CMS Increases 2024 Skilled Nursing Facility Payments by 4%

CMS has finalized a 4.0 percent increase in Medicare Part A payments to skilled nursing facilities (SNFs) in fiscal year (FY) 2024.

The payment boost translates to $1.4 billion and is slightly higher than the 3.7 percent increase the agency initially proposed. The update reflects a 3.0 percent market basket increase, a 3.6 percent increase for the market basket forecast error adjustment, a 0.2 percent reduction for productivity, and a 2.3 percent decrease for the Patient-Driven Payment Model (PDPM) parity adjustment recalibration.

Based on stakeholder feedback on the FY 2023 SNF Prospective Payment System (PPS) proposed rule, CMS finalized a PDPM parity adjustment factor of 4.6 percent with a two-year phase-in period, resulting in a 2.3 percent reduction in FY 2023 and a 2.3 percent reduction in FY 2024.

The final rule included changes to the SNF Quality Reporting Program (QRP), in which SNFs are subject to a two-percentage-point reduction in payments if they do not meet reporting requirements.

CMS is adding the Discharge Function Score measure starting with the FY 2025 SNF QRP, which assesses the share of SNF residents who meet or exceed an expected discharge function score. This measure will replace the Application of Percent of Long-Term Care Hospital patients with an Admission and Discharge Functional Assessment/a Care Plan That Addresses Function measure.

The agency is also adopting the COVID-19 Vaccine: Percent of Patients/Residents Who Are Up to Date measure beginning with the FY 2026 SNF QRP. The measure reports the share of stays in which SNF residents are up to date with recommended COVID-19 vaccinations.

The rule modified the COVID-19 Vaccination Coverage among Healthcare Personnel measure and removed the Application of the IRF Functional Outcome Measures: Change in Self-Care Score for Medical Rehabilitation Patients measure and the Application of the IRF Functional Outcome Measures: Change in Mobility Score for Medical Rehabilitation Patients measure.

Starting in FY 2026, SNFs must report 100 percent of the required quality measure data and standardized resident assessment data collected using the minimum data set (MDS) on at least 90 percent of the assessments they submit to CMS.

Additionally, CMS is beginning the public reporting of the Transfer of Health Information to the Provider—PAC Measure and the Transfer of Health Information to the Patient—PAC Measure with the October 2025 Care Compare refresh.

The agency adopted four new quality measures in the SNF Value-Based Purchasing (VBP) Program, including the Nursing Staff Turnover measure, the Discharge Function Score measure, the Long Stay Hospitalization Measure per 1,000 Resident Days, and the Percent of Residents Experiencing One or More Falls with Major Injury (Long Stay).

The final rule replaced the Skilled Nursing Facility 30-Day All-Cause Readmission Measure with the Skilled Nursing Facility Within Stay Potentially Preventable Readmissions measure starting with the FY 2028 program year.

CMS is also adopting a Health Equity Adjustment in the SNF VBP Program that rewards SNFs that perform well and whose resident population includes at least 20 percent of residents with dual eligibility status.

The complete FY 2024 SNF PPS final rule can be found here.