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Proposed Rule2023-07137

Medicare Program; Prospective Payment System and Consolidated Billing for Skilled Nursing Facilities; Updates to the Quality Reporting Program and Value-Based Purchasing Program for Federal Fiscal Year 2024

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Published

April 10, 2023

Issuing agencies

Health and Human Services DepartmentCenters for Medicare & Medicaid Services

Abstract

This proposed rule would update payment rates, including implementing the second phase of the Patient Driven Payment Model (PDPM) parity adjustment recalibration. This proposed rule also proposes updates to the diagnosis code mappings used under PDPM, the SNF Quality Reporting Program (QRP), and the SNF Value-Based Purchasing (VBP) Program. We are also proposing to eliminate the requirement for facilities to actively waive their right to a hearing in writing, instead treating the failure to submit a timely request for a hearing as a constructive waiver.

Full Text

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[Federal Register Volume 88, Number 68 (Monday, April 10, 2023)]
[Proposed Rules]
[Pages 21316-21422]
From the Federal Register Online via the Government Publishing Office [<a href="http://www.gpo.gov">www.gpo.gov</a>]
[FR Doc No: 2023-07137]

[[Page 21315]]

Vol. 88

Monday,

No. 68

April 10, 2023

Part III

Department of Health and Human Services

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Centers for Medicare & Medicaid Services

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42 CFR Parts 411, 413, 488, et al.

Medicare Program; Prospective Payment System and Consolidated Billing
for Skilled Nursing Facilities; Updates to the Quality Reporting
Program and Value-Based Purchasing Program for Federal Fiscal Year
2024; Proposed Rule

Federal Register / Vol. 88 , No. 68 / Monday, April 10, 2023 /
Proposed Rules

[[Page 21316]]

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DEPARTMENT OF HEALTH AND HUMAN SERVICES

Centers for Medicare & Medicaid Services

42 CFR Parts 411, 413, 488, and 489

[CMS-1779-P]
RIN 0938-AV02

Medicare Program; Prospective Payment System and Consolidated
Billing for Skilled Nursing Facilities; Updates to the Quality
Reporting Program and Value-Based Purchasing Program for Federal Fiscal
Year 2024

AGENCY: Centers for Medicare & Medicaid Services (CMS), Department of
Health and Human Services (HHS).

ACTION: Proposed rule.

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SUMMARY: This proposed rule would update payment rates, including
implementing the second phase of the Patient Driven Payment Model
(PDPM) parity adjustment recalibration. This proposed rule also
proposes updates to the diagnosis code mappings used under PDPM, the
SNF Quality Reporting Program (QRP), and the SNF Value-Based Purchasing
(VBP) Program. We are also proposing to eliminate the requirement for
facilities to actively waive their right to a hearing in writing,
instead treating the failure to submit a timely request for a hearing
as a constructive waiver.

DATES: To be assured consideration, comments must be received at one of
the addresses provided below, by June 5, 2023.

ADDRESSES: In commenting, please refer to file code CMS-1779-P.
Comments, including mass comment submissions, must be submitted in
one of the following three ways (please choose only one of the ways
listed):
1. Electronically. You may submit electronic comments on this
regulation to <a href="http://www.regulations.gov">http://www.regulations.gov</a>. Follow the ``Submit a
comment'' instructions.
2. By regular mail. You may mail written comments to the following
address ONLY: Centers for Medicare & Medicaid Services, Department of
Health and Human Services, Attention: CMS-1779-P, P.O. Box 8016,
Baltimore, MD 21244-8016.
Please allow sufficient time for mailed comments to be received
before the close of the comment period.
3. By express or overnight mail. You may send written comments to
the following address ONLY: Centers for Medicare & Medicaid Services,
Department of Health and Human Services, Attention: CMS-1779-P, Mail
Stop C4-26-05, 7500 Security Boulevard, Baltimore, MD 21244-1850.
For information on viewing public comments, see the beginning of
the SUPPLEMENTARY INFORMATION section.

FOR FURTHER INFORMATION CONTACT:
<a href="/cdn-cgi/l/email-protection#edbda9bda0ad8e809ec385859ec38a829b">[email&#160;protected]</a> for issues related to the SNF PPS.
Heidi Magladry, (410) 786-6034, for information related to the
skilled nursing facility quality reporting program.
Alexandre Laberge, (410) 786-8625, for information related to the
skilled nursing facility value-based purchasing program.
Lorelei Kahn, (443) 803-8643, for information related to the Civil
Money Penalties Waiver of Hearing.

SUPPLEMENTARY INFORMATION: Inspection of Public Comments: All comments
received before the close of the comment period are available for
viewing by the public, including any personally identifiable or
confidential business information that is included in a comment. We
post all comments received before the close of the comment period on
the following website as soon as possible after they have been
received: <a href="http://www.regulations.gov">http://www.regulations.gov</a>. Follow the search instructions on
that website to view public comments. CMS will not post on
<a href="http://Regulations.gov">Regulations.gov</a> public comments that make threats to individuals or
institutions or suggest that the individual will take actions to harm
the individual. CMS continues to encourage individuals not to submit
duplicative comments. We will post acceptable comments from multiple
unique commenters even if the content is identical or nearly identical
to other comments.

Availability of Certain Tables Exclusively Through the Internet on the
CMS Website

As discussed in the FY 2014 SNF PPS final rule (78 FR 47936),
tables setting forth the Wage Index for Urban Areas Based on CBSA Labor
Market Areas and the Wage Index Based on CBSA Labor Market Areas for
Rural Areas are no longer published in the Federal Register. Instead,
these tables are available exclusively through the internet on the CMS
website. The wage index tables for this proposed rule can be accessed
on the SNF PPS Wage Index home page, at <a href="https://www.cms.gov/Medicare/Medicare-Fee-for-Service-Payment/SNFPPS/WageIndex.html">https://www.cms.gov/Medicare/Medicare-Fee-for-Service-Payment/SNFPPS/WageIndex.html</a>.
Readers who experience any problems accessing any of these online
SNF PPS wage index tables should contact Kia Burwell at (410) 786-7816.
To assist readers in referencing sections contained in this
document, we are providing the following Table of Contents.

Table of Contents

I. Executive Summary
A. Purpose
B. Summary of Major Provisions
C. Summary of Cost and Benefits
D. Advancing Health Information Exchange
II. Background on SNF PPS
A. Statutory Basis and Scope
B. Initial Transition for the SNF PPS
C. Required Annual Rate Updates
III. Proposed SNF PPS Rate Setting Methodology and FY 2024 Update
A. Federal Base Rates
B. SNF Market Basket Update
C. Case-Mix Adjustment
D. Wage Index Adjustment
E. SNF Value-Based Purchasing Program
F. Adjusted Rate Computation Example
IV. Additional Aspects of the SNF PPS
A. SNF Level of Care--Administrative Presumption
B. Consolidated Billing
C. Payment for SNF-Level Swing-Bed Services
D. Revisions to the Regulation Text
V. Other SNF PPS Issues
A. Technical Updates to PDPM ICD-10 Mappings
VI. Skilled Nursing Facility Quality Reporting Program (SNF QRP)
A. Background and Statutory Authority
B. General Considerations Used for the Selection of Measures for
the SNF QRP
C. SNF QRP Quality Measure Proposals
D. Principles for Selecting and Prioritizing SNF QRP Quality
Measures and Concepts Under Consideration for Future Years: Request
for Information (RFI)
E. Health Equity Update
F. Form, Manner, and Timing of Data Submission Under the SNF QRP
G. Proposed Policies Regarding Public Display of Measure Data
for the SNF QRP
VII. Skilled Nursing Facility Value-Based Purchasing Program (SNF
VBP)
A. Statutory Background
B. SNF VBP Program Measures
C. SNF VBP Performance Period and Baseline Period Proposals
D. SNF VBP Performance Standards
E. Proposed Changes to the SNF VBP Performance Scoring
Methodology
F. Proposed Update to the Extraordinary Circumstances Exception
Policy Regulation Text
G. Proposal to Update the Validation Process for the SNF VBP
Program
H. SNF Value-Based Incentive Payments for FY 2024
I. Public Reporting on the Provider Data Catalog Website
VIII. Civil Money Penalties: Waiver of Hearing, Automatic Reduction
of Penalty Amount
IX. Collection of Information Requirements
X. Response to Comments
XI. Economic Analyses
A. Regulatory Impact Analysis
B. Regulatory Flexibility Act Analysis

[[Page 21317]]

C. Unfunded Mandates Reform Act Analysis
D. Federalism Analysis
E. Regulatory Review Costs

I. Executive Summary

A. Purpose

This proposed rule would update the SNF prospective payment rates
for fiscal year (FY) 2024, as required under section 1888(e)(4)(E) of
the Social Security Act (the Act). It also responds to section
1888(e)(4)(H) of the Act, which requires the Secretary to provide for
publication of certain specified information relating to the payment
update (see section II.C. of this proposed rule) in the Federal
Register before the August 1 that precedes the start of each FY. In
addition, this proposed rule includes proposals for the Skilled Nursing
Facility Quality Reporting Program (SNF QRP) for the FY 2025, FY 2026,
and FY 2027 program years. This proposed rule would add three new
measures to the SNF QRP, remove three measures from the SNF QRP, and
modify one measure in the SNF QRP. This proposed rule would also make
policy changes to the SNF QRP, and begin public reporting of four
measures. In addition, this proposed rule includes an update on our
health equity efforts and requests information on principles we would
use to select and prioritize SNF QRP quality measures in future years.
Finally, this proposed rule includes proposals for the Skilled Nursing
Facility Value-Based Purchasing Program (SNF VBP), including adopting
new quality measures for the SNF VBP Program, proposing several updates
to the Program's scoring methodology, including a Health Equity
Adjustment, and proposing new processes to validate SNF VBP data. We
are proposing changes to the current long-term care (LTC) facility
requirements that would simplify and streamline the current
requirements and thereby increase provider flexibility and reduce
unnecessary administrative burden, while also allowing facilities to
focus on providing healthcare to residents to meet their needs. This
proposal was previously proposed and published in the July 18, 2019
Federal Register in the proposed rule entitled, ``Medicare and Medicaid
Programs; Requirements for Long-Term Care Facilities: Regulatory
Provisions to Promote Efficiency, and Transparency'' (84 FR 34718). We
are re-proposing this proposed revision for a facility to waive its
hearing rights and receive a reduction in civil money penalties in an
effort to gather additional feedback from interested parties.

B. Summary of Major Provisions

In accordance with sections 1888(e)(4)(E)(ii)(IV) and (e)(5) of the
Act, the Federal rates in this proposed rule would reflect an update to
the rates that we published in the SNF PPS final rule for FY 2023 (87
FR 47502, August 3, 2022). In addition, this proposed rule includes a
forecast error adjustment for FY 2024 and includes the second phase of
the PDPM parity adjustment recalibration. This proposed rule also
proposes updates to the diagnosis code mappings used under the PDPM.
Beginning with the FY 2025 SNF QRP, we propose to modify the COVID-
19 Vaccination Coverage among Healthcare Personnel measure, adopt the
Discharge Function Score measure, and remove the (1) Application of
Percent of Long-Term Care Hospital Patients with an Admission and
Discharge Functional Assessment and a Care Plan That Addresses Function
measure, (2) the Application of IRF Functional Outcome Measure: Change
in Self-Care Score for Medical Rehabilitation Patients measure, and (3)
the Application of IRF Functional Outcome Measure: Change in Mobility
Score for Medical Rehabilitation Patients measure. Beginning with the
FY 2026 SNF QRP, we propose to adopt the CoreQ: Short Stay Discharge
measure and the COVID-19 Vaccine: Percent of Patients/Residents Who Are
Up to Date measure. We also propose changes to the SNF QRP data
completion thresholds for the Minimum Data Set (MDS) data items
beginning with the FY 2026 SNF QRP and to make certain revisions to
regulation text at Sec. 413.360. This proposed rule also contains
proposals pertaining to the public reporting of the (1) Transfer of
Health Information to the Patient-Post-Acute Care measure, (2) the
Transfer of Health Information to the Provider-PAC measure, (3) the
Discharge Function Score measure, and (4) the COVID-19 Vaccine: Percent
of Patients/Residents Who Are Up to Date measure. In addition, we are
seeking information on principles for selecting and prioritizing SNF
QRP quality measures and concepts and provide an update on our
continued efforts to close the health equity gap, including under the
SNF QRP.
We are proposing several updates for the SNF VBP Program We are
proposing to adopt a Health Equity Adjustment that rewards top tier
performing SNFs that serve higher proportions of SNF residents with
dual eligibility status, effective with the FY 2027 program year and to
adopt a variable payback percentage to maintain an estimated payback
percentage for all SNFs of no less than 60 percent. We are proposing to
adopt four new quality measures to the SNF VBP Program, one taking
effect beginning with the FY 2026 program year and three taking effect
beginning with the FY 2027 program year. We are also proposing to
refine the Skilled Nursing Facility 30-Day Potentially Preventable
Readmission (SNFPPR) measure specifications and update the name to the
Skilled Nursing Facility Within-Stay Potentially Preventable
Readmission (SNF WS PPR) measure effective with the FY 2028 program
year. We are proposing to adopt new processes to validate SNF VBP
program data.
In addition, we are proposing to eliminate the requirement for
facilities facing a civil money penalty to actively waive their right
to a hearing in writing in order to receive a penalty reduction. We
would create, in its place, a constructive waiver process that would
operate by default when CMS has not received a timely request for a
hearing. The accompanying 35 percent penalty reduction would remain.
This proposed revision would result in lower administrative costs for
most LTC facilities facing civil money penalties (CMPs), and would
streamline and reduce the administrative burden for CMS. This proposal
was previously proposed and published in the July 18, 2019 Federal
Register.

C. Summary of Cost and Benefits

Table 1--Cost and Benefits
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Provision description Total transfers/costs
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FY 2024 SNF PPS payment rate The overall economic impact of this
update. proposed rule is an estimated
increase of $1.2 billion in
aggregate payments to SNFs during
FY 2024.
FY 2025 SNF QRP changes........... The overall economic impact of this
proposed rule to SNFs is an
estimated benefit of $1,037,261 to
SNFs during FY 2025.

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FY 2026 SNF QRP changes........... The overall economic impact of this
proposed rule to SNFs who would be
exempt from the proposed CoreQ:
Short Stay Discharge measure
reporting requirements and the
increase in burden from the
addition of the Patient/Resident
COVID-19 Vaccine measure is an
estimated increase in aggregate
cost from FY 2025 of $866,772.
The overall economic impact of this
proposed rule to SNFs who
participate in the proposed CoreQ:
Short Stay Discharge measure
reporting requirements and the
increase in burden from the
addition of the Patient/Resident
COVID-19 Vaccine measure is an
estimated increase in aggregate
cost from FY 2025 of $61,580,090.
FY 2027 SNF QRP changes........... The overall economic impact of this
proposed rule to SNFs who would be
exempt from the proposed CoreQ:
Short Stay Discharge measure
reporting requirements is an
estimated increase in aggregate
cost from FY 2026 of $88,181.
The overall economic impact of this
proposed rule to SNFs who
participate in the proposed CoreQ:
Short Stay Discharge measure
reporting requirements is an
estimated increase in aggregate
cost from FY 2026 of $63,344,417.
FY 2024 SNF VBP changes........... The overall economic impact of the
SNF VBP Program is an estimated
reduction of $184.85 million in
aggregate payments to SNFs during
FY 2024.
FY 2026 SNF VBP changes........... The overall economic impact of the
SNF VBP Program is an estimated
reduction of $196.50 million in
aggregate payments to SNFs during
FY 2026.
FY 2027 SNF VBP changes........... The overall economic impact of the
SNF VBP Program is an estimated
reduction of $166.86 million in
aggregate payments to SNFs during
FY 2027.
FY 2028 SNF VBP changes........... The overall economic impact of the
SNF VBP Program is an estimated
reduction of $170.98 million in
aggregate payments to SNFs during
FY 2028.
FY 2024 Enforcement Provisions for The overall impact of this
LTC Facilities Requirements regulatory change is an estimated
Changes. administrative cost savings of
$2,299,716 to LTC facilities and
$772,044 to the Federal Government
during FY 2024.
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D. Advancing Health Information Exchange

The Department of Health and Human Services (HHS) has a number of
initiatives designed to encourage and support the adoption of
interoperable health information technology and to promote nationwide
health information exchange to improve health care and patient access
to their digital health information.
To further interoperability in post-acute care settings, CMS and
the Office of the National Coordinator for Health Information
Technology (ONC) participate in the Post-Acute Care Interoperability
Workgroup (PACIO) to facilitate collaboration with interested parties
to develop Health Level Seven International[supreg] (HL7) Fast
Healthcare Interoperability Resource[supreg] (FHIR) standards. These
standards could support the exchange and reuse of patient assessment
data derived from the post-acute care (PAC) setting assessment tools,
such as the minimum data set (MDS), inpatient rehabilitation facility -
patient assessment instrument (IRF-PAI), Long-Term Care Hospital (LTCH)
continuity assessment record and evaluation (CARE) Data Set (LCDS),
outcome and assessment information set (OASIS), and other
sources.1 2 The PACIO Project has focused on HL7 FHIR
implementation guides for: functional status, cognitive status and new
use cases on advance directives, re-assessment timepoints, and Speech,
language, swallowing, cognitive communication and hearing (SPLASCH)
pathology.\3\ We encourage PAC provider and health IT vendor
participation as the efforts advance.
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\1\ HL7 FHIR Release 4. Available at <a href="https://www.hl7.org/fhir/">https://www.hl7.org/fhir/</a>.
\2\ HL7 FHIR. PACIO Functional Status Implementation Guide.
Available at <a href="https://paciowg.github.io/functional-status-ig/">https://paciowg.github.io/functional-status-ig/</a>.
\3\ PACIO Project. Available at <a href="http://pacioproject.org/about/">http://pacioproject.org/about/</a>.
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The CMS Data Element Library (DEL) continues to be updated and
serves as a resource for PAC assessment data elements and their
associated mappings to health IT standards such as Logical Observation
Identifiers Names and Codes (LOINC) and Systematized Nomenclature of
Medicine Clinical Terms (SNOMED).\4\ The DEL furthers CMS' goal of data
standardization and interoperability. Standards in the DEL can be
referenced on the CMS website and in the ONC Interoperability Standards
Advisory (ISA). The 2023 ISA is available at <a href="https://www.healthit.gov/sites/isa/files/inline-files/2023%20Reference%20Edition_ISA_508.pdf">https://www.healthit.gov/sites/isa/files/inline-files/2023%20Reference%20Edition_ISA_508.pdf</a>.
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\4\ Centers for Medicare & Medicaid Services. Newsroom. Fact
sheet: CMS Data Element Library Fact Sheet. June 21, 2018. Available
at <a href="https://www.cms.gov/newsroom/fact-sheets/cms-data-element-library-fact-sheet">https://www.cms.gov/newsroom/fact-sheets/cms-data-element-library-fact-sheet</a>.
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We are also working with ONC to advance the United States Core Data
for Interoperability (USCDI), a standardized set of health data classes
and constituent data elements for nationwide, interoperable health
information exchange.\5\ We are collaborating with ONC and other
Federal agencies to define and prioritize additional data
standardization needs and develop consensus on recommendations for
future versions of the USCDI. We are also directly collaborating with
ONC to build requirements to support data standardization and alignment
with requirements for quality measurement. ONC has launched the USCDI+
initiative to support the identification and establishment of domain
specific datasets that build on the core USCDI foundation.\6\ The
USCDI+ quality measurement domain currently being developed aims to
support defining additional data specifications for quality measurement
that harmonize, where possible, with other Federal agency data needs
and inform supplemental standards necessary to support quality
measurement, including the needs of programs supporting quality
measurement for long-term and post-acute care.
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\5\ USCDI. Available at <a href="https://www.healthit.gov/isa/united-states-core-data-interoperability-uscdi">https://www.healthit.gov/isa/united-states-core-data-interoperability-uscdi</a>.
\6\ USCDI+. Available at <a href="https://www.healthit.gov/topic/interoperability/uscdi-plus">https://www.healthit.gov/topic/interoperability/uscdi-plus</a>.
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The 21st Century Cures Act (Cures Act) (Public Law 114-255, enacted
December 13, 2016) required HHS and ONC to take steps to promote
adoption and use of electronic health record (EHR) technology.\7\
Specifically, section

[[Page 21319]]

