[Federal Register Volume 89, Number 151 (Tuesday, August 6, 2024)]
[Rules and Regulations]
[Pages 64048-64163]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2024-16907]
[[Page 64047]]
Vol. 89
Tuesday,
No. 151
August 6, 2024
Part II
Department of Health and Human Services
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Centers for Medicare & Medicaid Services
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42 CFR Parts 413 and 488
Medicare Program; Prospective Payment System and Consolidated Billing
for Skilled Nursing Facilities; Updates to the Quality Reporting
Program and Value-Based Purchasing Program for Federal Fiscal Year
2025; Final Rule
Federal Register / Vol. 89, No. 151 / Tuesday, August 6, 2024 / Rules
and Regulations
[[Page 64048]]
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DEPARTMENT OF HEALTH AND HUMAN SERVICES
Centers for Medicare & Medicaid Services
42 CFR Parts 413 and 488
[CMS-1802-F]
RIN 0938-AV30
Medicare Program; Prospective Payment System and Consolidated
Billing for Skilled Nursing Facilities; Updates to the Quality
Reporting Program and Value-Based Purchasing Program for Federal Fiscal
Year 2025
AGENCY: Centers for Medicare & Medicaid Services (CMS), Department of
Health and Human Services (HHS).
ACTION: Final rule.
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SUMMARY: This final rule finalizes changes and updates to the policies
and payment rates used under the Skilled Nursing Facility (SNF)
Prospective Payment System (PPS) for fiscal year (FY) 2025. First, we
are rebasing and revising the SNF market basket to reflect a 2022 base
year. Next, we update the wage index used under the SNF PPS to reflect
data collected during the most recent decennial census. Additionally,
we finalize several technical revisions to the code mappings used to
classify patients under the Patient Driven Payment Model (PDPM) to
improve payment and coding accuracy. This final rule also updates the
requirements for the SNF Quality Reporting Program and the SNF Value-
Based Purchasing Program. Finally, we also are revising CMS'
enforcement authority for imposing civil money penalties (CMPs) and
including revisions to strengthen nursing home enforcement regulations.
DATES: These regulations are effective on October 1, 2024.
FOR FURTHER INFORMATION CONTACT:
[email protected] for issues related to the SNF PPS.
Heidi Magladry, (410) 786-6034, for information related to the
skilled nursing facility quality reporting program.
Christopher Palmer, (410) 786-8025, for information related to the
skilled nursing facility value-based purchasing program.
Celeste Saunders, (410) 786-5603, for information related to
Nursing Home Enforcement.
SUPPLEMENTARY INFORMATION:
Availability of Certain Tables Exclusively Through the Internet on the
CMS Website
As discussed in the FY 2014 SNF PPS final rule (78 FR 47936),
tables setting forth the Wage Index for Urban Areas Based on Core-Based
Statistical Area (CBSA) Labor Market Areas and the Wage Index Based on
CBSA Labor Market Areas for Rural Areas are no longer published in the
Federal Register. Instead, these tables are available exclusively
through the internet on the CMS website. The wage index tables for this
final rule can be accessed on the SNF PPS Wage Index home page, at
https://www.cms.gov/Medicare/Medicare-Fee-for-Service-Payment/SNFPPS/WageIndex.html.
Readers who experience any problems accessing any of these online
SNF PPS wage index tables should contact Kia Burwell at (410) 786-7816.
To assist readers in referencing sections contained in this
document, we are providing the following Table of Contents.
