CMS issues PDPM updates and makes 2.4% Medicare raise official

Editor’s Note: This story has been updated with comments from LeadingAge.

Skilled nursing providers will split an $851 million pay increase in FY 2020, following a final rule published by the Centers for Medicare & Medicaid Services issued late Tuesday.

At least one provider organization praised the net 2.4% increase, noting that it will go into effect the same day the new Patient-Driven Payment Model kicks in.

“The 2.4 percent market basket increase is critical, especially as members are actively preparing for implementation of the new Patient-Driven Payment Model on October 1,” Mark Parkinson, president and CEO at the American Health Care Association, said in a statement. “Skilled nursing facilities are coping with devastating closures, particularly in rural areas. This increase doesn’t solve this problem, but it does provide some much needed help.”

The final market basket increase reflects a required 0.4% productivity reduction from CMS’ proposed 2.8% rate.

While the 2.4% market basket update is helpful, it isn’t significant enough given the increasing costs for nursing homes, said LeadingAge’s Aaron Tripp.

“The 2.4% Medicare increase is not provided equally to all SNFs. It is a national average,” he said. “Some providers will get more than 2.4% and some will get less. How much a provider gets depends on numerous factors, including: their performance in the VPB program; whether they submitted quality reporting program data; and whether they received rebates based on their performance in the VBP program.”

In addition to the pay raise, the FY2020 final rule for Medicare participation includes new guidance on components of PDPM.

It institutes an expected sub-regulatory process for classification of diseases and corresponding ICD-10 codes, such as when a prior code is split into two new codes. The new reporting procedures will mimic standards already used by inpatient rehabilitation facilities.

Also, the group therapy definition for skilled nursing, as expected, will soon follow the inpatient rehabilitation facility (IRF) norm and cover sessions with groups of two to six patients.

The rule also institutes two new quality reporting measures designed to improve interoperability, CMS said in a press release. Those require providers to document transfer of health information to the provider, post-acute-care, and to document the transfer of health information to the patient, post-acute care.

The agency’s goal is to improve medication management among subsequent providers and discharged patients, especially through the use of electronic medication records.

“The communication of health information and patient care preferences is critical to ensuring safe and effective transitions from one health care setting to another,” the rule states. “Patients in PAC settings often have complicated medication regimens and require efficient and effective communication and coordination of care between settings, including detailed transfer of medication information.”