4003(b) of the Cures Act required ONC to take steps to advance
interoperability through the development of a Trusted Exchange
Framework and Common Agreement aimed at establishing full network-to
network exchange of health information nationally. On January 18, 2022,
ONC announced a significant milestone by releasing the Trusted Exchange
Framework \8\ and Common Agreement Version 1.\9\ The Trusted Exchange
Framework is a set of non-binding principles for health information
exchange, and the Common Agreement is a contract that advances those
principles. The Common Agreement and the Qualified Health Information
Network Technical Framework Version 1 (incorporated by reference into
the Common Agreement) establish the technical infrastructure model and
governing approach for different health information networks and their
users to securely share clinical information with each other, all under
commonly agreed to terms. The technical and policy architecture of how
exchange occurs under the Common Agreement follows a network-of-
networks structure, which allows for connections at different levels
and is inclusive of many different types of entities at those different
levels, such as health information networks, healthcare practices,
hospitals, public health agencies, and Individual Access Services (IAS)
Providers.\10\ On February 13, 2023, HHS marked a new milestone during
an event at HHS headquarters,\11\ which recognized the first set of
applicants accepted for onboarding to the Common Agreement as Qualified
Health Information Networks (QHINs). QHINs will be entities that will
connect directly to each other to serve as the core for nationwide
interoperability.\12\ For more information, we refer readers to <a href="https://www.healthit.gov/topic/interoperability/trusted-exchange-framework-and-common-agreement">https://www.healthit.gov/topic/interoperability/trusted-exchange-framework-and-common-agreement</a>.
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\7\ Sections 4001 through 4008 of Public Law 114-255. Available
at <a href="https://www.govinfo.gov/content/pkg/PLAW-114publ255/html/PLAW-114publ255.htm">https://www.govinfo.gov/content/pkg/PLAW-114publ255/html/PLAW-114publ255.htm</a>.
\8\ The Trusted Exchange Framework (TEF): Principles for Trusted
Exchange (Jan. 2022). Available at <a href="https://www.healthit.gov/sites/default/files/page/2022-01/Trusted_Exchange_Framework_0122.pdf">https://www.healthit.gov/sites/default/files/page/2022-01/Trusted_Exchange_Framework_0122.pdf</a>.
\9\ Common Agreement for Nationwide Health Information
Interoperability Version 1 (Jan. 2022). Available at <a href="https://www.healthit.gov/sites/default/files/page/2022-01/Common_Agreement_for_Nationwide_Health_Information_Interoperability_Version_1.pdf">https://www.healthit.gov/sites/default/files/page/2022-01/Common_Agreement_for_Nationwide_Health_Information_Interoperability_Version_1.pdf</a>.
\10\ The Common Agreement defines Individual Access Services
(IAS) as ``with respect to the Exchange Purposes definition, the
services provided utilizing the Connectivity Services, to the extent
consistent with Applicable Law, to an Individual with whom the QHIN,
Participant, or Subparticipant has a Direct Relationship to satisfy
that Individual's ability to access, inspect, or obtain a copy of
that Individual's Required Information that is then maintained by or
for any QHIN, Participant, or Subparticipant.'' The Common Agreement
defines ``IAS Provider'' as: ``Each QHIN, Participant, and
Subparticipant that offers Individual Access Services.'' See Common
Agreement for Nationwide Health Information Interoperability Version
1, at 7 (Jan. 2022), <a href="https://www.healthit.gov/sites/default/files/page/2022-01/Common_Agreement_for_Nationwide_Health_Information_Interoperability_Version_1.pdf">https://www.healthit.gov/sites/default/files/page/2022-01/Common_Agreement_for_Nationwide_Health_Information_Interoperability_Version_1.pdf</a>.
\11\ ``Building TEFCA,'' Micky Tripathi and Mariann Yeager,
Health IT Buzz Blog. February 13, 2023. <a href="https://www.healthit.gov/buzz-blog/electronic-health-and-medical-records/interoperability-electronic-health-and-medical-records/building-tefca">https://www.healthit.gov/buzz-blog/electronic-health-and-medical-records/interoperability-electronic-health-and-medical-records/building-tefca</a>.
\12\ The Common Agreement defines a QHIN as ``to the extent
permitted by applicable SOP(s), a Health Information Network that is
a U.S. Entity that has been Designated by the RCE and is a party to
the Common Agreement countersigned by the RCE.'' See Common
Agreement for Nationwide Health Information Interoperability Version
1, at 10 (Jan. 2022), <a href="https://www.healthit.gov/sites/default/files/page/2022-01/Common_Agreement_for_Nationwide_Health_Information_Interoperability_Version_1.pdf">https://www.healthit.gov/sites/default/files/page/2022-01/Common_Agreement_for_Nationwide_Health_Information_Interoperability_Version_1.pdf</a>.
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We invite providers to learn more about these important
developments and how they are likely to affect SNFs.

II. Background on SNF PPS

A. Statutory Basis and Scope

As amended by section 4432 of the Balanced Budget Act of 1997 (BBA
1997) (Pub. L. 105-33, enacted August 5, 1997), section 1888(e) of the
Act provides for the implementation of a PPS for SNFs. This methodology
uses prospective, case-mix adjusted per diem payment rates applicable
to all covered SNF services defined in section 1888(e)(2)(A) of the
Act. The SNF PPS is effective for cost reporting periods beginning on
or after July 1, 1998, and covers all costs of furnishing covered SNF
services (routine, ancillary, and capital-related costs) other than
costs associated with approved educational activities and bad debts.
Under section 1888(e)(2)(A)(i) of the Act, covered SNF services include
post-hospital extended care services for which benefits are provided
under Part A, as well as those items and services (other than a small
number of excluded services, such as physicians' services) for which
payment may otherwise be made under Part B and which are furnished to
Medicare beneficiaries who are residents in a SNF during a covered Part
A stay. A comprehensive discussion of these provisions appears in the
May 12, 1998 interim final rule (63 FR 26252). In addition, a detailed
discussion of the legislative history of the SNF PPS is available
online at <a href="https://www.cms.gov/Medicare/Medicare-Fee-for-Service-Payment/SNFPPS/Downloads/Legislative_History_2018-10-01.pdf">https://www.cms.gov/Medicare/Medicare-Fee-for-Service-Payment/SNFPPS/Downloads/Legislative_History_2018-10-01.pdf</a>.
Section 215(a) of the Protecting Access to Medicare Act of 2014
(PAMA) (Pub. L. 113-93, enacted April 1, 2014) added section 1888(g) to
the Act requiring the Secretary to specify an all-cause all-condition
hospital readmission measure and an all-condition risk-adjusted
potentially preventable hospital readmission measure for the SNF
setting. Additionally, section 215(b) of PAMA added section 1888(h) to
the Act requiring the Secretary to implement a VBP program for SNFs.
Finally, section 2(c)(4) of the Improving Medicare Post-Acute Care
Transformation (IMPACT) Act of 2014 (Pub. L. 113-185, enacted October
6, 2014) amended section 1888(e)(6) of the Act, which requires the
Secretary to implement a QRP for SNFs under which SNFs report data on
measures and resident assessment data. Finally, section 111 of the
Consolidated Appropriations Act, 2021 (CAA 2021) updated section
1888(h) of the Act, authorizing the Secretary to apply up to nine
additional measures to the VBP program for SNFs.

B. Initial Transition for the SNF PPS

Under sections 1888(e)(1)(A) and (e)(11) of the Act, the SNF PPS
included an initial, three-phase transition that blended a facility-
specific rate (reflecting the individual facility's historical cost
experience) with the Federal case-mix adjusted rate. The transition
extended through the facility's first 3 cost reporting periods under
the PPS, up to and including the one that began in FY 2001. Thus, the
SNF PPS is no longer operating under the transition, as all facilities
have been paid at the full Federal rate effective with cost reporting
periods beginning in FY 2002. As we now base payments for SNFs entirely
on the adjusted Federal per diem rates, we no longer include adjustment
factors under the transition related to facility-specific rates for the
upcoming FY.

C. Required Annual Rate Updates

Section 1888(e)(4)(E) of the Act requires the SNF PPS payment rates
to be updated annually. The most recent annual update occurred in a
final rule that set forth updates to the SNF PPS payment rates for FY
2023 (87 FR 47502, August 3, 2022).
Section 1888(e)(4)(H) of the Act specifies that we provide for
publication annually in the Federal Register the following:
<bullet> The unadjusted Federal per diem rates to be applied to
days of covered SNF services furnished during the upcoming FY.

[[Page 21320]]

<bullet> The case-mix classification system to be applied for these
services during the upcoming FY.
<bullet> The factors to be applied in making the area wage
adjustment for these services.
Along with other revisions discussed later in this preamble, this
proposal would set out the required annual updates to the per diem
payment rates for SNFs for FY 2024.

III. Proposed SNF PPS Rate Setting Methodology and FY 2024 Update

A. Federal Base Rates

Under section 1888(e)(4) of the Act, the SNF PPS uses per diem
Federal payment rates based on mean SNF costs in a base year (FY 1995)
updated for inflation to the first effective period of the PPS. We
developed the Federal payment rates using allowable costs from
hospital-based and freestanding SNF cost reports for reporting periods
beginning in FY 1995. The data used in developing the Federal rates
also incorporated a Part B add-on, which is an estimate of the amounts
that, prior to the SNF PPS, would be payable under Part B for covered
SNF services furnished to individuals during the course of a covered
Part A stay in a SNF.
In developing the rates for the initial period, we updated costs to
the first effective year of the PPS (the 15-month period beginning July
1, 1998) using a SNF market basket, and then standardized for
geographic variations in wages and for the costs of facility
differences in case-mix. In compiling the database used to compute the
Federal payment rates, we excluded those providers that received new
provider exemptions from the routine cost limits, as well as costs
related to payments for exceptions to the routine cost limits. Using
the formula that the BBA 1997 prescribed, we set the Federal rates at a
level equal to the weighted mean of freestanding costs plus 50 percent
of the difference between the freestanding mean and weighted mean of
all SNF costs (hospital-based and freestanding) combined. We computed
and applied separately the payment rates for facilities located in
urban and rural areas and adjusted the portion of the Federal rate
attributable to wage-related costs by a wage index to reflect
geographic variations in wages.

B. SNF Market Basket Update

1. SNF Market Basket
Section 1888(e)(5)(A) of the Act requires us to establish a SNF
market basket that reflects changes over time in the prices of an
appropriate mix of goods and services included in covered SNF services.
Accordingly, we have developed a SNF market basket that encompasses the
most commonly used cost categories for SNF routine services, ancillary
services, and capital-related expenses. In the SNF PPS final rule for
FY 2018 (82 FR 36548 through 36566), we rebased and revised the SNF
market basket, which included updating the base year from FY 2010 to
2014. In the SNF PPS final rule for FY 2022 (86 FR 42444 through
42463), we rebased and revised the SNF market basket, which included
updating the base year from 2014 to 2018.
The SNF market basket is used to compute the market basket
percentage increase that is used to update the SNF Federal rates on an
annual basis, as required by section 1888(e)(4)(E)(ii)(IV) of the Act.
This market basket percentage increase is adjusted by a forecast error
adjustment, if applicable, and then further adjusted by the application
of a productivity adjustment as required by section 1888(e)(5)(B)(ii)
of the Act and described in section III.B.4. of this proposed rule.
As outlined in this proposed rule, we propose a FY 2024 SNF market
basket percentage increase of 2.7 percent based on IHS Global Inc.'s
(IGI's) fourth quarter 2022 forecast of the 2018-based SNF market
basket (before application of the forecast error adjustment and
productivity adjustment). We also propose that if more recent data
subsequently become available (for example, a more recent estimate of
the market basket and/or the productivity adjustment), we would use
such data, if appropriate, to determine the FY 2024 SNF market basket
percentage increase, labor-related share relative importance, forecast
error adjustment, or productivity adjustment in the SNF PPS final rule.
2. Market Basket Update Factor for FY 2024
Section 1888(e)(5)(B) of the Act defines the SNF market basket
percentage increase as the percentage change in the SNF market basket
from the midpoint of the previous FY to the midpoint of the current FY.
For the Federal rates outlined in this proposed rule, we use the
percentage change in the SNF market basket to compute the update factor
for FY 2024. This factor is based on the FY 2024 percentage increase in
the 2018-based SNF market basket reflecting routine, ancillary, and
capital-related expenses. Sections 1888(e)(4)(E)(ii)(IV) and
(e)(5)(B)(i) of the Act require that the update factor used to
establish the FY 2024 unadjusted Federal rates be at a level equal to
the SNF market basket percentage increase. Accordingly, we determined
the total growth from the average market basket level for the period of
October 1, 2022 through September 30, 2023 to the average market basket
level for the period of October 1, 2023 through September 30, 2024.
This process yields a percentage increase in the 2018-based SNF market
basket of 2.7 percent.
As further explained in section III.B.3. of this proposed rule, as
applicable, we adjust the percentage increase by the forecast error
adjustment from the most recently available FY for which there is final
data and apply this adjustment whenever the difference between the
forecasted and actual percentage increase in the market basket exceeds
a 0.5 percentage point threshold in absolute terms. Additionally,
section 1888(e)(5)(B)(ii) of the Act requires us to reduce the market
basket percentage increase by the productivity adjustment (the 10-year
moving average of changes in annual economy-wide private nonfarm
business total factor productivity (TFP) for the period ending
September 30, 2024) which is estimated to be 0.2 percentage point, as
described in section III.B.4. of this proposed rule.
We also note that section 1888(e)(6)(A)(i) of the Act provides
that, beginning with FY 2018, SNFs that fail to submit data, as
applicable, in accordance with sections 1888(e)(6)(B)(i)(II) and (III)
of the Act for a fiscal year will receive a 2.0 percentage point
reduction to their market basket update for the fiscal year involved,
after application of section 1888(e)(5)(B)(ii) of the Act (the
productivity adjustment) and section 1888(e)(5)(B)(iii) of the Act (the
market basket increase). In addition, section 1888(e)(6)(A)(ii) of the
Act states that application of the 2.0 percentage point reduction
(after application of section 1888(e)(5)(B)(ii) and (iii) of the Act)
may result in the market basket percentage change being less than zero
for a fiscal year, and may result in payment rates for a fiscal year
being less than such payment rates for the preceding fiscal year.
Section 1888(e)(6)(A)(iii) of the Act further specifies that the 2.0
percentage point reduction is applied in a noncumulative manner, so
that any reduction made under section 1888(e)(6)(A)(i) of the Act
applies only to the fiscal year involved, and that the reduction cannot
be taken into account in computing the payment amount for a subsequent
fiscal year.
3. Forecast Error Adjustment
As discussed in the June 10, 2003 supplemental proposed rule (68 FR
34768) and finalized in the August 4,

[[Page 21321]]

2003 final rule (68 FR 46057 through 46059), Sec. 413.337(d)(2)
provides for an adjustment to account for market basket forecast error.
The initial adjustment for market basket forecast error applied to the
update of the FY 2003 rate for FY 2004 and took into account the
cumulative forecast error for the period from FY 2000 through FY 2002,
resulting in an increase of 3.26 percent to the FY 2004 update.
Subsequent adjustments in succeeding FYs take into account the forecast
error from the most recently available FY for which there is final data
and apply the difference between the forecasted and actual change in
the market basket when the difference exceeds a specified threshold. We
originally used a 0.25 percentage point threshold for this purpose;
however, for the reasons specified in the FY 2008 SNF PPS final rule
(72 FR 43425), we adopted a 0.5 percentage point threshold effective
for FY 2008 and subsequent FYs. As we stated in the final rule for FY
2004 that first issued the market basket forecast error adjustment (68
FR 46058), the adjustment will reflect both upward and downward
adjustments, as appropriate.
For FY 2022 (the most recently available FY for which there is
final data), the forecasted or estimated increase in the SNF market
basket was 2.7 percent, and the actual increase for FY 2022 is 6.3
percent, resulting in the actual increase being 3.6 percentage points
higher than the estimated increase. Accordingly, as the difference
between the estimated and actual amount of change in the market basket
exceeds the 0.5 percentage point threshold, under the policy previously
described (comparing the forecasted and actual market basket percentage
increase), the FY 2024 market basket percentage increase of 2.7 percent
would be adjusted upward to account for the forecast error adjustment
of 3.6 percentage points, resulting in a SNF market basket percentage
increase of 6.3 percent, which is then reduced by the productivity
adjustment of 0.2 percentage point, discussed in section III.B.4. of
this proposed rule. This results in a proposed SNF market basket update
for FY 2024 of 6.1 percent.
Table 2 shows the forecasted and actual market basket increases for
FY 2022.

Table 2--Difference Between the Actual and Forecasted Market Basket Increases for FY 2022
----------------------------------------------------------------------------------------------------------------
Forecasted FY Actual FY 2022 FY 2022
Index 2022 increase * increase ** difference
----------------------------------------------------------------------------------------------------------------
SNF.......................................................... 2.7 6.3 3.6
----------------------------------------------------------------------------------------------------------------
* Published in Federal Register; based on second quarter 2021 IGI forecast (2018-based SNF market basket).
** Based on the fourth quarter 2022 IGI forecast (2018-based SNF market basket).

4. Productivity Adjustment
Section 1888(e)(5)(B)(ii) of the Act, as added by section 3401(b)
of the Patient Protection and Affordable Care Act (Affordable Care Act)
(Pub. L. 111-148, enacted March 23, 2010) requires that, in FY 2012 and
in subsequent FYs, the market basket percentage under the SNF payment
system (as described in section 1888(e)(5)(B)(i) of the Act) is to be
reduced annually by the productivity adjustment described in section
1886(b)(3)(B)(xi)(II) of the Act. Section 1886(b)(3)(B)(xi)(II) of the
Act, in turn, defines the productivity adjustment to be equal to the
10-year moving average of changes in annual economy-wide, private
nonfarm business multifactor productivity (MFP) (as projected by the
Secretary for the 10-year period ending with the applicable FY, year,
cost-reporting period, or other annual period).
The U.S. Department of Labor's Bureau of Labor Statistics (BLS)
publishes the official measure of productivity for the U.S. We note
that previously the productivity measure referenced at section
1886(b)(3)(B)(xi)(II) of the Act was published by BLS as private
nonfarm business multifactor productivity. Beginning with the November
18, 2021 release of productivity data, BLS replaced the term MFP with
TFP. BLS noted that this is a change in terminology only and will not
affect the data or methodology. As a result of the BLS name change, the
productivity measure referenced in section 1886(b)(3)(B)(xi)(II) of the
Act is now published by BLS as private nonfarm business total factor
productivity. We refer readers to the BLS website at <a href="http://www.bls.gov">www.bls.gov</a> for
the BLS historical published TFP data. A complete description of the
TFP projection methodology is available on our website at <a href="https://www.cms.gov/Research-Statistics-Data-and-Systems/Statistics-Trends-and-Reports/MedicareProgramRatesStats/MarketBasketResearch">https://www.cms.gov/Research-Statistics-Data-and-Systems/Statistics-Trends-and-Reports/MedicareProgramRatesStats/MarketBasketResearch</a>. In addition, in
the FY 2022 SNF final rule (86 FR 42429) we noted that, effective with
FY 2022 and forward, we changed the name of this adjustment to refer to
it as the ``productivity adjustment,'' rather than the ``MFP
adjustment.''
Per section 1888(e)(5)(A) of the Act, the Secretary shall establish
a SNF market basket that reflects changes over time in the prices of an
appropriate mix of goods and services included in covered SNF services.
Section 1888(e)(5)(B)(ii) of the Act, added by section 3401(b) of the
Affordable Care Act, requires that for FY 2012 and each subsequent FY,
after determining the market basket percentage described in section
1888(e)(5)(B)(i) of the Act, the Secretary shall reduce such percentage
by the productivity adjustment described in section
1886(b)(3)(B)(xi)(II) of the Act. Section 1888(e)(5)(B)(ii) of the Act
further states that the reduction of the market basket percentage by
the productivity adjustment may result in the market basket percentage
being less than zero for a FY and may result in payment rates under
section 1888(e) of the Act being less than such payment rates for the
preceding fiscal year. Thus, if the application of the productivity
adjustment to the market basket percentage calculated under section
1888(e)(5)(B)(i) of the Act results in a productivity-adjusted market
basket percentage that is less than zero, then the annual update to the
unadjusted Federal per diem rates under section 1888(e)(4)(E)(ii) of
the Act would be negative, and such rates would decrease relative to
the prior FY.
Based on the data available for this FY 2024 SNF PPS proposed rule,
the current proposed productivity adjustment (the 10-year moving
average of changes in annual economy-wide private nonfarm business TFP
for the period ending September 30, 2024) is projected to be 0.2
percentage point.
Consistent with section 1888(e)(5)(B)(i) of the Act and Sec.
413.337(d)(2), and as discussed previously in section III.B.1. of this
proposed rule, the proposed market basket percentage for FY 2024 for
the SNF PPS is based on IGI's fourth quarter 2022 forecast of the SNF
market basket percentage, which is estimated to be 2.7 percent. This
market basket percentage

[[Page 21322]]

is then increased by 3.6 percentage points, due to application of the
forecast error adjustment discussed earlier in section III.B.3. of this
proposed rule. Finally, as discussed earlier in section III.B.4. of
this proposed rule, we are applying a proposed 0.2 percentage point
productivity adjustment to the FY 2024 SNF market basket percentage.
Therefore, the resulting proposed productivity-adjusted FY 2024 SNF
market basket update is equal to 6.1 percent, which reflects a market
basket percentage increase of 2.7 percent, plus the 3.6 percentage
points forecast error adjustment, and less the 0.2 percentage point to
account for the productivity adjustment. Thus, we propose to apply a
net SNF market basket update factor of 6.1 percent in our determination
of the FY 2024 SNF PPS unadjusted Federal per diem rates.
5. Unadjusted Federal Per Diem Rates for FY 2024
As discussed in the FY 2019 SNF PPS final rule (83 FR 39162), in FY
2020 we implemented a new case-mix classification system to classify
SNF patients under the SNF PPS, the PDPM. As discussed in section
V.B.1. of that final rule (83 FR 39189), under PDPM, the unadjusted
Federal per diem rates are divided into six components, five of which
are case-mix adjusted components (Physical Therapy (PT), Occupational
Therapy (OT), Speech-Language Pathology (SLP), Nursing, and Non-Therapy
Ancillaries (NTA)), and one of which is a non-case-mix component, as
existed under the previous RUG-IV model. We propose to use the SNF
market basket, adjusted as described previously in sections III.B.1.
through III.B.4. of this proposed rule, to adjust each per diem
component of the Federal rates forward to reflect the change in the
average prices for FY 2024 from the average prices for FY 2023. We also
propose to further adjust the rates by a wage index budget neutrality
factor, described later in section III.D. of this proposed rule.
Further, in the past, we used the revised Office of Management and
Budget (OMB) delineations adopted in the FY 2015 SNF PPS final rule (79
FR 45632, 45634), with updates as reflected in OMB Bulletin Nos. 15-01
and 17-01, to identify a facility's urban or rural status for the
purpose of determining which set of rate tables would apply to the
facility. As discussed in the FY 2021 SNF PPS proposed and final rules,
we adopted the revised OMB delineations identified in OMB Bulletin No.
18-04 (available at <a href="https://www.whitehouse.gov/wp-content/uploads/2018/09/Bulletin-18-04.pdf">https://www.whitehouse.gov/wp-content/uploads/2018/09/Bulletin-18-04.pdf</a>) to identify a facility's urban or rural status
effective beginning with FY 2021.
Tables 3 and 4 reflect the updated unadjusted Federal rates for FY
2024, prior to adjustment for case-mix.

