to a hearing in writing and instead treat the failure to submit a timely hearing request as a constructive waiver.

It was widely expected that CMS would issue regulations around minimum staffing requirements in this proposed rule; however, that did not happen at this time. CMS indicated that it is continuing to review feedback and evidence from its request for information as well as a 2022 mixed-method study on staffing levels in nursing homes. CMS did indicate that it would “remain committed to proposing minimum staffing standards for nursing facilities later this spring.”

Some key proposals in this proposed rule include:

FY 2024 Proposed Updates to the SNF Payment Rates

  • CMS estimates that the aggregate impact of the payment policies in this proposed rule would result in a net increase of 3.7%, or approximately $1.2 billion, in Medicare Part A payments to SNFs in FY 2024. This estimate reflects a $2 billion increase resulting from the 6.1% net market basket update to the payment rates, which is based on a 2.7% SNF market basket increase plus a 3.6% market basket forecast error adjustment and less a 0.2% productivity adjustment, as well as a negative 2.3%, or approximately $745 million, decrease in the FY 2024 SNF PPS rates as a result of the second phase of the Patient Driven Payment Model (PDPM) parity adjustment recalibration.

Proposed Changes in PDPM ICD-10 Code Mappings

  • The PDPM utilizes the International Classification of Diseases, 10th Revision, Clinical Modification (ICD‑10) codes in several ways, including using the person’s primary diagnosis to assign patients to clinical categories. In response to stakeholder feedback and to improve consistency between the ICD-10 code mappings and current ICD-10 coding guidelines, CMS is proposing several changes to the PDPM ICD-10 code mappings. The proposed changes to the ICD-10 code mappings and lists used under PDPM are available on the PDPM website.

Proposed Changes to the SNF QRP

  • The SNF QRP is a pay-for-reporting program. SNFs that do not meet reporting requirements are subject to a two-percentage-point reduction in their Annual Payment Update (APU). In the FY 2024 SNF PPS proposed rule, CMS is proposing the adoption of three measures in the SNF QRP, the removal of three measures from the SNF QRP, and the modification of one measure in the SNF QRP. In addition, this proposed rule would make policy changes to the SNF QRP, and begin public reporting of four measures. The proposed adopted measures are:
    • Discharge Function Score (DC Function) Measure
    • CoreQ: Short Stay Discharge (CoreQ:SS DDC) Measure
    • COVID-19 Vaccine: Percent of Patients/Residents Who Are Up to Date (Patient/Resident COVID-19 Vaccine) Measure
    • Update the COVID-19 Vaccination Coverage among Health-Care Personnel (HCP COVID-19) Measures—now it would measure if health-care personnel are up to date with CDC’s most recent guidance.
  • Proposed measures for removal:
    • Application of Percent of Long-Term Care Hospital (LTCH) Patients with an Admission and Discharge Functional Assessment and a Care Plan That Addresses Function (Application of Functional Assessment/Care Plan) Measure
    • Application of the IRF Functional Outcome Measures: Change in Self-Care Score for Medical Rehabilitation Patients Measure; and the Change in Mobility Score for Medical Rehabilitation Patients Measure

Proposed Changes to the SNF VBP Program

The SNF VBP Program rewards SNFs with incentive payments based on the quality of care they provide. All SNFs paid under Medicare’s SNF PPS are included in the SNF VBP Program.   

In this proposed rule, CMS is proposing the adoption of four new quality measures, the replacement of one quality measure, and several policy changes in the SNF VBP Program. The quality measure revisions include the following:

  • CMS is proposing the adoption of the Nursing Staff Turnover Measure for the SNF VBP program beginning with the FY 2026 program year and FY 2024 performance year. This is a structural measure that has been collected and publicly reported on Care Compare and assesses the stability of the staffing within the SNF using nursing staff turnover. This is part of the administration’s focus on ensuring adequate staffing in long-term care settings. Facilities would begin reporting for this measure in FY 2024, with payment effects beginning in FY 2026.
  • CMS is proposing the adoption of the Discharge Function Score Measure beginning with the FY 2027 program year and FY 2025 performance year. This measure is also being proposed for SNF QRP and assesses functional status by assessing the percentage of SNF residents who meet or exceed an expected discharge function score, and use mobility and self-care items already collected on the MDS.
  • CMS is proposing the adoption of the Long Stay Hospitalization Measure per 100 residents beginning with the FY 2027 program year and FY 2025 performance year. This measure assesses the hospitalization rate of long-stay residents.
  • CMS is proposing the adoption of the Percent of Residents Experiencing One or More Falls with Major Injury (Long Stay) Measure beginning with the FY 2027 program year and FY 2025 performance year. This measure assesses the falls with major injury rates of long-stay residents.
  • CMS is proposing the replacement of the Skilled Nursing Facility 30-Day All-Cause Readmission Measure (SNFRM) with the Skilled Nursing Facility Within Stay Potentially Preventable Readmissions (SNF WS PPR) Measure beginning with the FY 2028 program year and FY 2025 performance year.

Proposed Changes to Civil Money Penalties (CMP): Waiver of Hearing, Reduction of Penalty Amount (§ 488.436)

In this proposed rule, CMS is streamlining a procedure for facilities facing a civil money penalty to actively waive their right to a hearing in writing in order to receive a penalty reduction. Nearly 95% of facilities facing CMPs are following this process, by which they then receive a 35% penalty reduction. CMS would create, in its place, a system in which failure to submit a timely request for a hearing would be treated as a constructive waiver. The accompanying 35% penalty reduction would remain. This proposed revision would reduce the burden on not only the facilities but on the states and CMS as well as they would no longer have to track and manage the written waiver requests.

The proposed rule can be downloaded from the Federal Register.