FY 2023 Skilled Nursing Facilities (SNF) Prospective Payment System (PPS) Proposed Rule

On April 15, 2022, the Centers for Medicare and Medicaid Services (CMS) issued a proposed rule that would update payment rates for the Skilled Nursing Facilities (SNFs) Prospective Payment System (PPS) for Fiscal Year (FY) 2023 and propose changes to SNF Quality Reporting Program (QRP), SNF Value Based Purchasing Program (VBP), and requests information regarding requirements for Long-Term Care (LTC) facilities to establish mandatory minimum staffing levels.

Key proposals include:

  • Updated payment rates by 3.9%, reflecting a market basket index percentage change of 2.8%, increased by the forecast error adjustment of 1.5% and reduced by the productivity adjustment of 0.4% required under the Affordable Care Act. However, a 4.6% proposed parity adjustment to ensure budget neutrality results in an approximately $320 million decrease in Medicare Part A payments to SNFs in FY 2023.
  • Requesting information on establishing mandatory minimum staffing requirements for LTC facilities. Specifically, feedback on evidence that establishes an appropriate minimum staffing requirement, associated costs, rural considerations including workforce recruiting challenges, and how the minimum staffing requirement should be measured.
  • Adopting the Centers for Disease Control (CDC) Influenza Vaccination Coverage among Healthcare Personnel (HCP) measure for the SNF QRP in FY 2025 to report the percentage of HCP that receive the influenza vaccine each season.
  • Revising the compliance date to October 1, 2023, for collecting data on Transfer of Health (TOH) Information to Provider-PAC measure, TOH Information to Patient-PAC measure, and certain standardized patient assessment data elements.
  • Adopting new SNF VBP quality measures including the SNF Healthcare Associated Infections (HAI) Requiring Hospitalizations measure and the Total Nursing Hours per Resident Day staffing measure in FY 2026 and the Discharge to Community Post-Acute Care (DTC PAC) measure in FY 2027. Currently, hospital readmissions are the only quality measures for VBP.
  • Implementing case minimums and measure minimums as eligibility requirements for inclusion in VBP programs and incentive-based payments.

NRHA plans to submit comments on the proposed rule. Please share any questions or concerns with NRHA staff before the June 10, 2022, deadline. CMS’s FY23 SNF PPS Fact Sheet can be found here. President Biden’s remarks on improving nursing home safety and quality can be found here. The proposed rule can be found here.

For further questions, please contact Alexa McKinley, NRHA Government Affairs and Policy Coordinator, at amckinley@ruralhealth.us or another member of the Government Affairs team.