Table 3--FY 2024 Unadjusted Federal Rate Per Diem--URBAN
--------------------------------------------------------------------------------------------------------------------------------------------------------
Rate component PT OT SLP Nursing NTA Non-case-mix
--------------------------------------------------------------------------------------------------------------------------------------------------------
Per Diem Amount................................... $70.08 $65.23 $26.16 $122.15 $92.16 $109.39
--------------------------------------------------------------------------------------------------------------------------------------------------------

Table 4--FY 2024 Unadjusted Federal Rate Per Diem--RURAL
--------------------------------------------------------------------------------------------------------------------------------------------------------
Rate component PT OT SLP Nursing NTA Non-case-mix
--------------------------------------------------------------------------------------------------------------------------------------------------------
Per Diem Amount................................... $79.88 $73.36 $32.96 $116.71 $88.05 $111.41
--------------------------------------------------------------------------------------------------------------------------------------------------------

C. Case-Mix Adjustment

Under section 1888(e)(4)(G)(i) of the Act, the Federal rate also
incorporates an adjustment to account for facility case-mix, using a
classification system that accounts for the relative resource
utilization of different patient types. The statute specifies that the
adjustment is to reflect both a resident classification system that the
Secretary establishes to account for the relative resource use of
different patient types, as well as resident assessment data and other
data that the Secretary considers appropriate. In the FY 2019 final
rule (83 FR 39162, August 8, 2018), we finalized a new case-mix
classification model, the PDPM, which took effect beginning October 1,
2019. The previous RUG-IV model classified most patients into a therapy
payment group and primarily used the volume of therapy services
provided to the patient as the basis for payment classification, thus
creating an incentive for SNFs to furnish therapy regardless of the
individual patient's unique characteristics, goals, or needs. PDPM
eliminates this incentive and improves the overall accuracy and
appropriateness of SNF payments by classifying patients into payment
groups based on specific, data-driven patient characteristics, while
simultaneously reducing the administrative burden on SNFs.
The PDPM uses clinical data from the MDS to assign case-mix
classifiers to each patient that are then used to calculate a per diem
payment under the SNF PPS, consistent with the provisions of section
1888(e)(4)(G)(i) of the Act. As discussed in section IV.A. of this
proposed rule, the clinical orientation of the case-mix classification
system supports the SNF PPS's use of an administrative presumption that
considers a beneficiary's initial case-mix classification to assist in
making certain SNF level of care determinations. Further, because the
MDS is used as a basis for payment, as well as a clinical assessment,
we have provided extensive training on proper coding and the timeframes
for MDS completion in our Resident Assessment Instrument (RAI) Manual.
As we have stated in prior rules, for an MDS to be considered valid for
use in determining payment, the MDS assessment should be completed in
compliance with the instructions in the RAI Manual in effect at the
time the assessment is completed. For payment and quality monitoring
purposes, the RAI Manual consists of both the Manual instructions and
the interpretive guidance and policy clarifications posted on the
appropriate MDS website at <a href="https://www.cms.gov/Medicare/Quality-Initiatives-Patient-Assessment-Instruments/NursingHomeQualityInits/MDS30RAIManual.html">https://www.cms.gov/Medicare/Quality-Initiatives-Patient-Assessment-Instruments/NursingHomeQualityInits/MDS30RAIManual.html</a>.
Under section 1888(e)(4)(H) of the Act, each update of the payment
rates must include the case-mix classification methodology applicable
for the upcoming FY. The FY 2024 payment rates set forth in this
proposed rule reflect the use of the PDPM case-mix classification
system from October 1, 2023, through September 30, 2024. The case-mix
adjusted PDPM payment rates for FY 2024 are listed separately for urban
and rural SNFs, in Tables 5 and 6 with corresponding case-mix values.

[[Page 21323]]

Given the differences between the previous RUG-IV model and PDPM in
terms of patient classification and billing, it was important that the
format of Tables 5 and 6 reflect these differences. More specifically,
under both RUG-IV and PDPM, providers use a Health Insurance
Prospective Payment System (HIPPS) code on a claim to bill for covered
SNF services. Under RUG-IV, the HIPPS code included the three-character
RUG-IV group into which the patient classified, as well as a two-
character assessment indicator code that represented the assessment
used to generate this code. Under PDPM, while providers still use a
HIPPS code, the characters in that code represent different things. For
example, the first character represents the PT and OT group into which
the patient classifies. If the patient is classified into the PT and OT
group ``TA'', then the first character in the patient's HIPPS code
would be an A. Similarly, if the patient is classified into the SLP
group ``SB'', then the second character in the patient's HIPPS code
would be a B. The third character represents the Nursing group into
which the patient classifies. The fourth character represents the NTA
group into which the patient classifies. Finally, the fifth character
represents the assessment used to generate the HIPPS code.
Tables 5 and 6 reflect the PDPM's structure. Accordingly, Column 1
of Tables 5 and 6 represents the character in the HIPPS code associated
with a given PDPM component. Columns 2 and 3 provide the case-mix index
and associated case-mix adjusted component rate, respectively, for the
relevant PT group. Columns 4 and 5 provide the case-mix index and
associated case-mix adjusted component rate, respectively, for the
relevant OT group. Columns 6 and 7 provide the case-mix index and
associated case-mix adjusted component rate, respectively, for the
relevant SLP group. Column 8 provides the nursing case-mix group (CMG)
that is connected with a given PDPM HIPPS character. For example, if
the patient qualified for the nursing group CBC1, then the third
character in the patient's HIPPS code would be a ``P.'' Columns 9 and
10 provide the case-mix index and associated case-mix adjusted
component rate, respectively, for the relevant nursing group. Finally,
columns 11 and 12 provide the case-mix index and associated case-mix
adjusted component rate, respectively, for the relevant NTA group.
Tables 5 and 6 do not reflect adjustments which may be made to the
SNF PPS rates as a result of the SNF VBP Program, discussed in section
VII. of this proposed rule, or other adjustments, such as the variable
per diem adjustment. Further, in the past, we used the revised OMB
delineations adopted in the FY 2015 SNF PPS final rule (79 FR 45632,
45634), with updates as reflected in OMB Bulletin Nos, 15-01 and 17-01,
to identify a facility's urban or rural status for the purpose of
determining which set of rate tables would apply to the facility. As
discussed in the FY 2021 SNF PPS final rule (85 FR 47594), we adopted
the revised OMB delineations identified in OMB Bulletin No. 18-04
(available at <a href="https://www.whitehouse.gov/wp-content/uploads/2018/09/Bulletin-18-04.pdf">https://www.whitehouse.gov/wp-content/uploads/2018/09/Bulletin-18-04.pdf</a>) to identify a facility's urban or rural status
effective beginning with FY 2021.
In the FY 2023 SNF PPS final rule (87 FR 47502), we finalized a
proposal to recalibrate the PDPM parity adjustment over 2 years
starting in FY 2023, which means that, for each of the PDPM case-mix
adjusted components, we lowered the PDPM parity adjustment factor from
46 percent to 42 percent in FY 2023 and we would further lower the PDPM
parity adjustment factor from 42 percent to 38 percent in FY 2024.
Following this methodology, which is further described in the FY 2023
SNF PPS final rule (87 FR 47525 through 47534), Tables 5 and 6
incorporate the second phase of the PDPM parity adjustment
recalibration.

Table 5--PDPM Case-Mix Adjusted Federal Rates and Associated Indexes--URBAN
[Including the parity adjustment recalibration]
------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
Nursing Nursing
PDPM group PT CMI PT rate OT CMI OT rate SLP CMI SLP rate Nursing CMG CMI rate NTA CMI NTA rate
------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
A.............................................. 1.45 $101.62 1.41 $91.97 0.64 $16.74 ES3.............................. 3.84 $469.06 3.06 $282.01
B.............................................. 1.61 112.83 1.54 100.45 1.72 45.00 ES2.............................. 2.90 354.24 2.39 220.26
C.............................................. 1.78 124.74 1.60 104.37 2.52 65.92 ES1.............................. 2.77 338.36 1.74 160.36
D.............................................. 1.81 126.84 1.45 94.58 1.38 36.10 HDE2............................. 2.27 277.28 1.26 116.12
E.............................................. 1.34 93.91 1.33 86.76 2.21 57.81 HDE1............................. 1.88 229.64 0.91 83.87
F.............................................. 1.52 106.52 1.51 98.50 2.82 73.77 HBC2............................. 2.12 258.96 0.68 62.67
G.............................................. 1.58 110.73 1.55 101.11 1.93 50.49 HBC1............................. 1.76 214.98 ......... .........
H.............................................. 1.10 77.09 1.09 71.10 2.7 70.63 LDE2............................. 1.97 240.64 ......... .........
I.............................................. 1.07 74.99 1.12 73.06 3.34 87.37 LDE1............................. 1.64 200.33 ......... .........
J.............................................. 1.34 93.91 1.37 89.37 2.83 74.03 LBC2............................. 1.63 199.10 ......... .........
K.............................................. 1.44 100.92 1.46 95.24 3.5 91.56 LBC1............................. 1.35 164.90 ......... .........
L.............................................. 1.03 72.18 1.05 68.49 3.98 104.12 CDE2............................. 1.77 216.21 ......... .........
M.............................................. 1.20 84.10 1.23 80.23 ......... ......... CDE1............................. 1.53 186.89 ......... .........
N.............................................. 1.40 98.11 1.42 92.63 ......... ......... CBC2............................. 1.47 179.56 ......... .........
O.............................................. 1.47 103.02 1.47 95.89 ......... ......... CA2.............................. 1.03 125.81 ......... .........
P.............................................. 1.02 71.48 1.03 67.19 ......... ......... CBC1............................. 1.27 155.13 ......... .........
Q.............................................. ......... ......... ......... ......... ......... ......... CA1.............................. 0.89 108.71 ......... .........
R.............................................. ......... ......... ......... ......... ......... ......... BAB2............................. 0.98 119.71 ......... .........
S.............................................. ......... ......... ......... ......... ......... ......... BAB1............................. 0.94 114.82 ......... .........
T.............................................. ......... ......... ......... ......... ......... ......... PDE2............................. 1.48 180.78 ......... .........
U.............................................. ......... ......... ......... ......... ......... ......... PDE1............................. 1.39 169.79 ......... .........
V.............................................. ......... ......... ......... ......... ......... ......... PBC2............................. 1.15 140.47 ......... .........
W.............................................. ......... ......... ......... ......... ......... ......... PA2.............................. 0.67 81.84 ......... .........
X.............................................. ......... ......... ......... ......... ......... ......... PBC1............................. 1.07 130.70 ......... .........
Y.............................................. ......... ......... ......... ......... ......... ......... PA1.............................. 0.62 75.73 ......... .........
------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

Table 6--PDPM Case-Mix Adjusted Federal Rates and Associated Indexes--RURAL
[Including the parity adjustment recalibration]
------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
Nursing Nursing
PDPM group PT CMI PT rate OT CMI OT rate SLP CMI SLP rate Nursing CMG CMI rate NTA CMI NTA rate
------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
A.............................................. 1.45 $115.83 1.41 $103.44 0.64 $21.09 ES3.............................. 3.84 $448.17 3.06 $269.43

[[Page 21324]]

B.............................................. 1.61 128.61 1.54 112.97 1.72 56.69 ES2.............................. 2.90 338.46 2.39 210.44
C.............................................. 1.78 142.19 1.60 117.38 2.52 83.06 ES1.............................. 2.77 323.29 1.74 153.21
D.............................................. 1.81 144.58 1.45 106.37 1.38 45.48 HDE2............................. 2.27 264.93 1.26 110.94
E.............................................. 1.34 107.04 1.33 97.57 2.21 72.84 HDE1............................. 1.88 219.41 0.91 80.13
F.............................................. 1.52 121.42 1.51 110.77 2.82 92.95 HBC2............................. 2.12 247.43 0.68 59.87
G.............................................. 1.58 126.21 1.55 113.71 1.93 63.61 HBC1............................. 1.76 205.41 ......... .........
H.............................................. 1.10 87.87 1.09 79.96 2.7 88.99 LDE2............................. 1.97 229.92 ......... .........
I.............................................. 1.07 85.47 1.12 82.16 3.34 110.09 LDE1............................. 1.64 191.40 ......... .........
J.............................................. 1.34 107.04 1.37 100.50 2.83 93.28 LBC2............................. 1.63 190.24 ......... .........
K.............................................. 1.44 115.03 1.46 107.11 3.5 115.36 LBC1............................. 1.35 157.56 ......... .........
L.............................................. 1.03 82.28 1.05 77.03 3.98 131.18 CDE2............................. 1.77 206.58 ......... .........
M.............................................. 1.20 95.86 1.23 90.23 ......... ......... CDE1............................. 1.53 178.57 ......... .........
N.............................................. 1.40 111.83 1.42 104.17 ......... ......... CBC2............................. 1.47 171.56 ......... .........
O.............................................. 1.47 117.42 1.47 107.84 ......... ......... CA2.............................. 1.03 120.21 ......... .........
P.............................................. 1.02 81.48 1.03 75.56 ......... ......... CBC1............................. 1.27 148.22 ......... .........
Q.............................................. ......... ......... ......... ......... ......... ......... CA1.............................. 0.89 103.87 ......... .........
R.............................................. ......... ......... ......... ......... ......... ......... BAB2............................. 0.98 114.38 ......... .........
S.............................................. ......... ......... ......... ......... ......... ......... BAB1............................. 0.94 109.71 ......... .........
T.............................................. ......... ......... ......... ......... ......... ......... PDE2............................. 1.48 172.73 ......... .........
U.............................................. ......... ......... ......... ......... ......... ......... PDE1............................. 1.39 162.23 ......... .........
V.............................................. ......... ......... ......... ......... ......... ......... PBC2............................. 1.15 134.22 ......... .........
W.............................................. ......... ......... ......... ......... ......... ......... PA2.............................. 0.67 78.20 ......... .........
X.............................................. ......... ......... ......... ......... ......... ......... PBC1............................. 1.07 124.88 ......... .........
Y.............................................. ......... ......... ......... ......... ......... ......... PA1.............................. 0.62 72.36 ......... .........
------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

D. Wage Index Adjustment

Section 1888(e)(4)(G)(ii) of the Act requires that we adjust the
Federal rates to account for differences in area wage levels, using a
wage index that the Secretary determines appropriate. Since the
inception of the SNF PPS, we have used hospital inpatient wage data in
developing a wage index to be applied to SNFs. We propose to continue
this practice for FY 2024, as we continue to believe that in the
absence of SNF-specific wage data, using the hospital inpatient wage
index data is appropriate and reasonable for the SNF PPS. As explained
in the update notice for FY 2005 (69 FR 45786), the SNF PPS does not
use the hospital area wage index's occupational mix adjustment, as this
adjustment serves specifically to define the occupational categories
more clearly in a hospital setting; moreover, the collection of the
occupational wage data under the inpatient prospective payment system
(IPPS) also excludes any wage data related to SNFs. Therefore, we
believe that using the updated wage data exclusive of the occupational
mix adjustment continues to be appropriate for SNF payments. As in
previous years, we would continue to use the pre-reclassified IPPS
hospital wage data, without applying the occupational mix, rural floor,
or outmigration adjustment, as the basis for the SNF PPS wage index.
For FY 2024, the updated wage data are for hospital cost reporting
periods beginning on or after October 1, 2019 and before October 1,
2020 (FY 2020 cost report data).
We note that section 315 of the Medicare, Medicaid, and SCHIP
Benefits Improvement and Protection Act of 2000 (BIPA) (Pub. L. 106-
554, enacted December 21, 2000) gave the Secretary the discretion to
establish a geographic reclassification procedure specific to SNFs, but
only after collecting the data necessary to establish a SNF PPS wage
index that is based on wage data from nursing homes. To date, this has
proven to be unfeasible due to the volatility of existing SNF wage data
and the significant amount of resources that would be required to
improve the quality of the data. More specifically, auditing all SNF
cost reports, similar to the process used to audit inpatient hospital
cost reports for purposes of the IPPS wage index, would place a burden
on providers in terms of recordkeeping and completion of the cost
report worksheet. Adopting such an approach would require a significant
commitment of resources by CMS and the Medicare Administrative
Contractors, potentially far in excess of those required under the
IPPS, given that there are nearly five times as many SNFs as there are
inpatient hospitals. While we continue to believe that the development
of such an audit process could improve SNF cost reports in such a
manner as to permit us to establish a SNF-specific wage index, we do
not believe this undertaking is feasible at this time.
In addition, we propose to continue to use the same methodology
discussed in the SNF PPS final rule for FY 2008 (72 FR 43423) to
address those geographic areas in which there are no hospitals, and
thus, no hospital wage index data on which to base the calculation of
the FY 2022 SNF PPS wage index. For rural geographic areas that do not
have hospitals and, therefore, lack hospital wage data on which to base
an area wage adjustment, we propose to continue using the average wage
index from all contiguous Core-Based Statistical Areas (CBSAs) as a
reasonable proxy. For FY 2024, there are no rural geographic areas that
do not have hospitals, and thus, this methodology will not be applied.
For rural Puerto Rico, we propose not to apply this methodology due to
the distinct economic circumstances there; due to the close proximity
of almost all of Puerto Rico's various urban and non-urban areas, this
methodology would produce a wage index for rural Puerto Rico that is
higher than that in half of its urban areas. Instead, we would continue
using the most recent wage index previously available for that area.
For urban areas without specific hospital wage index data, we propose
to continue using the average wage indexes of all urban areas within
the State to serve as a reasonable proxy for the wage index of that
urban CBSA. For FY 2024, the only urban area without wage index data
available is CBSA 25980, Hinesville-Fort Stewart, GA.
In the SNF PPS final rule for FY 2006 (70 FR 45026, August 4,
2005), we adopted the changes discussed in OMB Bulletin No. 03-04 (June
6, 2003), which announced revised definitions for MSAs and the creation
of micropolitan statistical areas and combined statistical areas. In
adopting the CBSA geographic designations, we

