August 2, 2018

CMS finalizes payment bumps for post-acute care, hospice providers

Daily Briefing

    Read Advisory Board's take on this story.

    CMS this week issued final rules increasing payments for skilled nursing facilities (SNFs), inpatient rehabilitation facilities (IRFs), inpatient psychiatric facilities (IPFs), and hospices for fiscal year (FY) 2019.

    CMS in a release said the rules "put patients over paperwork, ease provider burden, and make significant strides in modernizing Medicare."

    Skilled nursing facilities final rule

    Under CMS' final rule for SNFs, SNF Medicare payments for FY 2019 will increase by 2.4%, or $820 million, when compared with FY 2018. CMS in a fact sheet said the payment update is required under the Bipartisan Budget Act of 2018.

    In addition, the final rule effective Oct. 1, 2019, replaces the SNF Prospective Payment Systems' existing case-mix classification system with the SNF Patient-Driven Payment Model in FY 2019. CMS said the newly proposed model "is designed to improve the incentives to treat the needs of the whole patient, instead of focusing on the volume of services the patient receives, which requires substantial paperwork to track over time."

    Under the new model, Medicare payments to SNFs will be adjusted "based on each aspect of a resident's care, most notably for Non-Therapy Ancillaries …, which are items and services not related to the provision of therapy such as drugs and medical supplies, thereby more accurately addressing costs associated with medically complex patients." The new model also will adjust per diem payments SNFs receive to reflect cost variations that occur throughout a beneficiary's stay "and incorporate safeguards against potential financial incentives to ensure that beneficiaries receive care consistent with their unique needs and goals," CMS said.

    CMS estimated that the new model will save SNFs an estimated $2 billion over 10 years.

    CMS did not finalize any changes to measures used under the SNF Quality Reporting Program. However, the final rule changes the way CMS evaluates SNF quality measures for removal to include costs associated with measures used under the program and how they compare with associated benefits.

    CMS in the final rule also included policy updates and changes to the scoring methodology it will use for the SNF Value-Based Purchasing Program.

    Inpatient rehabilitation facilities final rule

    Under CMS' final rule for IRF payments, IRFs will see their Medicare payments for FY 2019 increase by 1.3%, or $105 million, when compared with FY 2018.

    The final rule also will impose changes that CMS said aim "to reduce regulatory burden on rehabilitation providers and physicians." For instance, CMS beginning in FY 2019 will

    • Allow post-admission physician evaluations to qualify as a face-to-face physician visit;
    • Allow rehabilitation physicians to lead interdisciplinary teams remotely without requiring any additional documentation; and
    • Remove the admission order documentation requirement.

    In addition, the final rule eliminates two quality measures IRFs must report under the IRF Quality Reporting Program (IRFQRP):

    • CDC–Methicillin Resistant Staph Aureus Infection; and
    • Patient Influenza Vaccination Measure.

    CMS said it is removing the measures because they "either have significant operational challenges with reporting or the measure performance among IRFs is so high and unvarying that meaningful distinctions in improvements in performance can be no longer be made."

    CMS under the final rule also will change the methods by which the agency notifies IRFs of noncompliance with IRFQRP and, beginning in FY 2020, will display data on the program's four assessment-based function outcome measures.

    Inpatient psychiatric facilities final rule

    CMS' final rule for IPFs will increase Medicare payments to the facilities by 1.1%, or $50 million, in FY 2019.

    CMS under the final rule also will remove five measures from the Inpatient Psychiatric Facility Quality Reporting (IPFQR) Program effective for the FY 2020 payment determination and subsequent years. Under the final rule, CMS is removing quality measures for:

    • Assessment of patient experience of care; and
    • Alcohol use screening;
    • Influenza vaccination coverage among health care personnel;
    • Tobacco use screening; and
    • Use of an electronic health record.

    In addition, CMS in a fact sheet said, under the final rule, it will no longer require IPFs "to submit sample size counts for measures for which sampling is performed beginning with the FY 2020 payment determination and subsequent years."

