Nursing homes would receive a 1.3% net Medicare increase for fiscal year 2022 under a proposal announced by the Centers for Medicare & Medicaid Services late Thursday afternoon.

The update would result in a $444 million aggregate pay boost in Medicare Part A payments for skilled nursing facilities. 

CMS also is proposing a new quality measure that would require skilled nursing facilities to report staff COVID-19 vaccination rates, starting Oct. 1, 2021. Reporting would take place through the Centers for Disease Control and Prevention National Healthcare Safety Network.

In addition, the proposed rule would expand the SNF Quality Reporting Program (QRP), including a reporting requirement and potential penalties for healthcare-acquired infections such as sepsis, urinary tract infection, and pneumonia. It also proposes changes to the SNF Value-Based Program (VBP) for FY 2022. 

The Skilled Nursing Facility Prospective Payment System proposed rule would take effect Oct. 1, 2021, the start of the new fiscal year. 

The 2022 proposed Medicare pay increase actually is $445 million, but that is affected by a $1.2 million decrease due to a proposed cut to account for the recent blood-clotting factors exclusion.

These impact figures also do not incorporate the SNF VBP reductions that CMS estimates to be $184.25 million for fiscal 2022, the agency added.

CMS noted that its analysis of the Patient Driven Payment System pay rates, which went into effect in October 2019, revealed an unintended average hike of about 5%, or $1.7 billion, in payments. But in deference to the ongoing public health emergency, it is only seeking comments at this time as to how the system can be brought back in line with its payment-neutral goal.

“CMS is soliciting broad public comments on a potential methodology for recalibrating the PDPM parity adjustment that would account for the potential effects of the COVID-19 PHE without compromising the accuracy of the adjustment,” the agency said. “CMS also seeks comment on whether any necessary adjustment should be delayed or phased in over time to provide payment stability.”

The new Medicare payment increase is the byproduct of a 2.3% market basket increase, minus a 0.8 percentage point forecast error adjustment and a 0.2 percentage point multifactor productivity (MFP) adjustment. 

CMS also proposes to rebase and revise the SNF market basket index, including updating the base year from 2014 to 2018. 

The proposed COVID-19 vaccination coverage measure would require skilled nursing facilities to report worker vaccination fates to gauge “whether SNFs are taking steps to limit the spread of COVID-19 among their HCP, reduce the risk of transmission within their facilities and help sustain the ability of SNFs to continue serving their communities throughout the COVID-19 PHE and beyond.”

Nothing dramatic had been expected by many industry insiders since a new CMS administrator has not been confirmed yet. President Joe Biden nominated Chiquita Brooks-LaSure in February but required Senate confirmation hearings have not taken place. Liz Richter is the acting CMS administrator.

Even the small boost should come as a relief to providers, many of whom report operating at a loss due to COVID-19. 

“This ongoing work makes government support and robust reimbursement rates more important than ever,” Mark Parkinson, president and CEO of AHCA said in a statement Thursday. “With the skilled nursing profession grappling with an economic crisis and hundreds of facilities on the brink of closure due to the pandemic, it is critical that Medicare remain a reliable funding source and reflect the increasing costs providers are facing.”

Parkinson also acknowledged thet new worker-vaccination reporting proposal, albeit without an outright endorsement.

“We also recognize the importance of quality measures associated with COVID-19 including a proposed measure of the COVID-19 Vaccination Coverage among health care personnel, he said. “We thank Acting Administrator Richter and the Administration for their support through the pandemic.”

Last year, for fiscal 2021, nursing homes wound up with a net 2.2% Medicare raise, which was 0.1% less than the 2.3% rate originally proposed in April 2020. The increase amounted to an additional $750 million injected into the skilled nursing funding stream. 

Also last year, CMS also proposed revised geographic delineations used to identify a provider’s status as an urban or rural facility. They were to be used “to calculate the wage index and apply a 5% cap to wage index decreases.” Slight changes to ICD-10 code mapping under the Patient-Driven Payment Model also were proposed.

A CMS fact sheet on the proposed 2022 rule can be found here. CMS will be taking comments on the proposals until June 7. The agency will announce any adjustments to the rule after collecting and making decisions about comments gathered.

This is a developing story. Please check back for updates.