Back in July, I wrote a blog highlighting the, what was then, Fiscal Year (FY) SNF PPS proposed rule. Let’s take a look at what changed in the FY 2023 SNF PPS Final Rule, which was issued July 29, 2022. This final rule is effective October 1, 2022.
FY 2023 Finalized SNF Payment Rates
WIN! CMS estimates that the impact of the final rule payments will result in an increase of 2.7% in Medicare payments in FY 2023 (Approximately $904 million).
| Market Basket and Adjustments | Change |
| Market basket | 3.9% |
| (+) Forecast error | 1.5% |
| (-) Market basket forecast error adjustment | 0.3% |
| (-) Parity Adjustment | 2.3% |
| Final | 2.7% |
In the final rule, CMS will phase-in the 4.6% parity adjustment amount over two years. 2.3% will be applied in FY 2023, and 2.3% will be applied in FY 2024. The parity adjustment will be applied equally across all PDPM components.
Let’s compare FY 2022 base rates to FY 2023 base rates.
| PDPM COMPONENT | FY 2022- URBAN | FY 2023-URBAN |
| PT | $62.82 | $66.06 |
| OT | $58.48 | $61.49 |
| ST | $23.45 | $24.66 |
| NURSING | $109.51 | $115.15 |
| NTA | $82.62 | $86.88 |
| NON-CASE-MIX | $98.07 | $103.12 |
| PDPM COMPONENT | FY 2022- RURAL | FY 2023-RURAL |
| PT | $71.61 | $75.03 |
| OT | $65.77 | $69.16 |
| ST | $29.55 | $31.07 |
| NURSING | $104.63 | $110.02 |
| NTA | $78.93 | $83.00 |
| NON-CASE-MIX | $99.88 | $105.03 |
CMS finalized all proposed changes to the FY 2023 Value Based Purchasing Program (VBP):
- Freezing the calculation of payment adjustment so all providers have the same Incentive Payment Multiplier, which will reduce the applicable federal per diem rate for each SNF by 2% and then award each SNF 60% of that withhold, resulting in a 1.2% payback to those SNFs;
- Excludes SNFs with less than 25 admissions from the program in FY 2023;
- Adding COVID-19 diagnosis in the rehospitalization risk adjustment model;
- Adding three measures:
- Potentially preventable hospitalization measure in FY 2026.
- Total nurse staffing hours per resident day (HPRD) in FY 2026.
- Discharge to community measure in FY 2027.
- Finalizing the methodology for calculating facilities’ scores for each new measure, weighing each measure equally, and requiring a facility to have data for two measures to participate in the program starting in FY 2026.
- CMS is not adding any additional audit requirements beyond what is already done for auditing claims and PBJ data.
CMS finalized the changes below to the SNF Quality Reporting Program (QRP):
- Influenza Vaccination Coverage Among Healthcare Personnel (NQF #0431) Measure Beginning with the FY 2024 SNF QRP and associated submission and public reporting policies finalized with updated start date.
- Finalizing the proposed revised compliance date for certain SNF QRP requirements beginning with the FY 2024 SNF QRP without modifications.
CMS requested information on potential future SNF QRP initiatives. In this final rule, CMS provided some discussion of the comments, and stated that the feedback would be considered for future rulemaking.
- A single cross-setting functional measure that would incorporate the domains of selfcare and mobility as an alternative to the four current redundant measures as discussed during a recent PAC TEP.
- Measures of health equity, such as structural measures that assess an organization’s leadership in advancing equity goals or assess progress towards achieving equity priorities.
- The value of a COVID–19 Vaccination Coverage measure that would assess whether SNF patients were up to date on their COVID–19 vaccine.
- Overarching Principles for Measuring Equity and Healthcare Quality Disparities Across CMS Quality Programs.
- Inclusion of the CoreQ: Short Stay Discharge Measure in a Future SNF QRP Program Year.
CMS finalized the revision of Requirements of Participation (RoP) for long-term care facilities in the areas of Physical Environment and requirements for the Director of Food and Nutrition Services.
Physical Environment Requirement: CMS is updating the physical environment requirements allowing long-term care facilities that were participating in Medicare before July 5, 2016, and that previously used the Fire Safety Evaluation System (FSES) to determine equivalent fire protection levels to continue to use the 2001 FSES mandatory values when determining compliance for containment, extinguishment, and people movement requirements.
Director of Food and Nutrition Services:
CMS added an option for qualification allowing individuals with:
- Two or more years of experience in the position of a Director of Food and Nutrition Services, and
- Who have also completed a minimum course of study in food safety that includes topics integral to managing dietary operations (such as, but not limited to: foodborne illness, sanitation procedures, food purchasing/receiving, etc.) can meet the qualification requirement.
CMS also requested information regarding minimum staffing requirements for long-term care facilities and will continue to review those comments. CMS states that the comments received may be used in future rulemaking within one year.