Proposed Rule2025-06348
Medicare Program; Prospective Payment System and Consolidated Billing for Skilled Nursing Facilities; Updates to the Quality Reporting Program for Federal Fiscal Year 2026
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Published
April 30, 2025
Issuing agencies
Health and Human Services DepartmentCenters for Medicare & Medicaid Services
Abstract
This proposed rule would change and update policies and payment rates used under the Skilled Nursing Facility (SNF) Prospective Payment System (PPS) for FY 2026. This rulemaking also proposes to update the requirements for the SNF Quality Reporting Program and the SNF Value-Based Purchasing Program.
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[Federal Register Volume 90, Number 82 (Wednesday, April 30, 2025)]
[Proposed Rules]
[Pages 18590-18626]
From the Federal Register Online via the Government Publishing Office [<a href="http://www.gpo.gov">www.gpo.gov</a>]
[FR Doc No: 2025-06348]
[[Page 18589]]
Vol. 90
Wednesday,
No. 82
April 30, 2025
Part VI
Department of Health and Human Services
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Centers for Medicare & Medicaid Services
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42 CFR Part 413
Medicare Program; Prospective Payment System and Consolidated Billing
for Skilled Nursing Facilities; Updates to the Quality Reporting
Program for Federal Fiscal Year 2026; Proposed Rule
Federal Register / Vol. 90, No. 82 / Wednesday, April 30, 2025 /
Proposed Rules
[[Page 18590]]
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DEPARTMENT OF HEALTH AND HUMAN SERVICES
Centers for Medicare & Medicaid Services
42 CFR Part 413
[CMS-1827-P]
RIN 0938-AV47
Medicare Program; Prospective Payment System and Consolidated
Billing for Skilled Nursing Facilities; Updates to the Quality
Reporting Program for Federal Fiscal Year 2026
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 change and update policies and
payment rates used under the Skilled Nursing Facility (SNF) Prospective
Payment System (PPS) for FY 2026. This rulemaking also proposes to
update the requirements for the SNF Quality Reporting Program and the
SNF Value-Based Purchasing Program.
DATES: To be assured consideration, comments must be received at one of
the addresses provided below, by June 30, 2025.
ADDRESSES: In commenting, please refer to file code CMS-1827-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-1827-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-1827-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:
Patricia Taft, (410) 786-4561, for issues related to the SNF PPS.
Heidi Magladry, (410) 786-6034, for information related to the
skilled nursing facility quality reporting program.
Christopher Palmer, (410) 786-8025, for information related to the
skilled nursing facility value-based purchasing program.
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 commenter will take actions to harm an 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.
Plain Language Summary: In accordance with 5 U.S.C. 553(b)(4), a
plain language summary of this rule may be found at <a href="https://www.regulations.gov/">https://www.regulations.gov/</a>.
Unleashing Prosperity Through Deregulation of the Medicare
Program--Request for Information: On January 31, 2025, President Trump
issued Executive Order (E.O.) 14192 ``Unleashing Prosperity Through
Deregulation,'' which states the Administration policy to significantly
reduce the private expenditures required to comply with Federal
regulations to secure America's economic prosperity and national
security and the highest possible quality of life for each citizen. We
would like public input on approaches and opportunities to streamline
regulations and reduce administrative burdens on providers, suppliers,
beneficiaries, and other stakeholders participating in the Medicare
program. CMS has made available a Request for Information (RFI) at:
<a href="https://www.cms.gov/medicare-regulatory-relief-rfi">https://www.cms.gov/medicare-regulatory-relief-rfi</a>. Please submit all
comments in response to this request for information through the
provided weblink.
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 Patricia Taft at (410) 786-
4561.
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
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 2026 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
V. Other SNF PPS Issues
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. Proposal To Remove Four Standardized Patient Assessment Data
Elements Beginning With the FY 2027 SNF QRP
D. Proposals To Amend the Reconsideration Request Policy and
Process
E. SNF QRP Measure Concepts Under Consideration for Future
Years--Request for Information (RFI): Interoperability, Well-Being,
Nutrition & Delirium
F. Potential Revision of the Final Data Submission Deadline From
4.5 Months to 45 Days--Request for Information (RFI)
[[Page 18591]]
G. Advancing Digital Quality Measurement in the SNF QRP--Request
for Information (RFI)
H. Form, Manner, and Timing of Data Submission Under the SNF QRP
I. Policies Regarding Public Display of Measure Data for the SNF
QRP
VII. Skilled Nursing Facility Value-Based Purchasing (SNF VBP)
Program
A. Statutory Background
B. Proposed Removal of the Health Equity Adjustment From the SNF
VBP Program Scoring Methodology
C. SNF VBP Program Measures
D. SNF VBP Performance Standards
E. SNF VBP Performance Scoring Methodology
F. Proposal To Adopt a SNF VBP Program Reconsideration Process
VIII. Collection of Information Requirements
IX. Response to Comments
X. Economic Analyses
A. Regulatory Impact Analysis
B. Regulatory Flexibility Act Analysis
C. Unfunded Mandates Reform Act Analysis
D. Federalism Analysis
E. Regulatory Review Costs
F. E.O. 14192, ``Unleashing Prosperity Through Deregulation''
I. Executive Summary
A. Purpose
This proposed rule would update the SNF prospective payment rates
for fiscal year (FY) 2026, 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. We are
also proposing several technical revisions to the code mappings used to
classify patients under the Patient Driven Payment Model (PDPM) to
improve payment and coding accuracy. We are proposing updates to the
requirements for the SNF QRP by removing four standardized patient
assessment data elements under the SDOH category and proposing to amend
our reconsideration policy and process. We are also including three
Requests for Information (RFIs) for the SNF QRP, specifically on future
measure concepts for the SNF QRP, potential revisions to the data
submission deadlines for assessment data collected for the SNF QRP, and
advancing digital quality measurement in SNFs. This proposed rule also
proposes updates to the Skilled Nursing Facility Value-Based Purchasing
(SNF VBP) Program, including removing the Health Equity Adjustment,
estimating performance standards, applying the Program's scoring
methodology to the Skilled Nursing Facility Within-Stay Potentially
Preventable Readmission (SNF WS PPR) measure, adopting a new
reconsideration process that will allow SNFs to appeal CMS's decisions
on review and correction requests, and technical updates to the SNF VBP
Program's regulation text.
B. Summary of Major Provisions
In accordance with sections 1888(e)(4)(E)(ii)(IV) and (e)(5) of the
Act, this proposed rule would update the annual rates that we published
in the SNF PPS final rule for FY 2025 (89 FR 64048). In addition, this
proposed rule includes a proposed forecast error adjustment for FY
2026. We are also proposing several technical revisions to the code
mappings used to classify patients under the PDPM to improve payment
and coding accuracy.
For the SNF VBP Program, we are providing estimated performance
standards for the FY 2028 and FY 2029 program years to comply with the
program's statutory notice deadline. Second, we are proposing to apply
the previously finalized scoring methodology codified at Sec.
413.338(e)(1) and Sec. 413.338(e)(3) of our regulations to the Skilled
Nursing Facility Within-Stay Potentially Preventable Readmission (SNF
WS PPR) measure beginning with the FY 2028 program year, which is the
first year that measure will be used in the SNF VBP Program's measure
set (88 FR 53280). Third, we are proposing to adopt a reconsideration
process that will allow SNFs to seek reconsideration of a review and
correction request if they are not satisfied with CMS's decision on
that request, beginning with the FY 2027 program year. Lastly, we are
proposing to remove the Health Equity Adjustment to simplify the
methodology and provide clearer incentives for SNFs as they seek to
improve their quality of care for all residents.
Finally, we are proposing two updates for the SNF QRP. Beginning
with residents admitted on October 1, 2025, for the FY 2027 SNF QRP, we
are proposing to remove four standardized patient assessment data
elements under the social determinants of health (SDOH) category. We
are also proposing to amend and codify our reconsideration request
policy and process. We are also including three Requests for
Information (RFIs) for the SNF QRP on future measure concepts for the
SNF QRP, potential revisions to the data submission deadlines for
assessment data collected for the SNF QRP from 4.5 months after the end
of each quarter to 45 days after the end of each quarter, and advancing
digital quality measurement in SNFs.
C. Summary of Cost and Benefits
Table 1--Estimated Cost and Benefits
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Proposals Estimated total transfers/costs
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FY 2026 SNF PPS payment rate The overall economic impact of this
update. proposed rule is an estimated increase
of $997 million in aggregate payments
to SNFs during FY 2026.
FY 2027 SNF QRP changes due to The overall economic impact of this
the proposed Removal of Four proposal to SNFs is an estimated
Standardized Patient decrease of $2,228,563.12 annually to
Assessment Data Elements. SNFs beginning with the FY 2027 SNF
QRP.
FY 2027 SNF QRP changes due to The overall economic impact of this
the proposed Amendment of the proposal to those SNFs requesting an
Reconsideration Request extension to file a request for
Policy and Process for those reconsideration is an estimated
SNF's requesting an extension increase of $2,391.90 annually.
to file a request for
reconsideration.
FY 2026 SNF VBP changes....... The overall economic impact of the SNF
VBP Program is an estimated reduction
of $208.36 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 $207.99 million in aggregate
payments to SNFs during FY 2027.
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[[Page 18592]]
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 virtually 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. 11393, 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. In
2014, 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) (Pub. L. 116-260,
enacted December 27, 2020) amended 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
2025 (89 FR 64048,), as amended by the subsequent correction notice (89
FR 80132).
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.
<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
proposed rule will set out the required annual updates to the per diem
payment rates for SNFs for FY 2026.
III. Proposed SNF PPS Rate Setting Methodology and FY 2026 Payment
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 the 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 2025 (89 FR 64065 through 64082), we rebased and revised the SNF
market basket, which included updating the base year from 2018 to 2022.
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.
[[Page 18593]]
As outlined in this proposed rule, we propose a FY 2026 SNF market
basket percentage increase of 3.0 percent based on IHS Global Inc.'s
(IGI's) fourth-quarter 2024 forecast of the 2022-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, the productivity adjustment, and/or the forecast
error adjustment), we would use such data, if appropriate, to determine
the FY 2026 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 for FY 2026
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 2026. This factor is based on the FY 2026 percentage increase in
the 2022-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 2026 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, 2024 through September 30, 2025 to the average market basket
level for the period of October 1, 2025 through September 30, 2026.
This process yields a percentage increase in the 2022-based SNF market
basket of 3.0 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, 2026), which is estimated to be 0.8 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, 2003 final rule (68 FR 46057
through 46059), Sec. 413.337(d)(2) provides for an adjustment to
account for SNF market basket forecast error. The initial adjustment
for SNF 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 2024 (the most recently available FY for which there is
final data), the forecasted or estimated increase in the SNF market
basket was 3.0 percent, and the actual increase for FY 2024 was 3.6
percent, resulting in the actual increase being 0.6 percentage point
higher than the estimated increase. Accordingly, as the difference
between the estimated and actual percentage increase 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 2026 market basket percentage increase of
3.0 percent is adjusted upward to account for the forecast error
adjustment of 0.6 percentage point, resulting in a proposed FY 2026 SNF
market basket percentage increase of 3.6 percent, which is then reduced
by the proposed productivity adjustment of 0.8 percentage point,
discussed in section III.B.4. of this proposed rule. This results in a
proposed SNF market basket update for FY 2026 of 2.8 percent.
Table 2 shows the forecasted and actual market basket percentage
increases for FY 2024.
Table 2--Difference Between the Actual and Forecasted SNF Market Basket Percentage Increases for FY 2024
----------------------------------------------------------------------------------------------------------------
Forecasted FY 2024 Actual FY 2024 FY 2024
Index percentage increase * percentage increase ** difference
----------------------------------------------------------------------------------------------------------------
SNF.......................................... 3.0 3.6 0.6
----------------------------------------------------------------------------------------------------------------
* Published in Federal Register; based on second quarter 2023 IHS Global Inc. forecast (2018-based SNF market
basket).
** Based on the fourth quarter 2024 IHS Global Inc. forecast (2018-based SNF market basket), with historical
data through third quarter 2024.
[[Page 18594]]
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
increase 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 2026 SNF PPS proposed rule,
the productivity adjustment (the 10-year moving average of changes in
annual economy-wide private nonfarm business TFP for the period ending
September 30, 2026) is projected to be 0.8 percentage point.
Consistent with section 1888(e)(5)(B)(i) of the Act and Sec.
413.337(d)(2), and as outlined previously in section III.B.1. of this
proposed rule, the market basket percentage increase for FY 2026 for
the SNF PPS is based on IHS Global Inc.'s fourth quarter 2024 forecast
of the SNF market basket percentage increase, which is estimated to be
3.0 percent. This market basket percentage increase is then increased
by 0.6 percentage point, due to application of the forecast error
adjustment outlined earlier in section III.B.3. of this proposed rule.
Finally, as outlined earlier in this section, we are applying a
proposed 0.8 percentage point productivity adjustment to the FY 2026
SNF market basket percentage increase. Therefore, the resulting
proposed FY 2026 SNF market basket update is equal to 2.8 percent,
which reflects a proposed market basket percentage increase of 3.0
percent, plus the proposed 0.6 percentage point forecast error
adjustment, reduced by the proposed 0.8 percentage point productivity
adjustment. Thus, we apply a net proposed SNF market basket update
factor of 2.8 percent in our determination of the proposed FY 2026 SNF
PPS unadjusted Federal per diem rates.
5. Unadjusted Federal Per Diem Rates for FY 2026
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 Resource Utilization Groups, Version IV
(RUG-IV) model. We propose to use the SNF market basket update,
adjusted as outlined 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 2026
from the average prices for FY 2025. We also proposed to further adjust
the rates by a wage index budget neutrality factor, outlined 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 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. As discussed in the FY 2025 SNF PPS
proposed and final rules, we adopted the revised OMB delineations
identified in OMB Bulletin No. 23-01 (available at <a href="https://www.whitehouse.gov/wp-content/uploads/2023/07/OMB-Bulletin-23-01.pdf">https://www.whitehouse.gov/wp-content/uploads/2023/07/OMB-Bulletin-23-01.pdf</a>)
to identify a facility's urban or rural status effective beginning with
FY 2025.