Table of Contents
I. Executive Summary
A. Purpose
B. Summary of Major Provisions
C. Summary of Cost and Benefits
II. Background on SNF PPS
A. Statutory Basis and Scope
B. Initial Transition for the SNF PPS
C. Required Annual Rate Updates
III. Analysis and Responses to Public Comments on the FY 2025 SNF
PPS Proposed Rule
A. General Comments on the FY 2025 SNF PPS Proposed Rule
IV. SNF PPS Rate Setting Methodology and FY 2025 Update
A. Federal Base Rates
B. SNF Market Basket Update
C. Case-Mix Adjustment
D. Wage Index Adjustment
E. SNF Value-Based Purchasing Program
F. Adjusted Rate Computation Example
V. Additional Aspects of the SNF PPS
A. SNF Level of Care--Administrative Presumption
B. Consolidated Billing
C. Payment for SNF-Level Swing-Bed Services
VI. Other SNF PPS Issues
A. Rebasing and Revising the SNF Market Basket
B. Changes to SNF PPS Wage Index
C. Technical Updates to PDPM ICD-10 Mappings
D. Request for Information: Update to PDPM Non-Therapy Ancillary
Component
VII. Skilled Nursing Facility Quality Reporting Program (SNF QRP)
A. Background and Statutory Authority
B. General Considerations Used for the Selection of Measures for
the SNF QRP
C. Collection of Four Additional Items as Standardized Patient
Assessment Data Elements and Modification of One Item Collected as a
Standardized Patient Assessment Data Element Beginning With the FY
2027 SNF QRP
D. SNF QRP Quality Measure Concepts Under Consideration for
Future Years--Request for Information (RFI)
E. Form, Manner, and Timing of Data Submission Under the SNF QRP
F. Policies Regarding Public Display of Measure Data for the SNF
QRP
VIII. Skilled Nursing Facility Value-Based Purchasing (SNF VBP)
Program
A. Statutory Background
B. Regulation Text Technical Updates
C. SNF VBP Program Measures
D. SNF VBP Performance Standards
E. SNF VBP Performance Scoring Methodology
F. Updates to the SNF VBP Review and Correction Process
G. Updates to the SNF VBP Extraordinary Circumstances Exception
Policy
IX. Nursing Home Enforcement
A. Background
B. Analysis of the Provisions of the Proposed Regulations
X. Collection of Information Requirements
XI. Economic Analyses
A. Regulatory Impact Analysis
B. Regulatory Flexibility Act Analysis
C. Unfunded Mandates Reform Act Analysis
D. Federalism Analysis
E. Regulatory Review Costs
I. Executive Summary
A. Purpose
This final rule will update the SNF prospective payment rates for
fiscal year (FY) 2025, as required under section 1888(e)(4)(E) of the
Social Security Act (the Act). It also responds to section
1888(e)(4)(H) of the Act, which requires the Secretary to provide for
publication of certain specified information relating to the payment
update (see section II.C. of this final rule) in the Federal Register
before the August 1 that precedes the start of each FY. Additionally,
in this final rule, we are finalizing the rebasing and revising of the
SNF market basket to reflect a 2022 base year. Next, we are finalizing
the update to the wage index used under the SNF PPS to reflect data
collected during the most recent decennial census. We also finalize
several technical revisions to the code mappings used to classify
patients under the PDPM to improve payment and coding accuracy. This
final rule updates the requirements for the SNF QRP, including the
collection of four new items as standardized patient assessment data
elements, and the modification of one item collected and submitted
using the Minimum Data Set (MDS) beginning with the FY 2027 SNF QRP. We
also finalize a policy that SNFs, which participate in the SNF QRP,
participate in a validation process beginning with the FY 2027 SNF QRP.
We also provide a summary of the
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comments received on the request for information on quality measure
concepts under consideration for future SNF QRP program years. This
final rule also includes requirements for the Skilled Nursing Facility
Value-Based Purchasing (SNF VBP) Program, including adopting a measure
selection, retention, and removal policy, a technical measure updates
policy, a measure minimum for FY 2028 and subsequent years, updates to
the review and correction policy to accommodate new measure data
sources, updates to the Extraordinary Circumstances Exception policy,
and updates to the SNF VBP regulation text. We also proposed revisions
to existing long-term care (LTC) enforcement regulations that would
enable CMS and the States to impose CMPs to better reflect amounts that
are more consistent with the type of noncompliance that occurred.
