On March 28, 2024, the Centers for Medicare & Medicaid Services (CMS) issued the FY2025 SNF Proposed Rule, which updates Medicare Prospective Payment System (PPS) rates and payment policies for skilled nursing facilities (SNFs). The public comment period for feedback on the proposed changes can be submitted to CMS through May 28, 2024. The full FY2025 SNF Proposed Rule can be found here.
Proposed Updates to FY2025 Payment Rates
The Proposed Rule includes a 4.1% increase to SNF Medicare PPS rates, representing approximately $1.3 billion in additional reimbursement. This 4.1% increase includes a 2.8% SNF market basket increase, plus a 1.7% forecast error adjustment, less a negative 0.4% productivity adjustment, as mandated by regulation. These figures do not include the SNF Value-Based Payment (VBP) reductions applicable to certain providers, estimated at $196.5 million for FY2025.
The Proposed FY 2025 SNF PPS unadjusted federal per diem rates are as follows:
Rate Component | PT | OT | SLP | Nursing | NTA | Non-Case-Mix |
|---|---|---|---|---|---|---|
Per Diem Amount | $73.16 | $68.10 | $27.31 | $127.52 | $96.21 | $114.20 |
Rate Component | PT | OT | SLP | Nursing | NTA | Non-Case-Mix |
|---|---|---|---|---|---|---|
Per Diem Amount | $83.39 | $76.59 | $34.41 | $121.83 | $91.92 | $116.31 |
Labor-Related Share
The FY2025 Proposed Rule includes a labor-related share of PPS rates at 71.9% compared to 71.1% from the FY2024 SNF Final Rule.
Proposed Changes to ICD-10 Code Mappings
CMS is proposing several revisions to the ICD-10 code mappings to improve payment and coding accuracy. The complete list of proposed ICD-10 changes can be found here. The Proposed Rule also includes a request for information for potential updates and coding changes to the Non-Therapy Ancillary component of PDPM.
Updates to the Quality Reporting Program (QRP) & Value-Based Purchasing (VBP) Program
The Proposed Rule includes updates to the requirements for the SNF QRP, including a proposal to collect four new Standardized Patient Assessment Data Elements on the MDS beginning with the FY2027 QRP. There is also a proposal to adopt an MDS validation process for SNF QRP, which aligns with the same validation process used for the VBP program. Validation contractors would begin determining the validity of QRP information beginning with the FY2027 QPR. There also are several operational and administrative changes to the VBP program.
Enforcement
The FY2025 Proposed Rule includes updated guidelines related to enforcement authority and Civil Monetary Penalties (CMP). Under the proposed rule, CMS and survey agencies would have the authority to issue “per diem” and “per Instance” CMPs on the same survey, as well as the authority to issue multiple per instance CMPs for the same type of noncompliance.
Other
The market basket information used to update SNF PPS rates has been rebased periodically, with the last rebase occurring for the FY2022 SNF PPS Final Rule; based on 2018 SNF Medicare Cost Report data. For FY2025 and after, CMS is proposing to rebase the market basket based on 2022 SNF Medicare Cost Report data. CMS believes that 2022 cost report data represents the most recent and valid data to represent market basket adjustments and would include residual industry impacts related to the COVID-19 pandemic.
For FY2025, CMS will continue using the geographic hospital data as a basis for calculating the wage index component of SNF PPS rates. Per regulation, CMS continues to have the discretion to establish a geographic wage index specific to SNFs. However, to date, CMS has maintained that the effort and resources needed to collect SNF specific wage data are not feasible. This concept will continue to be monitored for future fiscal years.
If you have any questions about the FY2025 Proposed Rule or the impact on your individual organization, please reach out to our Forvis Mazars professionals.