Tables 3 and 4 reflect the proposed unadjusted Federal rates for FY
2026, prior to adjustment for case-mix.
[[Page 18595]]
Table 3--Proposed FY 2026 Unadjusted Federal Rate Per Diem--Urban
--------------------------------------------------------------------------------------------------------------------------------------------------------
Rate component PT OT SLP Nursing NTA Non-case-mix
--------------------------------------------------------------------------------------------------------------------------------------------------------
Per Diem Amount................................... $75.42 $70.20 $28.16 $131.47 $99.19 $117.73
--------------------------------------------------------------------------------------------------------------------------------------------------------
Table 4--Proposed FY 2026 Unadjusted Federal Rate Per Diem--Rural
--------------------------------------------------------------------------------------------------------------------------------------------------------
Rate component PT OT SLP Nursing NTA Non-case-mix
--------------------------------------------------------------------------------------------------------------------------------------------------------
Per Diem Amount................................... $85.98 $78.96 $35.48 $125.61 94.76 $119.91
--------------------------------------------------------------------------------------------------------------------------------------------------------
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 outlined in section IV.A. of the
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 2026 payment rates set forth in this
proposed rule reflect the use of the PDPM case-mix classification
system from October 1, 2025, through September 30, 2026. The case-mix
adjusted PDPM payment rates for FY 2026 are listed separately for urban
and rural SNFs, in Tables 5 and 6 with corresponding case-mix values.
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 A5 and A6 reflect the PDPM's structure. Accordingly, Column
1 of Tables A5 and A6 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, outlined in section
VII. of this proposed rule, or other adjustments, such as the variable
per diem adjustment.
[[Page 18596]]
Table 5--PDPM Case-Mix Adjusted Federal Rates and Associated Indexes--Urban
--------------------------------------------------------------------------------------------------------------------------------------------------------
Nursing Nursing Nursing
PDPM group PT CMI PT rate OT CMI OT rate SLP CMI SLP rate CMG CMI rate NTA CMI NTA rate
--------------------------------------------------------------------------------------------------------------------------------------------------------
A.............................. 1.45 $109.36 1.41 $98.98 0.64 $18.02 ES3 3.84 $504.84 3.06 $303.52
B.............................. 1.61 121.43 1.54 108.11 1.72 48.44 ES2 2.90 381.26 2.39 237.06
C.............................. 1.78 134.25 1.60 112.32 2.52 70.96 ES1 2.77 364.17 1.74 172.59
D.............................. 1.81 136.51 1.45 101.79 1.38 38.86 HDE2 2.27 298.44 1.26 124.98
E.............................. 1.34 101.06 1.33 93.37 2.21 62.23 HDE1 1.88 247.16 0.91 90.26
F.............................. 1.52 114.64 1.51 106.00 2.82 79.41 HBC2 2.12 278.72 0.68 67.45
G.............................. 1.58 119.16 1.55 108.81 1.93 54.35 HBC1 1.76 231.39 ......... .........
H.............................. 1.10 82.96 1.09 76.52 2.7 76.03 LDE2 1.97 259.00 ......... .........
I.............................. 1.07 80.70 1.12 78.62 3.34 94.05 LDE1 1.64 215.61 ......... .........
J.............................. 1.34 101.06 1.37 96.17 2.83 79.69 LBC2 1.63 214.30 ......... .........
K.............................. 1.44 108.60 1.46 102.49 3.50 98.56 LBC1 1.35 177.48 ......... .........
L.............................. 1.03 77.68 1.05 73.71 3.98 112.08 CDE2 1.77 232.70 ......... .........
M.............................. 1.20 90.50 1.23 86.35 ......... ......... CDE1 1.53 201.15 ......... .........
N.............................. 1.40 105.59 1.42 99.68 ......... ......... CBC2 1.47 193.26 ......... .........
O.............................. 1.47 110.87 1.47 103.19 ......... ......... CA2 1.03 135.41 ......... .........
P.............................. 1.02 76.93 1.03 72.31 ......... ......... CBC1 1.27 166.97 ......... .........
Q.............................. ......... ......... ......... ......... ......... ......... CA1 0.89 117.01 ......... .........
R.............................. ......... ......... ......... ......... ......... ......... BAB2 0.98 128.84 ......... .........
S.............................. ......... ......... ......... ......... ......... ......... BAB1 0.94 123.58 ......... .........
T.............................. ......... ......... ......... ......... ......... ......... PDE2 1.48 194.58 ......... .........
U.............................. ......... ......... ......... ......... ......... ......... PDE1 1.39 182.74 ......... .........
V.............................. ......... ......... ......... ......... ......... ......... PBC2 1.15 151.19 ......... .........
W.............................. ......... ......... ......... ......... ......... ......... PA2 0.67 88.08 ......... .........
X.............................. ......... ......... ......... ......... ......... ......... PBC1 1.07 140.67 ......... .........
Y.............................. ......... ......... ......... ......... ......... ......... PA1 0.62 81.51 ......... .........
--------------------------------------------------------------------------------------------------------------------------------------------------------
Table 6--PDPM Case-Mix Adjusted Federal Rates and Associated Indexes--Rural
--------------------------------------------------------------------------------------------------------------------------------------------------------
Nursing Nursing Nursing
PDPM group PT CMI PT rate OT CMI OT rate SLP CMI SLP rate CMG CMI rate NTA CMI NTA rate
--------------------------------------------------------------------------------------------------------------------------------------------------------
A.............................. 1.45 $124.67 1.41 $111.33 0.64 $22.71 ES3 3.84 $482.34 3.06 $289.97
B.............................. 1.61 138.43 1.54 121.60 1.72 61.03 ES2 2.90 364.27 2.39 226.48
C.............................. 1.78 153.04 1.60 126.34 2.52 89.41 ES1 2.77 347.94 1.74 164.88
D.............................. 1.81 155.62 1.45 114.49 1.38 48.96 HDE2 2.27 285.13 1.26 119.40
E.............................. 1.34 115.21 1.33 105.02 2.21 78.41 HDE1 1.88 236.15 0.91 86.23
F.............................. 1.52 130.69 1.51 119.23 2.82 100.05 HBC2 2.12 266.29 0.68 64.44
G.............................. 1.58 135.85 1.55 122.39 1.93 68.48 HBC1 1.76 221.07 ......... .........
H.............................. 1.10 94.58 1.09 86.07 2.7 95.80 LDE2 1.97 247.45 ......... .........
I.............................. 1.07 92.00 1.12 88.44 3.34 118.50 LDE1 1.64 206.00 ......... .........
J.............................. 1.34 115.21 1.37 108.18 2.83 100.41 LBC2 1.63 204.74 ......... .........
K.............................. 1.44 123.81 1.46 115.28 3.50 124.18 LBC1 1.35 169.57 ......... .........
L.............................. 1.03 88.56 1.05 82.91 3.98 141.21 CDE2 1.77 222.33 ......... .........
M.............................. 1.20 103.18 1.23 97.12 ......... ......... CDE1 1.53 192.18 ......... .........
N.............................. 1.40 120.37 1.42 112.12 ......... ......... CBC2 1.47 184.65 ......... .........
O.............................. 1.47 126.39 1.47 116.07 ......... ......... CA2 1.03 129.38 ......... .........
P.............................. 1.02 87.70 1.03 81.33 ......... ......... CBC1 1.27 159.52 ......... .........
Q.............................. ......... ......... ......... ......... ......... ......... CA1 0.89 111.79 ......... .........
R.............................. ......... ......... ......... ......... ......... ......... BAB2 0.98 123.10 ......... .........
S.............................. ......... ......... ......... ......... ......... ......... BAB1 0.94 118.07 ......... .........
T.............................. ......... ......... ......... ......... ......... ......... PDE2 1.48 185.90 ......... .........
U.............................. ......... ......... ......... ......... ......... ......... PDE1 1.39 174.60 ......... .........
V.............................. ......... ......... ......... ......... ......... ......... PBC2 1.15 144.45 ......... .........
W.............................. ......... ......... ......... ......... ......... ......... PA2 0.67 84.16 ......... .........
X.............................. ......... ......... ......... ......... ......... ......... PBC1 1.07 134.40 ......... .........
Y.............................. ......... ......... ......... ......... ......... ......... PA1 0.62 77.88 ......... .........
--------------------------------------------------------------------------------------------------------------------------------------------------------
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 2026, 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 propose to 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 2026, the updated wage data are for hospital cost reporting
periods beginning on or after October 1, 2021 and before October 1,
2022 (FY 2022 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
[[Page 18597]]
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 (MACs), 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 do not
believe this undertaking is feasible at this time, we will continue to
explore implementation of a spot audit process to improve SNF cost
reports to ensure they are adequately accurate for cost development
purposes, in such a manner as to permit us to establish a SNF-specific
wage index in the future.
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 2026 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 will continue using the average wage index
from all contiguous Core-Based Statistical Areas (CBSAs) as a
reasonable proxy. For FY 2026, the only rural area without wage index
data available is North Dakota. For urban areas without specific
hospital wage index data, we will 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 2026, 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 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. We amended the SNF
PPS regulations at 42 CFR 413.337(b)(4)(ii) to reflect this permanent
cap on wage index decreases. 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.
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, we did not propose to adopt the revised OMB
delineations identified in OMB Bulletin No. 20-01 for FY 2022 through
FY 2024.
On July 21, 2023, OMB issued OMB Bulletin No. 23-01 which updates
and supersedes OMB Bulletin No. 20-01 based on the decennial census.
OMB Bulletin No. 23-01 revised delineations for CBSAs which are made up
of counties and equivalent entities (for example, boroughs, a city and
borough, and a municipality in Alaska, planning regions in Connecticut,
parishes in Louisiana, municipios in Puerto Rico, and independent
cities in Maryland, Missouri, Nevada, and Virginia). As discussed in
the FY 2025 SNF PPS final rule (89 FR 64059), we adopted the revised
OMB delineations identified in OMB Bulletin No. 23-01 (available at
https://www.whitehouse.gov/wp-content/uploads/2023/07/OMB-Bulletin-
[[Page 18598]]
23-01.pdf). OMB has not published further delineation revisions since
OMB Bulletin No. 23-01. Therefore, for FY 2026, we propose to maintain
the current CBSA delineations. The wage index applicable to FY 2026 is
set forth in Table 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 will apply the wage index adjustment to the
labor-related share 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 2025 (89 FR 64060), we
finalized a proposal to revise the labor-related share to reflect the
relative importance of the 2022-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 share beginning in FY 2025 is discussed in detail in the FY
2025 SNF PPS final rule (89 FR 64080 through 64081).
We calculate the labor-related relative importance from the SNF
market basket, and it approximates the labor-related share of the total
costs after taking into account historical and projected price changes
between the base year and FY 2026. 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 2026 than the base year weights
from the SNF market basket. We calculate the labor-related relative
importance for FY 2026 in four steps. First, we compute the FY 2026
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 2026 price index level for that cost category by the
total market basket price index level. Third, we determine the FY 2026
relative importance for each cost category by multiplying this ratio by
the base year (2022) weight. Finally, we add the FY 2026 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 proposed FY
2026 labor-related relative importance.
Table 7--Labor-Related Share, FY 2025 and FY 2026
------------------------------------------------------------------------
Relative Proposed relative
importance, importance,
labor-related labor-related
share, FY 2025 share, FY 2026
24:2 forecast \1\ 24:4 forecast \2\
------------------------------------------------------------------------
Wages and Salaries................ 53.2 53.3
Employee Benefits................. 9.2 9.0
Professional Fees: Labor-Related.. 3.5 3.6
Administrative & Facilities 0.4 0.4
Support Services.................
Installation, Maintenance & Repair 0.5 0.5
Services.........................
All Other: Labor-Related Services. 2.0 2.0
Capital-Related (.391* Capital RI) 3.2 3.1
-------------------------------------
Total......................... 72.0 71.9
------------------------------------------------------------------------
\1\ Published in the Federal Register; Based on the second quarter 2024
IHS Global Inc. forecast of the 2022-based SNF market basket.
\2\ Based on the fourth quarter 2024 IHS Global Inc. forecast of the
2022-based SNF market basket. The relative importance of capital for
FY 2026 is forecasted to be 8.0 percent.
To calculate the labor portion of the case-mix adjusted per diem
rate, we will 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 2026
labor-related share percentage provided in Table 7. The remaining
portion of the rate will 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 2026 (Federal rates
effective October 1, 2025), 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 2025 to the weighted average wage adjustment
factor for FY 2026. For this calculation, we will use the same FY 2024
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 2026 is 1.0016.
We are also proposing that if more recent data become available
(for example, revised wage data and/or
[[Page 18599]]
updated claims data), we would use such data, if appropriate, to
determine the wage index budget neutrality factor in the SNF PPS final
rule.
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 the updates we are proposing for the SNF VBP Program.
F. Adjusted Rate Computation Example
Tables 8 through 10 provide examples generally illustrating payment
calculations during FY 2026 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) to compute the
provider's case-mix adjusted per diem rate for FY 2026, 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 2026
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 $23,529.37.
