August 2, 2019

CMS finalizes 2020 payment rules for SNFs, hospices, inpatient rehab, psych facilities

Daily Briefing

    CMS this week released rules finalizing Medicare payment adjustments for skilled nursing facilities (SNFs), hospices, and inpatient rehabilitation (IRFs) and psychiatric (IPFs) facilities for fiscal year (FY) 2020.

    CMS finalizes 2.4% payment bump for SNFs

    CMS on Tuesday released a final rule that will increase payments to SNFs by 2.4% in FY 2020 relative to FY 2019. CMS estimated that it will pay SNFs an additional $851 million in FY 2020 than it did in FY 2019. CMS in a fact sheet said the increase "is attributable to a 2.8% market basket increase factor with a 0.4 percentage point reduction for the multifactor productivity adjustment."

    CMS also finalized several changes to a new model for paying SNFs, called the Patient Driven Payment Model (PDPM) that is scheduled to take effect Oct. 1. CMS said the agency under the new model will shift from determining Medicare payments based on the amount of care provided to focusing on a patient's conditions and their resultant care.

    For instance, the final rule includes a subregulatory process that allows CMS to change the list of ICD-10 codes that providers will use to classify patients into clinical categories under PDPM. CMS said the process is in line with similar processes currently used in the SNF and IRF prospective payment systems (PPS).

    Further, CMS under the final rule revised the definition of group therapy under the SNF PPS to align with the IRF PPS. CMS under the IRF PPS allows group therapy to involve a minimum of two patients, but it previously had required a minimum of four patients under the SNF PPS.

    CMS also finalized a 25% combined cap on the amount of group and concurrent therapy SNFs may provide to a resident under PDPM, but said it plans to watch how SNFs change the way they provide such services under the cap. The agency said it might make additional changes based on that monitoring.

    In addition, CMS under the final rule will adopt two new quality measures in FY 2020 under the SNF Quality Reporting Program. One of the measures will assess how SNFs transfer health information from one provider to another, and the other measure will assess how SNFs transfer health information to patients. CMS under the final rule also will adopt several patient assessment data elements for the program.

    CMS in the final rule also included changes to the SNF Value-Based Purchasing Program, including renaming the program's "potentially preventable readmission" measure and updating certain reporting and revision requirements.

    Industry stakeholders praised the final rule. Mark Parkinson—president and CEO of the American Health Care Association, which represents SNFs—said, "The 2.4% … increase is critical, especially as members are actively preparing for implementation of the new Patient-Driven Payment Model on Oct. 1. [SNFs] are coping with devastating closures, particularly in rural areas. This increase doesn't solve this problem, but it does provide some much needed help."

    Cynthia Morton, executive vice president for the National Association for the Support of Long-Term Care, applauded CMS' decision to align the SNF group therapy definition with the IRF definition.

    CMS finalizes 1.5% payment bump for IPFs

    CMS on Tuesday also released a final rule that will increase Medicare payments to IPFs by 1.5%, or $65 million, in FY 2020 when compared with FY 2019, Inside Health Policy reports. CMS said the payment increase is based on a 2.9% market basket increase that is "adjusted by two reductions required by law (the productivity adjustment of 0.4 percentage point and a 0.75 percentage point reduction), resulting in an IPF payment rate update of 1.75%." The agency continued, "Additionally, total estimated payments to IPFs are estimated to decrease 0.23 percentage point due to updating the threshold amount used in calculating outlier payments."

    CMS in the final rule also revised the IPF market basket to use 2016, rather than 2012, as a baseline year. CMS said the agency routinely makes such changes "to reflect more recent data."

    CMS also finalized a change to the IPF wage index. The agency said, "Historically, the IPF wage index has been based on the prior year's hospital inpatient wage data, which caused a data lag compared to several other payment systems.  For FY 2020 and subsequent years, CMS is removing the one-year lag of the wage index data to enhance the consistency of the wage indexes across settings."

    In addition, CMS under the final rule will add one measure to the IPF Quality Reporting Program that will assess medication continuation for patients with bipolar disorder, major depressive disorder, or schizophrenia. The measure will assess whether such patients filled a prescription for at least one evidence-based medication either two days before discharge or 30 days after being discharged. CMS said the measure will not require any new reporting from IPFs, as the agency can calculate the measure based on Medicare claims data.

