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FOR IMMEDIATE RELEASE
July 31, 2017

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Medicare finalizes fiscal year 2018 payment & policy changes for skilled nursing facilities

Overview

On July 31, 2017, the Centers for Medicare & Medicaid Services (CMS) issued a final rule [CMS-1679-F] outlining Fiscal Year (FY) 2018 Medicare payment rates and quality programs for skilled nursing facilities (SNFs).

Policies in the final rule continue to build on CMS’ commitment to shift Medicare payments from volume to value, with continued implementation of the SNF Value-based Purchasing (VBP) program.

This fact sheet discusses major provisions of the final rule, including policies related to the SNF Value-Based Purchasing Program and the SNF Quality Reporting Program. The final rule also finalizes an updated performance period for the National Healthcare Safety Network (NHSN) Healthcare Personnel (HCP) Influenza Vaccination Reporting Measure included in the End Stage Renal Disease (ESRD) Quality Incentive Program (QIP) for Payment Year 2020 and other key elements. The major FY 2018 policies and other issues discussed in the final rule are summarized below.

Additionally, in the final rule CMS clarifies definitions and provisions related to the investigation of complaints and team composition and aligns regulatory provisions for the investigation of complaints with sections 1819 and 1919 of the Act. CMS has finalized this clarification. The final rule can be downloaded from the Federal Register at: https://www.federalregister.gov/public-inspection

Changes to Payment Rates under the SNF Prospective Payment System (PPS)

Based on changes contained within this final rule, CMS projects aggregate payments to SNFs will increase in FY 2018 by $370 million, or 1.0 percent, from payments in FY 2017. This estimated increase is attributable to a 1.0 percent market basket increase required by section 411(a) of the Medicare Access and CHIP Reauthorization Act of 2015 (MACRA).

SNF Quality Reporting Program (QRP)

Background: Under the SNF QRP, SNFs that fail to submit the required quality data to CMS will be subject to a 2 percentage point reduction to the otherwise applicable annual market basket percentage update with respect to that fiscal year.

Finalized Changes: In this FY 2018 final rule, CMS is finalizing its replacement of the current pressure ulcer measure with an updated version of that measure and adopting four new measures that address functional status beginning with the FY 2020 program year.  The new quality measures being finalized are:

1. Changes in Skin Integrity Post-Acute Care: Pressure Ulcer/Injury
2. Four outcome-based functional measures on resident functional status:
   1. Change in Self-Care Score for Medical Rehabilitation Patients (NQF #2633)
   2. Change in Mobility Score for Medical Rehabilitation Patients (NQF #2634)
   3. Discharge Self-Care Score for Medical Rehabilitation Patients (NQF #2635)
   4. Discharge Mobility Score for Medical Rehabilitation Patients (NQF #2636)

Further, CMS is finalizing that it will begin publically reporting six new measures for display by fall 2018.

1. In addition, CMS is finalizing that beginning with the FY 2019 SNF QRP, the data SNFs report on the measure Percent of Residents or Patients with Pressure Ulcers That Are New or Worsened (Short Stay) (NQF #0678) meet the definition of standardized resident assessment data and that beginning with the FY 2020 SNF QRP, the data SNFs report on the measures: Application of Percent of Long-Term Care Hospital Patients with an Admission and Discharge Functional Assessment and a Care Plan That Addresses Function (NQF #2631); and Changes in Skin Integrity Post-Acute Care: Pressure Ulcer/Injury meet the definition of standardized resident assessment data. However, in response to the comments received for the FY 2020 program year, CMS is not finalizing the additional proposed standardized data elements.

SNF Value-Based Purchasing Program (VBP) 

Background: The SNF VBP Program has adopted scoring and operational policies for its first year (FY 2019) and has specified measures and program features as required by statute.  The FY 2018 SNF PPS final rule includes additional Program proposals, including an exchange function approach to implement value-based incentive payment adjustments beginning October 1, 2018.

Scoring & Operational Updates: The SNF VBP Program’s scoring and operational policies for its first year (FY 2019) include:

• The Program will include one readmission measure for each year.
• The Secretary will reduce the adjusted Federal per diem rate applicable to each SNF in a fiscal year by 2 percent to fund the value-based incentive payments for that fiscal year
• The total amount of value-based incentive payments that can be made to SNFs’ in a fiscal year will be 60 percent of the total amount withheld from SNFs’ Medicare payments for that fiscal year, as estimated by the Secretary. The Program will pay SNFs ranked in the lowest 40 percent less than the amount they would otherwise be paid in the absence of the SNF VBP.
• Both public and confidential facility performance reporting will be conducted.