Table 8--PDPM Case-Mix Adjusted Rate Computation Example
----------------------------------------------------------------------------------------------------------------
Per diem rate calculation
-----------------------------------------------------------------------------------------------------------------
Component VPD adjustment
Component group Component rate factor VPD adj. rate
----------------------------------------------------------------------------------------------------------------
PT.............................................. N $105.59 1.00 $105.59
OT.............................................. N 99.68 1.00 99.68
SLP............................................. H 76.03 1.00 76.03
Nursing......................................... N 193.26 1.00 193.26
NTA............................................. C 172.59 3.00 517.77
Non-Case-Mix.................................... .............. 117.73 .............. 117.73
---------------------------------------------------------------
Total PDPM Case-Mix Adj. Per Diem........... .............. .............. .............. 1,110.06
----------------------------------------------------------------------------------------------------------------
Table 9--Wage Index Adjusted Rate Computation Example
--------------------------------------------------------------------------------------------------------------------------------------------------------
PDPM wage index adjustment calculation
---------------------------------------------------------------------------------------------------------------------------------------------------------
Total case mix and
HIPPS code PDPM case-mix Labor portion Wage index Wage index Non-labor wage index adj.
adjusted per diem adjusted rate portion rate
--------------------------------------------------------------------------------------------------------------------------------------------------------
NHNC1....................................... $1,110.06 $798.13 0.9768 $779.61 $311.93 $1,091.54
--------------------------------------------------------------------------------------------------------------------------------------------------------
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 $1,091.54
2............................................................... 3.0 1.0 1,091.54
3............................................................... 3.0 1.0 1,091.54
4............................................................... 1.0 1.0 752.12
5............................................................... 1.0 1.0 752.12
6............................................................... 1.0 1.0 752.12
7............................................................... 1.0 1.0 752.12
8............................................................... 1.0 1.0 752.12
9............................................................... 1.0 1.0 752.12
10.............................................................. 1.0 1.0 752.12
11.............................................................. 1.0 1.0 752.12
12.............................................................. 1.0 1.0 752.12
13.............................................................. 1.0 1.0 752.12
[[Page 18600]]
14.............................................................. 1.0 1.0 752.12
15.............................................................. 1.0 1.0 752.12
16.............................................................. 1.0 1.0 752.12
17.............................................................. 1.0 1.0 752.12
18.............................................................. 1.0 1.0 752.12
19.............................................................. 1.0 1.0 752.12
20.............................................................. 1.0 1.0 752.12
21.............................................................. 1.0 0.98 748.08
22.............................................................. 1.0 0.98 748.08
23.............................................................. 1.0 0.98 748.08
24.............................................................. 1.0 0.98 748.08
25.............................................................. 1.0 0.98 748.08
26.............................................................. 1.0 0.98 748.08
27.............................................................. 1.0 0.98 748.08
28.............................................................. 1.0 0.96 744.05
29.............................................................. 1.0 0.96 744.05
30.............................................................. 1.0 0.96 744.05
-----------------------------------------------
Total Payment............................................... .............. .............. 23,529.37
----------------------------------------------------------------------------------------------------------------
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 outlined in
section III.C. of the proposed rule. This 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
[[Page 18601]]
(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) (Pub. L. 117-328, enacted December 29, 2022)
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.
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
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.
Effective with items and services furnished on or after October 1,
2021, section 134 in Division CC of the CAA, 2021 established an
additional fifth 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.
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>.
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
five service categories specified in the BBRA 1999 and CAA, 2021; 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).
In this proposed rule, we specifically solicit 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 in this section of the preamble. 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, if we identify through the current rulemaking cycle
any new services that meet the criteria for exclusion from SNF
consolidated billing, we will 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, 2024). By making any new
exclusions in
[[Page 18602]]
this manner, we can 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>.
V. Other SNF PPS Issues
Technical Updates to the 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
PDPM ICD-10 code to clinical category mapping, ICD-10 code to SLP
comorbidity mapping, and ICD-10 code to NTA comorbidity mapping
(hereafter collectively referred to as the PDPM ICD-10 code mappings)
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 mappings,
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
non-substantive changes to the PDPM ICD-10 code mappings through a sub-
regulatory process consisting of posting the updated PDPM ICD-10 code
mappings 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 non-substantive changes are
limited to those specific changes that are necessary to maintain
consistency with the most current PDPM ICD-10 code mappings.
On the other hand, substantive changes that go beyond the intention
of maintaining consistency with the most current PDPM ICD-10 code
mappings, such as changes to the assignment of a code to a clinical
category or comorbidity list, are made via notice and comment
rulemaking, because they are changes that affect policy. We noted in
the proposed rule that in the case of any diagnoses that are either
currently mapped to ``Return to Provider'' clinical category or that we
are finalizing 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 2026
Each year, we review the clinical categories assigned to new ICD-10
diagnosis codes and propose adding, removing, or changing the
assignment to another clinical category if warranted. This year, we are
proposing to change the clinical category assignment for the following
thirty-four new ICD-10 codes that were effective October 1, 2024.
a. Type 1 Diabetes Mellitus
Type 1 diabetes mellitus is an autoimmune condition characterized
by insulin deficiency, leading to chronic hyperglycemia. Codes E10.A0
(Type 1 diabetes mellitus, presymptomatic, unspecified), E10.A1 (Type 1
diabetes mellitus, presymptomatic, Stage 1), E10.A2 (Type 1 diabetes
mellitus, presymptomatic, Stage 2), and E10.9 (Type 1 diabetes mellitus
without complications) were initially assigned to the ``Medical
Management'' clinical category. However, these codes refer to diagnoses
in which a patient's Type 1 diabetes is considered presymptomatic,
which means a patient has not developed symptoms, or a patient that is
not experiencing any complications associated with having diabetes. In
both cases, given the patient has not exhibited symptoms or experienced
complications from the condition, testing and treatments for these
diagnoses would typically occur on an outpatient basis and not require
an inpatient SNF stay in and of themselves. Therefore, we do not
believe these codes would serve appropriately as the primary diagnoses
for a Part A-covered SNF stay. As a result, we propose to change the
mapping of these codes from ``Medical Management'' to the clinical
category of ``Return to Provider''.
b. Hypoglycemia
Hypoglycemia, defined as blood glucose levels below 70 mg/dL, is a
common complication in individuals with diabetes mellitus or other
metabolic disorders. Codes E16.A1 (Hypoglycemia level 1), E16.A2
(Hypoglycemia level 2), E16.A3 (Hypoglycemia level 3), E16.0 (Drug-
induced hypoglycemia without coma), E16.1 (Other hypoglycemia), E16.2
(Hypoglycemia, unspecified), E16.3 (Increased secretion of glucagon),
E16.4 (Increased secretion of gastrin), E16.8 (Other specified
disorders of pancreatic internal secretion), and E16.9 (Disorder of
pancreatic internal secretion, unspecified) were initially assigned to
the ``Medical Management'' clinical category. However, these diagnoses
are typically treated using interventions
[[Page 18603]]
such as, but not limited to, blood sugar monitoring education, dietary
counseling, physical exercise education and training, pharmacological
interventions, etc. Given these interventions, treatment for these
diagnoses would typically occur on an outpatient basis and not require
an inpatient SNF stay in and of themselves. Therefore, we do not
believe these codes would serve appropriately as the primary diagnoses
for a Part A-covered SNF stay. As a result, we propose to change the
mapping of these codes from ``Medical Management'' to the clinical
category of ``Return to Provider''.
c. Obesity
Obesity is a chronic, relapsing, multifactorial disease
characterized by excessive adipose tissue accumulation that increases
the risk of metabolic, cardiovascular, and musculoskeletal disorders.
Codes E66.811 (Obesity, class 1), E66.812 (Obesity, class 2), E66.89
(Other obesity not elsewhere classified), E66.01 (Morbid (severe)
obesity due to excess calories), E66.09 (Other obesity due to excess
calories), E66.1 (Drug-induced obesity), E66.3 (Overweight), and E66.9
(Obesity, unspecified) were initially assigned to the ``Medical
Management'' clinical category. However, these diagnoses are typically
treated using interventions such as, but not limited to, lifestyle
interventions, psychosocial therapy and support, weight management
programs, pharmacological interventions, etc. Given these
interventions, treatment for these diagnoses would typically occur on
an outpatient basis and not require an inpatient SNF stay in and of
themselves. Therefore, we do not believe these codes would serve
appropriately as the primary diagnoses for a Part A-covered SNF stay.
As a result, we propose to change the mapping of these codes from
``Medical Management'' to the clinical category of ``Return to
Provider''.
d. Anorexia Nervosa, Restricting Type
Anorexia Nervosa (AN) is a psychiatric disorder characterized by
severe food restriction, intense fear of weight gain, and distorted
body image. Patients with AN, restricting type may present with
significant weight loss, malnutrition, and/or medical complications
such as bradycardia, osteoporosis, electrolyte imbalances, and/or organ
dysfunction. Code F50.010 (Anorexia nervosa, restricting type, mild)
was initially assigned to the ``Medical Management'' clinical category.
However, this diagnosis is typically treated using interventions such
as, but not limited to, psychosocial therapy and support, nutritional
counseling, pharmacological interventions, etc. Given these
interventions, treatment for this diagnosis would typically occur on an
outpatient basis and not require an inpatient SNF stay in and of
itself. Therefore, we do not believe this code would serve
appropriately as the primary diagnosis for a Part A-covered SNF stay.
As a result, we propose to change the mapping of this code from
``Medical Management'' to the clinical category of ``Return to
Provider''.
e. Anorexia Nervosa, Binge Eating/Purging Type
AN is a psychiatric disorder characterized by severe food
restriction, intense fear of weight gain, and distorted body image.
Individuals with AN binge eating/purging type engage in recurrent binge
eating and/or purging behaviors. Codes F50.020 (Anorexia nervosa, binge
eating/purging type, mild) and F50.021 (Anorexia nervosa, binge eating/
purging type, moderate) were initially assigned to the ``Medical
Management'' clinical category. However, these diagnoses are typically
treated using interventions such as, but not limited to, psychosocial
therapy and support, nutritional counseling, pharmacological
interventions, etc. Given these interventions, treatment for these
diagnoses would typically occur on an outpatient basis and not require
an inpatient SNF stay in and of themselves. Therefore, we do not
believe these codes would serve appropriately as the primary diagnoses
for a Part A-covered SNF stay. As a result, we propose to change the
mapping of these codes from ``Medical Management'' to the clinical
category of ``Return to Provider''.
f. Bulimia Nervosa
Bulimia nervosa is an eating disorder characterized by recurrent
episodes of binge eating, consuming large amounts of food within a
short period, followed by self-induced vomiting, laxative misuse,
fasting, or excessive exercise. Codes F50.21 (Bulimia nervosa, mild)
and F50.22 (Bulimia nervosa, moderate) were initially assigned to the
``Medical Management'' clinical category. However, these diagnoses are
typically treated using interventions such as, but not limited to,
Cognitive-Behavioral Therapy (CBT), psychotherapy, nutritional
counseling, pharmacological interventions, etc. Given these
interventions, treatment for these diagnoses would typically occur on
an outpatient basis and not require an inpatient SNF stay in and of
themselves. Therefore, we do not believe these codes would serve
appropriately as the primary diagnoses for a Part A-covered SNF stay.
As a result, we propose to change the mapping of these codes from
``Medical Management'' to the clinical category of ``Return to
Provider''.
g. Binge Eating Disorder
Binge eating disorder is characterized by recurrent episodes of
binge eating without compensatory behaviors such as purging, fasting,
excessive exercise, etc. Codes F50.810 (Binge eating disorder, mild)
and F50.81 (Binge eating disorder, moderate) were initially assigned to
the ``Medical Management'' clinical category. However, these diagnoses
are typically treated using interventions such as, but not limited to,
CBT, psychotherapy, nutritional counseling, pharmacological
interventions, etc. Given these interventions, treatment for these
diagnoses would typically occur on an outpatient basis and not require
an inpatient SNF stay in and of themselves. Therefore, we do not
believe these codes would serve appropriately as the primary diagnoses
for a Part A-covered SNF stay. As a result, we propose to change the
mapping of these codes from ``Medical Management'' to the clinical
category of ``Return to Provider''.
h. Pica and Rumination Disorder
Pica is an eating disorder characterized by the persistent
consumption of non-nutritive, non-food substances for at least one
month. Rumination is an eating disorder where individuals repeatedly
regurgitate food, rechew, re-swallow, or spit out, for at least one
month. Codes F50.83 (Pica in adults), F50.84 (Rumination disorder in
adults), F98.21 (Rumination disorder of infancy and childhood), and
F98.3 (Pica of infancy and childhood) were initially assigned to the
``Medical Management'' clinical category. However, these diagnoses are
typically treated using interventions such as, but not limited to,
behavioral therapy, nutritional counseling, environmental
modifications, pharmacological interventions, etc. Given these
interventions, treatment for these diagnoses would typically occur on
an outpatient basis and not require an inpatient SNF stay in and of
themselves. Therefore, we do not believe these codes would serve
appropriately as the primary diagnoses for a Part A-covered SNF stay.
As a result, we propose to change the mapping of these codes from
``Medical Management'' to the clinical category of ``Return to
Provider''.
[[Page 18604]]
i. Serotonin Syndrome
Serotonin syndrome is a potentially life-threatening condition
caused by excess serotonin in the central nervous system, typically due
to drug interactions or the overdose of serotonergic medications. Code
G90.81 (Serotonin syndrome) was initially assigned to the ``Acute
Neurologic'' clinical category. However, this diagnosis may require
testing and interventions, such as, but not limited to, identifying and
discontinuing causative agents, symptom management and support,
pharmacological management, education, and up to and including
emergency care and/or ICU-admission depending on the severity. Given
these interventions, treatment for this diagnosis, depending on
severity, would typically occur on an outpatient basis or in an acute
care hospital and not require an inpatient SNF stay in and of itself.
Therefore, we do not believe this code would serve appropriately as the
primary diagnosis for a Part A-covered SNF stay. As a result, we
propose to change the mapping of this code from ``Acute Neurologic'' to
the clinical category of ``Medical Management'.
We invite comments on the proposed changes to the PDPM ICD-10
mappings discussed earlier in this section.
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. The SNF QRP 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 Sec. 413.360.