[[Page 21325]]

provided for a 1-year transition in FY 2006 with a blended wage index
for all providers. For FY 2006, the wage index for each provider
consisted of a blend of 50 percent of the FY 2006 MSA-based wage index
and 50 percent of the FY 2006 CBSA-based wage index (both using FY 2002
hospital data). We referred to the blended wage index as the FY 2006
SNF PPS transition wage index. As discussed in the SNF PPS final rule
for FY 2006 (70 FR 45041), after the expiration of this 1-year
transition on September 30, 2006, we used the full CBSA-based wage
index values.
In the FY 2015 SNF PPS final rule (79 FR 45644 through 45646), we
finalized changes to the SNF PPS wage index based on the newest OMB
delineations, as described in OMB Bulletin No. 13-01, beginning in FY
2015, including a 1-year transition with a blended wage index for FY
2015. OMB Bulletin No. 13-01 established revised delineations for
Metropolitan Statistical Areas, Micropolitan Statistical Areas, and
Combined Statistical Areas in the United States and Puerto Rico based
on the 2010 Census, and provided guidance on the use of the
delineations of these statistical areas using standards published in
the June 28, 2010 Federal Register (75 FR 37246 through 37252).
Subsequently, on July 15, 2015, OMB issued OMB Bulletin No. 15-01,
which provided minor updates to and superseded OMB Bulletin No. 13-01
that was issued on February 28, 2013. The attachment to OMB Bulletin
No. 15-01 provided detailed information on the update to statistical
areas since February 28, 2013. The updates provided in OMB Bulletin No.
15-01 were based on the application of the 2010 Standards for
Delineating Metropolitan and Micropolitan Statistical Areas to Census
Bureau population estimates for July 1, 2012 and July 1, 2013 and were
adopted under the SNF PPS in the FY 2017 SNF PPS final rule (81 FR
51983, August 5, 2016). In addition, on August 15, 2017, OMB issued
Bulletin No. 17-01 which announced a new urban CBSA, Twin Falls, Idaho
(CBSA 46300) which was adopted in the SNF PPS final rule for FY 2019
(83 FR 39173, August 8, 2018).
As discussed in the FY 2021 SNF PPS final rule (85 FR 47594), we
adopted the revised OMB delineations identified in OMB Bulletin No. 18-
04 (available at <a href="https://www.whitehouse.gov/wp-content/uploads/2018/09/Bulletin-18-04.pdf">https://www.whitehouse.gov/wp-content/uploads/2018/09/Bulletin-18-04.pdf</a>) beginning October 1, 2020, including a 1-year
transition for FY 2021 under which we applied a 5 percent cap on any
decrease in a hospital's wage index compared to its wage index for the
prior fiscal year (FY 2020). The updated OMB delineations more
accurately reflect the contemporary urban and rural nature of areas
across the country, and the use of such delineations allows us to
determine more accurately the appropriate wage index and rate tables to
apply under the SNF PPS.
In the FY 2023 SNF PPS final rule (87 FR 47521 through 47525), we
finalized a policy to apply a permanent 5 percent cap on any decreases
to a provider's wage index from its wage index in the prior year,
regardless of the circumstances causing the decline. Additionally, we
finalized a policy that a new SNF would be paid the wage index for the
area in which it is geographically located for its first full or
partial FY with no cap applied because a new SNF would not have a wage
index in the prior FY. We amended the SNF PPS regulations at 42 CFR
413.337(b)(4)(ii) to reflect this permanent cap on wage index
decreases. A full discussion of the adoption of this policy is found in
the FY 2023 SNF PPS final rule.
As we previously stated in the FY 2008 SNF PPS proposed and final
rules (72 FR 25538 through 25539, and 72 FR 43423), this and all
subsequent SNF PPS rules and notices are considered to incorporate any
updates and revisions set forth in the most recent OMB bulletin that
applies to the hospital wage data used to determine the current SNF PPS
wage index. OMB issued further revised CBSA delineations in OMB
Bulletin No. 20-01, on March 6, 2020 (available on the web at <a href="https://www.whitehouse.gov/wp-content/uploads/2020/03/Bulletin-20-01.pdf">https://www.whitehouse.gov/wp-content/uploads/2020/03/Bulletin-20-01.pdf</a>).
However, we determined that the changes in OMB Bulletin No. 20-01 do
not impact the CBSA-based labor market area delineations adopted in FY
2021. Therefore, CMS did not propose to adopt the revised OMB
delineations identified in OMB Bulletin No. 20 01 for FY 2022 or 2023,
and for these reasons CMS is likewise not making such a proposal for FY
2024.The wage index applicable to FY 2024 is set forth in Tables A and
B available on the CMS website at <a href="http://www.cms.gov/Medicare/Medicare-Fee-for-Service-Payment/SNFPPS/WageIndex.html">http://www.cms.gov/Medicare/Medicare-Fee-for-Service-Payment/SNFPPS/WageIndex.html</a>.
Once calculated, we would apply the wage index adjustment to the
labor-related portion of the Federal rate. Each year, we calculate a
labor-related share, based on the relative importance of labor-related
cost categories (that is, those cost categories that are labor-
intensive and vary with the local labor market) in the input price
index. In the SNF PPS final rule for FY 2022 (86 FR 42437), we
finalized a proposal to revise the labor-related share to reflect the
relative importance of the 2018-based SNF market basket cost weights
for the following cost categories: Wages and Salaries; Employee
Benefits; Professional Fees: Labor-Related; Administrative and
Facilities Support services; Installation, Maintenance, and Repair
Services; All Other: Labor-Related Services; and a proportion of
Capital-Related expenses. The methodology for calculating the labor-
related portion beginning in FY 2022 is discussed in detail in the FY
2022 SNF PPS final rule (86 FR 42461 through 42463).
We calculate the labor-related relative importance from the SNF
market basket, and it approximates the labor-related portion of the
total costs after taking into account historical and projected price
changes between the base year and FY 2024. The price proxies that move
the different cost categories in the market basket do not necessarily
change at the same rate, and the relative importance captures these
changes. Accordingly, the relative importance figure more closely
reflects the cost share weights for FY 2024 than the base year weights
from the SNF market basket. We calculate the labor-related relative
importance for FY 2024 in four steps. First, we compute the FY 2024
price index level for the total market basket and each cost category of
the market basket. Second, we calculate a ratio for each cost category
by dividing the FY 2024 price index level for that cost category by the
total market basket price index level. Third, we determine the FY 2024
relative importance for each cost category by multiplying this ratio by
the base year (2018) weight. Finally, we add the FY 2024 relative
importance for each of the labor-related cost categories (Wages and
Salaries; Employee Benefits; Professional Fees: Labor-Related;
Administrative and Facilities Support Services; Installation,
Maintenance, and Repair Services; All Other: Labor-Related Services;
and a portion of Capital-Related expenses) to produce the FY 2024
labor-related relative importance.
Table 7 summarizes the proposed labor-related share for FY 2024,
based on IGI's fourth quarter 2022 forecast of the 2018-based SNF
market basket, compared to the labor-related share that was used for
the FY 2023 SNF PPS final rule.

[[Page 21326]]

Table 7--Labor-Related Share, FY 2023 and FY 2024
------------------------------------------------------------------------
Proposed
Relative relative
importance, importance,
labor-related labor-related
share, FY 2023 share, FY 2024
22:2 forecast 22:4 forecast
\1\ \2\
------------------------------------------------------------------------
Wages and salaries...................... 51.9 52.2
Employee benefits....................... 9.5 9.5
Professional fees: Labor-related........ 3.5 3.4
Administrative & facilities support 0.6 0.6
services...............................
Installation, maintenance & repair 0.4 0.4
services...............................
All other: Labor-related services....... 2.0 2.0
Capital-related (.391).................. 2.9 2.9
-------------------------------
Total............................... 70.8 71.0
------------------------------------------------------------------------
\1\ Published in the Federal Register; Based on the second quarter 2022
IHS Global Inc. forecast of the 2018-based SNF market basket.
\2\ Based on the fourth quarter 2022 IHS Global Inc. forecast of the
2018-based SNF market basket.

To calculate the labor portion of the case-mix adjusted per diem
rate, we would multiply the total case-mix adjusted per diem rate,
which is the sum of all five case-mix adjusted components into which a
patient classifies, and the non-case-mix component rate, by the FY 2024
labor-related share percentage provided in Table 7. The remaining
portion of the rate would be the non-labor portion. Under the previous
RUG-IV model, we included tables which provided the case-mix adjusted
RUG-IV rates, by RUG-IV group, broken out by total rate, labor portion
and non-labor portion, such as Table 9 of the FY 2019 SNF PPS final
rule (83 FR 39175). However, as we discussed in the FY 2020 final rule
(84 FR 38738), under PDPM, as the total rate is calculated as a
combination of six different component rates, five of which are case-
mix adjusted, and given the sheer volume of possible combinations of
these five case-mix adjusted components, it is not feasible to provide
tables similar to those that existed in the prior rulemaking.
Therefore, to aid interested parties in understanding the effect of
the wage index on the calculation of the SNF per diem rate, we have
included a hypothetical rate calculation in Table 9.
Section 1888(e)(4)(G)(ii) of the Act also requires that we apply
this wage index in a manner that does not result in aggregate payments
under the SNF PPS that are greater or less than would otherwise be made
if the wage adjustment had not been made. For FY 2024 (Federal rates
effective October 1, 2023), we apply an adjustment to fulfill the
budget neutrality requirement. We meet this requirement by multiplying
each of the components of the unadjusted Federal rates by a budget
neutrality factor, equal to the ratio of the weighted average wage
adjustment factor for FY 2023 to the weighted average wage adjustment
factor for FY 2024. For this calculation, we would use the same FY 2022
claims utilization data for both the numerator and denominator of this
ratio. We define the wage adjustment factor used in this calculation as
the labor portion of the rate component multiplied by the wage index
plus the non-labor portion of the rate component. The proposed budget
neutrality factor for FY 2024 is 0.9998.
We note that if more recent data become available (for example,
revised wage data), we would use such data, as appropriate, to
determine the wage index budget neutrality factor in the SNF PPS final
rule.
We invite public comment on the proposed SNF wage adjustment for FY
2024.

E. SNF Value-Based Purchasing Program

Beginning with payment for services furnished on October 1, 2018,
section 1888(h) of the Act requires the Secretary to reduce the
adjusted Federal per diem rate determined under section 1888(e)(4)(G)
of the Act otherwise applicable to a SNF for services furnished during
a fiscal year by 2 percent, and to adjust the resulting rate for a SNF
by the value-based incentive payment amount earned by the SNF based on
the SNF's performance score for that fiscal year under the SNF VBP
Program. To implement these requirements, we finalized in the FY 2019
SNF PPS final rule the addition of Sec. 413.337(f) to our regulations
(83 FR 39178).
Please see section VII. of this proposed rule for further
discussion of our proposed updates to the SNF VBP Program.

F. Adjusted Rate Computation Example

Tables 8 through 10 provide examples generally illustrating payment
calculations during FY 2024 under PDPM for a hypothetical 30-day SNF
stay, involving the hypothetical SNF XYZ, located in Frederick, MD
(Urban CBSA 23224), for a hypothetical patient who is classified into
such groups that the patient's HIPPS code is NHNC1. Table 8 shows the
adjustments made to the Federal per diem rates (prior to application of
any adjustments under the SNF VBP Program as discussed previously and
taking into account the second phase of the parity adjustment
recalibration discussed in section III.C. of this proposed rule) to
compute the provider's case-mix adjusted per diem rate for FY 2024,
based on the patient's PDPM classification, as well as how the variable
per diem (VPD) adjustment factor affects calculation of the per diem
rate for a given day of the stay. Table 9 shows the adjustments made to
the case-mix adjusted per diem rate from Table 8 to account for the
provider's wage index. The wage index used in this example is based on
the FY 2024 SNF PPS wage index that appears in Table A available on the
CMS website at <a href="http://www.cms.gov/Medicare/Medicare-Fee-for-Service-Payment/SNFPPS/WageIndex.html">http://www.cms.gov/Medicare/Medicare-Fee-for-Service-Payment/SNFPPS/WageIndex.html</a>. Finally, Table 10 provides the case-mix
and wage index adjusted per-diem rate for this patient for each day of
the 30-day stay, as well as the total payment for this stay. Table 10
also includes the VPD adjustment factors for each day of the patient's
stay, to clarify why the patient's per diem rate changes for certain
days of the stay. As illustrated in Table 10, SNF XYZ's total PPS
payment for this particular patient's stay would equal $21,677.34.

[[Page 21327]]

Table 8--PDPM Case-Mix Adjusted Rate Computation Example
----------------------------------------------------------------------------------------------------------------
Per diem rate calculation
-----------------------------------------------------------------------------------------------------------------
VPD
Component Component group Component rate adjustment VPD adj. rate
factor
----------------------------------------------------------------------------------------------------------------
PT.................................... N....................... $98.11 1.00 $98.11
OT.................................... N....................... 92.63 1.00 92.63
SLP................................... H....................... 70.63 1.00 70.63
Nursing............................... N....................... 179.56 1.00 179.56
NTA................................... C....................... 160.36 3.00 481.08
Non-Case-Mix.......................... ........................ 109.39 .............. 109.39
-----------------------------------------------
Total PDPM Case-Mix Adj. Per Diem. ........................ .............. .............. 1,031.40
----------------------------------------------------------------------------------------------------------------

Table 9--Wage Index Adjusted Rate Computation Example
--------------------------------------------------------------------------------------------------------------------------------------------------------
PDPM wage index adjustment calculation
---------------------------------------------------------------------------------------------------------------------------------------------------------
PDPM case-mix Total case mix
HIPPS code adjusted per Labor portion Wage index Wage index Non-labor and wage index
diem adjusted rate portion adj. rate
--------------------------------------------------------------------------------------------------------------------------------------------------------
NHNC1................................................... $1,031.40 $732.29 0.9648 $706.51 $299.11 $1,005.62
--------------------------------------------------------------------------------------------------------------------------------------------------------

Table 10--Adjusted Rate Computation Example
----------------------------------------------------------------------------------------------------------------
Case mix and
NTA VPD PT/OT VPD wage index
Day of stay adjustment adjustment adjusted per
factor factor diem rate
----------------------------------------------------------------------------------------------------------------
1............................................................... 3.0 1.0 $1,005.62
2............................................................... 3.0 1.0 1,005.62
3............................................................... 3.0 1.0 1,005.62
4............................................................... 1.0 1.0 692.92
5............................................................... 1.0 1.0 692.92
6............................................................... 1.0 1.0 692.92
7............................................................... 1.0 1.0 692.92
8............................................................... 1.0 1.0 692.92
9............................................................... 1.0 1.0 692.92
10.............................................................. 1.0 1.0 692.92
11.............................................................. 1.0 1.0 692.92
12.............................................................. 1.0 1.0 692.92
13.............................................................. 1.0 1.0 692.92
14.............................................................. 1.0 1.0 692.92
15.............................................................. 1.0 1.0 692.92
16.............................................................. 1.0 1.0 692.92
17.............................................................. 1.0 1.0 692.92
18.............................................................. 1.0 1.0 692.92
19.............................................................. 1.0 1.0 692.92
20.............................................................. 1.0 1.0 692.92
21.............................................................. 1.0 0.98 689.20
22.............................................................. 1.0 0.98 689.20
23.............................................................. 1.0 0.98 689.20
24.............................................................. 1.0 0.98 689.20
25.............................................................. 1.0 0.98 689.20
26.............................................................. 1.0 0.98 689.20
27.............................................................. 1.0 0.98 689.20
28.............................................................. 1.0 0.96 685.48
29.............................................................. 1.0 0.96 685.48
30.............................................................. 1.0 0.96 685.48
-----------------------------------------------
Total Payment............................................... .............. .............. 21,677.34
----------------------------------------------------------------------------------------------------------------

IV. Additional Aspects of the SNF PPS

A. SNF Level of Care--Administrative Presumption

The establishment of the SNF PPS did not change Medicare's
fundamental requirements for SNF coverage. However, because the case-
mix classification is based, in part, on the beneficiary's need for
skilled nursing care and therapy, we have attempted, where possible, to
coordinate claims review procedures with the existing resident
assessment process and case-mix classification system discussed in
section III.C. of this proposed rule. This

[[Page 21328]]

approach includes an administrative presumption that utilizes a
beneficiary's correct assignment, at the outset of the SNF stay, of one
of the case-mix classifiers designated for this purpose to assist in
making certain SNF level of care determinations.
In accordance with Sec. 413.345, we include in each update of the
Federal payment rates in the Federal Register a discussion of the
resident classification system that provides the basis for case-mix
adjustment. We also designate those specific classifiers under the
case-mix classification system that represent the required SNF level of
care, as provided in 42 CFR 409.30. This designation reflects an
administrative presumption that those beneficiaries who are correctly
assigned one of the designated case-mix classifiers on the initial
Medicare assessment are automatically classified as meeting the SNF
level of care definition up to and including the assessment reference
date (ARD) for that assessment.
A beneficiary who does not qualify for the presumption is not
automatically classified as either meeting or not meeting the level of
care definition, but instead receives an individual determination on
this point using the existing administrative criteria. This presumption
recognizes the strong likelihood that those beneficiaries who are
correctly assigned one of the designated case-mix classifiers during
the immediate post-hospital period would require a covered level of
care, which would be less likely for other beneficiaries.
In the July 30, 1999 final rule (64 FR 41670), we indicated that we
would announce any changes to the guidelines for Medicare level of care
determinations related to modifications in the case-mix classification
structure. The FY 2018 final rule (82 FR 36544) further specified that
we would henceforth disseminate the standard description of the
administrative presumption's designated groups via the SNF PPS website
at <a href="https://www.cms.gov/Medicare/Medicare-Fee-for-Service-Payment/SNFPPS/index.html">https://www.cms.gov/Medicare/Medicare-Fee-for-Service-Payment/SNFPPS/index.html</a> (where such designations appear in the paragraph
entitled ``Case Mix Adjustment''), and would publish such designations
in rulemaking only to the extent that we actually intend to propose
changes in them. Under that approach, the set of case-mix classifiers
designated for this purpose under PDPM was finalized in the FY 2019 SNF
PPS final rule (83 FR 39253) and is posted on the SNF PPS website
(<a href="https://www.cms.gov/Medicare/Medicare-Fee-for-Service-Payment/SNFPPS/index.html">https://www.cms.gov/Medicare/Medicare-Fee-for-Service-Payment/SNFPPS/index.html</a>), in the paragraph entitled ``Case Mix Adjustment.''
However, we note that this administrative presumption policy does
not supersede the SNF's responsibility to ensure that its decisions
relating to level of care are appropriate and timely, including a
review to confirm that any services prompting the assignment of one of
the designated case-mix classifiers (which, in turn, serves to trigger
the administrative presumption) are themselves medically necessary. As
we explained in the FY 2000 SNF PPS final rule (64 FR 41667), the
administrative presumption is itself rebuttable in those individual
cases in which the services actually received by the resident do not
meet the basic statutory criterion of being reasonable and necessary to
diagnose or treat a beneficiary's condition (according to section
1862(a)(1) of the Act). Accordingly, the presumption would not apply,
for example, in those situations where the sole classifier that
triggers the presumption is itself assigned through the receipt of
services that are subsequently determined to be not reasonable and
necessary. Moreover, we want to stress the importance of careful
monitoring for changes in each patient's condition to determine the
continuing need for Part A SNF benefits after the ARD of the initial
Medicare assessment.

