Polaris Pulse

The Polaris Pulse: FY 2022 SNF Final Rules

Polaris Group Profile
Polaris Group
August 24, 2021
March 14, 2023
Polaris Group Profile
Polaris Group
March 14, 2023

Understand CMS' published SNF PPS Final Rules for FY 2022.

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FY 2022 SNF Final Rules

Payment Updates

CMS finalized the payment for SNF PPS payments in FY 2022 to be updated by 1.2%, which translates into a $410 million increase over FY 2021 payments. This net increase includes a 2.7% market-basket update that would be offset by a 0.7% productivity adjustment. CMS also identified a negative 0.8% market-based forecast error adjustment for FY 2022.

PDPM Issues

CMS did not make material changes to the design of the PDPM case-mix system. This rule does share agency observations regarding first-year experiences under PDPM in combination with the impact of theCOVID-19 pandemic. For example, the agency observes that FY 2020 SNF PPS payments appear to be on course to significantly exceed expected spending. CMS stated that “rather than simply achieving parity, the FY 2020 parity adjustment may have inadvertently triggered a significant increase in overall payment levels under the SNF PPS.”

The rule notes that current data indicates fee-for-service Medicare will pay 5% more ($1.7 billion) in FY 2020 than the agency otherwise would have paid to SNFs. However, the rule concludes that “a recalibration of the PDPM parity adjustment at this time will be put on hold”.

Consolidated Billing

SNF PPS Blood clotting factor (BCF) exclusion from consolidated billing: As required by section 134 of the Consolidated Appropriations Act, 2021, CMS excluded certain specified Blood Clotting Factors(BCFs) used for the treatment of residents with hemophilia, as well as other bleeding disorders, and items and services related to the furnishing of such factors from consolidated billing for Medicare Part A residents under SNF PPS. To implement this exclusion, CMS created a proportional reduction in the SNF PPS payment rates to offset the resulting increase in Part B spending. CMS invited public comments identifying HCPCS codes in the following five excluded categories for any recent medical advances that might meet the criteria for being added for consolidated billing. Exclusion categories for “high-cost, low probability services” include:

  • Chemotherapy items
  • Chemotherapy administration services
  • Radioisotope services
  • Customized prosthetic devices
  • New Consolidated Billing Exemption

SNF Administrative Presumption

The Administrative presumption requirement did not change with the new rule. The rule restates CMS ’position that the administrative presumption policy does not supersede the SNF’s responsibility to ensure that its decisions relating to level of care are appropriate and timely, including a review to confirm that any services prompting the assignment of one of the designated case-mix classifiers (which, in turn, serves to trigger the administrative presumption) are themselves medically necessary.

SNF QRP 2023 Changes

SNF Healthcare-Associated Infections (HAI)Requiring Hospitalization measure

CMS adopted the new SNF HAI Requiring Hospitalization measure for SNF QRP effective with the FY 2023 SNF QRP program year. This is a claims-based Medicare fee for service outcome measure. This measure estimates the rate of HAIs that are acquired during SNF care and result in hospitalization. The proposed schedule for data submission for this measure is for the FY 2023.

COVID-19 Vaccination Coverage Among Healthcare Personnel (HCP) measure

CMS adopted the new COVID-19 Vaccination Coverage Among HCP process measure for the SNF QRP effective with the FY 2023 SNF QRP program year. SNFs must report data via the Centers for Disease Control and Prevention’s National Health Safety Network (NHSN)Healthcare Personnel Safety Component submission framework a minimum of one week each month.

Transfer of Health (TOH) Information to the Patient-Post-Acute Care (PAC) measure denomination change

CMS modified the denominator for the “on hold ”TOH Information to the Patient PAC measure to exclude residents discharged home under the care of an organized home health service or hospice effective with the FY 2023 SNF QRP. SNFs were granted an exception to this SNF QRP reporting requirement for Q1 2020 (Jan. 1, 2020 – March 31,2020) and Q2 2020 (April 1, 2020 – June 30, 2020)that requires an adjustment to the public reporting schedule.