In this proposed rule, we are proposing to remove four items
previously adopted as standardized patient assessment data elements
under the social determinants of health (SDOH) category beginning with
the FY 2027 SNF QRP: one item for Living Situation, two items for Food,
and one item for Utilities. We are also proposing to amend our
reconsideration policy and process. We are also seeking public comment
on several Requests for Information (RFIs), specifically on: (1) future
measure concepts for the SNF QRP; (2) potential revisions to the data
submission deadlines for assessment data collected for the SNF QRP; and
(3) advancing digital quality measurement in SNFs.
B. General Considerations Used for the Selection of Measures for the
SNF QRP
For a detailed discussion of the considerations we historically
used 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 SNF QRP
The SNF QRP currently has 15 adopted measures, which are set forth
in Table 11. We are not proposing to adopt any new measures for the SNF
QRP.
For a discussion of the factors we use to evaluate whether a
measure should be removed from the SNF QRP, we refer readers to our
regulations at Sec. 413.360(b)(2) and to the FY 2019 SNF PPS final
rule (83 FR 39267 through 39269).
Table 11--Quality Measures Currently Adopted for the 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).
Discharge Mobility Score..... Application of IRF Functional Outcome
Measure: Discharge Mobility Score for
Medical Rehabilitation Patients.
Discharge Self-Care Score.... Application of IRF Functional Outcome
Measure: Discharge Self-Care Score for
Medical Rehabilitation Patients.
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).
DC Function.................. Discharge Function Score.
Patient/Resident COVID-19 COVID-19 Vaccine: Percent of Patients/
Vaccine. Residents Who Are Up to Date.
------------------------------------------------------------------------
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.
------------------------------------------------------------------------
National Healthcare Safety Network
------------------------------------------------------------------------
HCP COVID19 Vaccine.......... COVID19 Vaccination Coverage among
Healthcare Personnel (HCP).
[[Page 18605]]
HCP Influenza Vaccine........ Influenza Vaccination Coverage among
Healthcare Personnel (HCP).
------------------------------------------------------------------------
C. Proposal To Remove Four Standardized Patient Assessment Data
Elements Beginning With the FY 2027 SNF QRP
We refer readers to the FY 2025 SNF PPS final rule (89 FR 64100
through 64111) where we finalized the adoption of four new items as
standardized patient assessment data elements under the social
determinants of health (SDOH) category: one item for Living Situation
(R0310); two items for Food (R0320A and R0320B); and one item for
Utilities (R0330). As finalized in the FY 2025 SNF PPS final rule, SNFs
would be required to report these data elements using the MDS beginning
with residents admitted on October 1, 2025 through December 31, 2025
for purposes of the FY 2027 SNF QRP and each program year after (89 FR
64115 through 64118).
In this proposed rule, we are proposing to remove these four
standardized patient assessment data elements under the SDOH category
as we acknowledge the burden associated with these items at this time.
We continuously look for ways to balance the need for data collections
regarding quality care and burden of these data collections on health
care providers. CMS has a goal to facilitate improved health care
delivery by requiring different systems and software applications to
communicate and exchange data. Therefore, we would like to work towards
the workflow for these data elements being part of a low burden
interoperable electronic system. The focus will turn towards how the
data and associated recommendations exchanged can improve care
coordination, efficiency, reduction in errors, and resident experience.
As health information technology (HIT) advances and interoperability of
data becomes more standardized, the burden to collect and share
clinical data on these and other relevant resident information will
become less burdensome allowing for better outcomes for SNF residents
and their families. The objectives of the SNF QRP continue to be the
improvement of care, quality, and health outcomes for all residents
through transparency and quality measurement, while not imposing undue
burden on essential health providers. Under our proposal, SNFs would
not be required to collect and submit Living Situation (R0310), Food
(R0320A and R0320B), and Utilities (R0330) beginning with residents
admitted on or after October 1, 2025 as previously finalized. Under our
proposal, these items would not be required to meet the SNF QRP
requirements beginning with the FY 2027 SNF QRP.
Removing these items from the data collection for the FY 2027 SNF
QRP would keep the 15,253 SNFs from incurring 31,791.20 hours of
administrative burden at a cost of $2,228,563.12 (or $146.11 per SNF)
at this time. We refer readers to section VIII.B.1. of this proposed
rule for details on this estimated burden reduction.
We invite public comment on our proposal to remove four
standardized patient assessment data elements collected under the SDOH
category from the SNF QRP beginning with the FY 2027 SNF QRP.
D. Proposals To Amend the Reconsideration Request Policy and Process
1. Background
In the FY 2016 SNF PPS final rule (80 FR 46460 and 46461), we
finalized the SNF QRP Reconsideration policy and process whereby a SNF
may request reconsideration of an initial determination that the SNF
did not comply with the SNF QRP reporting requirements, warranting CMS
reducing the SNF's annual market basket percentage by 2 percent for the
applicable fiscal year as required by section 1888(e)(6)(A) of the Act.
In that rule, we stated that the SNF may file a request for
reconsideration if they believe that the finding of noncompliance is
erroneous, have submitted a request for extension or exception that has
not yet been decided, or have been granted an extension or exception
(80 FR 46460). We further finalized that, as part of the SNF's request
for reconsideration, the SNF must submit all supporting documentation
and evidence demonstrating full compliance with all SNF QRP reporting
requirements for the applicable FY, that the SNF requested an extension
or exception for which a decision has not yet been made, that the SNF
has been granted an extension or exception, or the SNF has experienced
an extenuating circumstance as defined in the FY 2016 SNF PPS final
rule for the ECE policy (80 FR 46459) but failed to file a timely
request of exception (80 FR 46460). We finalized that we would not
review any reconsideration request that fails to provide the necessary
documentation and evidence along with the request (80 FR 46460).
In the FY 2016 SNF PPS final rule, we provided that a SNF generally
must submit its request for reconsideration within 30 days from the
date of initial notification of noncompliance (80 FR 46460). However,
we finalized that, in very limited circumstances, we may grant a
request by a SNF to extend the 30-day deadline for their
reconsideration requests (80 FR 46460). We stated that, to extend the
deadline, SNFs would have to request an extension and demonstrate that
``extenuating circumstances'' existed which prevented the filing of the
reconsideration request by the 30-day deadline (80 FR 46460).
We finalized other procedural requirements for SNFs to request a
reconsideration in the FY 2016 SNF PPS final rule, including submission
of their request via electronic mail to CMS (80 FR 46460 and 46461). We
also provided that, if a SNF is dissatisfied with our decision
regarding their reconsideration request, the SNF may file an appeal
with the Provider Reimbursement Review Board (80 FR 46461).
In the FY 2018 SNF PPS final rule (82 FR 36606; 82 FR 36634 and
36635), we codified the SNF QRP's reconsideration policy, as previously
finalized, at Sec. 413.360(d). Subsequently, we have finalized minor
amendments to Sec. 413.360(d)(1) and (d)(4) to reflect updates to our
methods for communicating our notifications of noncompliance and
reconsideration request decisions (83 FR 39270 and 39271; 83 FR 39290;
84 FR 38817; 84 FR 38832 and 38833).
As codified, our regulation at Sec. 413.360(d) addresses how we
send our written notification of noncompliance to a SNF, the process
for a SNF to request reconsideration, what information a SNF must
include with its reconsideration request (for example, reason(s) for
requesting reconsideration, including all supporting documentation),
that we will not consider a reconsideration request unless the SNF has
complied fully with the procedural requirements, and how
[[Page 18606]]
we notify the SNF of our final decision regarding its reconsideration
request.
We have become aware there are inconsistencies in our preamble and
regulation text regarding SNF requests for reconsideration. On this
basis, in this proposed rule, we seek to clarify these areas.
2. Proposal To Allow SNFs To Request an Extension To File a Request for
Reconsideration
As noted previously, in the FY 2016 SNF PPS final rule, we stated
that, in very limited circumstances, we may grant a request by a SNF to
extend the deadline to submit its reconsideration request, so long as
the SNF requested the extension and demonstrated that extenuating
circumstances existed that prevented it filing a reconsideration
request by the 30-day deadline (80 FR 46460). We did not codify this
policy--permitting SNFs to request an extension to file their
reconsideration request, in our regulation text at Sec. 413.360(d). In
implementing this finalized policy, we have noted two areas where
further clarity would be beneficial to SNFs.
First, we have not clearly defined or explained the term
``extenuating circumstances'' as used in our reconsideration policy. In
contrast, we use the term ``extraordinary circumstances'' in our
Extraordinary Circumstances Exception and Extension (ECE) policy, as
codified at Sec. 413.360(c). We did explain ``extraordinary
circumstances'' in detail when we originally finalized this ECE policy
in the FY 2016 SNF PPS final rule (80 FR 46459).
On this basis, we are proposing to remove the term ``extenuating
circumstances'' as used currently in our reconsideration policy and
replace it with ``extraordinary circumstances.'' Specifically, we
propose that a SNF may request, and CMS may grant, an extension to file
a reconsideration request if the SNF was affected by an extraordinary
circumstance beyond the control of the SNF (for example, a natural or
man-made disaster). By modifying the basis by which a SNF may request
an extension to file a reconsideration request in this manner, we also
propose to incorporate our prior explanation regarding the meaning of
extraordinary circumstances, as set forth in the FY 2016 SNF PPS final
rule (80 FR 46459) as part of our Extraordinary Circumstance Exception
and Extension (ECE) policy.
Second, we have noted some areas in our policy where SNFs may
benefit from clearly demarcated deadlines. Although we believe a SNF
would have an interest in asking for an extension to file a
reconsideration request prior to the deadline, our policy currently
does not specify a deadline for a SNF to submit its request for such an
extension (80 FR 46460). Our policy also provides that, to support such
request, the SNF must demonstrate that extenuating circumstances
existed that prevented filing the reconsideration request by the 30-day
deadline (80 FR 46460). However, we have not specified a temporal
relationship between when the extenuating circumstances occurred and
the reconsideration request deadline. We believe SNFs may benefit from
further specificity regarding these requirements for submitting a
request to extend the deadline to file a reconsideration request.
On this basis, we propose to amend our reconsideration policy as
codified at Sec. 413.360(d) to permit a SNF to request, and CMS to
grant, an extension to file a request for reconsideration of a
noncompliance determination if, during the period to request a
reconsideration as set forth in Sec. 413.360(d)(1), the SNF was
affected by an extraordinary circumstance beyond the control of the SNF
(for example, a natural or man-made disaster). We propose that the SNF
must submit its request for an extension to file a reconsideration
request to CMS via email to <a href="/cdn-cgi/l/email-protection#590a171f080b090b3c3a36372a303d3c2b382d3036372a193a342a7731312a773e362f"><span class="__cf_email__" data-cfemail="92c1dcd4c3c0c2c0f7f1fdfce1fbf6f7e0f3e6fbfdfce1d2f1ffe1bcfafae1bcf5fde4">[email protected]</span></a> no later
than 30 calendar days from the date of the written notification of
noncompliance. We propose that the SNF's extension request, submitted
to CMS, must contain all of the following information: (1) the SNF's
CCN; (2) the SNF's business name; (3) the SNF's business address; (4)
certain contact information for the SNF's chief executive officer or
designated personnel; (5) a statement of the reason for the request for
the extension; and (6) evidence of the impact of the extraordinary
circumstances, including, for example, photographs, newspaper articles,
and other media. We propose to codify this process at Sec.
413.360(d)(5).
We further propose that CMS will notify the SNF in writing of its
final decision regarding its request for an extension to file a
reconsideration of noncompliance request via an email from CMS. We
propose to notify the SNF in writing via email because this will allow
for more expedient correspondence with the SNF, given the 30-day
reconsideration timeframe. We propose to codify this process at Sec.
413.360(d)(6).
We note that we are considering similar proposals across all post-
acute care setting quality reporting programs to more closely align the
reconsideration processes. On average, over the last 3 years, CMS has
received 202 reconsideration requests annually from SNFs. If all these
SNFs submitted an extension to file a reconsideration request to CMS,
we estimate 51 hours total of administrative burden at an increased
cost of $2,391.90 for these SNFs. We refer readers to section X.A.6.b.
of this proposed rule for details on this estimated increase in burden.
We invite comment on these proposals to amend the SNF QRP
reconsideration policy to permit SNFs to request an extension to file a
reconsideration request and to codify this proposed policy and process
at Sec. 413.360(d)(5) and (d)(6).
3. Proposal To Update the Bases on Which CMS Can Grant a
Reconsideration Request
As discussed previously, in FY 2016 SNF PPS final rule (80 FR
46460), we stated that the SNF may file a request for reconsideration
if they believe that the finding of noncompliance is erroneous, have
submitted a request for extension or exception that has not yet been
decided, or have been granted an extension or exception (80 FR 46460).
We further finalized that, as part of the SNF's request for
reconsideration, the SNF must submit all supporting documentation and
evidence demonstrating full compliance with all SNF QRP reporting
requirements for the applicable FY, that the SNF requested an extension
or exception for which a decision has not yet been made, that the SNF
has been granted an extension or exception, or the SNF has experienced
an extenuating circumstance as defined in the FY 2016 SNF PPS final
rule for the ECE policy (80 FR 46459) but failed to file a timely
request of exception (80 FR 46460). We finalized that we would not
review any reconsideration request that fails to provide the necessary
documentation and evidence along with the request (80 FR 46460).
As previously discussed, we codified our reconsideration policy at
Sec. 413.360(d) in the FY 2018 SNF PPS final rule (82 FR 36606; 82 FR
36634 and 36635). Our regulation at Sec. 413.360(d)(2)(vi) requires
that a SNF's request for reconsideration include the reason(s) for
requesting reconsideration including all supporting documentation. As
provided in Sec. 413.360(d)(3), we will not consider a reconsideration
request unless the SNF has complied fully with the requirements of
Sec. 413.360(d)(2), governing submission of its reconsideration
request. We will notify the SNF in writing regarding our final decision
on its reconsideration request in accordance with Sec. 413.360(d)(4).