B. Consolidated Billing

Sections 1842(b)(6)(E) and 1862(a)(18) of the Act (as added by
section 4432(b) of the BBA 1997) require a SNF to submit consolidated
Medicare bills to its Medicare Administrative Contractor (MAC) for
almost all of the services that its residents receive during the course
of a covered Part A stay. In addition, section 1862(a)(18) of the Act
places the responsibility with the SNF for billing Medicare for
physical therapy, occupational therapy, and speech-language pathology
services that the resident receives during a noncovered stay. Section
1888(e)(2)(A) of the Act excludes a small list of services from the
consolidated billing provision (primarily those services furnished by
physicians and certain other types of practitioners), which remain
separately billable under Part B when furnished to a SNF's Part A
resident. These excluded service categories are discussed in greater
detail in section V.B.2. of the May 12, 1998 interim final rule (63 FR
26295 through 26297).
Effective with services furnished on or after January 1, 2024,
section 4121(a)(4) of the Consolidated Appropriations Act, 2023 (CAA
2023) added marriage and family therapists and mental health counselors
to the list of practitioners at section 1888(e)(2)(A)(ii) of the Act
whose services are excluded from the consolidated billing provision. We
note that there are no rate adjustments required to the per diem to
offset these exclusions, as payments for services made under section
1888(e)(2)(A)(ii) of the Act are not specified under the requirement at
section 1888(e)(4)(G)(iii) of the Act as services for which the
Secretary must ``provide for an appropriate proportional reduction . .
. equal to the aggregate increase in payments attributable to the
exclusion''. See section IV.D. of this proposed rule for a discussion
of the proposed regulatory updates implementing this change.
A detailed discussion of the legislative history of the
consolidated billing provision is available on the SNF PPS website at
<a href="https://www.cms.gov/Medicare/Medicare-Fee-for-Service-Payment/SNFPPS/Downloads/Legislative_History_2018-10-01.pdf">https://www.cms.gov/Medicare/Medicare-Fee-for-Service-Payment/SNFPPS/Downloads/Legislative_History_2018-10-01.pdf</a>. In particular, section
103 of the Medicare, Medicaid, and SCHIP Balanced Budget Refinement Act
of 1999 (BBRA 1999) (Pub. L. 106-113, enacted November 29, 1999)
amended section 1888(e)(2)(A)(iii) of the Act by further excluding a
number of individual high-cost, low probability services, identified by
HCPCS codes, within several broader categories (chemotherapy items,
chemotherapy administration services, radioisotope services, and
customized prosthetic devices) that otherwise remained subject to the
provision. We discuss this BBRA 1999 amendment in greater detail in the
SNF PPS proposed and final rules for FY 2001 (65 FR 19231 through
19232, April 10, 2000, and 65 FR 46790 through 46795, July 31, 2000),
as well as in Program Memorandum AB-00-18 (Change Request #1070),
issued March 2000, which is available online at <a href="http://www.cms.gov/transmittals/downloads/ab001860.pdf">www.cms.gov/transmittals/downloads/ab001860.pdf</a>.
As explained in the FY 2001 proposed rule (65 FR 19232), the
amendments enacted in section 103 of the BBRA 1999 not only identified
for exclusion from this provision a number of particular service codes
within four specified categories (that is, chemotherapy items,
chemotherapy administration services, radioisotope services, and
customized prosthetic devices), but also gave the Secretary the
authority to designate additional, individual services for exclusion
within each of these four specified service categories. In the proposed
rule for FY 2001, we also noted that the BBRA 1999 Conference report
(H.R. Conf. Rep. No. 106-479 at 854 (1999)) characterizes the

[[Page 21329]]

individual services that this legislation targets for exclusion as
high-cost, low probability events that could have devastating financial
impacts because their costs far exceed the payment SNFs receive under
the PPS. According to the conferees, section 103(a) of the BBRA 1999 is
an attempt to exclude from the PPS certain services and costly items
that are provided infrequently in SNFs. By contrast, the amendments
enacted in section 103 of the BBRA 1999 do not designate for exclusion
any of the remaining services within those four categories (thus,
leaving all of those services subject to SNF consolidated billing),
because they are relatively inexpensive and are furnished routinely in
SNFs.
As we further explained in the final rule for FY 2001 (65 FR
46790), and as is consistent with our longstanding policy, any
additional service codes that we might designate for exclusion under
our discretionary authority must meet the same statutory criteria used
in identifying the original codes excluded from consolidated billing
under section 103(a) of the BBRA 1999: they must fall within one of the
four service categories specified in the BBRA 1999; and they also must
meet the same standards of high cost and low probability in the SNF
setting, as discussed in the BBRA 1999 Conference report. Accordingly,
we characterized this statutory authority to identify additional
service codes for exclusion as essentially affording the flexibility to
revise the list of excluded codes in response to changes of major
significance that may occur over time (for example, the development of
new medical technologies or other advances in the state of medical
practice) (65 FR 46791).
Effective with items and services furnished on or after October 1,
2021, section 134 in Division CC of the CAA 2021 established an
additional category of excluded codes in section 1888(e)(2)(A)(iii)(VI)
of the Act, for certain blood clotting factors for the treatment of
patients with hemophilia and other bleeding disorders along with items
and services related to the furnishing of such factors under section
1842(o)(5)(C) of the Act. Like the provisions enacted in the BBRA 1999,
section 1888(e)(2)(A)(iii)(VI) of the Act gives the Secretary the
authority to designate additional items and services for exclusion
within the category of items and services related to blood clotting
factors, as described in that section. Finally, as noted previously in
this proposed rule, section 4121(a)(4) CAA 2023 amended section
1888(e)(2)(A)(ii) of the Act to exclude marriage and family therapist
services and mental health counselor services from consolidated billing
effective January 1, 2024.
In this proposed rule, we specifically invite public comments
identifying HCPCS codes in any of these five service categories
(chemotherapy items, chemotherapy administration services, radioisotope
services, customized prosthetic devices, and blood clotting factors)
representing recent medical advances that might meet our criteria for
exclusion from SNF consolidated billing. We may consider excluding a
particular service if it meets our criteria for exclusion as specified
previously. We request that commenters identify in their comments the
specific HCPCS code that is associated with the service in question, as
well as their rationale for requesting that the identified HCPCS
code(s) be excluded.
We note that the original BBRA amendment and the CAA 2021
identified a set of excluded items and services by means of specifying
individual HCPCS codes within the designated categories that were in
effect as of a particular date (in the case of the BBRA 1999, July 1,
1999, and in the case of the CAA 2021, July 1, 2020), as subsequently
modified by the Secretary. In addition, as noted in this section of the
preamble, the statute (sections 1888(e)(2)(A)(iii)(II) through (VI) of
the Act) gives the Secretary authority to identify additional items and
services for exclusion within the five specified categories of items
and services described in the statute, which are also designated by
HCPCS code. Designating the excluded services in this manner makes it
possible for us to utilize program issuances as the vehicle for
accomplishing routine updates to the excluded codes to reflect any
minor revisions that might subsequently occur in the coding system
itself, such as the assignment of a different code number to a service
already designated as excluded, or the creation of a new code for a
type of service that falls within one of the established exclusion
categories and meets our criteria for exclusion.
Accordingly, in the event that we identify through the current
rulemaking cycle any new services that would actually represent a
substantive change in the scope of the exclusions from SNF consolidated
billing, we would identify these additional excluded services by means
of the HCPCS codes that are in effect as of a specific date (in this
case, October 1, 2023). By making any new exclusions in this manner, we
could similarly accomplish routine future updates of these additional
codes through the issuance of program instructions. The latest list of
excluded codes can be found on the SNF Consolidated Billing website at
<a href="https://www.cms.gov/Medicare/Billing/SNFConsolidatedBilling">https://www.cms.gov/Medicare/Billing/SNFConsolidatedBilling</a>.

C. Payment for SNF-Level Swing-Bed Services

Section 1883 of the Act permits certain small, rural hospitals to
enter into a Medicare swing-bed agreement, under which the hospital can
use its beds to provide either acute- or SNF-level care, as needed. For
critical access hospitals (CAHs), Part A pays on a reasonable cost
basis for SNF-level services furnished under a swing-bed agreement.
However, in accordance with section 1888(e)(7) of the Act, SNF-level
services furnished by non-CAH rural hospitals are paid under the SNF
PPS, effective with cost reporting periods beginning on or after July
1, 2002. As explained in the FY 2002 final rule (66 FR 39562), this
effective date is consistent with the statutory provision to integrate
swing-bed rural hospitals into the SNF PPS by the end of the transition
period, June 30, 2002.
Accordingly, all non-CAH swing-bed rural hospitals have now come
under the SNF PPS. Therefore, all rates and wage indexes outlined in
earlier sections of this proposed rule for the SNF PPS also apply to
all non-CAH swing-bed rural hospitals. As finalized in the FY 2010 SNF
PPS final rule (74 FR 40356 through 40357), effective October 1, 2010,
non-CAH swing-bed rural hospitals are required to complete an MDS 3.0
swing-bed assessment which is limited to the required demographic,
payment, and quality items. As discussed in the FY 2019 SNF PPS final
rule (83 FR 39235), revisions were made to the swing bed assessment to
support implementation of PDPM, effective October 1, 2019. A discussion
of the assessment schedule and the MDS effective beginning FY 2020
appears in the FY 2019 SNF PPS final rule (83 FR 39229 through 39237).
The latest changes in the MDS for swing-bed rural hospitals appear on
the SNF PPS website at <a href="https://www.cms.gov/Medicare/Medicare-Fee-for-Service-Payment/SNFPPS/index.html">https://www.cms.gov/Medicare/Medicare-Fee-for-Service-Payment/SNFPPS/index.html</a>.

D. Revisions to the Regulation Text

We propose to make the following revisions in the regulation text.
To reflect the recently-enacted exclusion of marriage and family
therapist services and mental health counselor services from SNF
consolidated billing at section 1888(e)(2)(A)(ii) of the Act (as
discussed in section IV.B of this proposed rule), we propose to
redesignate current Sec. 411.15(p)(2)(vi) through (xviii) as
Sec. Sec. 411.15(p)(2)(viii) through (xx),

[[Page 21330]]

respectively. In addition, we propose to redesignate Sec. 489.20(s)(6)
through (18) as Sec. 489.20(s)(8) through (20), respectively. We also
propose to add new regulation text at Sec. Sec. 411.15(p)(2)(vi) and
(vii) and 489.20(s)(6) and (7). Specifically, proposed new Sec. Sec.
411.15(p)(2)(vi) and 489.20(s)(6) would reflect the exclusion of
services performed by a marriage and family therapist, as defined in
section 1861(lll)(2) of the Act. Proposed new Sec. Sec.
411.15(p)(2)(vii) and 489.20(s)(7) would reflect the exclusion of
services performed by a mental health counselor, as defined in section
1861(lll)(4) of the Act.

V. Other SNF PPS Issues

A. Technical Updates to PDPM ICD-10 Mappings

1. Background
In the FY 2019 SNF PPS final rule (83 FR 39162), we finalized the
implementation of the Patient Driven Payment Model (PDPM), effective
October 1, 2019. The PDPM utilizes the International Classification of
Diseases, 10th Revision, Clinical Modification (ICD-10-CM, hereafter
referred to as ICD-10) codes in several ways, including using the
patient's primary diagnosis to assign patients to clinical categories
under several PDPM components, specifically the PT, OT, SLP and NTA
components. While other ICD-10 codes may be reported as secondary
diagnoses and designated as additional comorbidities, the PDPM does not
use secondary diagnoses to assign patients to clinical categories. The
ICD-10 code to clinical category mapping used under PDPM (hereafter
referred to as PDPM ICD-10 code mapping) are available on the CMS
website at <a href="https://www.cms.gov/Medicare/Medicare-Fee-for-Service-Payment/SNFPPS/PDPM">https://www.cms.gov/Medicare/Medicare-Fee-for-Service-Payment/SNFPPS/PDPM</a>.
In the FY 2020 SNF PPS final rule (84 FR 38750), we outlined the
process by which we maintain and update the PDPM ICD-10 code mapping,
as well as the SNF Grouper software and other such products related to
patient classification and billing, to ensure that they reflect the
most up to date codes. Beginning with the updates for FY 2020, we apply
nonsubstantive changes to the PDPM ICD-10 code mapping through a
subregulatory process consisting of posting the updated PDPM ICD-10
code mapping on the CMS website at <a href="https://www.cms.gov/Medicare/Medicare-Fee-for-Service-Payment/SNFPPS/PDPM">https://www.cms.gov/Medicare/Medicare-Fee-for-Service-Payment/SNFPPS/PDPM</a>. Such nonsubstantive
changes are limited to those specific changes that are necessary to
maintain consistency with the most current PDPM ICD-10 code mapping.
On the other hand, substantive changes that go beyond the intention
of maintaining consistency with the most current PDPM ICD-10 code
mapping, such as changes to the assignment of a code to a clinical
category or comorbidity list, will be proposed through notice and
comment rulemaking because they are changes that affect policy. We note
that, in the case of any diagnoses that are either currently mapped to
Return to Provider or that we are proposing to classify into this
category, this is not intended to reflect any judgment on the
importance of recognizing and treating these conditions. Rather, we
believe that there are more specific or appropriate diagnoses that
would better serve as the primary diagnosis for a Part-A covered SNF
stay.
2. Proposed Clinical Category Changes for New ICD-10 Codes for FY 2023
Each year, we review the clinical category assigned to new ICD-10
diagnosis codes and propose changing the assignment to another clinical
category if warranted. This year, we are proposing changing the
clinical category assignment for the following five new ICD-10 codes
that were effective on October 1, 2022:
<bullet> D75.84 Other platelet-activating anti-platelet factor 4
(PF4) disorders is mapped to the clinical category of Return to
Provider. Patients with anti-PF4 disorders have blood clotting
disorders. Examples of disorders to be classified with D75.84 are
spontaneous heparin-induced thrombocytopenia (without heparin
exposure), thrombosis with thrombocytopenia syndrome, and vaccine-
induced thrombotic thrombocytopenia. Due to the similarity of this code
to other anti-PF4 disorders, we propose to change the assignment to
Medical Management.
<bullet> F43.81 Prolonged grief disorder and F43.89 Other reactions
to severe stress are mapped to the clinical category of Medical
Management. However, while we believe that SNFs serve an important role
in providing services to those beneficiaries suffering from mental
illness, the SNF setting is not the setting that would be most
beneficial to treat a patient for whom these diagnoses are coded as the
patient's primary diagnosis. For this reason, we propose changing the
clinical category of both codes to Return to Provider. We would
encourage providers to continue reporting these codes as secondary
diagnoses, to ensure that we are able to identify these patients and
that they are receiving appropriate care.
<bullet> G90.A Postural orthostatic tachycardia syndrome (POTS) is
mapped to the clinical category of Acute Neurologic. POTS is a type of
orthostatic intolerance that causes the heart to beat faster than
normal when transitioning from sitting or lying down to standing up,
causing changes in blood pressure, increase in heart rate, and
lightheadedness. The treatment for POTS involves hydration, physical
therapy, and vasoconstrictor medications, which are also treatments for
codes such as E86.0 Dehydration and E86.1 Hypovolemia that are mapped
to the Medical Management category. Since the medical interventions are
similar, we propose changing the assignment for POTS to Medical
Management.
<bullet> K76.82 Hepatic encephalopathy is mapped to the clinical
category of Return to Provider. Hepatic encephalopathy is a condition
resulting from severe liver disease, where toxins build up in the blood
that can affect brain function and lead to a change in medical status.
Prior to the development of this code, multiple codes were used to
characterize this condition such as K76.6 Portal hypertension, K76.7
Hepatorenal syndrome, and K76.89 Other unspecified diseases of liver,
which are mapped to the Medical Management category. Since these codes
describe similar liver conditions, we propose to change the assignment
to Medical Management.
We invite comments on the proposed substantive changes to the PDPM
ICD-10 code mapping discussed in this section, as well as comments on
additional substantive and nonsubstantive changes that commenters
believe are necessary.
3. Proposed Clinical Category Changes for Unspecified Substance Use
Disorder Codes
Effective with stays beginning on and after October 1, 2022, ICD-10
diagnosis codes F10.90 Alcohol use, unspecified, uncomplicated, F10.91
Alcohol use, unspecified, in remission, F11.91 Opioid use, unspecified,
in remission, F12.91 Cannabis use, unspecified, in remission, F13.91
Sedative, hypnotic or anxiolytic use, unspecified, in remission, and
F14.91 Cocaine use, unspecified, in remission went into effect and were
mapped to the clinical category of Medical Management. We reviewed
these 6 unspecified substance use disorder (SUD) codes and propose
changing the assignment from Medical Management to Return to Provider
because the codes are not specific as to if they refer to abuse or
dependence, and there are other specific codes

[[Page 21331]]

available for each of these conditions that would be more appropriate
as a primary diagnosis for a SNF stay. For example, diagnosis code
F10.90 Alcohol use, unspecified, uncomplicated is not specific as to
whether the patient has alcohol abuse or alcohol dependence. There are
more specific codes that could be used instead, such as F10.10 Alcohol
abuse, uncomplicated or F10.20 Alcohol dependence, uncomplicated, that
may serve as the primary diagnosis for a SNF stay and are appropriately
mapped to the clinical category of Medical Management.
Moreover, we believe that increased accuracy of coding primary
diagnoses aligns with CMS' broader efforts to ensure better quality of
care. Therefore, we reviewed all 458 ICD-10 SUD codes from code
categories F10 to F19 and propose reassigning 162 additional
unspecified SUD codes to Return to Provider from Medical Management
because the codes are not specific as to if they refer to abuse or
dependence. We would note that this policy change would not affect a
large number of SNF stays. Our data from FY 2021 show that the 162
unspecified SUD codes were used as primary diagnoses for only 323 SNF
stays (0.02 percent) and as secondary diagnoses for 9,537 SNF stays
(0.54 percent). The purpose of enacting this policy is to continue an
ongoing effort to refine the PDPM ICD-10 code mapping each year to
ensure more accurate coding of primary diagnoses. We would encourage
providers to continue reporting these codes as secondary diagnoses, to
ensure that we are able to identify these patients and that they are
receiving appropriate care.
Table 1, Proposed Clinical Category Changes for Unspecified
Substance Use Disorder Codes, which lists all 168 codes included in
this proposal, is available on the CMS website at <a href="https://www.cms.gov/Medicare/Medicare-Fee-for-Service-Payment/SNFPPS/PDPM">https://www.cms.gov/Medicare/Medicare-Fee-for-Service-Payment/SNFPPS/PDPM</a>. We invite
comments on the proposed substantive changes to the PDPM ICD-10 code
mapping discussed in this section, as well as comments on additional
substantive and nonsubstantive changes that commenters believe are
necessary.
3. Proposed Clinical Category Changes for Certain Subcategory Fracture
Codes
Each year, we invite comments on additional substantive and
nonsubstantive changes that commenters believe are necessary to the
PDPM ICD-10 code mapping. In the FY 2023 final rule (87 FR 47524), we
described how one commenter recommended that CMS consider revising the
PDPM ICD-10 code mapping to reclassify certain subcategory S42.2--
humeral fracture codes. The commenter highlighted that certain
encounter codes for humeral fractures, such as those ending in the 7th
character of A for an initial encounter for fracture, are permitted the
option to be mapped to a surgical clinical category, denoted on the
PDPM ICD-10 code mapping as May be Eligible for One of the Two
Orthopedic Surgery Categories (that is, major joint replacement or
spinal surgery, or orthopedic surgery) if the resident had a major
procedure during the prior inpatient stay that impacts the SNF care
plan. However, the commenter noted that other encounter codes within
the same code family, such as those ending in the 7th character of D
for subsequent encounter for fracture with routine healing, are mapped
to the Non-Surgical Orthopedic/Musculoskeletal without the surgical
option. The commenter requested that we review all subcategory S42.2--
fracture codes to ensure that the appropriate surgical clinical
category could be selected for joint aftercare. Since then, the
commenter has also contacted CMS with a similar suggestion for M84.552D
Pathological fracture in neoplastic disease, left femur, subsequent
encounter for fracture with routine healing.
We have since reviewed the suggested code subcategories to
determine the most efficient manner for addressing this discrepancy. We
propose adding the surgical option that allows 45 subcategory S42.2--
codes for displaced fractures to be eligible for one of two orthopedic
surgery categories. However, we note that this proposal does not extend
to subcategory S42.2--codes for nondisplaced fractures, which typically
do not require surgery. We also propose adding the surgical option to
subcategory 46 M84.5--codes for pathological fractures to certain major
weight-bearing bones to be eligible for one of two orthopedic surgery
categories.
Table 2, Proposed Clinical Category Changes for S42.2 and M84.5
Fracture Codes, which lists all 91 codes included in this proposal, is
available on the CMS website at <a href="https://www.cms.gov/Medicare/Medicare-Fee-for-Service-Payment/SNFPPS/PDPM">https://www.cms.gov/Medicare/Medicare-Fee-for-Service-Payment/SNFPPS/PDPM</a>. We invite comments on the proposed
substantive changes to the PDPM ICD-10 code mapping discussed in this
section, as well as comments on additional substantive and
nonsubstantive changes that commenters believe are necessary.
4. Proposed Clinical Category Changes for Unacceptable Principal
Diagnosis Codes
In the FY 2023 final rule (87 FR 47525) we described how several
commenters referred to instances when SNF claims were denied for
including a primary diagnosis code that is listed on the PDPM ICD-10
code mapping as a valid code, but that is not accepted by some Medicare
Administrative Contractors (MACs) that use the Hospital Inpatient
Prospective Payment System (IPPS) Medicare Code Editor (MCE) lists when
evaluating the primary diagnosis codes listed on SNF claims. In the
IPPS, a patient's diagnosis is entered into the Medicare claims
processing systems and subjected to a series of automated screens
called the MCE. The MCE lists are designed to identify cases that
require further review before classification into an MS-DRG. We note
that all codes on the MCE lists are able to be reported; however, a
code edit may be triggered that the MAC may either choose to bypass or
return to the provider to resubmit. Updates to the MCE lists are
proposed on an annual basis and discussed through IPPS rulemaking when
new codes or policies involving existing codes are introduced.
Commenters recommended that CMS seek to align the PDPM ICD-10 code
mapping with the MCE in treating diagnoses that are Return to Provider,
specifically referring to the Unacceptable Principal Diagnosis edit
code list in the Definition of Medicare Code Edits, which is available
on the CMS website at <a href="https://www.cms.gov/medicare/medicare-fee-for-service-payment/acuteinpatientpps/ms-drg-classifications-and-software">https://www.cms.gov/medicare/medicare-fee-for-service-payment/acuteinpatientpps/ms-drg-classifications-and-software</a>.
The Unacceptable Principal Diagnosis edit code list contains selected
codes that describe a circumstance that influences an individual's
health status but not a current illness or injury, or codes that are
not specific manifestations but may be due to an underlying cause, and
which are considered unacceptable as a principal diagnosis.
We have identified 95 codes from the MCE Unacceptable Principal
Diagnosis edit code list that are mapped to a valid clinical category
on the PDPM ICD-10 code mapping, and that were coded as primary
diagnoses for 14,808 SNF stays (0.84 percent) in FY 2021. Table 3,
Proposed Clinical Category Changes for Unacceptable Principal Diagnosis
Codes, which lists all 95 codes included in this proposal, is available
on the CMS website at <a href="https://www.cms.gov/Medicare/Medicare-Fee-for-Service-Payment/SNFPPS/PDPM">https://www.cms.gov/Medicare/Medicare-Fee-for-Service-Payment/SNFPPS/PDPM</a>. As stated previously in this section of
this