    CMS finalizes 2% payment bump for IRFs

    Further, CMS on Wednesday released a final rule that will increase Medicare payments to IRFs by 2.5%, or $210 million, in FY 2020 relative to FY 2019, Inside Health Policy reports. CMS said the increase is based on a 2.9% market basket increase reduced by a 0.4 percentage point multifactor productivity adjustment. The agency predicted that rural-based facilities under the final rule would see IRF payments per discharge increase by 4.4% in FY 2020 relative to FY 2019, while facilities located in urban areas would see a 2.4% increase.

    CMS in the final rule also revised the IRF market basket to use 2016 as a baseline year instead of 2012.

    CMS also finalized changes to IRF case-mix groups based on data from FYs 2017 and 2018. The agency said, "The use of the quality indicator data items requires some minor changes to the payment groups and the associated payments for each group to ensure that payments accurately reflect the costs of caring for patients in each of the updated payment groups, and moves us a step closer to [a] unified post-acute care payment." CMS also finalized changes to the average length of stay values and relative weights tied with the updated case-mix groups, which will take effect Oct. 1.

    In addition, CMS in the final rule clarified that IRFs can determine whether a physician qualifies as a "rehabilitation physician." Federal rules define rehabilitation physicians as physicians with "specialized training and experience in inpatient rehabilitation," but it is up to IRFs to determine what level of training or experience is sufficient. CMS said providers are "in the best position to make that determination."

    Further, CMS under the final rule will adopt two new measures for the IRF Quality Reporting Program. The new measures are related to health data transfers and are intended to improve the interoperability of electronic health records and ensure a patient's medication list is up-to-date at the time of transfer or discharge. CMS also adopted several standardized patient assessment data elements, including some focused on social determinants of health.

    CMS finalizes 2% payment bump for hospice facilities

    CMS on Wednesday also released a final rule that will increase Medicare payments for hospice facilities by 2.6%, or $520 million, in FY 2020 relative to FY 2019, Inside Health Policy reports. CMS said the payment increase is based on a 3% hospital market basket increased reduced by a 0.4 percentage point multifactor productivity adjustment. The agency also noted that hospice facilities that fail to meet quality reporting requirements will receive a two percentage point reduction to the annual market basket update for FY 2020.

    CMS also noted that the statutory aggregate cap for the hospice payment system in FY 2020 will be $29,964.78. CMS said that cap "is equal to the FY 2019 cap amount ($29,205.44) updated by the final FY 2020 hospice payment update percentage of 2.6%." Further, CMS said it will use the FY 2020 pre-floor pre-reclassified hospital wage index data for the FY 2020 wage index for hospices, instead of using the FY 2019 pre-floor, pre-reclassified hospital wage index.

    In addition, CMS finalized changes to rebase per diem payment rates for continuous home care, general inpatient care, and inpatient respite care in a budget-neutral manner for FY 2020. CMS said the changes will help to more accurately align Medicare payments with the actual costs of providing care. According to Inside Health Policy, the payment rate reduction for routine home care is 0.19%.

    CMS in the final rule said it will no longer publicly report data on hospice visits that occur during a patient's last seven days of life via the Hospice Quality Reporting Program. CMS said, "As previously announced, we will not publicly report this measure at this time to allow for further testing to determine if changes to the measure specifications or how it is displayed on Hospice Compare are needed."

    Further, CMS under the final rule will exempt smaller hospices from the Consumer Assessment of Healthcare Providers and Systems Hospice Survey.

    CMS also changed its hospice election statement content requirements to help beneficiaries better understand what services are covered under Medicare hospice benefits. Under the final rule, CMS will require hospice election statements to include an addendum that lists the drugs, items, and services a hospice facility has determined are unrelated to the beneficiary's terminal illness and related medical conditions. Hospice facilities under the change also will have to provide the rationale behind those determinations (Stein, Inside Health Policy, 7/30 [subscription required]; Spanko, Skilled Nursing News, 7/30; CMS SNF fact sheet, 7/30; Romoser, Inside Health Policy, 7/30 [subscription required]; CMS IPF fact sheet, 7/30; Stein, Inside Health Policy, 7/31 [subscription required]; CMS IRF fact sheet, 7/31; Cirruzzo, Inside Health Policy, 7/31 [subscription required]; CMS hospice fact sheet, 7/31).

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