The Centers for Medicare and Medicaid Services (CMS) recently released the proposed rule for the Skilled Nursing Facility (SNF) Prospective Payment System (PPS) fiscal year (FY) 2020 update. Based on the proposed rule, CMS projects aggregate payments to SNFs will increase by $887 million or 2.5% above payments in FY 2019. The most recent estimate of the SNF market basket is 3% with a Productivity Adjustment offset of 0.5%. There was no market basket forecast error from FY 2018 as the actual market basket increase and forecasted increase were the same at 2.6%.
CMS estimates that the overall economic impact of the SNF Value-Based Purchasing Program (VBP) will be an estimated reduction of $213.6 million in aggregate payment to SNFs during FY2020. The SNF VBP Program is changing the name of the Program’s measure to the “Skilled Nursing Facility Potentially Preventable Readmissions after Hospital Discharge” measure. The measure will retain the same abbreviation (SNF PPR). The proposed rule also includes updated public reporting requirements for SNFs with less than 25 eligible stays during the baseline period or performance period for a Program year, and SNFs with zero eligible cases during the performance period for a Program year.
There is also a 30-day deadline for Phase One Review and Corrections requests. CMS estimates the total reductions to payments required by the Act, to be $534 million for FY2020. Based on the 60% payback percentage, that will disburse approximately $320.4 million in value-based incentive payments to SNFs in FY2020, that the net SNF VBP Program is estimated to result in approximately $213.6 million in savings to the Medicare program in FY 2020. The final rule is anticipated to be released around August 1.
For a more detailed summary, read the American Health Care Association memo here.
This article was re-published from the Florida Health Care Association Pulse Newsletter.
Lorne Simmons is with MSL CPAs & Advisors, Florida Health Care Association's CPA Consultant. Lorne is located in MSL’s Tallahassee/North Florida office.