[[Page 21332]]

proposed rule, we note that reporting these codes as a primary
diagnosis for a SNF stay may trigger an edit that the MAC may either
choose to bypass or return to the provider to resubmit, and therefore
not all of these 14,808 stays were denied by the MACs.
After clinical review, we concur that these 95 codes listed in
Table 3 on the CMS website should be assigned to Return to Provider.
For the diagnosis codes listed in Table 3 on the CMS website that are
from the category B95 to B97 range and contain the suffix ``as the
cause of diseases classified elsewhere'', the ICD-10 coding convention
for such etiology and manifestation codes, where certain conditions
have both an underlying etiology and multiple body system
manifestations due to the underlying etiology, dictates that the
underlying condition should be sequenced first, followed by the
manifestation. The ICD-10 coding guidelines also state that codes from
subcategory G92.0--Immune effector cell-associated neurotoxicity
syndrome, subcategory R40.2--Coma scale, and subcategory S06.A--
Traumatic brain injury should only be reported as secondary diagnoses,
as there are more specific codes that should be sequenced first.
Additionally, the ICD-10 coding guidelines state that diagnosis codes
in categories Z90 and Z98 are status codes, indicating that a patient
is either a carrier of a disease or has the sequelae or residual of a
past disease or condition, and are not reasons for a patient to be
admitted to a SNF. Lastly, our clinicians determined that diagnosis
code Z43.9 Encounter for attention to unspecified artificial opening
should be assigned to the clinical category Return to Provider because
there are more specific codes that identify the site for the artificial
opening.
Therefore, we propose to reassign the 95 codes listed in Table 3 on
the CMS website from the current default clinical category on the PDPM
ICD-10 code mapping to Return to Provider. We also propose to make
future updates to align the PDPM ICD-10 code mapping with the MCE
Unacceptable Principal Diagnosis edit code list on a subregulatory
basis going forward. Moreover, we are soliciting comment on aligning
with the MCE Manifestation codes not allowed as principal diagnosis
edit code list, which contains diagnosis codes that are the
manifestation of an underlying disease, not the disease itself, and
therefore should not be used as a principal diagnosis, and the
Questionable admission codes edit code list, which contains diagnoses
codes that are not usually sufficient justification for admission to an
acute care hospital. While these MCE lists were not mentioned by
commenters, we believe that some MACs may be applying these edit lists
to SNF claims and this could cause continued differences between the
PDPM ICD-10 code mapping and the IPPS MCE. If finalized, we also
propose to make future updates to align the PDPM ICD-10 code mapping
with the MCE Manifestation codes not allowed as principal diagnosis
edit code list and the Questionable admission codes edit code list on a
subregulatory basis going forward.
We invite comments on the proposed substantive changes to the PDPM
ICD-10 code mapping discussed in this section, as well as comments on
additional substantive and nonsubstantive changes that commenters
believe are necessary.

VI. Skilled Nursing Facility Quality Reporting Program (SNF QRP)

A. Background and Statutory Authority

The Skilled Nursing Facility Quality Reporting Program (SNF QRP) is
authorized by section 1888(e)(6) of the Act, and it applies to
freestanding SNFs, SNFs affiliated with acute care facilities, and all
non-critical access hospital (CAH) swing-bed rural hospitals. Section
1888(e)(6)(A)(i) of the Act requires the Secretary to reduce by 2
percentage points the annual market basket percentage increase
described in section 1888(e)(5)(B)(i) of the Act applicable to a SNF
for a fiscal year (FY), after application of section 1888(e)(5)(B)(ii)
of the Act (the productivity adjustment) and section 1888(e)(5)(B)(iii)
of the Act, in the case of a SNF that does not submit data in
accordance with sections 1888(e)(6)(B)(i)(II) and (III) of the Act for
that FY. Section 1890A of the Act requires that the Secretary establish
and follow a pre-rulemaking process, in coordination with the
consensus-based entity (CBE) with a contract under section 1890(a) of
the Act, to solicit input from certain groups regarding the selection
of quality and efficiency measures for the SNF QRP. We have codified
our program requirements in our regulations at 42 CFR part 413.
In this proposed rule, we are proposing to adopt three new
measures, remove three existing measures, and modify one existing
measure. Second, we are seeking information on principles we could use
to select and prioritize SNF QRP quality measures in future years.
Third, we are providing an update on our health equity efforts. Fourth,
we are proposing several administrative changes, including a change to
the SNF QRP data completion thresholds and a data submission method for
the proposed CoreQ: Short Stay Discharge questionnaire. Finally, we are
proposing to begin public reporting of four measures. These proposals
are further specified below.

B. General Considerations Used for the Selection of Measures for the
SNF QRP

For a detailed discussion of the considerations we use for the
selection of SNF QRP quality, resource use, or other measures, we refer
readers to the FY 2016 SNF (PPS) final rule (80 FR 46429 through
46431).
1. Quality Measures Currently Adopted for the FY 2024 SNF QRP
The SNF QRP currently has 16 measures for the FY 2024 program year,
which are listed in Table 11. For a discussion of the factors used to
evaluate whether a measure should be removed from the SNF QRP, we refer
readers to Sec. 413.360(b)(2).

Table 11--Quality Measures Currently Adopted for the FY 2024 SNF QRP
------------------------------------------------------------------------
Short name Measure name & data source
------------------------------------------------------------------------
Resident Assessment Instrument Minimum Data Set (Assessment-Based)
------------------------------------------------------------------------
Pressure Ulcer/Injury.................. Changes in Skin Integrity Post-
Acute Care: Pressure Ulcer/
Injury.
Application of Falls................... Application of Percent of
Residents Experiencing One or
More Falls with Major Injury
(Long Stay).
Application of Functional Assessment/ Application of Percent of Long-
Care Plan. Term Care Hospital (LTCH)
Patients with an Admission and
Discharge Functional
Assessment and a Care Plan
That Addresses Function.
Change in Mobility Score............... Application of IRF Functional
Outcome Measure: Change in
Mobility Score for Medical
Rehabilitation Patients.
Discharge Mobility Score............... Application of IRF Functional
Outcome Measure: Discharge
Mobility Score for Medical
Rehabilitation Patients.
Change in Self-Care Score.............. Application of the IRF
Functional Outcome Measure:
Change in Self-Care Score for
Medical Rehabilitation
Patients.
Discharge Self-Care Score.............. Application of IRF Functional
Outcome Measure: Discharge
Self-Care Score for Medical
Rehabilitation Patients.

[[Page 21333]]

DRR.................................... Drug Regimen Review Conducted
With Follow-Up for Identified
Issues-Post Acute Care (PAC)
Skilled Nursing Facility (SNF)
Quality Reporting Program
(QRP).
TOH-Provider *......................... Transfer of Health (TOH)
Information to the Provider
Post-Acute Care (PAC).
TOH-Patient *.......................... Transfer of Health (TOH)
Information to the Patient
Post-Acute Care (PAC).
------------------------------------------------------------------------
Claims-Based
------------------------------------------------------------------------
MSPB SNF............................... Medicare Spending Per
Beneficiary (MSPB)--Post Acute
Care (PAC) Skilled Nursing
Facility (SNF) Quality
Reporting Program (QRP).
DTC.................................... Discharge to Community (DTC)--
Post Acute Care (PAC) Skilled
Nursing Facility (SNF) Quality
Reporting Program (QRP).
PPR.................................... Potentially Preventable 30-Day
Post-Discharge Readmission
Measure for Skilled Nursing
Facility (SNF) Quality
Reporting Program (QRP).
SNF HAI................................ SNF Healthcare-Associated
Infections (HAI) Requiring
Hospitalization.
------------------------------------------------------------------------
NHSN
------------------------------------------------------------------------
HCP COVID-19 Vaccine................... COVID-19 Vaccination Coverage
among Healthcare Personnel
(HCP).
HCP Influenza Vaccine.................. Influenza Vaccination Coverage
among Healthcare Personnel
(HCP).
------------------------------------------------------------------------
* In response to the public health emergency (PHE) for the Coronavirus
Disease 2019 (COVID-19), we released an Interim Final Rule (85 FR
27595 through 27597) which delayed the compliance date for collection
and reporting of the Transfer of Health (TOH) Information measures for
at least 2 full fiscal years after the end of the PHE. The compliance
date for the collection and reporting of the Transfer of Health
Information measures was revised to October 1, 2023 in the FY 2023 SNF
PPS final rule (87 FR 47547 through 47551).

C. SNF QRP Quality Measure Proposals

In this proposed rule, we include SNF QRP proposals for the FY
2025, FY 2026, and FY 2027 program years. This proposed rule would add
new measures to the SNF QRP as well as remove measures from the SNF
QRP. Beginning with the FY 2025 SNF QRP, we are proposing to (1) modify
the COVID-19 Vaccination Coverage among Healthcare Personnel (HCP)
measure, (2) adopt the Discharge Function Score measure,\13\ which we
are specifying under section 1888(e)(6)(B)(i) of the Act, and (3)
remove three current measures: (i) the Application of Percent of Long-
Term Care Hospital (LTCH) Patients with an Admission and Discharge
Functional Assessment and a Care Plan That Addresses Function measure,
(ii) the Application of IRF Functional Outcome Measure: Change in Self-
Care Score for Medical Rehabilitation Patients measure, and (iii) the
Application of IRF Functional Outcome Measure: Change in Mobility Score
for Medical Rehabilitation Patients measure.
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\13\ This measure was submitted to the Measures Under
Consideration (MUC) List as the Cross-Setting Discharge Function
Score. Subsequent to the MAP Workgroup meetings, the measure
developer modified the name. Discharge Function Score for Skilled
Nursing Facilities (SNFs) Technical Report. <a href="https://www.cms.gov/files/document/snf-discharge-function-score-technical-report-february-2023.pdf">https://www.cms.gov/files/document/snf-discharge-function-score-technical-report-february-2023.pdf</a>.
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We are proposing to adopt two new measures beginning with the FY
2026 SNF QRP: (i) the CoreQ: Short Stay Discharge measure which we are
specifying under section 1899B(d)(1) of the Act, and (ii) the COVID-19
Vaccine: Percent of Patients/Residents Who Are Up to Date measure,
which we are specifying under section 1899B(d)(1) of the Act.
1. SNF QRP Quality Measure Proposals Beginning With the FY 2025 SNF QRP
a. Proposed Modification of the COVID-19 Vaccination Coverage Among
Healthcare Personnel (HCP) Measure Beginning With the FY 2025 SNF QRP
(1) Background
On January 31, 2020, the Secretary declared a public health
emergency (PHE) for the United States in response to the global
outbreak of SARS-CoV-2, a novel (new) coronavirus that causes a disease
named ``coronavirus disease 2019'' (COVID-19).\14\ Subsequently, in the
FY 2022 SNF PPS final rule (86 FR 42480 through 42489), we adopted the
COVID-19 Vaccination Coverage among Healthcare Personnel (HCP) (HCP
COVID-19 Vaccine) measure for the SNF QRP. The HCP COVID-19 Vaccine
measure requires each SNF to submit data on the percentage of HCP
eligible to work in the SNF for at least one day during the reporting
period, excluding persons with contraindications to FDA-authorized or -
approved COVID-19 Vaccines, who have received a complete vaccination
course against SARS-CoV-2. Since that time, COVID-19 has continued to
spread domestically and around the world with more than 102.7 million
cases and 1.1 million deaths in the United States as of February 13,
2023.\15\ In recognition of the ongoing significance and complexity of
COVID-19, the Secretary has renewed the PHE on April 21, 2020, July 23,
2020, October 2, 2020, January 7, 2021, April 15, 2021, July 19, 2021,
October 15, 2021, January 14, 2022, April 12, 2022, July 15, 2022,
October 13, 2022, January 11, 2023, and February 9, 2023.\16\ The
Department of Health and Human Services (HHS) announced plans to let
the PHE expire on May 11, 2023 and stated that the public health
response to COVID-19 remains a public health priority with a whole of
government approach to combating the virus, including through
vaccination efforts.\17\
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\14\ U.S. Department of Health and Human Services, Office of the
Assistant Secretary for Preparedness and Response. Determination
that a Public Health Emergency Exists. January 31, 2020. <a href="https://www.phe.gov/emergency/news/healthactions/phe/Pages/2019-nCoV.aspx">https://www.phe.gov/emergency/news/healthactions/phe/Pages/2019-nCoV.aspx</a>.
\15\ Centers for Disease Control and Prevention. COVID Data
Tracker. February 13, 2023. <a href="https://covid.cdc.gov/covid-data-tracker/#datatracker-home">https://covid.cdc.gov/covid-data-tracker/#datatracker-home</a>.
\16\ U.S. Department of Health and Human Services, Office of the
Assistant Secretary for Preparedness and Response. Renewal of
Determination that a Public Health Emergency Exists. February 9,
2023. <a href="https://aspr.hhs.gov/legal/PHE/Pages/COVID19-9Feb2023.aspx">https://aspr.hhs.gov/legal/PHE/Pages/COVID19-9Feb2023.aspx</a>.
\17\ U.S. Department of Health and Human Services. Fact Sheet:
COVID-19 Public Health Emergency Transition Roadmap. February 9,
2023. <a href="https://www.hhs.gov/about/news/2023/02/09/fact-sheet-covid-19-public-health-emergency-transition-roadmap.html">https://www.hhs.gov/about/news/2023/02/09/fact-sheet-covid-19-public-health-emergency-transition-roadmap.html</a>.
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In the FY 2022 SNF PPS final rule (86 FR 42480 through 42489) and
in the Revised Guidance for Staff Vaccination Requirements,\18\ we
stated that vaccination is a critical part of the nation's strategy to
effectively counter the spread of COVID-19. We continue to believe it
is important to incentivize and track HCP vaccination in SNFs through
quality measurement in order to protect HCP, residents, and caregivers,
and to help sustain the ability of SNFs to continue serving their
communities throughout the PHE and beyond. At the time we issued the FY
2022 SNF PPS final rule, the Food and Drug Administration (FDA) had
issued emergency use authorizations (EUAs) for COVID-19 vaccines
manufactured

[[Page 21334]]

