Skilled nursing facility proposed rule updates payment rates, VBP program

CMS has released the Skilled Nursing Facility Prospective Payment System (SNF PPS), proposing a payment rate increase, revisions to nursing home enforcement authority, and updates to the quality reporting program.

The agency proposed a 4.1 percent increase to SNF payment rates in FY 2025. This update reflects a proposed 2.8 percent increase in the SNF market basket, a 1.7 percent market basket forecast error adjustment, and a 0.4 percent decrease for productivity.

The update does not incorporate the SNF value-based purchasing (VBP) program reductions for certain SNFs subject to payment reductions under the program. Those adjustments are estimated to total $196.5 million in FY 2025, according to the fact sheet.

The rule includes changes to the Patient-Driven Payment Model (PDPM) ICD-10 code mappings that allow providers to offer more accurate, consistent, and appropriate primary diagnoses that meet the criteria for skilled intervention during a Part A SNF stay. The proposal also includes a request for information on future updates to the Non-Therapy Ancillary component of PDPM.

CMS proposed expanding the existing nursing home enforcement authority to allow the agency to impose financial penalties for health and safety risks. Current regulations allow CMS to inflict civil money penalties per instance for isolated situations or per day until non-compliance is corrected. Per instance and per day penalties cannot be imposed during the same survey.

The proposals would allow CMS to impose per instance and per day penalties concurrently, following statutory daily limits. This would provide the agency with greater flexibility to provide penalties in a way that directly reflects the health and safety impacts on residents and incentivizes permanent correction, the fact sheet stated.

The rule proposed changes to the SNF quality reporting program (QRP), including adding four new items to the Minimum Data Set (MDS) in the following social determinants of health categories: living situation, food, and utilities. Additionally, CMS proposed modifying the Transportation item in the social determinants of health category to clarify the look-back period when a patient experienced a lack of transportation, simplify response options for residents, and only collect the assessment item at admission.

CMS also proposed requiring SNFs in the QRP to participate in an MDS validation process. These changes to the QRP would start with FY 2027.

The rule included updates to the SNF VBP program, such as adopting a measure retention and removal policy. This aims to help ensure the program’s measure set focuses on the most appropriate metrics for assessing care quality in the SNF setting.

CMS proposed administrative policy updates, including modifying the Review and Correction policy to ensure SNFs can review and correct Payroll-Based Journal (PBJ) data starting with the FY 2026 program year and MDS data starting with the FY 2027 program year.

The proposed rule can be accessed here.