The Department of Veterans Affairs plans to adopt a new formula to calculate payments to state-run nursing homes that provide nursing home care to eligible veterans.
The new formula would use a baseline combined with the Centers for Medicare & Medicaid Services’ SNF Market Basket rate. Comments on the Dec. 21 proposed rule are due on or before Feb. 21, 2023. Officials plan to put it into effect when the 2024 fiscal year starts Oct. 1, 2023.
The VA pays 162 state homes (totaling 30,000 beds) across the country and Puerto Rico a per diem for each eligible veteran who receives nursing home care there. Currently, there are two types of per diem rates the VA may pay for such care; the department plans to amend the prevailing rate option, which is for veterans with service-connected disabilities.
Currently, the prevailing rate is specific to each state home and is based on CMS’ case-mix levels. The VA began using two CMS case-mix data sets in 2013: Resource Utilization Groups, which applies to metropolitan areas, and the Skilled Nursing Facility Prospective Payment System, which applies to rural areas.
CMS replaced the RUG and SNF-PPS case-mix classification systems with the Patient Driven Payment Model in October 2019, and the change spurred the VA to study its own payment system.
The VA consulted with the National Association of State Veterans Homes in June of 2019 and decided that it would not be appropriate to use the PDPM formula because it is focused on incentivizing providers to take on new short-term patients, which is not an issue VA faces.
“For example, under Medicare, CMS only pays for the first 100 days of skilled nursing home care,” said the proposed rule in the Federal Register. “After which, the patient’s care must be paid for by another source, or the patient is discharged. This does not apply to state homes. In many cases, state homes provide nursing home care to our veterans for the remainder of their lives.”
Also, 31% of the state homes that provide nursing home care to eligible veterans are not subject to the CMS PDPM formula because they aren’t certified by CMS and don’t receive Medicare or Medicaid payments.
The VA said it believes that the CMS SNF Market Basket rate would more accurately reflect actual costs than would an alternate method such as a component of the Consumer Price Index.
“The CMS SNF Market Basket rate is adjusted annually based on price changes in goods and services specifically identified as being utilized in nursing home care, while other measures such as the CPI reflect price changes in goods and services in the general medical services field,” the proposed rule stated.
SNF Market Basket increase rates are published in the Federal Register annually; in 2023, the CMS SNF Market Basket rate increase was 5.1% percent.
