Money, Healthcare

The Centers for Medicare & Medicaid Services announced late Thursday that it will delay adjusting Patient Driven Payment Model payment rates until next year. The agency also will give nursing homes just a 1.2% pay raise for fiscal 2022.

Industry stakeholders had widely feared CMS would adjust the PDPM parity rate starting Oct. 1, after agency officials this spring surprised many by asking for guidance on how exactly to make the cut. At the time, the agency stated the new pay system had disbursed 5%, or $1.7 billion, more than intended after its Oct. 1, 2019, launch.

Many operators contested that estimate as overly inflated, given ensuing pandemic conditions that drove up the cost of care. 

The comment period, however, wound up buying fearful providers more time, as CMS acknowledged that its original analysis might not have accounted for pandemic factors appropriately.

“In light of … comments, as well as the importance of addressing any existing overpayments under the SNF PPS, we intend to utilize these comments to refine the data we have collected in developing a proposed methodology that will be included in the FY 2023 SNF PPS Proposed Rule,” CMS explained late Thursday.

The agency also announced that the disappointing 1.3% PPS pay hike it proposed in April is being finalized at 1.2%, good for an infusion of an additional $410 million in Medicare Part A payments in fiscal 2022. 

Mark Parkinson, president and CEO of the American Health Care Association, Thursday night thanked CMS Administrator Chiquita Brooks-LaSure for ensuring an increase and delaying the PDPM cut.

“Nursing homes across the country continue to dedicate extensive resources to safeguard their residents and staff from COVID-19, especially with the highly contagious Delta variant spreading in communities around the U.S.” he said. “The ongoing costs to fight the pandemic have left the majority of nursing homes struggling to stay afloat. Long term care providers need sustained support to keep residents and staff safe, and it is vital that Medicare remain a reliable funding source and reflect the increasing costs providers are facing.” 

 The 1.2% pay increase is derived from an initial 2.7% proposed pay raise, trimmed by a forecast error correction of 0.8% and a productivity adjustment of 0.7%. 

CMS added that market basket impact figures do not incorporate the SNF VBP reductions that are estimated to be $184.25 million in FY 2022.

New quality reporting measures

The new rule also updates metrics used in the SNF Quality Reporting Program. SNFs that do not meet reporting requirements for any of the metrics can be subject to a 2% reduction in their annual update. 

Starting in fiscal year 2023, facilities will have to report healthcare-associated infections, or HAIs, requiring hospitalization. Sepsis, urinary tract infection, and pneumonia are among the kinds of infections CMS will track, noting that HAIs often result from “inadequate patient management following a medical intervention, such as surgery or device implementation, or poor adherence to protocol and antibiotic stewardship guidelines.” 

CMS said it wants to be able to monitor characteristics associated with facilities that have notably higher HAI rates to encourage “improved quality of care.”

Despite some resistance from provider groups during the public comment period, the agency will also use COVID-19 vaccination among healthcare personnel as a new metric “to assess 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.”

The rule originally proposed in April was more complex than usual, with many facets for providers and other stakeholders to consider, particularly while still struggling with effects of the pandemic.