We believe it would be beneficial for SNFs
[[Page 18607]]
if we codify our specific bases for granting a reconsideration request
in our regulation at Sec. 413.360(d).
On these bases, we propose to modify our reconsideration policy to
provide that we will grant a timely request for reconsideration, and
reverse an initial finding of non-compliance, only if CMS determines
that the SNF was in full compliance with the SNF QRP requirements for
the applicable program year. We would consider full compliance with the
SNF QRP requirements to include CMS granting an exception or extension
to SNF QRP reporting requirements under our ECE policy at Sec.
413.360(c). However, to demonstrate full compliance with our ECE
policy, the SNF would need to comply with our ECE policy's
requirements, including the specific scope of the exception or
extension as granted by CMS.
We propose to revise Sec. 413.360(d)(4) to codify this modified
policy in our regulation.
The remainder of the text at Sec. 413.360(d)(4) would remain the
same. We note that we are considering similar proposals across all
post-acute care quality reporting programs to more closely align the
reconsideration policies and processes.
We invite comment on these proposals to amend, and codify at Sec.
413.360(d)(4), the bases by which we grant a reconsideration request
under the SNF QRP Reconsideration policy.
E. SNF QRP Measure Concepts Under Consideration for Future Years--
Request for Information (RFI): Interoperability, Well-Being, Nutrition
& Delirium
We are seeking input on the importance, relevance, appropriateness,
and applicability of each of the quality measure concepts under
consideration listed in Table 12 for future years in the SNF QRP. As we
review new measure concepts, CMS will prioritize outcome measures that
are evidence-based. In the FY 2024 SNF PPS proposed rule (88 FR 21353
through 21355), we included a request for information (RFI) on a set of
principles for selecting and prioritizing SNF QRP measures, identifying
measurement gaps, and suitable measures for filling these gaps. We
refer readers to the FY 2024 SNF PPS final rule (88 FR 53265 through
53267) for a summary of the public comments received in response to the
RFI.
We are seeking input on four concepts for future measures for the
SNF QRP.
Table 12--Future Measure Concepts Under Consideration for the SNF QRP
------------------------------------------------------------------------
Quality measure concepts
-------------------------------------------------------------------------
Interoperability.
Well-being.
Nutrition.
Delirium.
------------------------------------------------------------------------
1. Interoperability
We are seeking input on the quality measure concept of
interoperability, focusing on information technology systems' readiness
and capabilities in the SNF setting. Title XXX of the Public Health
Service Act defines ``interoperability'' in part, and with respect to
health information technology (IT), as health IT that enables the
secure exchange of electronic health information with, and use of
electronic health information from, other health IT without requiring
special efforts by the user.\1\ The definition further states that
interoperability of health IT allows for complete, including by
providers and residents, access, exchange, and use of electronically
accessible health information for authorized uses under applicable
State or Federal Law.\2\ We request input and comment on approaches to
assessing interoperability in the SNF setting, for instance, measures
that address or evaluate the level of readiness for interoperable data
exchange, or measures that evaluate the ability of data systems to
securely share information across the spectrum of care. Please provide
input on the relevant aspects of interoperability for the SNF setting.
---------------------------------------------------------------------------
\1\ Public Health Service Act, 42 U.S.C. 3000(9) (2025).
\2\ Public Health Service Act, 42 U.S.C. 3000(9) (2025).
---------------------------------------------------------------------------
2. Well-Being
We are seeking input on a quality measure concept of well-being for
future quality measures. We are seeking input on this concept for use
in the SNF QRP with potential use in the SNF VBP. Well-being is a
comprehensive approach to disease prevention and health promotion, as
it integrates mental and physical health <SUP>3 4</SUP> while
emphasizing preventative care to proactively address potential health
issues. This comprehensive approach emphasizes person-centered care by
promoting well-being of residents. We request input and comment on
tools and measures that assess for overall health, happiness, and
satisfaction in life that could include aspects of emotional well-
being, social connections, purpose, fulfillment, and self-care work.
Please provide input on the relevant aspects of well-being for the SNF
setting.
---------------------------------------------------------------------------
\3\ Overall well-being. See more information at <a href="https://odphp.health.gov/healthypeople/objectives-and-data/overall-health-and-well-being-measures/overall-well-being-ohm-01">https://odphp.health.gov/healthypeople/objectives-and-data/overall-health-and-well-being-measures/overall-well-being-ohm-01</a>.
\4\ Well-Being Measurement. See more information at <a href="https://www.va.gov/WHOLEHEALTH/professional-resources/well-being.measurement.asp">https://www.va.gov/WHOLEHEALTH/professional-resources/well-being.measurement.asp</a>.
---------------------------------------------------------------------------
3. Nutrition
We are seeking input on a quality measure concept of nutrition for
future quality measures. We are seeking input on this concept for use
in the SNF QRP with potential use in the SNF VBP. Assessment of an
individual's nutritional status may include various strategies,
guidelines, and practices designed to promote healthy eating habits and
ensure individuals receive the necessary nutrients for maintaining
health, growth, and overall well-being. This also includes aspects of
health that support or mediate nutritional status, such as physical
activity and sleep. In this context, preventable care plays a vital
role by proactively addressing factors that may lead to poor
nutritional status or related health issues. These efforts not only
support optimal nutrition but also work to prevent conditions that
could otherwise hinder an individual's health and nutritional needs. We
request input and comment on tools and frameworks that promote healthy
eating habits, appropriate exercise, nutrition, or physical activity
for optimal health, well-being, and best care for all. Please provide
input on the relevant aspects of nutrition for the SNF setting.
4. Delirium
Finally, we are seeking input on a quality measure concept of
delirium for future quality measures. Delirium, often under-detected,
is a common complication of illness or injury that leads to negative
health outcomes like frailty, cognitive impairment, and functional
decline. Post-acute care residents experiencing delirium symptoms are
more likely to undergo rehospitalization, experience poor functional
recovery outcomes, and have a higher 6-month mortality rate compared to
residents without delirium.\5\ We request input and comment on the
applicability of measures that evaluate for the sudden, serious change
in a person's mental state or altered state of consciousness
[[Page 18608]]
that may be associated with underlying symptoms or conditions. Please
provide input on the relevant aspects of delirium for the SNF setting.
---------------------------------------------------------------------------
\5\ Marcantonio, E.R., Kiely, D.K., Simon, S.E., John Orav, E.,
Jones, R.N., Murphy, K.M., & Bergmann, M.A. (2005). Outcomes of
older people admitted to postacute facilities with delirium. Journal
of the American Geriatrics Society, 53(6), 963-969. <a href="https://doi.org/10.1111/j.1532-5415.2005.53305.x">https://doi.org/10.1111/j.1532-5415.2005.53305.x</a>.
---------------------------------------------------------------------------
F. Potential Revision of the Final Data Submission Deadline From 4.5
Months to 45 Days--Request for Information (RFI)
Sections 1899B(f) and (g) of the Act require CMS to provide
feedback to SNFs and to publicly report their performance on SNF
quality measures specified under section 1899B(c)(1) of the Act and
resource use and other measures specified under 1899B(d)(1) of the Act.
More specifically, section 1899B(f)(1) of the Act requires the
Secretary to provide confidential feedback reports to SNFs on their
performance on the quality, resource use, and other measures specified
under section 1899B(c)(1) and (d)(1) of the Act. Section 1899B(f)(2) of
the Act provides that, to the extent feasible, the Secretary must make
these confidential feedback reports available, no less than on a
quarterly basis except in the case of measures reported on an annual
basis, in which case confidential feedback reports may be made
available annually. Additionally, section 1899B(g)(1) of the Act
requires the Secretary to provide for the public reporting of each
SNFs' performance on the quality measures, resource use, and other
measures specified under sections 1899B(c)(1) and (d)(1) of the Act by
establishing procedures for making the performance data available to
the public. Section 1899B(g)(2) of the Act specifically requires that
such procedures must ensure, including through a process consistent
with the process applied under section 1886(b)(3)(B)(viii)(VII) of the
Act, that SNFs can review and submit corrections to the data and other
information before it is made public.
Although sections 1899B(f) and (g) of the Act require the provision
of confidential feedback reports and public reporting of SNF
performance on measures, section 1888(e)(6)(B)(i) of the Act provides
the Secretary with discretion to prescribe the manner and the
timeframes for SNFs to submit data as specified for reporting for the
SNF QRP. In the FY 2017 SNF PPS final rule (81 FR 52042 and 52043), we
finalized that SNFs will have approximately 4.5 months after each
quarterly data collection period to complete their data submissions and
make corrections to such data where necessary. At that time, we
received several comments supporting the alignment of the data
submission and correction timeframes with other quality reporting
programs, but we did not receive any comments on the 4.5-month data
submission timeframe. We refer readers to the FY 2017 SNF PPS final
rule (81 FR 52041 through 52043) for a detailed discussion of our
proposal and summary of comments received and responses thereto.
Public reporting of data collected under quality programs, such as
the SNF QRP, is designed to provide consumers and their families with
the most current information so they can make quality-informed
decisions about where to receive their care. In the process of
implementing the public reporting for the quality reporting programs,
we have identified that the time between when data on measures is
collected and submitted to us and when that data are publicly reported
(that is, approximately nine months) may be too long to provide the
most accurate and up to date information for the public. For example,
through technical expert panels, we have received feedback from patient
caregiver advocates that the aged data used in publicly reported
quality measures diminishes their value to consumers. Furthermore, we
have heard from SNFs that the SNF QRP measure results they receive
prior to public reporting are not useful for their quality improvement
efforts due to the aged data and the delay in when they receive these
reports.\6\
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\6\ SNF QRP Listening Session Summary: Possible Expansion of MDS
Data Submission to All SNF Residents Regardless of Payer. Available
in the Downloads section of the SNF QRP Measures and Technical
Information web page: <a href="https://www.cms.gov/medicare/quality/snf-quality-reporting-program/measures-and-technical-information">https://www.cms.gov/medicare/quality/snf-quality-reporting-program/measures-and-technical-information</a>.
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Currently, the largest contributing factor to the nine-month lag
between the end of the data collection period and when measures are
publicly reported is the 4.5-month timeframe for data submission. If
the data submission timeframe was reduced from 4.5 months to 45 days,
then the lag time between the end of the data collection period and
public reporting of that data could be reduced by up to three months.
This revised timeframe would result in more timely public reporting of
data that may provide more value for consumers and families as they
make decisions about where they may want to receive their care.
Additionally, this timeframe provides SNFs with more recent data to use
in their quality improvement activities.
An important consideration in reducing the data submission
timeframe is the potential burden it may place on SNFs, which could
lead to fewer assessments submitted within the shorter 45-day data
submission timeframe. We conducted an analysis to evaluate the
potential impact of reducing the timeframe by determining how many
assessments are currently being submitted within 45 days. Using 2023
data, we identified that only 4.2 percent of all MDS assessments were
submitted after the 45-day timeframe. Of those submissions, about two-
thirds (or 2.8 percent of the total MDS assessments submitted) were
submitted between 45 days and 4.5 months and hence have potential to be
impacted.\7\ On these bases, we believe reducing the SNF QRP data
submission deadline from 4.5 months to 45 days would improve the
timeliness of public reporting by one quarter, which could be
beneficial to both consumers and SNFs, with limited change in burden to
SNFs.
---------------------------------------------------------------------------
\7\ Internal CMS analysis of FY 2023 MDS assessment data.
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We are requesting feedback on this potential future reduction of
the SNF QRP data submission deadline from 4.5 months to 45 days that is
under consideration. Specifically, we are requesting comment on:
<bullet> How this potential change could improve the timeliness and
actionability of SNF QRP quality measures;
<bullet> How this potential change could improve public display of
quality information; and
<bullet> How this potential change could impact SNF workflows or
require updates to systems.
We intend to use this input to inform our program improvement
efforts.
G. Advancing Digital Quality Measurement in the SNF QRP--Request for
Information (RFI)
As part of our effort to advance the digital quality measurement
(dQM) transition, we are issuing this request for information (RFI) to
gather broad public input on the dQM transition in SNFs.
1. Background
We are committed to improving healthcare quality through
measurement, transparency, and public reporting of quality data, and to
enhancing healthcare data exchange by promoting the adoption of
interoperable health information technology (IT) that enables
information exchange using Fast Healthcare Interoperability
Resources[supreg] (FHIR[supreg]) standards. Proposing to require the
use of such technology within the SNF QRP in the future could
potentially enable greater care coordination and information sharing,
which is essential for delivering high-quality, efficient care and
better outcomes at a lower cost. In
[[Page 18609]]
the FYs 2021, 2022, 2023 and 2024 SNF PPS proposed rules,\8\ we
outlined several Department of Health and Human Services (HHS)
initiatives aimed at promoting the adoption of interoperable health IT
and facilitating nationwide health information exchange. Further, to
inform our digital strategy, in the FY 2022 SNF PPS proposed rule (86
FR 19998) we shared and sought feedback on the following:
---------------------------------------------------------------------------
\8\ ``Advancing Health Information Exchange'' in: FY 2021 SNF
PPS proposed rule (85 FR 20915) <a href="https://www.federalregister.gov/documents/2020/04/15/2020-07875/medicare-program-prospective-payment-system-and-consolidated-billing-for-skilled-nursing-facilities#p-60">https://www.federalregister.gov/documents/2020/04/15/2020-07875/medicare-program-prospective-payment-system-and-consolidated-billing-for-skilled-nursing-facilities#p-60</a>, FY 2022 SNF PPS proposed rule (86 FR 19956) <a href="https://www.federalregister.gov/d/2021-07556/p-64">https://www.federalregister.gov/d/2021-07556/p-64</a>, FY 2023 SNF PPS proposed
rule (87 FR 22721) <a href="https://www.federalregister.gov/d/2022-07906/p-78">https://www.federalregister.gov/d/2022-07906/p-78</a>, and FY 2024 SNF PPS proposed rule (88 FR 21318) <a href="https://www.federalregister.gov/d/2023-07137/p-76">https://www.federalregister.gov/d/2023-07137/p-76</a>.
