On April 15, 2015, CMS issued its proposed FY 2016 rule outlining Medicare payment rates for skilled nursing facilities (SNFs).  CMS projects that the overall economic impact of the proposed rule would result in an estimated increase of $500 million (or 1.4 percent) in aggregate payments to SNFs from payments in FY 2015.  The proposed rule was published in the April 20, 2015 Federal Register.  Comments on the proposed rule are due by June 19, 2015. 

In addition to proposed payment amounts, CMS makes proposals regarding the implementation of a quality reporting program that would require SNFs to begin submitting quality data concerning three specific measures to CMS beginning in FY 2018.  The measures include (1) skin integrity; (2) incidence of major falls; and (3) functional status, cognitive function, and changes in function and cognitive function. 

The agency also addresses the SNF Value Based Purchasing (VBP) Program that was authorized by the Protecting Access to Medicare Act of 2014 (PAMA) and under which value-based incentive payments will be made to SNFs based on performance.  In this regard, CMS proposes to specify the Skilled Nursing Facility 30-Day All-Cause Readmission Measure (SNFRM) (NQF #2510) as the skilled nursing facility all-cause, all-condition hospital readmission measure that is required by PAMA.  CMS states that the measure is intended to assess the risk-standardized rate of all-cause, all-condition, unplanned inpatient hospital readmissions of Medicare fee-for-service (FFS) SNF patients within 30 days of discharge from an inpatient prospective payment system (IPPS) hospital, critical access hospital (CAH), or psychiatric hospital.  The measure would be claims-based and require no additional data collection or submission burden for SNFs. 

CMS solicits comments on future policy considerations relating to the SNF VBP Program in the following areas:

• Performance standards
• Measuring improvements
• Appropriate baseline and performance periods
• Performance scoring methodology
• Public reporting of performance information
• Feedback reports

The proposed rule also addresses proposed amendments to the requirements at 42 C.F.R. Part 483 that a long-term care (LTC) facility must meet in order to qualify as a SNF in the Medicare program or as a nursing facility (NF) in the Medicaid Program.  If the proposal is finalized, beginning on July 1, 2016, LTC facilities that participate in Medicare or Medicaid will be required to electronically submit direct care staffing information (including information for agency and contract staff) based on payroll and other verifiable and auditable data in a uniform format. 

The FY 2016 proposed SNF rule is available by clicking here.  Click here for the CMS Fact Sheet.

Reporter, Tracy Weir, Washington, D.C., +1 202 626 2923, tweir@kslaw.com.