CMS Issues SNF Final Payment Rule for FY 2016 – On July 30, 2015, CMS released the final Medicare FY 2016 payment rule for skilled nursing facilities (SNFs). The final rule will result in an estimated increase of $430 million in aggregate payments to SNFs during FY 2016, or a 1.2 percent increase over payments in FY 2015.  (Total payment increases for SNFs had been estimated under the proposed rule to be 1.4 percent of FY 2015 payments, or $500 million.)  The final rule also implements a quality reporting program (QRP) for SNFs.  Beginning in FY 2018, SNFs that do not satisfactorily report the required quality data to CMS under the SNF QRP will have their market basket percentage updates reduced by two percentage points.  In addition, the final rule adopts an all-cause, all-condition hospital readmission measure for a new SNF Value-Based Purchasing Program.  The final rule is effective October 1, 2015, and is expected to be published in the Federal Register on August 4, 2015. A display copy of the final rule is available here, and the CMS fact sheet is available here.

CMS Issues Hospice Final Payment Rule for FY 2016 – On July 31, 2015, CMS released a final rule that updates the hospice payment rates and the wage index for FY 2016, including implementing the last year of the phase-out of the wage index budget neutrality adjustment factor.  Total payments to hospices in FY 2016 are anticipated to increase under the final rule by 1.1 percent, or $160 million, over payments in FY 2015.  (The total estimated payment increase under the proposed rule had been 1.3 percent, or $200 million.)  Effective January 1, 2016, the final rule establishes two different payment rates for routine home care that will result in a higher base payment rate for the first 60 days of hospice care and a reduced base payment rate for additional days of hospice care.  In addition, the rule establishes a service intensity add-on payment that will result in an add-on payment equal to the Continuous Home Care hourly payment rate multiplied by the amount of direct patient care provided during the last seven days of a beneficiary’s life, if certain criteria are met.  The rule also provides updates on the hospice quality reporting system.  The final rule is effective October 1, 2015, and is expected to be published in the Federal Register on August 6, 2015.  A display copy of the final rule is available here. 

CMS Issues IRF PPS Final Rule for FY 2016 – On July 31, 2015, CMS released a final rule updating the prospective payment system (PPS) payment rates for inpatient rehabilitation facilities (IRFs) for FY 2016.  Under the final rule, the estimated payments to IRFs will increase by 1.8 percent, or $135 million, compared to FY 2015 payments.  (The estimated payment increase under the proposed rule had been 1.7 percent, or $130 million.)  The 1.8 percent increase in estimated payments reflects a new IRF-specific market basket of 2.4 percent less a 0.5 percent multi-factor productivity adjustment and a 0.2 percent reduction required by the Affordable Care Act, for a net market basket update of 1.7 percent, plus an additional 0.1 percent anticipated increase due to updating the high-cost outlier threshold amount.  The final rule also adopts measures to satisfy three of the quality domains specified in the Improving Medicare Post-Acute Care Transformation Act of 2014: skin integrity and changes in skin integrity; functional status, cognitive function, and changes in function and cognitive function; and incidence of major falls.  The final rule is expected to be published in the Federal Register on August 6, 2015.  A display copy of the final rule is available here and the CMS fact sheet is available here.

CMS Issues IPF PPS Final Rule for FY 2016 – On July 31, 2015, CMS released a final rule updating Medicare payment policies and rates for inpatient psychiatric facilities (IPF) for FY 2016.  Under the final rule, the estimated payments to IPFs will increase by 1.5 percent, or $75 million, compared to FY 2015 payments.  (The estimated payment increase under the proposed rule had been 1.6 percent, or $80 million.)  The 1.5 percent increase in estimated payments reflects a 1.7 percent net market basked update, less 0.2 percentage points due to CMS’s update of the outlier fixed-dollar loss threshold amount.  The 1.7 percent net market basket includes a 2.4 percent market basket update less a 0.5 percent productivity adjustment and 0.2 percent reduction required by the Affordable Care Act.  The final rule also modifies the IPF Quality Reporting Program to add five new measures and remove three measures for a total of 16 measures overall, and finalizes policies to lessen the burden on reporting entities.  The final rule is expected to be published in the Federal Register on August 5, 2015.  A display copy of the final rule is available here, and the CMS fact sheet is available here. 

King & Spalding to Offer On-Demand Roundtable of Two Midnight Rule Developments – Due to strong demand, King & Spalding is offering an on-demand replay of its July 14 Healthcare Roundtable on the proposed changes to the Two Midnight Rule set forth in the 2016 Outpatient PPS Proposed Rule.  The on-demand replay is available through August 31 and is free of charge.  Click here for more details.