CMS Floats $887M Boost in Medicare Skilled Nursing Payments in Fiscal 2020

Skilled nursing facilities could get an $887 million increase in aggregate payments in fiscal 2020 under a proposed rule issued by the Centers for Medicare & Medicaid Services (CMS) on Friday.

CMS issued a proposed rule that would update the Medicare payment rates and quality programs for SNFs as part of its effort to more closely align payments to the cost of providing care, the agency said in its release.

For fiscal 2020, the agency projects an increase of $887 million, or 2.5%, in aggregate payments to SNFs, due to a 3% market basket increase factor, alongside a 0.5 percentage point reduction for multifactor productivity adjustment.


The market basket rate is set by the CMS Office of the Actuary, which considers the costs of various products and commodities. Individual market baskets are produced for several payment systems, including the Skilled Nursing Facility Prospective Payment System (PPS), to measure the price changes providers are dealing with, according to CMS.

The market basket rate was a bone of contention for providers last year, prior to the announcement of the Patient-Driven Payment Model, when the government’s spending plan set the rate at 2.4% for fiscal 2019.

The nation’s largest SNF industry trade group, the American Health Care Association (AHCA), applauded the proposed 2020 market basket increase.


“We are transitioning to a new payment system, and the sector is on the financial brink,” AHCA president and CEO Mark Parkinson said in a statement issued Friday. “MedPAC just reported that our all-in margin is only 0.5 percent, and many skilled nursing providers are facing devastating closures, particularly in rural areas. This increase doesn’t solve these problems, but it gets us headed in the right direction.”

CMS on Friday also proposed changes to the value-based purchasing program (VBP) and quality reporting program. The VBP initiative changes include scoring and operational updates; updated public reporting requirements for SNFs to ensure CMS has accurate performance information for low-volume SNFs; and a 30-day deadline for Phase One Review and Corrections requests.

For the quality reporting program, CMS proposed two new quality measures to assess the sharing of health information; the transfer of health information from a SNF to another provider; and the transfer of health information from the SNF to the patient. It also proposed adopting several patient assessment data elements and updates to specifications for the Discharge to Community PAC SNF QRP measure.

“In response to public input, we are proposing to collect standardized patient assessment data and other data required to calculate quality measures using the MDS on all patients, regardless of payer source,” the agency noted.

Stakeholders have until June 18 to submit any commentary on the proposals, which are described in full in the Federal Register.

Companies featured in this article: