Breaking news: Fiscal year 2021 payment and policy changes for Medicare SNFs final rule issued

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“On July 31, 2020, the Centers for Medicare & Medicaid Services (CMS) issued a final rule [CMS-1737-F] for Fiscal Year (FY) 2021 that updates the Medicare payment rates and the value-based purchasing program for skilled nursing facilities (SNFs). CMS is publishing this final rule consistent with the legal requirements to update Medicare payment policies for SNFs on an annual basis. In recognition of the significant impact of the COVID-19 public health emergency, and limited capacity of health care providers to review and provide comment on extensive proposals, CMS has limited annual SNF rulemaking required by statute to essential policies including Medicare payment to SNFs.

The final rule includes routine technical rate-setting updates to the SNF prospective payment system (PPS) payment rates and adopts the revised Office of Management and Budget (OMB) statistical area delineations.  In addition, the rule applies a 5 percent cap on wage index decreases from FY 2020 to FY 2021. In response to stakeholder feedback, we are also finalizing changes to the International Classification of Diseases, Version 10 (ICD-10) code mappings, effective October 1, 2020. Finally, this rule includes minor administrative changes related to the SNF Value-Based Purchasing (VBP) Program, further described below.

This fact sheet discusses several major provisions of the final rule: the changes to SNF payment policy under the SNF PPS and the SNF VBP Program. This final rule includes revisions that reflect our commitment to shifting Medicare payments from volume to value, with the continued implementation of the Patient Driven Payment Model (PDPM) and the SNF VBP, and to improve program interoperability, operational quality and safety.”

The 116-page Final Rule was filed at 3:15pm (ET) today and will be published in the Federal Register on Wednesday, August 5, 2020.

  • CMS projects that aggregate Medicare program payments to SNFs will increase by $750 million, or 2.2 percent, for FY 2021 compared to FY 2020. This estimated increase is attributable to a 2.2 percent market basket increase factor, adjusted by a 0.0 percentage point productivity adjustment.
  • In this final rule, CMS is also adopting revised geographic delineations provided by OMB to identify a provider’s status as an urban or rural facility and to calculate the wage index, applying a 5 percent cap on any decreases in a provider’s wage index from FY 2020 to FY 2021.
  • In this final rule, in response to these stakeholder recommendations, CMS is finalizing changes to the ICD-10 code mappings, effective October 1, 2020. CMS encourages stakeholders to continue to provide this essential feedback on the ICD-10 code mappings so that (CMS) may continue to improve and refine our payment methodology.
  • In the FY 2021 SNF PPS final rule, CMS is finalizing updates to the SNF VBP Program regulation text at 42 CFR § 413.338 so that it reflects previously finalized policies, and is also updating the 30-day Phase One Review and Correction deadline for the baseline period quality measure quarterly report.  CMS is also announcing performance periods and performance standards for the FY 2023 program year. CMS made no changes to the measures, SNF VBP scoring policies, or payment policies.

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