FY 2022 measure suppression and special scoring policies due to the COVID-19 PHE

CMS will suppress the Skilled Nursing Facility 30-DayAll-Cause Readmission Measure (SNFRM) for the FY2022 SNF VBP program year due to the COVID-19PHE impacting the ability to “make fair, national comparisons of SNFs’ performance scores.” Highlights of this policy include the following:

  • All participating SNFs will receive a performance score of zero no matter how they performed using the previously finalized scoring methodology.
  • Per statute, CMS will withhold each SNF’s federal per-diem rate by 2 percent.
  • CMS will award each SNF 60 percent of that withhold, resulting in a 1.2 percent pay back percentage across the board (with the following exception) because each SNF received an identical performance score, as well as an identical incentive payment multiplier.
  • SNFs that qualify for the low-volume adjustment(i.e., have fewer than 25 eligible stays during the performance period for the program year) will receive 100 percent of that 2 percent withhold, increasing the payback percentage by 2.9 percent
  • The agency will nevertheless publicly report the data, although SNFs will not be ranked. The revised performance period for the FY 2022 SNF VBP(April 1, 2019 – Dec. 31, 2019 and July 1, 2020 –Sept. 30, 2020) will be used to calculate each SNF’s risk-standardized readmission rate (RSRR) for the publicly reported SNFRM results.
  • CMS is considering “options for mitigating any potential negative impacts the PHE due to COVID19 may have on the FY 2023 program,” says the agency.

Finalized FY 2022 ICD-10 Mapping Updates

The following Sickle-cell thalassemia codes will change from Medical Management to Return to Provider (RTP):

  • D57.42 Sickle-cell thalassemia beta zero without crisis
  • D57.44 Sickle-cell thalassemia beta plus without crisis

The following Esophagitis codes will change from Return to Provider to Medical Management:

  • K20.81 Other esophagitis with bleeding
  • K20.91 Esophagitis, unspecified with bleeding
  • K21.01 Gastro-esophageal reflux disease with esophagitis, with bleeding

M35.81 Multisystem Inflammatory Syndrome would change from Non-Surgical Orthopedic/Musculoskeletal to Medical Management.

U07.0 Vaping-related disorder would change from RTP to Pulmonary which collapses to Medical Management.

G93.1 Anoxic brain damage, not elsewhere classified would change from Return to Provider to Acute Neurologic.

The following Neonatal Cerebral Infarction codes would change from RTP to Acute Neurologic:

  • P91.821 Neonatal cerebral infarction, right side of brain
  • P91.822 Neonatal cerebral infarction, left side of brain
  • P91.823 Neonatal cerebral infarction, bilateral

SNF VBP FY 2022 Changes

The SNF VBP program must tie a portion of SNF Medicare reimbursement to performance on either a measure of all-cause hospital readmissions from SNFs or a “potentially avoidable readmission” measure. A pool of funding is created by reducing each SNF’s Medicare per-diem payments by 2%. CMS proposes several temporary adjustments to the SNF VBP program to account for the effects of the COVID-19 public health emergency (PHE). In this rule, the agency adopted a policy for the duration of the PHE to allow itself to suppress SNF readmission measure data for use in the VBP program if the agency determines that the PHE has affected performance significantly.

Following this policy, CMS will suppress the all-cause hospital readmissions measure for the FY 2022 SNF VBP program year. Under the proposed policy, CMS would calculate SNF readmission measure rates, but suppress the use of those rates to generate performance scores, rank SNFs, and calculate value-based incentive payment percentages. Performance would still be publicly reported, but CMS would add appropriate caveats noting the limitations of the data due to the PHE.

Added Measures to VBP

CMS thanked commenters for input regarding which measures it should consider adding, including measures of functional status, patient safety, care coordination or patient experience. CMS stated they will take all of this feedback into consideration as they develop their policies for future rulemaking. In addition, as previously indicated, they plan to report SNF employee turnover information in the near future. Two Patient-Reported Proposed Measures are:

  • The CoreQ: Short Stay Discharge Measure calculates the percentage of individuals discharged in a six- month time period from a SNF, within 100 days of admission, who are satisfied with their SNF stay.
  • The CoreQ: Short Stay Discharge Questionnaire Measure which is the second proposed Patient Reported Measure. The short-stay discharge questionnaire utilizes four items:
  1. In recommending this facility to your friends and family, how would you rate it overall?
  2. Overall, how would you rate the staff?
  3. How would you rate the care you receive?
  4. How would you rate how well your discharge needs were met?

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