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<bullet> Our intent to explore the use of FHIR[supreg]-based
standards to exchange clinical information through application
programming interfaces (APIs).
<bullet> Enabling quality data submission to CMS through our
internet Quality Improvement and Evaluation System (iQIES).
<bullet> To work with healthcare standards organizations to ensure
their standards support our assessment tools.
We are considering opportunities to advance FHIR[supreg]-based
reporting of resident assessment data for the submission of the MDS and
other existing systems such as CDC's National Healthcare Safety Network
(NHSN) for which SNFs have current CMS reporting requirements. Our
objective is to explore how SNFs typically integrate technologies with
varying complexity into existing systems and how this affects SNF
workflows. In this RFI, we seek to identify the challenges and/or
opportunities that may arise during this integration, and determine the
support needed to complete and submit quality data in ways that protect
and enhance care delivery.
We are also seeking input on future measures under consideration
including applicability of interoperability as a future measure concept
in post-acute care settings, including the SNF QRP. Refer to section
VI.E. of this proposed rule for more information.
Any updates specific to the SNF QRP program requirements related to
quality measurement and reporting provisions would be addressed through
separate and future notice-and-comment rulemaking, as necessary.
2. Solicitation for Comment
We seek feedback on the current state of health IT use, including
electronic health records (EHRs), in SNF facilities:
<bullet> To what extent does your SNF use health IT systems to
maintain and exchange resident records? If your facility has
transitioned to using electronic records in part or in whole, what
types of health IT does your SNF use to maintain resident records? Are
these health IT systems certified under the Office of the National
Coordinator for Health Information Technology Health Information
Technology (ONC Health IT) Certification Program? If your facility uses
health IT products or systems that are not certified under the ONC
Health IT Certification Program, please specify. Does your facility use
EHRs or other health IT products or systems that are not certified
under the ONC Health IT Certification Program? If no, what is the
reason for not doing so? Do these other systems exchange data using
standards and implementation specifications adopted by HHS? Does your
facility maintain any resident records outside of these electronic
systems? If so, are the data organized in a structured format, using
codes and recognized standards, that can be exchanged with other
systems and providers?
<bullet> Does your SNF submit resident assessment data to CMS
directly from your health IT system without the assistance of a third-
party intermediary? If a third-party intermediary is used to report
data, what type of intermediary service is used? How does your facility
currently exchange health information with other healthcare providers
or systems, specifically between SNFs and other provider types? What
about health information exchange with other entities, such as public
health agencies? What challenges do you face with electronic exchange
of health information?
<bullet> Are there any challenges with your current electronic
devices (for example, tablets, smartphones, computers) that hinder your
ability to easily exchange information across systems? Please describe
any specific issues you encounter. Does limited internet or lack of
internet connectivity impact your ability to exchange data with other
healthcare providers, including community-based care services, or your
ability to submit resident assessment data to CMS? Please specify.
<bullet> What steps does your SNF take with respect to the
implementation of health IT systems to ensure compliance with security
and patient privacy requirements such as the Health Insurance
Portability and Accountability Act (HIPAA)?
<bullet> Does your SNF refer to the Safety Assurance Factors for
EHR Resilience (SAFER) Guides (see newly revised versions published in
January 2025 at <a href="https://www.healthit.gov/topic/safety/safer-guides">https://www.healthit.gov/topic/safety/safer-guides</a>) to
self-assess EHR safety practices?
<bullet> What challenges or barriers does your facility encounter
when submitting quality measure data to CMS as part of the SNF QRP?
What opportunities or factors could improve your facility's successful
data submission to CMS?
<bullet> What types of technical assistance guidance, workforce
trainings, and/or other resources would be most beneficial for the
implementation of FHIR[supreg]-based technology in your facility for
the submission of the MDS to CMS and other existing systems such as
CDC's National Healthcare Safety Network (NHSN) for which SNFs have
current CMS reporting requirements? What strategies can CMS, HHS, or
other federal partners take to ensure that technical assistance is both
comprehensive and user-friendly? How could Quality Improvement
Organizations (QIOs) or other entities enhance this support?
<bullet> Is your facility using technology that utilizes APIs based
on the FHIR[supreg] standard to enable electronic data sharing? If so,
with whom are you sharing data using the FHIR[supreg] standard and for
what purpose(s)? For example, have you used FHIR[supreg] APIs to share
data with public health agencies? Does your facility use any
Substitutable Medical Applications and Reusable Technologies (SMART) on
FHIR[supreg] applications? If so, are the SMART on FHIR[supreg]
applications integrated with your EHR or other health IT?
<bullet> How do you anticipate the adoption of technology using
FHIR[supreg]-based APIs to facilitate the reporting of resident
assessment data could impact provider workflows? What impact, if any,
do you anticipate it will have on quality of care?
<bullet> What benefits or challenges have you experienced with
implementing technology that uses FHIR[supreg]-based APIs? How can
adopting technology that uses FHIR[supreg]-based APIs to facilitate the
reporting of resident assessment data impact provider workflows? What
impact, if any, does adopting this technology have on quality of care?
<bullet> Does your facility have any experience using technology
that shares electronic health information using one or more versions of
the United States Core Data for Interoperability (USCDI) standard? \9\
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\9\ For more information about USCDI see <a href="https://www.healthit.gov/isp/united-states-core-data-interoperability-uscdi">https://www.healthit.gov/isp/united-states-core-data-interoperability-uscdi</a>.
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<bullet> Would your SNF and/or vendors be interested in
participating in testing to
[[Page 18610]]
explore options for transmission of assessments, for example testing
the transmission of a FHIR[supreg]-based assessment to CMS?
<bullet> How could the Trusted Exchange Framework and Common
Agreement<SUP>TM</SUP> (TEFCA<SUP>TM</SUP>) support CMS quality
programs' adoption of FHIR[supreg]-based assessment submissions
consistent with the FHIR[supreg] Roadmap (available at <a href="https://rce.sequoiaproject.org/three-year-fhir-roadmap-for-tefca/">https://rce.sequoiaproject.org/three-year-fhir-roadmap-for-tefca/</a>)? How might
resident assessment data hold secondary uses for treatment or other
TEFCA exchange purposes?
<bullet> What other information should we consider to facilitate
successful adoption and integration of FHIR[supreg]-based technologies
and standardized data for patient/resident assessment instruments like
the MDS? We invite any feedback, suggestions, best practices, or
success stories related to the implementation of these technologies.
We invite any feedback, suggestions, best practices, or success
stories related to the implementation of these technologies and will
use this input to inform our future dQM transition efforts.
H. Form, Manner, and Timing of Data Submission Under the SNF QRP
We are not currently proposing any new policies regarding the form,
manner, and timing of data submitted under the SNF QRP. We refer
readers to the current regulatory text at Sec. 413.360(b) for
information regarding the policies for reporting specified data for the
SNF QRP.
I. Policies Regarding Public Display of Measure Data for the SNF QRP
We are not currently proposing any new policies regarding the
public display of measure data. For a discussion of our policies
regarding public display of SNF QRP measure data and procedures for the
SNFs to review and correct data and information prior to their
publication, we refer readers to the FY 2017 SNF PPS final rule (81 FR
52045 through 52048).
VII. Updates to the Skilled Nursing Facility Value-Based Purchasing
(SNF VBP) Program
A. Statutory Background
Through the Skilled Nursing Facility Value-Based Purchasing (SNF
VBP) Program, we award incentive payments to SNFs to encourage
improvements in the quality of care provided to Medicare beneficiaries.
The SNF VBP Program is authorized by section 1888(h) of the Act, and it
applies to freestanding SNFs, SNFs affiliated with acute care
facilities, and all non-Critical Access Hospitals (CAH) swing-bed rural
hospitals. The SNF VBP Program has helped to transform how Medicare
payment is made for SNF care, moving toward rewarding better value and
outcomes instead of merely rewarding volume. Our codified policies for
the SNF VBP Program can be found in our regulations at 42 CFR
413.337(f) and 413.338.
B. Proposed Removal of the Health Equity Adjustment From the SNF VBP
Program Scoring Methodology
1. Background
In the FY 2024 SNF PPS final rule (88 FR 53304 through 53318), we
adopted a Health Equity Adjustment (HEA) that, beginning with the FY
2027 program year, rewards top tier performing SNFs that serve higher
proportions of SNF residents with dual eligibility status. We codified
the HEA at Sec. 413.338(k) of our regulations. Section 1888(h)(4)(A)
of the Act requires the Secretary to develop a methodology for
assessing the total performance of each SNF based on performance
standards established under section 1888(h)(3) of the Act with respect
to the measures applied under section 1888(h)(2) of the Act.
As we discussed in the FY 2024 SNF PPS final rule, by providing the
HEA to SNFs that serve higher proportions of SNF residents with dual
eligibility status and that perform well on quality measures, we
believed the HEA would appropriately recognize the resource intensity
expended to achieve high performance on quality measures by SNFs that
serve a high proportion of SNF residents with dual eligibility status,
while also mitigating the worse health outcomes experienced by dually
eligible residents through incentivizing better care across all SNFs.
In the FY 2024 SNF PPS final rule (88 FR 53304 through 53318), we
also finalized a variable payback percentage, increasing the total
amount available for value-based incentive payments for a fiscal year,
beginning with the FY 2027 program year. We codified the increase in
the total amount available for value-based incentive payments as
appropriate for each fiscal year to account for the application of the
HEA at Sec. 413.338(c)(2)(i) of our regulations. The variable payback
percentage would vary by program year to account for the application of
the HEA such that SNFs that receive the HEA would receive increased
value-based incentive payment amounts, and SNFs that do not receive the
HEA would not experience a decrease in their value-based incentive
payment amount, to the greatest extent possible, relative to no HEA in
the SNF VBP Program and maintaining a payback percentage of 60 percent.
That is, the variable payback percentage confirms that a very limited
number of SNFs (if any) that do not receive HEA bonus points will
experience a downward payment adjustment.
2. Proposal To Remove the Health Equity Adjustment Beginning With the
FY 2027 Program Year
In this proposed rule, we are proposing to remove the HEA because
we believe simplifying the SNF VBP Program's scoring methodology by
removing the HEA will improve SNFs' understanding of the program and
provide clearer incentives for SNFs as they seek to improve their
quality of care for all residents. In addition, the estimated impact of
removing the HEA on overall incentive payment adjustments is small. We
conducted an analysis utilizing FY 2018 through FY 2021 measure data
for all 8 measures in the FY 2028 Program year's measure set,
estimating that the average incentive payment multiplier with the HEA
would be 0.9924613988 and without the HEA would be 0.9915553875. Given
this relatively small, estimated impact, and in light of the
Administration's priority to streamline regulations and reduce burdens
on those participating in the Medicare program, we are proposing to
remove the HEA at this time. We refer readers to the Supplementary
Information at the start of this proposed rule for the Unleashing
Prosperity Through Deregulation of the Medicare Program--Request for
Information for more information.
We considered altering the structure of the adjustment methodology
to simplify it, but that process will require time to develop and test
a new adjustment and, if pursued, would be addressed in future
rulemaking.
We also do not anticipate that any serious reliance interests would
be impacted by this proposed rule.
We propose to codify this removal of the HEA by removing Sec.
413.338 (k) and (e)(3)(iii) from our regulations, by removing terms
related to the HEA in Sec. 413.338 (a) of our regulations, and to
revise Sec. 413.338(c)(2)(i) of our regulations to remove the variable
payback percentage adopted beginning in the FY 2027 program year and
instead maintain the 60 percent payback percentage adopted beginning in
the FY 2023 program year.
We welcome public comment on these proposals.
[[Page 18611]]
C. SNF VBP Program Measures
1. Background
Our current measure selection, retention, and removal policy is
codified at Sec. 413.338(l) of our regulations. We also refer readers
to the FY 2024 SNF PPS final rule for background on the measures we
have adopted for the SNF VBP Program (88 FR 53276 through 53297). Table
13 lists the measures that have been adopted for the SNF VBP Program,
along with their status in the program for the FY 2026 program year
through the FY 2029 program year.
Table 13--SNF VBP Program Measures and Status in the SNF VBP Program for the FY 2026 Program Year Through the FY
2029 Program Year
----------------------------------------------------------------------------------------------------------------
FY 2026 program FY 2027 program FY 2028 program FY 2029 program
Measure year year year year
----------------------------------------------------------------------------------------------------------------
Skilled Nursing Facility 30-Day All- Included.......... Included......... ................. .................
Cause Readmission Measure (SNFRM).
Skilled Nursing Facility Healthcare- Included.......... Included......... Included......... Included.
Associated Infections Requiring
Hospitalization (SNF HAI) measure.
Total Nurse Staffing Hours per Included.......... Included......... Included......... Included.
Resident Day (Total Nurse
Staffing) measure.
Total Nursing Staff Turnover Included.......... Included......... Included......... Included.
(Nursing Staff Turnover) measure.
Discharge to Community--Post-Acute .................. Included......... Included......... Included.
Care Measure for Skilled Nursing
Facilities (DTC PAC SNF).
Percent of Residents Experiencing .................. Included......... Included......... Included.
One or More Falls with Major
Injury (Long-Stay) (Falls with
Major Injury (Long-Stay)) measure.
Discharge Function Score for SNFs .................. Included......... Included......... Included.
(DC Function) measure.
Number of Hospitalizations per .................. Included......... Included......... Included.
1,000 Long Stay Resident Days
(Long Stay Hospitalization)
measure.
Skilled Nursing Facility Within- .................. ................. Included......... Included.
Stay Potentially Preventable
Readmissions (SNF WS PPR) measure.