by Pfizer-BioNTech,\19\ Moderna,\20\ and Janssen.\21\ The Pfizer-
BioNTech vaccine was authorized for ages 12 and older and the Moderna
and Janssen vaccines for ages 18 and older. Shortly following the
publication of the final rule, on August 23, 2021, the FDA issued an
approval for the Pfizer-BioNTech vaccine, marketed as Comirnaty.\22\
The FDA issued approval for the Moderna vaccine, marketed as Spikevax,
on January 31, 2022 \23\ and an EUA for the Novavax vaccine, on July
13, 2022.\24\ The FDA also issued EUAs for single booster doses of the
then authorized COVID-19 vaccines. As of November 19, 2021 \25\ \26\
\27\ a single booster dose of each COVID-19 vaccine was authorized for
all eligible individuals 18 years of age and older. EUAs were
subsequently issued for a second booster dose of the Pfizer-BioNTech
and Moderna vaccines in certain populations in March 2022.\28\ FDA
first authorized the use of a booster dose of bivalent or ``updated''
COVID-19 vaccines from Pfizer-BioNTech and Moderna in August 2022.\29\
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\18\ Centers for Medicare & Medicaid Services. Revised Guidance
for Staff Vaccination Requirements QSO-23-02-ALL. October 26, 2022.
<a href="https://www.cms.gov/files/document/qs0-23-02-all.pdf">https://www.cms.gov/files/document/qs0-23-02-all.pdf</a>.
\19\ Food and Drug Administration. FDA Takes Key Action in Fight
Against COVID-19 By Issuing Emergency Use Authorization for First
COVID-19 Vaccine. December 11, 2020. <a href="https://www.fda.gov/news-events/press-announcements/fda-takes-key-action-fight-against-covid-19-issuing-emergency-use-authorization-first-covid-19">https://www.fda.gov/news-events/press-announcements/fda-takes-key-action-fight-against-covid-19-issuing-emergency-use-authorization-first-covid-19</a>.
\20\ Food and Drug Administration. FDA Takes Additional Action
in Fight Against COVID-19 By Issuing Emergency Use Authorization for
Second COVID-19 Vaccine. December 18, 2020. <a href="https://www.fda.gov/news-events/press-announcements/fda-takes-additional-action-fight-against-covid-19-issuing-emergency-use-authorization-second-covid">https://www.fda.gov/news-events/press-announcements/fda-takes-additional-action-fight-against-covid-19-issuing-emergency-use-authorization-second-covid</a>.
\21\ Food and Drug Administration. FDA Issues Emergency Use
Authorization for Third COVID-19 Vaccine. February 27, 2021. <a href="https://www.fda.gov/news-events/press-announcements/fda-issues-emergency-use-authorization-third-covid-19-vaccine">https://www.fda.gov/news-events/press-announcements/fda-issues-emergency-use-authorization-third-covid-19-vaccine</a>.
\22\ Food and Drug Administration. FDA Approves First COVID-19
Vaccine. August 23, 2021. <a href="https://www.fda.gov/news-events/press-announcements/fda-approves-first-covid-19-vaccine">https://www.fda.gov/news-events/press-announcements/fda-approves-first-covid-19-vaccine</a>.
\23\ Food and Drug Administration. Coronavirus (COVID-19)
Update: FDA Takes Key Action by Approving Second COVID-19 Vaccine.
January 31, 2022. <a href="https://www.fda.gov/news-events/press-announcements/coronavirus-covid-19-update-fda-takes-key-action-approving-second-covid-19-vaccine">https://www.fda.gov/news-events/press-announcements/coronavirus-covid-19-update-fda-takes-key-action-approving-second-covid-19-vaccine</a>.
\24\ Food and Drug Administration. Coronavirus (COVID-19)
Update: FDA Authorizes Emergency Use of Novavax COVID-19 Vaccine,
Adjuvanted. July 13, 2022. <a href="https://www.fda.gov/news-events/press-announcements/coronavirus-covid-19-update-fda-authorizes-emergency-use-novavax-covid-19-vaccine-adjuvanted">https://www.fda.gov/news-events/press-announcements/coronavirus-covid-19-update-fda-authorizes-emergency-use-novavax-covid-19-vaccine-adjuvanted</a>.
\25\ Food and Drug Administration. FDA Authorizes Booster Dose
of Pfizer-BioNTech COVID-19 Vaccine for Certain Populations.
September 22, 2021. <a href="https://www.fda.gov/news-events/press-announcements/fda-authorizes-booster-dose-pfizer-biontech-covid-19-vaccine-certain-populations">https://www.fda.gov/news-events/press-announcements/fda-authorizes-booster-dose-pfizer-biontech-covid-19-vaccine-certain-populations</a>.
\26\ Food and Drug Administration. Coronavirus (COVID-19)
Update: FDA Takes Additional Actions on the Use of a Booster Dose
for COVID-19 Vaccines. October 20, 2021. <a href="https://www.fda.gov/news-events/press-announcements/coronavirus-covid-19-update-fda-takes-additional-actions-use-booster-dose-covid-19-vaccines">https://www.fda.gov/news-events/press-announcements/coronavirus-covid-19-update-fda-takes-additional-actions-use-booster-dose-covid-19-vaccines</a>.
\27\ Food and Drug Administration. Coronavirus (COVID-19)
Update: FDA Expands Eligibility for COVID-19 Vaccine Boosters.
November 19, 2021. <a href="https://www.fda.gov/news-events/press-announcements/coronavirus-covid-19-update-fda-expands-eligibility-covid-19-vaccine-boosters">https://www.fda.gov/news-events/press-announcements/coronavirus-covid-19-update-fda-expands-eligibility-covid-19-vaccine-boosters</a>.
\28\ Food and Drug Administration. Coronavirus (COVID-19)
Update: FDA Authorizes Second Booster Dose of Two COVID-19 Vaccines
for Older and Immunocompromised Individuals. March 29, 2022. <a href="https://www.fda.gov/news-events/press-announcements/coronavirus-covid-19-update-fda-authorizes-second-booster-dose-two-covid-19-vaccines-older-and">https://www.fda.gov/news-events/press-announcements/coronavirus-covid-19-update-fda-authorizes-second-booster-dose-two-covid-19-vaccines-older-and</a>.
\29\ Food and Drug Administration. Coronavirus (COVID-19)
Update: FDA Authorizes Moderna, Pfizer-BioNTech Bivalent COVID-19
Vaccines for Use as a Booster Dose. August 31, 2022. <a href="https://www.fda.gov/news-events/press-announcements/coronavirus-covid-19-update-fda-authorizes-moderna-pfizer-biontech-bivalent-covid-19-vaccines-use">https://www.fda.gov/news-events/press-announcements/coronavirus-covid-19-update-fda-authorizes-moderna-pfizer-biontech-bivalent-covid-19-vaccines-use</a>.
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(a) Measure Importance
While the impact of COVID-19 vaccines on asymptomatic infection and
transmission is not yet fully known, there are now robust data
available on COVID-19 vaccine effectiveness across multiple populations
against severe illness, hospitalization, and death. Two-dose COVID-19
vaccines from Pfizer-BioNTech and Moderna were found to be 88 percent
and 93 percent effective against hospitalization for COVID-19,
respectively, over 6 months for adults over age 18 without
immunocompromising conditions.\30\ During a SARS-CoV-2 surge in the
spring and summer of 2021, 92 percent of COVID-19 hospitalizations and
91 percent of COVID-19-associated deaths were reported among persons
not fully vaccinated.\31\ Real-world studies of population-level
vaccine effectiveness indicated similarly high rates of efficacy in
preventing SARS-CoV-2 infection among frontline workers in multiple
industries, with a 90 percent effectiveness in preventing symptomatic
and asymptomatic infection from December 2020 through August 2021.\32\
Vaccines have also been highly effective in real-world conditions at
preventing COVID-19 in HCP with up to 96 percent efficacy for fully
vaccinated HCP, including those at risk for severe infection and those
in racial and ethnic groups disproportionately affected by COVID-
19.\33\ In the presence of high community prevalence of COVID-19,
residents of nursing homes with low staff vaccination coverage had
cases of COVID-19 related deaths 195 percent higher than those among
residents of nursing homes with high staff vaccination coverage.\34\
Overall, data demonstrate that COVID-19 vaccines are effective and
prevent severe disease, hospitalization, and death.
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\30\ Centers for Disease Control and Prevention. Morbidity and
Mortality Weekly Report (MMWR). Comparative Effectiveness of
Moderna, Pfizer-BioNTech, and Janssen (Johnson & Johnson) Vaccines
in Preventing COVID-19 Hospitalizations Among Adults Without
Immunocompromising Conditions--United States, March-August 2021.
September 24, 2021. <a href="https://cdc.gov/mmwr/volumes/70/wr/mm7038e1.htm?s_cid=mm7038e1_w">https://cdc.gov/mmwr/volumes/70/wr/mm7038e1.htm?s_cid=mm7038e1_w</a>.
\31\ Centers for Disease Control and Prevention. Morbidity and
Mortality Weekly Report (MMWR). Monitoring Incidence of COVID-19
Cases, Hospitalizations, and Deaths, by Vaccination Status--13 U.S.
Jurisdictions, April 4-July 17, 2021. September 10, 2021. <a href="https://cdc.gov.mmwr/volumes/70/wr/mm7037e1.htm?s_cid=mm7037e1_w">https://cdc.gov.mmwr/volumes/70/wr/mm7037e1.htm?s_cid=mm7037e1_w</a>.
\32\ Centers for Disease Control and Prevention. Morbidity and
Mortality Weekly Report (MMWR). Effectiveness of COVID-19 Vaccines
in Preventing SARS-CoV-2 Infection Among Frontline Workers Before
and During B.1.617.2 (Delta) Variant Predominance--Eight U.S.
Locations, December 2020-August 2021. August 27, 2021. <a href="https://cdc.gov/mmwr/volume/70/wr/mm7034e4.htm?s_cid=mm7034e4_w">https://cdc.gov/mmwr/volume/70/wr/mm7034e4.htm?s_cid=mm7034e4_w</a>.
\33\ Pilishvili T., Gierke R., Fleming-Dutra K.E., et al.
Effectiveness of mRNA Covid-19 Vaccine among U.S. Health Care
Personnel. N Engl J Med. 2021 Dec 16;385(25):e90. doi: 10.1056/
NEJMoa2106599. PMID: 34551224; PMCID: PMC8482809.
\34\ McGarry B.E., Barnett M.L., Grabowski D.C., Gandhi A.D.
Nursing Home Staff Vaccination and Covid-19 Outcomes. N Engl J Med.
2022 Jan 27;386(4):397-398. doi: 10.1056/NEJMc2115674. PMID:
34879189; PMCID: PMC8693685.
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As SARS-CoV-2 persists and evolves, our COVID-19 vaccination
strategy must remain responsive. When we adopted the HCP COVID-19
Vaccine measure in the FY 2022 SNF PPS final rule, we stated that the
need for booster doses of COVID-19 vaccine had not been established and
no additional doses had been recommended (86 FR 42484 through 42485).
We also stated that we believed the numerator was sufficiently broad to
include potential future boosters as part of a ``complete vaccination
course'' and that the measure was sufficiently specified to address
boosters (86 FR 42485). Since we adopted the HCP COVID-19 Vaccine
measure in the FY 2022 SNF PPS final rule, new variants of SARS-CoV-2
have emerged around the world and within the United States.
Specifically, the Omicron variant (and its related subvariants) is
listed as a variant of concern by the Centers for Disease Control and
Prevention (CDC) because it spreads more easily than earlier
variants.\35\ Vaccine manufacturers have responded to the Omicron
variant by developing bivalent COVID-19 vaccines, which include a
component of the original virus strain to provide broad protection
against COVID-19 and a component of the Omicron variant to provide
better protection against COVID-19 caused by the Omicron

[[Page 21335]]

variant.\36\ These booster doses of the bivalent COVID-19 vaccines have
been shown to increase immune response to SARS-CoV-2 variants,
including Omicron, particularly in individuals that are more than 6
months removed from receipt of their primary series.\37\ The FDA issued
EUAs for booster doses of two bivalent COVID-19 vaccines, one from
Pfizer-BioNTech \38\ and one from Moderna,\39\ and strongly encourages
anyone who is eligible to consider receiving a booster dose with a
bivalent COVID-19 vaccine to provide better protection against
currently circulating variants.\40\ COVID-19 booster doses are
associated with a greater reduction in infections among HCP relative to
those who only received primary series vaccination, with a rate of
breakthrough infections among HCP who received only a two-dose regimen
of 21.4 percent compared to a rate of 0.7 percent among boosted
HCP.41 42
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\35\ Centers for Disease Control and Prevention. Variants of the
Virus. <a href="https://www.cdc.gov/coronavirus/2019-ncov/variants/index.html">https://www.cdc.gov/coronavirus/2019-ncov/variants/index.html</a>.
\36\ Food and Drug Administration. COVID-19 Bivalent Vaccine
Boosters. <a href="https://www.fda.gov/emergency-preparedness-and-response/coronavirus-disease-2019-covid-19/covid-19-bivalent-vaccine-boosters">https://www.fda.gov/emergency-preparedness-and-response/coronavirus-disease-2019-covid-19/covid-19-bivalent-vaccine-boosters</a>.
\37\ Chalkias S., Harper C., Vrbicky K., et al. A Bivalent
Omicron-Containing Booster Vaccine Against COVID-19. N Engl J Med.
2022 Oct 6;387(14):1279-1291. doi: 10.1056/NEJMoa2208343. PMID:
36112399; PMCID: PMC9511634.
\38\ Food and Drug Administration. Pfizer-BioNTech COVID-19
Vaccines. <a href="https://www.fda.gov/emergency-preparedness-and-response/coronavirus-disease-2019-covid-19/pfizer-biontech-covid-19-vaccines">https://www.fda.gov/emergency-preparedness-and-response/coronavirus-disease-2019-covid-19/pfizer-biontech-covid-19-vaccines</a>.
\39\ Food and Drug Administration. Moderna COVID-19 Vaccines.
<a href="https://www.fda.gov/emergency-preparedness-and-response/coronavirus-disease-2019-covid-19/moderna-covid-19-vaccines">https://www.fda.gov/emergency-preparedness-and-response/coronavirus-disease-2019-covid-19/moderna-covid-19-vaccines</a>.
\40\ Food and Drug Administration. Coronavirus (COVID-19)
Update: FDA Authorizes Moderna, Pfizer-BioNTech Bivalent COVID-19
Vaccines for Use as a Booster Dose. August 31, 2022. <a href="https://www.fda.gov/news-events/press-announcements/coronavirus-covid-19-update-fda-authorizes-moderna-pfizer-biontech-bivalent-covid-19-vaccines-use">https://www.fda.gov/news-events/press-announcements/coronavirus-covid-19-update-fda-authorizes-moderna-pfizer-biontech-bivalent-covid-19-vaccines-use</a>.
\41\ Prasad N., Derado G., Nanduri S.A., et al. Effectiveness of
a COVID-19 Additional Primary or Booster Vaccine Dose in Preventing
SARS-CoV-2 Infection Among Nursing Home Residents During Widespread
Circulation of the Omicron Variant--United States, February 14-March
27, 2022. Morbidity and Mortality Weekly Report (MMWR). 2022 May
6;71(18):633-637. doi: 10.15585/mmwr.mm7118a4. PMID: 35511708;
PMCID: PMC9098239.
\42\ Oster Y., Benenson S., Nir-Paz R., Buda I., Cohen M.J. The
Effect of a Third BNT162b2 Vaccine on Breakthrough Infections in
Health Care Workers: a Cohort Analysis. Clin Microbiol Infect. 2022
May;28(5):735.e1-735.e3. doi: 10.1016/j.cmi.2022.01.019. PMID:
35143997; PMCID: PMC8820100.
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We believe that vaccination remains the most effective means to
prevent the severe consequences of COVID-19, including severe illness,
hospitalization, and death. Given the availability of vaccine efficacy
data, EUAs issued by the FDA for bivalent boosters, the continued
presence of SARS-CoV-2 in the United States, and variance among rates
of booster dose vaccination, it is important to update the
specifications of the HCP COVID-19 Vaccine measure to reflect recent
updates that explicitly specify for HCP to receive primary series and
booster vaccine doses in a timely manner. Given the persistent spread
of COVID-19, we continue to believe that monitoring and surveillance is
important and provides residents, beneficiaries, and their caregivers
with information to support informed decision making. Beginning with
the FY 2025 SNF QRP, we propose to modify the HCP COVID-19 Vaccine
measure to replace the term ``complete vaccination course'' with the
term ``up to date'' in the HCP vaccination definition. We also propose
to update the numerator to specify the time frames within which an HCP
is considered up to date with recommended COVID-19 vaccines, including
booster doses, beginning with the FY 2025 SNF QRP.
(b) Measure Testing
The CDC conducted beta testing of the modified HCP COVID-19 Vaccine
measure by assessing if the collection of information on additional/
booster vaccine doses received by HCP was feasible, as information on
receipt of booster vaccine doses is required for determining if HCP are
up to date with the current COVID-19 vaccination. Feasibility was
assessed by calculating the proportion of facilities that reported
additional/booster doses of the COVID-19 vaccine. The assessment was
conducted in various facility types, including SNFs, using vaccine
coverage data for the first quarter of calendar year (CY) 2022
(January-March), which was reported through the CDC's National
Healthcare Safety Network (NHSN). Feasibility of reporting additional/
booster doses of vaccine is evident by the fact that 99.2 percent of
SNFs reported vaccination additional/booster coverage data to the NHSN
for the first quarter of 2022.\43\ Additionally, HCP COVID-19 Vaccine
measure scores calculated using January 1-March 31, 2022 data had a
median of 31.8 percent and an interquartile range of 18.9 to 49.7
percent, indicating a measure performance gap as there are clinically
significant differences in booster/additional dose vaccination coverage
rates among SNFs.\44\
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\43\ National Quality Forum. Measure Application Partnership
(MAP) Post-Acute Care/Long-Term Care: 2022-2023 Measures Under
Consideration (MUC) Cycle Measure Specifications. December 1, 2022.
<a href="https://www.qualityforum.org/WorkArea/linkit.aspx?LinkIdentifier=id&ItemID=97883">https://www.qualityforum.org/WorkArea/linkit.aspx?LinkIdentifier=id&ItemID=97883</a>.
\44\ National Quality Forum. Measure Application Partnership
(MAP) Post-Acute Care/Long-Term Care: 2022-2023 Measures Under
Consideration (MUC) Cycle Measure Specifications. December 1, 2022.
<a href="https://www.qualityforum.org/WorkArea/linkit.aspx?LinkIdentifier=id&ItemID=97883">https://www.qualityforum.org/WorkArea/linkit.aspx?LinkIdentifier=id&ItemID=97883</a>.
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(2) Competing and Related Measures
Section 1899B(e)(2)(A) of the Act requires that, absent an
exception under section 1899B(e)(2)(B) of the Act, measures specified
under section 1899B of the Act be endorsed by a consensus-based entity
(CBE) with a contract under section 1890(a). In the case of a specified
area or medical topic determined appropriate by the Secretary for which
a feasible and practical measure has not been endorsed, section
1899B(e)(2)(B) permits the Secretary to specify a measure that is not
so endorsed, as long as due consideration is given to measures that
have been endorsed or adopted by a consensus organization identified by
the Secretary.
The current version of the HCP COVID-19 Vaccine (``Quarterly
Reporting of COVID-19 Vaccination Coverage Among Healthcare
Personnel'') measure recently received endorsement by the CBE on July
26, 2022.\45\ However, this measure received endorsement based on its
specifications depicted in the FY 2022 SNF PPS final rule (86 FR 42480
through 42489), and does not capture information about whether HCP are
up to date with their COVID-19 vaccinations. The proposed modification
of this measure utilizes the term up to date in the HCP vaccination
definition and updates the numerator to specify the time frames within
which an HCP is considered up to date with recommended COVID-19
vaccines, including booster doses. We were unable to identify any CBE-
endorsed measures for SNFs that captured information on whether HCP are
up to date with their COVID-19 vaccinations, and we found no other
feasible and practical measure on this topic.
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\45\ National Quality Forum. 3636 Quarterly Reporting of COVID-
19 Vaccination Coverage among Healthcare Personnel. Accessed
February 6, 2023. Available at <a href="https://www.qualityforum.org/QPS/3636">https://www.qualityforum.org/QPS/3636</a>.
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Therefore, after consideration of other available measures, we find
that the exception under section 1899B(e)(2)(B) of the Act applies and
are proposing the modified measure, HCP COVID-19 Vaccine, beginning
with the FY 2025 SNF QRP. The CDC, the measure developer, is pursuing
CBE endorsement for this modified version of the measure.

[[Page 21336]]

(3) Measure Applications Partnership (MAP) Review
We refer readers to the FY 2022 SNF PPS final rule (86 FR 42482)
for more information on the initial review of the HCP COVID-19 Vaccine
measure by the Measure Application Partnership (MAP).
In accordance with section 1890A of the Act, the pre-rulemaking
process includes making publicly available a list of quality and
efficiency measures, called the Measures Under Consideration (MUC)
List, that the Secretary is considering adopting for use in the
Medicare program(s), including our quality reporting programs. This
allows interested parties to provide recommendations to the Secretary
on the measures included on the MUC List. We submitted the updated
version of the HCP COVID-19 Vaccine measure on the MUC List entitled
``List of Measures under Consideration for December 1, 2022'' \46\ for
the 2022-2023 pre-rulemaking cycle for consideration by the MAP.
Interested parties submitted four comments to the MAP during the pre-
rulemaking process on the proposed modifications of the HCP COVID-19
Vaccine measure. Three commenters noted that it is important that HCP
be vaccinated against COVID-19 and supported measurement and reporting
as an important strategy to help healthcare organizations assess their
performance in achieving high rates of up to date vaccination of their
HCP. One of these commenters noted that the measure would provide
valuable information to the government as part of its ongoing response
to the pandemic. The other two commenters do not believe it should be
used in a pay-for-performance program, and one raised concerns of
potential unintended consequences, such as frequency of reporting and
the potential State regulations with which such a requirement might
conflict. One commenter did not support the measure, raising several
concerns with the measure, including that the data have never been
tested for validity or reliability. Finally, three of the four
commenters raised concern about the difficulty of defining up to date
for purposes of the modified measure.
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\46\ Centers for Medicare & Medicaid Services. Overview of the
List of Measures Under Consideration for December 1, 2022. <a href="https://mmshub.cms.gov/sites/default/files/2022-MUC-List-Overview.pdf">https://mmshub.cms.gov/sites/default/files/2022-MUC-List-Overview.pdf</a>.
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Shortly after publication of the MUC List, several MAP workgroups
met to provide input on the measure. First, the MAP Health Equity
Advisory Group convened on December 6-7, 2022. The MAP Health Equity
Advisory Group questioned whether the measure excludes residents with
contraindications to FDA authorized or approved COVID-19 vaccines, and
whether the measure will be stratified by demographic factors. The
measure developer (that is the CDC) confirmed that HCP with
contraindications to the vaccines are excluded from the measure
denominator, but the measure will not be stratified since the data are
submitted at an aggregate rather than an individual level.
The MAP Rural Health Advisory Group met on December 8-9, 2022,
during which a few members expressed concerns about data collection
burden, given that small rural hospitals may not have employee health
software. The measure developer acknowledged the challenge of getting
adequate documentation and emphasized their goal is to ensure the
measures do not present a burden on the provider. The measure developer
also noted that the model used for the HCP COVID-19 Vaccine measure is
based on the Influenza Vaccination Coverage among HCP measure (CBE
#0431), and it intends to utilize a similar approach to the modified
HCP COVID-19 Vaccine measure if vaccination strategy becomes seasonal.
The measure developer acknowledged that if COVID-19 becomes seasonal,
the measure model could evolve to capture seasonal vaccination.
Next, the MAP Post-Acute Care/Long-Term Care (PAC/LTC) workgroup
met on December 12, 2022 and provided input on the on the modification
for the HCP COVID-19 Vaccine measure. The MAP PAC/LTC workgroup noted
that the previous version of the measure received endorsement from the
CBE (CBE #3636),\47\ and that the CDC intends to submit the updated
measure for endorsement. The PAC/LTC workgroup voted to support the
staff recommendation of conditional support for rulemaking pending
testing indicating the measure is reliable and valid, and endorsement
by the CBE.
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\47\ National Quality Forum. 3636 Quarterly Reporting of COVID-
19 Vaccination Coverage among Healthcare Personnel. Accessed
February 6, 2023. <a href="https://www.qualityforum.org/QPS/3636">https://www.qualityforum.org/QPS/3636</a>.
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Following the PAC/LTC workgroup meeting, a public comment period
was held in which interested parties commented on the PAC/LTC
workgroup's preliminary recommendations, and the MAP received three
comments. Two supported the update to the measure, one of which
strongly supported the vaccination of HCP against COVID-19. Although
these commenters supported the measure, one commenter recommended CBE
endorsement for the updated measure, and encouraged us to monitor any
unintended consequences from the measure. Two commenters noted the
challenges associated with the measure's specifications. Specifically,
one noted the broad definition of the denominator and another
recommended a vaccination exclusion or exception due to religious
beliefs. Finally, one commenter raised issues related to the time lag
between data collection and public reporting on Care Compare and
encouraged us to provide information as to whether the measure is
reflecting vaccination rates accurately and encouraging HCP
vaccination.
The MAP Coordinating Committee convened on January 24-25, 2023,
during which the measure was placed on the consent calendar and
received a final recommendation of conditional support for rulemaking
pending testing indicating the measure is reliable and valid, and
endorsement by the CBE. We refer readers to the final MAP
recommendations, titled 2022-2023 MAP Final Recommendations.\48\
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\48\ 2022-2023 MAP Final Recommendations. <a href="https://mmshub.cms.gov/sites/default/files/2022-2023-MAP-Final-Recommendations-508.xlsx">https://mmshub.cms.gov/sites/default/files/2022-2023-MAP-Final-Recommendations-508.xlsx</a>.
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(4) Quality Measure Calculation
The HCP COVID-19 Vaccine measure is a process measure developed by
the CDC to track COVID-19 vaccination coverage among HCP in facilities
such as SNFs. The HCP COVID-19 Vaccine measure is a process measure and
is not risk-adjusted.
The denominator would be the number of HCP eligible to work in the
facility for at least one day during the reporting period, excluding
persons with contraindications to COVID-19 vaccination that are
described by the CDC.\49\ SNFs report the following four categories of
HCP to NHSN, and the first three categories are included in the measure
denominator:
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\49\ Centers for Disease Control and Prevention.
Contraindications and precautions. <a href="https://www.cdc.gov/vaccines/covid-19/clinical-considerations/interim-considerations-us.html#contraindications">https://www.cdc.gov/vaccines/covid-19/clinical-considerations/interim-considerations-us.html#contraindications</a>.
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<bullet> Employees: This includes all persons who receive a direct
paycheck from the reporting facility (that is, on the facility's
payroll), regardless of clinical responsibility or patient contact.
<bullet> Licensed independent practitioners (LIPs): This includes
physicians (MD, DO), advanced practice nurses, and physician assistants
who are affiliated with the reporting facility, but are not directly
employed by it (that is, they do not receive a paycheck from the