In addition to the logistic exchange function CMS is finalizing in the final rule, the SNF VBP Program policies in the FY 2018 final rule include performance and baseline periods for the FY 2020 Program year, updated values for performance standards for FY 2020, additional details for the Review and Correction process for SNFs’ performance information to be made public on Nursing Home Compare, and a revision to the previously-adopted rounding policy for SNF performance scores.

End-Stage Renal Disease (ESRD) Quality Incentive Program (QIP)

Background: Section 153(c) of the Medicare Improvements for Patients and Providers Act of 2008 (MIPPA) amended the Social Security Act to require CMS to establish an ESRD QIP that selects measures, establishes performance standards, specifies a performance period for each payment year (PY), assesses the total performance of each facility, applies an appropriate payment reduction to each facility that does not meet a minimum TPS, and publicly reports the results.  The ESRD QIP is intended to promote high-quality care by dialysis facilities treating beneficiaries with ESRD. This program changes the way CMS pays for the treatment of ESRD patients by linking a portion of payment directly to facilities’ performance on quality measures. The ESRD QIP will reduce payments by up to two percent to ESRD facilities that do not meet or exceed a minimum total performance score (TPS).

Updated PY 2020 Performance Period for the End-Stage Renal Disease (ESRD) Quality Incentive Program (QIP) National Healthcare Safety Network (NHSN) Healthcare Personnel (HCP) Influenza Vaccination Reporting Measure

In the Calendar Year (CY) 2017 ESRD Prospective Payment System (PPS) final rule, CMS inadvertently finalized the same performance period for the NHSN Healthcare Personnel Influenza Vaccination Reporting Measure for PY 2020 that it previously finalized for that measure for PY 2019.  In the FY 2018 SNF PPS proposed rule, CMS proposed to correct that performance period such that it will align with the schedule established in earlier payment years. Based on the comments received, the final rule finalizes the updated performance period for the NHSN Healthcare Personnel Influenza Vaccination Reporting Measure for PY 2020 as proposed:  The performance period for that measure is October 1, 2017, through March 31, 2018, for the Payment Year (PY) 2020 ESRD QIP program.

Survey Team Composition

In the proposed rule, CMS explained the need to make technical changes to specific provisions of 42 C.F.R. part 488 to more clearly reflect the authorizing statutory requirements found in Sections 1819 and 1919 of the Social Security Act, to clarify the regulatory requirements for team composition for surveys conducted for investigating a complaint, and to better align regulatory provisions for investigation of complaints with the statutory requirements found in sections 1819 and 1919 of the Act.

There has been recent administrative litigation as to which regulatory provision, that is, §488.314 or §488.332, applies to the survey team composition related to the investigation of complaints.  Thus, we are finalizing the regulatory changes as proposed to clarify that only surveys conducted under sections 1819(g)(2) and 1919(g)(2) of the Act are subject to the requirement at §488.314 that a survey team consist of an interdisciplinary team that must include a registered nurse.  And that complaint surveys and surveys related to on-site monitoring, including revisit surveys, are subject to the requirements of sections 1819(g)(4) and 1919(g)(4) of the Act and §488.332, which allow the state survey agency to use a specialized investigative team that may include appropriate healthcare professionals but need not include a registered nurse. This clarification is also reflected in revisions to the definition of complaint survey in §488.30(a), the definition of abbreviated standard survey in §488.301, and the requirements for the investigation of complaints in §488.308.

For more information…

The final rule displayed on July 31, 2017, at the Federal Register’s Public Inspection Desk and will be available under “Special Filings,” at http://www.federalregister.gov/inspection.aspx

Additional information is available at:

• SNF PPS: http://www.cms.gov/Medicare/Medicare-Fee-for-Service-Payment/SNFPPS/index.html

• SNF QRP: https://www.cms.gov/Medicare/Quality-Initiatives-Patient-Assessment-Instruments/NursingHomeQualityInits/Downloads/Proposed-Specifications-for-SNF-QRP-Quality-Measures-and-Standardized-Data-Elements-Effective-10-1-18.pdf

• SNF VBP: https://www.cms.gov/Medicare/Quality-Initiatives-Patient-Assessment-Instruments/Value-Based-Programs/Other-VBPs/SNF-VBP.html

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