----------------------------------------------------------------------------------------------------------------
D. SNF VBP Performance Standards
1. Background
Our current definitions for the performance standards are codified
at Sec. 413.338(a) of our regulations, and our current performance
standards notification and updates policies are codified at Sec.
413.338(n) of our regulations. We also refer readers to the FY 2024 SNF
PPS final rule (88 FR 53299 through 53300) for a detailed history of
our performance standards policies. In the FY 2025 SNF PPS final rule
(89 FR 64128 through 64129), we adopted the final numerical values for
the FY 2027 performance standards and the final numerical values for
the FY 2028 performance standards for the Discharge to Community--Post-
Acute Care Measure for Skilled Nursing Facilities (DTC PAC SNF) and
Skilled Nursing Facility Within-Stay Potentially Preventable
Readmissions (SNF WS PPR) measures.
2. Estimated Performance Standards for the FY 2028 Program Year
To meet the requirements at section 1888(h)(3)(C) of the Act, we
are providing estimated numerical performance standards for the
remaining measures applicable for the FY 2028 program year: the SNF
Healthcare-Associated Infections Requiring Hospitalization (SNF HAI)
measure, Total Nurse Staffing Hours per Resident Day (Total Nurse
Staffing) measure, Total Nursing Staff Turnover (Nursing Staff
Turnover) measure, Percent of Residents Experiencing One or More Falls
with Major Injury (Long-Stay) (Falls with Major Injury (Long-Stay))
measure, Number of Hospitalizations per 1,000 Long Stay Resident Days
(Long Stay Hospitalization) measure, and Discharge Function Score for
SNFs (DC Function) measure. In accordance with our previously finalized
methodology for calculating performance standards (81 FR 51996 through
51998), the estimated numerical values for the FY 2028 program year
performance standards are shown in Table 14. We will provide the final
numerical performance standards for the remaining measures applicable
for the FY 2028 program year in the FY 2026 SNF PPS final rule.
Table 14--Estimated FY 2028 SNF VBP Program Performance Standards
----------------------------------------------------------------------------------------------------------------
Measure short name Achievement threshold Benchmark
----------------------------------------------------------------------------------------------------------------
SNF HAI Measure.................................................... 0.92219 0.94693
Total Nurse Staffing Measure....................................... 3.21488 5.81159
Nursing Staff Turnover Measure..................................... 0.40230 0.75655
Falls with Major Injury (Long-Stay) Measure........................ 0.95349 0.99950
Long Stay Hospitalization Measure.................................. 0.99758 0.99959
DC Function Measure................................................ 0.40000 0.78800
----------------------------------------------------------------------------------------------------------------
3. Estimated Performance Standards for the FY 2029 Program Year
To meet the requirements at section 1888(h)(3)(C) of the Act, we
are providing estimated numerical performance standards for the FY 2029
program year for the DTC PAC SNF and SNF WS PPR measures. In accordance
with our previously finalized methodology for calculating performance
standards (81 FR 51996 through 51998), the estimated numerical values
for the FY 2029 program year performance standards for the DTC PAC SNF
and SNF WS PPR measures are shown in Table 15. We will provide the
final numerical performance standards for the DTC PAC SNF and SNF WS
PPR measures in the FY 2026 SNF PPS final rule.
We will provide the estimated numerical performance standards
values for the remaining measures applicable
[[Page 18612]]
to the FY 2029 program year in the FY 2027 SNF PPS proposed rule.
Table 15--Estimated FY 2029 SNF VBP Program Performance Standards
----------------------------------------------------------------------------------------------------------------
Measure short name Achievement threshold Benchmark
----------------------------------------------------------------------------------------------------------------
DTC PAC SNF Measure................................................ 0.42612 0.67309
SNF WS PPR Measure................................................. 0.86372 0.92363
----------------------------------------------------------------------------------------------------------------
E. SNF VBP Performance Scoring Methodology
1. Proposed Application of SNF VBP Scoring Methodology to the SNF WS
PPR Measure
a. Background
Our scoring methodology beginning in the FY 2027 program year is
codified at Sec. Sec. 413.338(e)(1), 413.338(e)(3), and 413.338(k) of
our regulations, and our current case minimum and measure minimum
policies are codified at Sec. 413.338(b) of our regulations. We also
refer readers to the FY 2024 SNF PPS final rule (88 FR 53300 through
53304) for a detailed history of our performance scoring methodology
and the FY 2025 SNF PPS final rule (89 FR 64131 through 64132) for an
update to the measure minimum policy for the FY 2028 program year and
subsequent program years. Under this methodology, we will calculate the
SNF performance score beginning with the FY 2027 program year as
follows:
<bullet> We will award up to 10 points for each measure based on
improvement or achievement, so long as the SNF reports a measure's
applicable minimum number of cases during the performance period
applicable to that fiscal year;
<bullet> We will sum all points awarded to a SNF based on their
performance on each measure; we will normalize the SNF's point total
such that the resulting point total is expressed as a number of points
earned out of a total of 100; and
<bullet> We will add to the SNF's normalized point total any
applicable bonus points calculated such that the resulting point total
is the overall SNF performance score for the fiscal year, except that
no SNF performance score may exceed 100 points.
In the FY 2023 SNF PPS final rule (87 FR 47588 through 47590), we
finalized an application of the scoring methodology to the SNF HAI, DTC
PAC SNF, and Total Nurse Staffing measures. In the FY 2024 SNF PPS
final rule (88 FR 53303 through 53304), we finalized an application of
the scoring methodology to the Nursing Staff Turnover, Falls with Major
Injury (Long-Stay), Long Stay Hospitalization, and DC Function
measures. Lastly, in the FY 2024 SNF PPS final rule (88 FR 53303), we
stated that we intended to address the FY 2028 performance scoring
methodology in future rulemaking, as we had also proposed to replace
the SNFRM with the SNF WS PPR measure beginning with the FY 2028
program year.
b. Proposed Application of the SNF VBP Scoring Methodology to the SNF
WS PPR Measure Beginning With the FY 2028 Program Year
In the FY 2024 SNF PPS final rule (88 FR 53280), we finalized that
the SNF WS PPR measure will replace the SNFRM beginning with the FY
2028 SNF VBP program year. We are proposing to apply the previously
finalized scoring methodology codified at Sec. 413.338(e)(1) and Sec.
413.338(e)(3) of our regulations to the SNF WS PPR measure beginning
with the FY 2028 program year to align the scoring methodology applied
to the SNF WS PPR measure with the scoring methodology previously
finalized and applied to all other measures in the SNF VBP Program's
measure set.
We invite public comment on our proposal to apply the previously
finalized scoring methodology to the SNF WS PPR measure beginning with
the FY 2028 SNF VBP program year.
F. Proposal To Adopt a SNF VBP Program Reconsideration Process
1. Background
We refer readers to the FY 2025 SNF PPS final rule (89 FR 64133
through 64136) and to Sec. 413.338(f) of our regulations for details
on the SNF VBP Program's confidential feedback reports policies, the
two-phase review and correction process, and public reporting policies
that we have adopted for the Program. We also refer readers to the SNF
VBP Program website (<a href="https://www.cms.gov/medicare/quality/nursing-home-improvement/value-based-purchasing/confidential-feedback-reporting-review-and-corrections">https://www.cms.gov/medicare/quality/nursing-home-improvement/value-based-purchasing/confidential-feedback-reporting-review-and-corrections</a>) for technical details on our review and
correction process.
In Phase One of the review and correction process, codified at
Sec. 413.338(f)(2) of our regulations, we accept correction requests
for 30 days after distributing the baseline period and performance
period quality measure quarterly reports, which contain the baseline
period and performance period measure results, respectively. SNFs may
submit corrections to the measure results contained in those reports.
The underlying data used to calculate the measure results are not
subject to review and correction during this process. And as codified
at Sec. 413.338(f)(1) of our regulations, measure results included in
those reports are calculated using data current as of specified dates
for each measure.
In Phase Two of the review and correction process, codified at
Sec. 413.338(f)(3) of our regulations, we accept correction requests
for 30 days after distributing the Performance Score Report which
contains the SNF performance score and ranking. SNFs may submit
corrections to the SNF performance score and ranking contained in this
report.
Under our current review and correction policy, the SNF must
identify the error for which it is requesting correction, explain its
reason for requesting the correction, and submit documentation or other
evidence, if available, supporting the request. Correction requests
must contain all of the following:
<bullet> The SNF's CMS Certification Number (CCN).
<bullet> The SNF's name.
<bullet> The correction requested.
<bullet> The reason for requesting the correction, including any
available evidence to support the request.
We review all review and correction requests and notify the
requesting SNF of our decision. We also implement any approved
corrections before the affected data becomes publicly available on the
website CMS uses to make quality data available to the public,
currently the Provider Data Catalog website (<a href="https://data.cms.gov/provider-data/">https://data.cms.gov/provider-data/</a>).
In this proposed rule, we are proposing to adopt a reconsideration
process that will allow SNFs to seek reconsideration of a review and
correction request if they are not satisfied with our decision on a
review and correction request submitted under section 413.338(f)(2) or
(f)(3). We are also proposing technical updates to our
[[Page 18613]]
regulation text to align the submission requirements for the proposed
reconsideration process with the submission requirements under the
review and correction process.
2. Proposed SNF VBP Program Reconsideration Process
Beginning with the FY 2027 SNF VBP program year, we are proposing
to implement a reconsideration request process that would be an
additional appeal process available to SNFs beyond the existing Phase
One and Phase Two review and correction process. The proposed
reconsideration request process would align the SNF VBP Program with
other CMS quality programs, including the Expanded Home Health Value-
Based Purchasing (HHVBP) Model (42 CFR 484.375(b)), to create a
familiar policy experience for providers across CMS quality programs.
We are proposing that SNFs would be able to request this additional
reconsideration only if they first submit a valid review and correction
request described at Sec. Sec. 413.338(f)(2) or (3) of our regulations
and are dissatisfied with the decision.
Under this proposed reconsideration process, SNFs would have 15
calendar days starting the day after the date we issue a decision via
email on a review and correction request (as noted on that decision)
submitted under section Sec. 413.338(f)(2) or (3). SNFs that seek
reconsideration of a review and correction request decision must submit
their reconsideration requests via email in the form and manner
specified by CMS in the review and correction decision. The
reconsideration request must contain all of the following:
<bullet> The SNF's CMS Certification Number (CCN).
<bullet> The SNF's name.
<bullet> The issue for which the SNF submitted a review and
correction request, received a review and correction request decision,
and are requesting reconsideration of.
<bullet> The reason why the SNF is requesting reconsideration,
which can be supported by any applicable documentation or other
evidence.
We would review the reconsideration request and provide a written
decision to the SNF in a timely manner before any affected data becomes
publicly available on the website CMS uses to make quality data
available to the public, currently the Provider Data Catalog website
(<a href="https://data.cms.gov/provider-data/">https://data.cms.gov/provider-data/</a>).
We are also proposing to codify the proposed SNF VBP Program's
reconsideration process at Sec. 413.338(f)(6) of our regulations.
We welcome public comment on this proposal.
3. Proposed Regulation Text Technical Updates
We are proposing to codify certain provisions of our existing
review and correction process that we finalized in the FY 2017 SNF PPS
final rule (81 FR 52006 through 52009) and FY 2018 SNF PPS final rule
(82 FR 36621 through 36623) but did not codify at that time.
Specifically, we are proposing to update Sec. 413.338(f)(2) and (3) to
specify that SNFs must submit their review and correction requests by
sending an email to the SNF VBP Program Help Desk, which is currently
available at <a href="/cdn-cgi/l/email-protection#73203d3525312302061600071a1c1d0033101e005d1b1b005d141c05"><span class="__cf_email__" data-cfemail="20736e667662705155455354494f4e5360434d530e4848530e474f56">[email protected]</span></a>.
We welcome public comment on these proposed technical updates to
our regulation text.
VIII. Collection of Information Requirements
Under the Paperwork Reduction Act of 1995, we are required to
provide 60-day notice in the Federal Register and solicit public
comment before a collection of information requirement is submitted to
the Office of Management and Budget (OMB) for review and approval. In
order to fairly evaluate whether an information collection should be
approved by OMB, section 3506(c)(2)(A) of the Paperwork Reduction Act
of 1995 requires that we solicit comment on the following issues:
<bullet> The need for the information collection and its usefulness
in carrying out the proper functions of our agency.
<bullet> The accuracy of our estimate of the information collection
burden.
<bullet> The quality, utility, and clarity of the information to be
collected.
<bullet> Recommendations to minimize the information collection
burden on the affected public, including automated collection
techniques.
We are soliciting public comment on each of these issues for the
following sections of this document that contain information collection
requirements (ICRs):
A. ICRs Regarding the Skilled Nursing Facility Value-Based Purchasing
Program
With regard to the SNF VBP Program, in section VII.F of this
proposed rule, we are proposing to adopt a reconsideration process that
will allow SNFs to seek reconsideration of a review and correction
request if they are not satisfied with our decision on a review and
correction request submitted under section 413.338(f)(2) or (f)(3) of
our regulations. We are also proposing to codify certain provisions of
our existing review and correction process that we finalized in the FY
2017 SNF PPS final rule (81 FR 52006 through 52009) and FY 2018 SNF PPS
final rule (82 FR 36621 through 36623) but did not codify at that time.
The review and correction and reconsideration process would provide
SNFs an opportunity to review information that is to be made public
with respect to the facility prior to such information being made
public, as required by section 1888(g)(6)(B) of the Act. This
opportunity to review is exempt from the Paperwork Reduction Act, as
specified by section 1888(g)(7) of the Act. This opportunity to review
is also voluntary, and will not create any new, required reporting
burdens for SNFs.