[[Page 21337]]

facility), regardless of clinical responsibility or patient contact.
Post-residency fellows are also included in this category if they are
not on the facility's payroll.
<bullet> Adult students/trainees and volunteers: This includes all
medical, nursing, or other health professional students, interns,
medical residents, or volunteers aged 18 or over who are affiliated
with the healthcare facility, but are not directly employed by it (that
is, they do not receive a direct paycheck from the facility),
regardless of clinical responsibility or patient contact.
<bullet> Other contract personnel: Contract personnel are defined
as persons providing care, treatment, or services at the facility
through a contract who do not fall into any of the above-mentioned
denominator categories. This also includes vendors providing care,
treatment, or services at the facility who may or may not be paid
through a contract. Facilities are required to enter data on other
contract personnel for submission in the NHSN application, but data
from this category are not included in the HCP COVID-19 Vaccine
measure.\50\
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\50\ For more details on the reporting of other contract
personnel, we refer readers to the NHSN COVID-19 Vaccination
Protocol, Weekly COVID-19 Vaccination Module for Healthcare
Personnel, <a href="https://www.cdc.gov/nhsn/pdfs/hps/covidvax/protocol-hcp-508.pdf">https://www.cdc.gov/nhsn/pdfs/hps/covidvax/protocol-hcp-508.pdf</a>.
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The denominator excludes denominator-eligible individuals with
contraindications as defined by the CDC.\51\ We are not proposing any
changes to the denominator exclusions.
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\51\ Centers for Disease Control and Prevention.
Contraindications and precautions. Available at <a href="https://www.cdc.gov/vaccines/covid-19/clinical-considerations/interim-considerations-us.html#contraindications">https://www.cdc.gov/vaccines/covid-19/clinical-considerations/interim-considerations-us.html#contraindications</a>.
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The numerator would be the cumulative number of HCP in the
denominator population who are considered up to date with CDC-
recommended COVID-19 vaccines. Providers should refer to the definition
of up to date as of the first day of the applicable reporting quarter,
which can be found at <a href="https://www.cdc.gov/nhsn/pdfs/hps/covidvax/UpToDateGuidance-508.pdf">https://www.cdc.gov/nhsn/pdfs/hps/covidvax/UpToDateGuidance-508.pdf</a>. For example, for the proposed updated
measure, HCP would be considered up to date during the quarter four of
the CY 2022 reporting period for the SNF QRP if they met one of the
following criteria:
1. Individuals who received an updated bivalent \52\ booster dose,
or
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\52\ The updated (bivalent) Moderna and Pfizer-BioNTech boosters
target the most recent Omicron subvariants. The updated (bivalent)
boosters were recommended by the CDC on September 2, 2022. As of
this date, the original, monovalent mRNA vaccines are no longer
authorized as a booster dose for people ages 12 years and older.
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2a. Individuals who received their last booster dose less than 2
months ago, or
2b. Individuals who completed their primary series \53\ less than 2
months ago.
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\53\ Completing a primary series means receiving a two-dose
series of a COVID-19 vaccine or a single dose of Janssen/J&J COVID-
19 vaccine.
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We note that for purposes of NHSN surveillance, the CDC used this
definition of up to date during quarter 4 2022 surveillance period
(September 26, 2022-December 25, 2022).
We refer readers to <a href="https://www.cdc.gov/nhsn/nqf/index.html">https://www.cdc.gov/nhsn/nqf/index.html</a> for
more details on the measure specifications.
While we are not proposing any changes to the data submission or
reporting process for the HCP COVID-19 Vaccine measure, we are
proposing that for purposes of meeting FY 2025 SNF QRP compliance, SNFs
would report individuals who are up to date beginning in quarter four
of CY 2023. Under the data submission and reporting process, SNFs would
collect the numerator and denominator for the modified HCP COVID-19
Vaccine measure for at least one self-selected week during each month
of the reporting quarter and submit the data to the NHSN Healthcare
Personnel Safety (HPS) Component before the quarterly deadline. If a
SNF submits more than one week of data in a month, the most recent
week's data would be used to calculate the measure. Each quarter, the
CDC would calculate a single quarterly HCP COVID-19 vaccination
coverage rate for each SNF, which would be calculated by taking the
average of the data from the three weekly rates submitted by the SNF
for that quarter. Beginning with the FY 2026 SNF QRP, SNFs would be
required to submit data for the entire calendar year.
We are also proposing that public reporting of the modified version
of the HCP COVID-19 Vaccine measure would begin with the October 2024
Care Compare refresh or as soon as technically feasible.
We invite public comment on our proposal to modify the COVID-19
Vaccination Coverage among Healthcare Personnel (HCP) measure beginning
with the FY 2025 SNF QRP.
b. Proposed Adoption of the Discharge Function Score Measure Beginning
With the FY 2025 SNF QRP
(1) Background
SNFs provide short-term skilled nursing care and rehabilitation
services, including physical and occupational therapy and speech-
language pathology services. The most common resident conditions are
septicemia, joint replacement, heart failure and shock, hip and femur
procedures (not including major joint replacement), and pneumonia.\54\
Septicemia progressing to sepsis is often associated with long-term
functional deficits and increased mortality in survivors.\55\
Rehabilitation of function, however, has been shown to be effective and
is associated with reducing mortality and improving quality of
life.56 57
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\54\ Medicare Payment Advisory Commission. Report to the
Congress: Medicare and the Health Care Delivery System. June 2021.
<a href="https://www.medpac.gov/wp-content/uploads/import_data/scrape_files/docs/default-source/reports/jun21_medpac_report_to_congress_sec.pdf">https://www.medpac.gov/wp-content/uploads/import_data/scrape_files/docs/default-source/reports/jun21_medpac_report_to_congress_sec.pdf</a>.
\55\ Winkler D., Rose N., Freytag A., Sauter W., Spoden M.,
Schettler A., Wedekind L., Storch J., Ditscheid B., Schlattmann P.,
Reinhart K., G[uuml]nster C., Hartog C.S., Fleischmann-Struzek C.
The Effect of Post-acute Rehabilitation on Mortality, Chronic Care
Dependency, Health Care Use and Costs in Sepsis Survivors. Ann Am
Thorac Soc. 2022 Oct 17. doi: 10.1513/AnnalsATS.202203-195OC. Epub
ahead of print. PMID: 36251451.
\56\ Chao P.W., Shih C.J., Lee Y.J., Tseng C.M., Kuo S.C., Shih
Y.N., Chou K.T., Tarng D.C., Li S.Y., Ou S.M., Chen Y.T. Association
of Post discharge Rehabilitation with Mortality in Intensive Care
Unit Survivors of Sepsis. Am J Respir Crit Care Med. 2014 Nov
1;190(9):1003-11. doi: 10.1164/rccm.201406-1170OC. PMID: 25210792.
\57\ Taito S., Taito M., Banno M., Tsujimoto H., Kataoka Y.,
Tsujimoto Y. Rehabilitation for Patients with Sepsis: A Systematic
Review and Meta-Analysis. PLoS One. 2018 Jul 26;13(7):e0201292. doi:
10.1371/journal.pone.0201292. Erratum in: PLoS One. 2019 Aug
21;14(8):e0221224. PMID: 30048540; PMCID: PMC6062068.
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Section 1888(e)(6)(B)(i) of the Act, cross-referencing subsections
(b), (c), and (d) of section 1899B of the Act, requires CMS to develop
and implement standardized quality measures from five quality measure
domains, including the domain of functional status, cognitive function,
and changes in function and cognitive function across the post-acute
care (PAC) settings, including SNFs. To satisfy this requirement, we
adopted the Application of Percent of Long-Term Care Hospital Patients
with an Admission and Discharge Functional Assessment and a Care Plan
That Addresses Function (Application of Functional Assessment/Care
Plan) measure, for the SNF QRP in the FY 2016 SNF PPS final rule (80 FR
46444 through 46453). While this process measure allowed for the
standardization of functional assessments across assessment instruments
and facilitated cross-setting data collection, quality measurement, and
interoperable data exchange, we believe it is now topped out and are
proposing to remove it in section VI.C.1.c. of this proposed rule.
While there are other outcome measures addressing functional status
\58\ that can

[[Page 21338]]

reliably distinguish performance among providers in the SNF QRP, these
outcome measures are not cross-setting in nature because they rely on
functional status items not collected in all PAC settings. In contrast,
a cross-setting functional outcome measure would align measure
specifications across settings, including the use of a common set of
standardized functional assessment data elements.
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\58\ The measures include: IRF Functional Outcome Measure:
Change in Self-Care Score for Medical Rehabilitation Patients, IRF
Functional Outcome Measure: Change in Mobility Score for Medical
Rehabilitation Patients, IRF Functional Outcome Measure: Discharge
Self-Care Score for Medical Rehabilitation Patients, IRF Functional
Outcome Measure: Discharge Mobility Score for Medical Rehabilitation
Patients.
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(a) Measure Importance
Maintenance or improvement of physical function among older adults
is increasingly an important focus of health care. Adults age 65 years
and older constitute the most rapidly growing population in the United
States, and functional capacity in physical (non-psychological) domains
has been shown to decline with age.\59\ Moreover, impaired functional
capacity is associated with poorer quality of life and an increased
risk of all-cause mortality, postoperative complications, and cognitive
impairment, the latter of which can complicate the return of a resident
to the community from post-acute care.60 61 62 Nonetheless,
evidence suggests that physical functional abilities, including
mobility and self-care, are modifiable predictors of resident outcomes
across PAC settings, including functional recovery or decline after
post-acute care,63 64 65 66 67 rehospitalization
rates,68 69 70 discharge to community,71 72 and
falls.\73\
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\59\ High K.P., Zieman S., Gurwitz J., Hill C., Lai J., Robinson
T., Schonberg M., Whitson H. Use of Functional Assessment to Define
Therapeutic Goals and Treatment. J Am Geriatr Soc. 2019
Sep;67(9):1782-1790. doi: 10.1111/jgs.15975. Epub 2019 May 13. PMID:
31081938; PMCID: PMC6955596.
\60\ Clouston S.A., Brewster P., Kuh D., Richards M., Cooper R.,
Hardy R., Rubin M.S., Hofer S.M. The dynamic relationship between
physical function and cognition in longitudinal aging cohorts.
Epidemiol Rev. 2013;35(1):33-50. doi: 10.1093/epirev/mxs004. Epub
2013 Jan 24. PMID: 23349427; PMCID: PMC3578448.
\61\ Michael Y.L., Colditz G.A., Coakley E., Kawachi I. Health
behaviors, social networks, and healthy aging: cross-sectional
evidence from the Nurses' Health Study. Qual Life Res. 1999
Dec;8(8):711-22. doi: 10.1023/a:1008949428041. PMID: 10855345.
\62\ High K.P., Zieman S., Gurwitz J., Hill C., Lai J., Robinson
T., Schonberg M., Whitson H. Use of Functional Assessment to Define
Therapeutic Goals and Treatment. J Am Geriatr Soc. 2019
Sep;67(9):1782-1790. doi: 10.1111/jgs.15975. Epub 2019 May 13. PMID:
31081938; PMCID: PMC6955596.
\63\ Deutsch A., Palmer L., Vaughan M., Schwartz C., McMullen T.
Inpatient Rehabilitation Facility Patients' Functional Abilities and
Validity Evaluation of the Standardized Self-Care and Mobility Data
Elements. Arch Phys Med Rehabil. 2022 Feb 11:S0003-9993(22)00205-2.
doi: 10.1016/j.apmr.2022.01.147. Epub ahead of print. PMID:
35157893.
\64\ Hong I., Goodwin J.S., Reistetter T.A., Kuo Y.F., Mallinson
T., Karmarkar A., Lin Y.L., Ottenbacher K.J. Comparison of
Functional Status Improvements Among Patients With Stroke Receiving
Postacute Care in Inpatient Rehabilitation vs Skilled Nursing
Facilities. JAMA Netw Open. 2019 Dec 2;2(12):e1916646. doi: 10.1001/
jamanetworkopen.2019.16646. PMID: 31800069; PMCID: PMC6902754.
\65\ Alcusky M., Ulbricht C.M., Lapane K.L. Postacute Care
Setting, Facility Characteristics, and Poststroke Outcomes: A
Systematic Review. Arch Phys Med Rehabil. 2018;99(6):1124-1140.e9.
doi:10.1016/j.apmr.2017.09.005. PMID: 28965738; PMCID: PMC5874162.
\66\ Chu C.H., Quan A.M.L, McGilton K.S. Depression and
Functional Mobility Decline in Long Term Care Home Residents with
Dementia: a Prospective Cohort Study. Can Geriatr J. 2021;24(4):325-
331. doi:10.5770/cgj.24.511. PMID: 34912487; PMCID: PMC8629506.
\67\ Lane N.E., Stukel T.A., Boyd C.M., Wodchis W.P. Long-Term
Care Residents' Geriatric Syndromes at Admission and Disablement
Over Time: An Observational Cohort Study. J Gerontol A Biol Sci Med
Sci. 2019;74(6):917-923. doi:10.1093/gerona/gly151. PMID: 29955879;
PMCID: PMC6521919.
\68\ Li C.Y., Haas A., Pritchard K.T., Karmarkar A., Kuo Y.F.,
Hreha K., Ottenbacher K.J. Functional Status Across Post-Acute
Settings is Associated With 30-Day and 90-Day Hospital Readmissions.
J Am Med Dir Assoc. 2021 Dec;22(12):2447-2453.e5. doi: 10.1016/
j.jamda.2021.07.039. Epub 2021 Aug 30. PMID: 34473961; PMCID:
PMC8627458.
\69\ Middleton A., Graham J.E., Lin Y.L., Goodwin J.S., Bettger
J.P., Deutsch A., Ottenbacher K.J. Motor and Cognitive Functional
Status Are Associated with 30-day Unplanned Rehospitalization
Following Post-Acute Care in Medicare Fee-for-Service Beneficiaries.
J Gen Intern Med. 2016 Dec;31(12):1427-1434. doi: 10.1007/s11606-
016-3704-4. Epub 2016 Jul 20. PMID: 27439979; PMCID: PMC5130938.
\70\ Gustavson A.M., Malone D.J., Boxer R.S., Forster J.E.,
Stevens-Lapsley J.E. Application of High-Intensity Functional
Resistance Training in a Skilled Nursing Facility: An Implementation
Study. Phys Ther. 2020;100(10):1746-1758. doi: 10.1093/ptj/pzaa126.
PMID: 32750132; PMCID: PMC7530575.
\71\ Minor M., Jaywant A., Toglia J., Campo M., O'Dell M.W.
Discharge Rehabilitation Measures Predict Activity Limitations in
Patients with Stroke Six Months after Inpatient Rehabilitation. Am J
Phys Med Rehabil. 2021 Oct 20. doi: 10.1097/PHM.0000000000001908.
Epub ahead of print. PMID: 34686630.
\72\ Dubin R., Veith J.M., Grippi M.A., McPeake J., Harhay M.O.,
Mikkelsen M.E. Functional Outcomes, Goals, and Goal Attainment among
Chronically Critically Ill Long-Term Acute Care Hospital Patients.
Ann Am Thorac Soc. 2021;18(12):2041-2048. doi:10.1513/
AnnalsATS.202011-1412OC. PMID: 33984248; PMCID: PMC8641806.
\73\ Hoffman G.J., Liu H., Alexander N.B., Tinetti M., Braun
T.M., Min L.C. Posthospital Fall Injuries and 30-Day Readmissions in
Adults 65 Years and Older. JAMA Netw Open. 2019 May 3;2(5):e194276.
doi: 10.1001/jamanetworkopen.2019.4276. PMID: 31125100; PMCID:
PMC6632136.
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The implementation of interventions that improve residents'
functional outcomes and reduce the risks of associated undesirable
outcomes as a part of a resident-centered care plan is essential to
maximizing functional improvement. For many people, the overall goals
of SNF care may include optimizing functional improvement, returning to
a previous level of independence, maintaining functional abilities, or
avoiding institutionalization. Studies have suggested that
rehabilitation services provided in SNFs can improve residents'
mobility and functional independence for residents with various
diagnoses, including cardiovascular and pulmonary conditions,
orthopedic conditions, and stroke.74 75 Moreover, studies
found an association between the level of therapy intensity and better
functional improvement, suggesting that assessment of functional status
as a health outcome in SNFs can provide valuable information in
determining treatment decisions throughout the care continuum, such as
the need for rehabilitation services, and discharge
planning,76 77 78 as well as provide information to
consumers about the effectiveness of skilled nursing services and
rehabilitation services delivered. Because evidence shows that older
adults experience aging heterogeneously and require individualized and
comprehensive health care, functional status can serve as a vital
component in informing the provision of health care and thus indicate a
SNF's quality of care.79 80
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\74\ Jette D.U., Warren R.L., Wirtalla C. The Relation Between
Therapy Intensity and Outcomes of Rehabilitation in Skilled Nursing
Facilities. Archives of Physical Medicine and Rehabilitation.
2005;86(3):373-379. doi: 10.1016/j.apmr.2004.10.018. PMID: 15759214.
\75\ Gustavson A.M., Malone D.J., Boxer R.S., Forster J.E.,
Stevens-Lapsley J.E. Application of High-Intensity Functional
Resistance Training in a Skilled Nursing Facility: An Implementation
Study. Phys Ther. 2020;100(10):1746-1758. doi: 10.1093/ptj/pzaa126.
PMID: 32750132; PMCID: PMC7530575.
\76\ Harry M., Woehrle T., Renier C., Furcht M., Enockson M.
Predictive Utility of the Activity Measure for Post-Acute Care `6-
Clicks' Short Forms on Discharge Disposition and Effect on
Readmissions: A Retrospective Observational Cohort Study. BMJ Open
2021;11:e044278. doi: 10.1136/bmjopen-2020-044278. PMID: 33478966;
PMCID: PMC7825271.
\77\ Warren M., Knecht J., Verheijde J., Tompkins J. Association
of AM-PAC ``6-Clicks'' Basic Mobility and Daily Activity Scores With
Discharge Destination. Phys Ther. 2021 Apr;101(4):pzab043. doi:
10.1093/ptj/pzab043. PMID: 33517463.
\78\ Covert S., Johnson J.K., Stilphen M., Passek S., Thompson
N.R., Katzan I. Use of the Activity Measure for Post-Acute Care ``6
Clicks'' Basic Mobility Inpatient Short Form and National Institutes
of Health Stroke Scale to Predict Hospital Discharge Disposition
After Stroke. Phys Ther. 2020 Aug 31;100(9):1423-1433. doi: 10.1093/
ptj/pzaa102. PMID: 32494809.
\79\ Criss M.G., Wingood M., Staples W., Southard V., Miller K.,
Norris T.L., Avers D., Ciolek C.H., Lewis C.B., Strunk E.R. APTA
Geriatrics' Guiding Principles for Best Practices in Geriatric
Physical Therapy: An Executive Summary. J Geriatr Phys Ther. 2022
April/June;45(2):70-75. doi: 10.1519/JPT.0000000000000342. PMID:
35384940.
\80\ Cogan A.M., Weaver J.A., McHarg M., Leland N.E., Davidson
L., Mallinson T. Association of Length of Stay, Recovery Rate, and
Therapy Time per Day With Functional Outcomes After Hip Fracture
Surgery. JAMA Netw Open. 2020 Jan 3;3(1):e1919672. doi: 10.1001/
jamanetworkopen.2019.19672. PMID: 31977059; PMCID: PMC6991278.

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[[Page 21339]]

We are proposing to adopt the Discharge Function Score (DC
Function) measure \81\ in the SNF QRP beginning with the FY 2025 SNF
QRP. This assessment-based outcome measure evaluates functional status
by calculating the percentage of Medicare Part A SNF residents who meet
or exceed an expected discharge function score. If finalized, this
measure would replace the topped-out Application of Functional
Assessment/Care Plan process measure. Like the cross-setting process
measure we are proposing to remove in section VI.C.1.c. of this
proposed rule, the proposed DC Function measure is calculated using
standardized resident assessment data from the current SNF assessment
tool, the Minimum Data Set (MDS).
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\81\ This measure was submitte

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