    Hospice provider final rule

    CMS' final rule for hospices increases Medicare payments to the facilities by 1.8%, or $340 million, for FY 2019. The final rule caps Medicare payments at $29,205.44 for hospices in FY 2019, in accordance with requirements under the Improving Medicare Post-Acute Care Transformation Act of 2014.

    The final rule also includes regulatory language that changes the definition of an "attending physician" for hospices as called for under the Bipartisan Budget Act of 2018. The language included in the final rule broadens the definition of "attending physician" to include nurse practitioners, physicians, and physician assistants.

    The final rule also requires officials to consider whether the burdens and costs associated with a quality measure outweigh the benefits of continuing to use it when deciding whether to remove a measure from the Hospice Quality Reporting Program. CMS in a fact sheet said its "goal is to move the program forward in the least costly and burdensome manner possible, while maintaining meaningful quality measures and continuing to incentivize improvement in the quality of care provided to patients."

    In addition, CMS under the final rule will change the information it displays on its Hospice Compare website. CMS will no longer "directly displa[y]" seven component measures that are used to calculate composite measures on Hospice Compare once the composite measures are displayed. However, CMS said users still will be able to access the component measure data "in an expandable/collapsible format under the composite measure itself."

    Further, starting Jan. 1, 2019, the final rule will give hospices four and a half months after the end of each quarter to review and correct any information that will be publicly reported on Hospice Compare. Currently, hospices have just 30 days to review and correct such information (Dickson, Modern Healthcare, 7/31; AHA News, 7/31; Colliver, "Pulse," Politico, 8/1; Stempniak, McKnight's Long-Term Care News, 8/1; Spanko, Skilled Nursing News, 7/31; CMS SNF fact sheet, 7/31; CMS IPF fact sheet, 7/31; CMS IRF fact sheet, 7/31; Morse, Healthcare Finance News, 8/1; Dickson, Modern Healthcare, 8/1; CMS hospice fact sheet, 8/1).

    Advisory Board's take

    Jared Landis, Managing Director, Post-Acute Care Collaborative, and Lily Rosenfield, Analyst, Post-Acute Care Collaborative

    While the final FY 2019 Payment Rules released yesterday are specific to inpatient rehabilitation facilities (IRFs) and skilled nursing facilities (SNFs), both contain common themes that are a welcome sight for all types of post-acute providers. 

    While we are still working through the details of the changes, we've pulled out two high-level takeaways. Specifically:

    1. Aggregate payments grew substantially. While controlling post-acute costs remains a focus of CMS, both SNFs and IRFs received overall payment increases for the coming year. This is good news for providers who will see an aggregate increase of $820 million and $105 million in Medicare payments to SNFs and IRFs, respectively.
    2. Providers can expect a reduced administrative burden. A common theme from the Trump Administration has been to reduce the administrative burden on providers, and they've done the same with this rule.  Post-acute providers today are being asked to manage a growing number of managed care relationships,—and the related administrative requirements—so any reduction in burden from CMS is a welcome sight.

    For SNFs specifically, the big news regards the new patient-driven payment model (PDPM). This model, which ties SNF's payments to patients' conditions and care needs rather than service volume, is a continuation of CMS's efforts to shift from volume to value and to better align payment with patient needs. This model also has simpler reporting requirements than those associated with CMS' earlier iterations of the SNF payment model (such as RCS-I). Some key changes include:

    • Using ICD-10 diagnosis codes and other patient characteristics as a basis for patient classification into payment rate groups, as opposed to volume of services.
    • Introducing a combined limit of 25% on group and concurrent therapy for patients.
    • Adjusting SNF per diem payments to decline as patient length of stay increases.

    The PDPDM model will be effective October 1, 2019. For our Post-Acute Care Collaborative members, we’ll have additional details and information forthcoming on this new SNF PDPM.

    In the meantime, download our new post-acute care clinical quality compendium, which provides strategies for delivering consistent high-quality clinical outcomes in post-acute care.

    Download the Compendium

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