Headshot of CMS Administrator Chiquita Brooks-LaSure

Nursing homes will get a higher-than-expected 4.0% increase in their Medicare Part A payments in fiscal 2024, per a finalized Centers for Medicare & Medicaid Services rule publicized late Monday.

But major provider organizations immediately called the extra 0.3% too little to offset increasing costs, especially those likely to blossom from an expected federal staffing minimum.

The net increase represents a $1.4 billion hike, slightly higher than the $1.2 billion proposed in an April draft rule.

“The final rule released today does not address the reality of providers’ operating environments, and will, ultimately, limit older adults’ access to much-needed care and services,” Katie Smith Sloan, president and CEO of LeadingAge, said in a statement Monday night. “Of course, our nonprofit and mission-driven members welcome any increase in payment rates, [but] the 4% provided in this rule will surely be offset by the increasing costs of care, which will most certainly continue to rise in the coming year – on top of the expected staffing standards.”

Martin Allen, senior vice president of reimbursement policy for the American Health Care Association, also pointed to the looming federal standard in his prepared comments.

 “We appreciate that CMS recognizes the severe challenges and increasing costs nursing home providers face—from an unprecedented workforce shortage to record inflation in recent years,” he said. “This Medicare increase will help nursing homes enhance their services and support their caregivers. However, more must be done to invest in our nation’s nursing homes, especially if the administration implements a federal staffing mandate, which could cost tens of billions of dollars each year. It is vital to fund government mandates and to ensure Medicare remains a viable program to ensure our nation’s seniors can access the care they need.” 

The final 2024 rate is based on a $2.2 billion increase resulting from the 6.4% net market basket update, minus a 2.3%, or approximately $789 million, cut representing the second half of a clawback for unanticipated Patient Driven Payment Model overspending.

Providers had reacted with cautious optimism in early April to CMS’s proposed pay rule that offered operators a 3.7% raise. They were guarded because the issuance came without any further info about a promised staffing mandate. The final rule includes no further details about the minimum staffing standards, which were still being reviewed by the White House Office of Management and Budget as of Monday.

The agency dropped the proposed 312-page SNF Prospective Payment System rule April 4. Monday’s final version weighed in at 451 pages.

Patient satisfaction measure paused 

The initial 2024 pay proposal also recommended vast changes to CMS’ quality reporting and value-based purchasing programs.

While most of those proposals remained in tact in the final rule, CMS said it was dropping its plan to add a quality report CoreQ: Short Stay Discharge measure “after consideration of the public comments received.” Some experts had told McKnight’s Long-Term Care News that the customer satisfaction measure could benefit providers, though they noted such an effort would carry a cost.

In its final rule, CMS Monday said commenters shared a preference for other survey tools; concern about the
number of residents that would be excluded from receiving a CoreQ short-stay survey; questioned the score’s calculation method; and worried about “the burden of submitting resident information files to the CoreQ survey vendor on a weekly basis.”

Nursing home critics also submitted comments questioning why CMS would use the CoreQ, which was developed by the American Health Care Association, when nursing homes metrics have been criticized for being too reliant on self-reported data.

“We have decided that at this time, we will not finalize the proposal to add the CoreQ: SS DC measure beginning with the FY 2026 SNF QRP,” CMS explained. “However, we remain committed to the timely adoption of a meaningful measure that addresses resident satisfaction or resident experience for the SNF QRP. … While it may require time to conduct further research to identify and/or develop a meaningful measure that meets the needs of both SNFs and consumers, we intend to propose a resident satisfaction or resident experience measure for the SNF QRP in future rulemaking.”

Value-based pay elements stand

As far as it upward rate adjustment, CMS said the positive change came after the agency reviewed the data underpinning its initial proposal for a 2.7% market basket increase. For the final rule, CMS used a second- quarter forecast that projected a 3.0% growth in costs.

Cynthia Morton, executive vice president for ADVION, on Monday called the payment update “very positive,” adding that “it will go a long way to helping facilities stay afloat.”  

Both LeadingAge and the American Health Care Association had called on CMS to include a funding mechanism in any proposed staffing mandate. The details of that mandate, first pledged by the White House in February 2022, were widely expected to appear in the April pay proposal.

LeadingAge said several measures “stand out as concerning on quality reporting and value-based purchasing”  because they “aren’t fair, reasonable or within providers’ control.”

Among those are a Total Nurse Staffing Turnover measure for the value-based program.

“The rule’s focus on staff turnover places inappropriate blame on providers, who are at the mercy of the workforce crisis,” Sloan said. “Further, we disagree with how CMS is defining gaps in employment (60 day-timeframe), which is contradictory to the Department of Labor’s guarantee of 12 weeks per year of family/medical leave.”

CMS said several commenters opposed the new measure because they believe it is unrelated to the intent of the program and “reflects circumstances outside of SNFs’ control such as market conditions.” Another commenter asked CMS to delay implementation of the measure until CMS finishes developing and rolls out its nurse staffing minimum standards. 

“There are ongoing efforts at CMS to address staffing, including discussions around nurse staffing minimum standards. However, nursing staff minimums and turnover are distinct, and we do not believe those efforts need to be in place prior to finalizing this Nursing Staff Turnover measure for the SNF VBP Program,” CMS said. “We reiterate that the proposed Nursing Staff Turnover measure is reliable and valid, and we do not anticipate staffing minimums having significant impact on this proposed measure… SNF staffing, including turnover, is a high priority for us because of its central role in the quality of care for SNF residents.”

CMS added that it would continue to evaluate SNFs’ behaviors, staffing levels and quality outcomes as the measure is implemented.

The final 2024 pay rule is expected to be formally complete when it is published in the Federal Register on Aug. 7.