Nursing homes may incur an additional $25 million in fees annually and $164,900 in annual administrative costs to federal and state agencies as a result of expanded enforcement policies for civil monetary penalties included in the finalized Skilled Nursing Facility Prospective Payment System (SNF PPS).

Meanwhile, value-based purchasing updates are expected to result in an estimated reduction of $187.69 million in aggregate payments to facilities in 2025, CliftonLarsonAllen (CLA) said in a regulatory update. Data collection modifications to the quality reporting program (QRP) is estimated to cost $2 million annually to SNFs beginning with the 2027 QRP, CLA added.

While several policy changes in the SNF VBP program were finalized, no new measures or measure set adjustments were made in the final rule.

Instead, administrative policies including adopting measure retention and removal policy, and a technical measure update policy and update of review and corrections policy were finalized. Nursing staff turnover, SNF healthcare-associated infection, and total nurse staffing measures will be scored beginning in 2026.

Three other measures including falls with major injury, discharge function score and long stay hospitalization, along with discharge to community and post-acute care, will be scored in 2027, CLA said.

Doubling down on CMPs

Historically, the Centers for Medicare & Medicaid Services (CMS) and the state decided whether to select a per day or per instance penalty for noncompliance, CLA said. With the rule, CMS finalized the definition of “instance” to mean a separate factual and temporal occurrence when a facility fails to meet a participation requirement, CLA said.

“CMS stated each instance of noncompliance would be sufficient to constitute a deficiency and a deficiency may be comprised of multiple instances of noncompliance,” CLA said in a statement. “Doing so allows CMS and the states to impose multiple [per instance] CMPs for the same type of noncompliance in a survey.”

CMS and states can impose a per day penalty up to $10,000, a per instance penalty between $1,000 to $10,000, or both, under the Medicare rule. Updated language from CMS says that the agencies may impose any combination of per instance or per day penalties for each instance of noncompliance within the same survey.

The agency said this change allows for penalties to better align with noncompliance and for more consistency of CMP amounts across the country.

“Additionally, CMS is allowing for each instance of noncompliance, a [per day] CMP, [per instance] CMP, ‘or both’ may be imposed, regardless of whether the deficiencies constitute immediate jeopardy,” CLA found.

Trends for 2024

CLA also touched on top trends shaping the nursing home industry – as facilities face higher penalties and payment changes with the finalized Medicare payment rule – including a positive occupancy momentum, driven by demand, along with more dependency on location given Medicaid updates.

An increase in mergers and acquisitions was also noted by CLA, with ongoing consolidation expected for the industry. Ever-present workforce pressures are another trend noted by CLA, with sufficient staff and wage growth being top of mind for providers.

Maturing vertical growth is another trend for the year, CLA said, with providers more confident in what health and wellness offerings are needed for their markets.