In addition, in section VII.B of this proposed rule, we are
proposing to remove the Health Equity Adjustment previously adopted in
the FY 2024 SNF PPS final rule (88 FR 53304 through 53318). The source
of data we would have used to calculate this adjustment was the State
Medicare Modernization Act (MMA) file of dual eligibility, therefore
our calculation of this adjustment would not have created any
additional reporting burden for SNFs, and thus removing the adjustment
will also not create any new or revised reporting burdens for SNFs.
Because this rule does not propose removing or adding any new or
revised collection of information requirements or burden related to the
SNF VBP Program, this section of the rule is not subject to OMB
approval under the authority of the Paperwork Reduction Act of 1995
(PRA) (44 U.S.C. 3501 et seq.). For the purpose of this section,
collection of information is defined under 5 CFR 1320.3(c) of the PRA's
implementing regulations.
If you comment on these information collections, that is,
reporting, recordkeeping or third-party disclosure requirements, please
submit your comments electronically as specified in the ADDRESSES
section of this proposed rule.
B. ICRs Regarding the Skilled Nursing Facility Quality Reporting
Program (SNF QRP)
In accordance with section 1888(e)(6)(A)(i) of the Act, the
Secretary must reduce by 2-percentage points the otherwise applicable
annual payment update to a SNF for a fiscal year if the SNF does not
comply with the requirements of the SNF QRP for that fiscal year.
In section VI.C. of the proposed rule, we are proposing to remove
four standardized patient assessment data elements under the SDOH
category beginning with the FY 2027 SNF QRP.
[[Page 18614]]
In Section VI.D. of the proposed rule, we are also proposing to amend
our reconsideration policy and process. As we noted in the FY 2016 SNF
PPS Proposed rule (80 FR 22082), because the reconsideration
requirements are associated with an administrative action (5 CFR
1320.4(a)(2) and (c)), they are exempt from the requirements of the
PRA. We have, however, provided detailed burden estimates in section
X.A.6.b. of this proposed rule.
1. ICRs Regarding the Removal of Four Standardized Patient Assessment
Data Elements Beginning With the FY 2027 SNF QRP
As stated in section VI.C. of the proposed rule, we are proposing
to remove four standardized patient assessment data elements under the
SDOH category previously adopted for collection and submission on
admission beginning October 1, 2025. The MDS, in its current form, has
been approved under OMB control number 0938-1140. On November 25, 2024,
under the Paperwork Reduction Act of 1995 (PRA), we placed a notice in
the Federal Register (89 FR 92939, November 25, 2024) on the revised
collection and implementation of the MDS 3.0 v1.20.1 beginning October
1, 2025. Although we did not receive any comments in response to this
notice, the revised collection and implementation package was not
finalized. We are now revising the package to support the proposed
removal of four standardized patient assessment data elements under the
SDOH category previously adopted and seeking comment on the updated
package.
The net result of removing four data elements at admission would be
an estimated decrease of 1.2 minutes or 0.02 hour of clinical staff
time at admission (4 data elements x 0.005 hour). We identified the
staff type based on past SNF burden calculations, and our assumptions
were based on the categories generally necessary to perform an
assessment. We believe these items would be completed equally by a
Registered Nurse (RN) and Licensed Practical and Licensed Vocational
Nurse (LPN/LVN). However, individual SNFs determine the staffing
resources necessary.
For the purposes of calculating the costs associated with the
collection of information requirements, we obtained median hourly wage
estimates for these staff from the U.S. Bureau of Labor Statistics'
(BLS) May 2023 National Occupational Employment and Wage Estimates.\10\
To account for other indirect costs and fringe benefits, we doubled the
median hourly wage. These amounts are detailed in Table 16. We
established a composite cost estimate using our adjusted hourly wage
estimates. The composite estimate of $70.10/hr was calculated by
weighting the adjusted hourly wage of the Registered Nurse (RN) and
Licensed Practical and Licensed Vocational Nurse (LPN/LVN) equally
[($82.76/hr x 0.5) plus ($57.44/hr x 0.5) = $70.10].
---------------------------------------------------------------------------
\10\ U.S. Bureau of Labor Statistics. Occupational Employment
and Wage Statistics. May 2023. <a href="https://www.bls.gov/oes/current/oes_stru.htm">https://www.bls.gov/oes/current/oes_stru.htm</a>.
Table 16--U.S. Bureau of Labor and Statistics' May 2023 National Occupational Employment and Wage Estimates
----------------------------------------------------------------------------------------------------------------
Other indirect
Occupation Median hourly costs and Adjusted
Occupation title code wage ($/hr) fringe benefit hourly wage ($/
($/hr) hr)
----------------------------------------------------------------------------------------------------------------
Licensed Practical and Licensed Vocational Nurse 29-2061 $28.72 $28.72 $57.44
(LPN/LVN).........................................
Registered Nurse (RN).............................. 29-1141 41.38 41.38 82.76
----------------------------------------------------------------------------------------------------------------
We estimate that the burden and cost for SNFs for complying with
the requirements of the FY 2027 SNF QRP would decrease under this
proposal. Using FY 2024 data, we estimate a total of 1,589,560 5-day
PPS assessments by 15,253 SNFs for an annual decrease of 31,791.20
hours in burden for all SNFs at admission (1,589,560 5-day PPS
assessments x 0.02 hour) and an annual decrease of 2.08 hours in burden
per SNF at admission (31,791.20 hours/15,253 SNFs). Given 0.02 hour at
$70.10 per hour to complete an average of 104 5-day PPS assessments per
SNF per year, we estimate the total annual cost at admission would be
decreased by $2,228,563.12 for all SNFs (31,791.20 hours x $70.10/hr)
or $146.11 per SNF ($2,228,563.12/15,253 SNFs).
The total estimated burden associated with the proposed removal of
four standardized patient assessment data elements at admission (as
described in this section) is summarized in Table 17.
Table 17--Estimated Reduction in Burden Associated With Removal of Four Standardized Patient Assessment Data
Elements Under the SDOH Category Beginning With the FY 2027 SNF QRP
----------------------------------------------------------------------------------------------------------------
Per SNF All SNFs
----------------------------------------------------------------------------
Requirement Change in annual Change in Change in annual Change in annual
burden hours annual cost burden hours cost
----------------------------------------------------------------------------------------------------------------
Proposal to Remove of Four -2.08 -$146.11 -31,791.20 $2,228,563.12
Standardized Patient Assessment
Data Elements.....................
----------------------------------------------------------------------------------------------------------------
We invite public comments on the proposed information collection
requirements and whether our estimated burden reduction of 0.02 hours
per patient and an annual decrease of 2.08
[[Page 18615]]
hours in burden per SNF at admission is an accurate estimate.
IX. Response to Comments
Because of the large number of public comments we normally receive
on Federal Register documents, we are not able to acknowledge or
respond to them individually. We will consider all comments we receive
by the date and time specified in the DATES section of this preamble,
and, when we proceed with a subsequent document, we will respond to the
comments in the preamble to that document.
X. Regulatory Impact Analysis
A. Statement of Need
1. Statutory Provisions
If finalized, this rule would update the FY 2026 SNF prospective
payment rates as required under section 1888(e)(4)(E) of the Act. It
also would respond to section 1888(e)(4)(H) of the Act, which requires
the Secretary to provide for publication in the Federal Register before
the August 1 that precedes the start of each FY, the unadjusted Federal
per diem rates, the case-mix classification system, and the factors to
be applied in making the area wage adjustment. These are statutory
provisions that prescribe a detailed methodology for calculating and
disseminating payment rates under the SNF PPS, and we do not have the
discretion to adopt an alternative approach on these issues.
With respect to the SNF QRP, as described in section VI.C of this
proposed rule, we are proposing to remove four standardized patient
assessment data elements beginning with the FY 2027 SNF. As described
in VI.D of this proposed rule, we are also proposing updates to our
reconsideration policy and process under the statutory discretion
afforded to the Secretary under section 1888(e)(6) of the Act.
With respect to the SNF VBP Program, this rule proposes updates to
the SNF VBP Program requirements for FY 2026 and subsequent years.
Section 1888(h)(3) of the Act requires the Secretary to establish and
announce performance standards for SNF VBP Program measures no later
than 60 days before the beginning of the performance period, and this
proposed rule estimates numerical values of the performance standards
for the FY 2028 program year for the SNF HAI, Total Nurse Staffing,
Nursing Staff Turnover, Falls with Major Injury (Long-Stay), DC
Function, and Long Stay Hospitalization measures; and numerical values
of the performance standards for the FY 2029 program year for the DTC
PAC SNF and SNF WS PPR measures.
2. Discretionary Provisions
In addition, this proposed rule includes the following
discretionary provisions:
a. SNF Forecast Error Adjustment
Each year, we evaluate the SNF market basket forecast error for the
most recent year for which historical data is available. The forecast
error is determined by comparing the projected SNF market basket
increase each year with the actual SNF market basket increase in that
year. In evaluating the data for FY 2024, we found that the forecast
error for that year was 0.6 percentage point, exceeding the 0.5
percentage point threshold we established in regulation to trigger a
forecast error adjustment. Given that the forecast error exceeds the
0.5 percentage point threshold for FY 2024, current regulations require
that the SNF market basket percentage increase for FY 2026 be adjusted
upward by 0.6 percentage point to account for forecasting error in the
FY 2024 SNF market basket update.
b. Technical Updates to ICD-10 Mappings
In the FY 2019 SNF PPS final rule (83 FR 39162), we finalized the
implementation of the PDPM, effective October 1, 2019. The PDPM
utilizes 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. In this rule, we are proposing several substantive changes
to the PDPM ICD-10 code mapping.
3. Introduction
We have examined the impacts of this proposed rule as required by
Executive Order 12866, ``Regulatory Planning and Review''; Executive
Order 13132, ``Federalism''; Executive Order 13563, ``Improving
Regulation and Regulatory Review''; Executive Order 14192, ``Unleashing
Prosperity Through Deregulation''; the Regulatory Flexibility Act (RFA)
(Pub. L. 96-354); section 1102(b) of the Social Security Act; section
202 of the Unfunded Mandates Reform Act of 1995 (Pub. L. 104-4).
Executive Orders 12866 and 13563 direct agencies to assess all
costs and benefits of available regulatory alternatives and, if
regulation is necessary, to select those regulatory approaches that
maximize net benefits (including potential economic, environmental,
public health and safety, and other advantages; distributive impacts).
Section 3(f) of Executive Order 12866 defines a ``significant
regulatory action'' as any regulatory action that is likely to result
in a rule that may: (1) have an annual effect on the economy of $100
million or more or adversely affect in a material way the economy, a
sector of the economy, productivity, competition, jobs, the
environment, public health or safety, or State, local, or tribal
governments or communities; (2) create a serious inconsistency or
otherwise interfere with an action taken or planned by another agency;
(3) materially alter the budgetary impact of entitlements, grants, user
fees, or loan programs or the rights and obligations of recipients
thereof; or (4) raise novel legal or policy issues arising out of legal
mandates, or the President's priorities. A regulatory impact analysis
(RIA) must be prepared for a regulatory action that is significant
under section 3(f)(1) of E.O. 12866. Based on our estimates, the Office
of Management and Budget's (OMB) Office of Information and Regulatory
Affairs (OIRA) has determined this rulemaking is significant per
section 3(f)(1). Accordingly, we have prepared an RIA that to the best
of our ability presents the costs and benefits of the rulemaking.
4. Overall Impacts
This rule would update the SNF PPS rates contained in the FY 2025
SNF PPS final rule (89 FR 64048). We estimate that the aggregate impact
would be an increase of approximately $997 million (2.8 percent) in
Part A payments to SNFs in FY 2026. We note in this proposed rule that
these impact numbers do not incorporate the SNF VBP Program reductions
that we estimate would total $208.36 million in FY 2026. We note that
events may occur to limit the scope or accuracy of our impact analysis,
as this analysis is future-oriented, and thus, very susceptible to
forecasting errors due to events that may occur within the assessed
impact time period.
In accordance with sections 1888(e)(4)(E) and (e)(5) of the Act and
implementing regulations at Sec. 413.337(d), we are proposing to
update the FY 2025 payment rates by a factor equal to the market basket
percentage increase adjusted for the forecast error adjustment and
reduced by the productivity adjustment to determine the payment rates
for FY 2026. The impact to Medicare is included in the total column of
Table F18. The annual update in this rule applies to SNF PPS payments
in FY 2026. Accordingly, the analysis of the impact of the annual
update that follows only describes the
[[Page 18616]]
impact of this single year. Furthermore, in accordance with the
requirements of the Act, we will publish a rule or notice for each
subsequent FY that will provide for an update to the payment rates and
include an associated impact analysis.
5. Detailed Economic Analysis
The FY 2026 SNF PPS payment impacts appear in Table F18. Using the
most recently available claims data, in this case FY 2024, we apply the
current FY 2025 case-mix indices (CMIs), wage index and labor-related
share value to the number of payment days to simulate FY 2025 payments.
Then, using the same FY 2024 claims data, we apply the FY 2026 CMIs,
wage index and labor-related share value to simulate FY 2026 payments.
We tabulate the resulting payments according to the classifications in
Table 18 (for example, facility type, geographic region, facility
ownership), and compare the simulated FY 2025 payments to the simulated
FY 2026 payments to determine the overall impact. The breakdown of the
various categories of data in Table F18 is as follows:
<bullet> The first column shows the breakdown of all SNFs by urban
or rural status, hospital-based or freestanding status, census region,
and ownership.
<bullet> The first row of figures describes the estimated effects
of the various changes contained in this proposed rule on all
facilities. The next six rows show the effects on facilities split by
hospital-based, freestanding, urban, and rural categories. The next
nineteen rows show the effects on facilities by urban versus rural
status by census region. The last three rows show the effects on
facilities by ownership (that is, government, profit, and non-profit
status).
<bullet> The second column shows the number of facilities in the
impact database.
<bullet> The third column shows the effect of the annual update
[…truncated; see source link]Indexed from Federal Register on April 30, 2025.
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