Polaris Pulse

The Polaris Pulse: FY 2022 SNF Proposed Rules

Polaris Group Profile
Polaris Group
July 22, 2021
March 14, 2023
Polaris Group Profile
Polaris Group
March 14, 2023

Learn more about CMS’ proposed SNF PPS payment in FY 2022.

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Proposed Payment

Updates CMS proposes that SNF PPS payments in FY 2022 be updated by 1.3%, which translates into a $444 million increase over FY 2021 payments. This net increase includes a 2.3% market-basket update that would be offset by a 0.2% productivity adjustment. CMS also proposes a negative 0.8% market-basket forecast error adjustment for FY 2022 since the difference between the projected 2.8% and actual 2.0% market basket exceeded its threshold of 0.5 percentage points. The difference between the estimated and actual amount of change in the market basket index exceeds the 0.5 percentage point threshold, under the policy previously described so the FY 2022 market basket percentage change of 2.3 percent would be adjusted downward to account for the forecast error correction of 0.8 percentage point, resulting in a SNF market basket percentage change of 1.5 percent.

PDPM Issues

CMS will 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 the COVID-19pandemic. For example, the agency observes that FY2020 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 2020than the agency otherwise would have paid to SNFs. The rule concludes that “a recalibration of the PDPM parity adjustment is warranted to ensure that the adjustment serves its intended purpose to make the transition between RUG-IV and PDPM budget neutral. CMS concluded that the “new” population of SNF beneficiaries (that is,COVID-19 patients and those using a section 1812(f)waiver) does not appear to be the cause of the increase in SNF payments after implementation of PDPM. This gap is quite large for the SLP (up 22.6%), Nursing (up 16.8%)and NTA (up 5.6%) CMIs irrespective of whether theCOVID-19 and waiver stay cases are included.

Potential Future Recalibration Method

Regarding FY 2020 payments, CMS projects a 5.3%increase in aggregate spending under PDPM versus the prior model, when considering the full SNF population. If those cases using a COVID-19 waiver or diagnosed with COVID-19 are eliminated, the increase is 5.0%. CMS believes it would be more appropriate to pursue are calibration using the subset population exclusive of COVID-19 waiver patients or patients diagnosed with COVID. So, the rule discusses, but does not propose, a5.0% reduction in the PDPM parity adjustment factor from46% to 37%. If this adjustment were applied for FY 2022,CMS estimates a reduction in SNF spending of approximately $1.7 billion. The Wage Index’s based on CBSA Labor Market Areas for Urban and Rural areas is no longer published in the Federal Register. They are available exclusively on CMS’s website at: http://www.cms.gov/Medicare/Medicare-Fee-for-ServicePayment/SNFPPS/WageIndex.html

CMS presented for discussion several potential phase-in strategies for a prospective PDPM parity adjustment update that would not affect prior payments, which could perhaps be proposed in future rulemaking:

  • Delayed Implementation Strategies: Delay the reduction for some period of time, perhaps one or more years, but implement the full 5-percent reduction in a single year;
  • Phased Implementation Strategies: Spread the reduction over some number of years, such as 2.5% for each of two years; and
  • Combination Strategies: Both delay and phase in the reduction over more than a single year.

Consolidated Billing

CMS is inviting 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.

Proposed FY 2022 ICD-10 Mapping Updates

The following Sickle-cell thalassemia codes would 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 would 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 Proposed 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 proposes to adopt 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 proposes to 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.

Proposed Added Measures to VBP

CMS is seeking input regarding which measures it should consider adding, including measures of functional status, patient safety, care coordination or patient experience. wo 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?

SNF QRP 2023 Proposed Changes

CMS proposes to adopt two new quality measures and adjust the denominator of one measure beginning with the FY 2023 SNF QRP. CMS proposes to adopt COVID-19Vaccination among Health Care Personnel (HCP)Measure. This measure would calculate the percentage of HCP eligible to work in the SNF for at least one day during the reporting period who received a complete vaccination course. If finalized, SNFs would be required to submit data beginning October 1, 2021. The measure would exclude persons with contraindications to theCOVID-19 vaccination as described by the Centers for Disease Control and Prevention (CDC).

Other proposed measures for 2023 are:

  • Modification of Transfer of Health Information to the Patient (TOH-Patient) Measure
  • SNF Healthcare-Associated Infections (HAI)Requiring Hospitalization

CMS seeks input on the importance, relevance, appropriateness, and applicability of the following measures and concepts for future years in the SNF QRP but they will not be responding to the specific comments submitted in response to the Request for Information (RFI)in the FY 2022 SNF PPS final rule:

  • Frailty
  • Patient-reported outcomes
  • Shared decision-making process
  • Appropriate pain assessment and pain management processes
  • Health Equity
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