B. Summary of Major Provisions
In accordance with sections 1888(e)(4)(E)(ii)(IV) and (e)(5) of the
Act, this final rule updates the annual rates that we published in the
SNF PPS final rule for FY 2024 (88 FR 53200, August 7, 2023). In
addition, this final rule includes a forecast error adjustment for FY
2025. We are also finalizing the rebasing and revising of the SNF
market basket to reflect a 2022 base year. Next, we are finalizing the
update of the wage index used under the SNF PPS to reflect data
collected during the most recent decennial census. We are also
finalizing several technical revisions to the code mappings used to
classify patients under the PDPM to improve payment and coding
accuracy.
We are finalizing several updates for the SNF VBP Program. We are
adopting a measure selection, retention, and removal policy that aligns
with policies we have adopted in other CMS quality programs. We are
adopting a technical measure updates policy that allows us to
incorporate technical measure updates into SNF VBP measure
specifications and to update the numerical values of the performance
standards for a program year if a measure's specifications were
technically updated between the time that we published the performance
standards for a measure and the time that we calculate SNF performance
on that measure at the conclusion of the applicable performance period.
We are adopting the same measure minimum we previously finalized for
the FY 2027 program year for the FY 2028 program year and subsequent
program years. We are adopting modifications to Phase One of our review
and correction policy such that the policy applies to all SNF VBP
measures regardless of the measure's data source. We are updating the
SNF VBP extraordinary circumstances exception (ECE) policy to allow
SNFs to request an ECE if the SNF can demonstrate that, as a result of
the extraordinary circumstance, it cannot report SNF VBP data on one or
more measures by the specified deadline. We are also updating the
instructions for requesting an extraordinary circumstance exception
(ECE). Lastly, we are adopting several updates to the SNF VBP
regulation text to align with previously finalized definitions and
policies.
Beginning with the FY 2027 SNF QRP, we are finalizing requirements
that SNFs participating in the SNF QRP collect and submit through the
MDS four new items as standardized patient assessment data elements
under the social determinants of health (SDOH) category: one item for
Living Situation, two items for Food, and one item for Utilities.
Additionally, we are finalizing our proposal to modify the current
Transportation item. We are finalizing with modification a validation
process for the SNF QRP, similar to the process that we adopted for the
SNF VBP beginning with the FY 2027 SNF QRP. We are also finalizing with
modification amendments to the regulation text at Sec. 413.360 to
implement the validation process we are finalizing. Finally, this final
rule also summarizes comments we received in response to a request for
information (RFI) on quality measure concepts under consideration for
future SNF QRP years.
We are finalizing revisions to CMS' existing enforcement authority
to expand the number and types of CMPs that can be imposed on LTC
facilities, allowing for more per-instance (PI) CMPs to be imposed in
conjunction with per-day (PD) CMPs. This update also expands our
authority to impose multiple PI CMPs when the same type of
noncompliance is identified on more than one day. Lastly, the final
revisions will enable CMS or the States to impose a CMP for the number
of days of previously cited noncompliance since the last three standard
surveys for which a CMP has not yet been imposed to ensure that
identified noncompliance may be subject to a penalty.
C. Summary of Cost and Benefits
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II. Background on SNF PPS
A. Statutory Basis and Scope
As amended by section 4432 of the Balanced Budget Act of 1997 (BBA
1997) (Pub. L. 105-33, enacted August 5, 1997), section 1888(e) of the
Act provides for the implementation of a PPS for SNFs. This methodology
uses prospective, case-mix adjusted per diem payment rates applicable
to all covered SNF services defined in section 1888(e)(2)(A) of the
Act. The SNF PPS is effective for cost reporting periods beginning on
or after July 1, 1998, and covers virtually all costs of furnishing
covered SNF services (routine, ancillary, and capital-related costs)
other than costs associated with approved educational activities and
bad debts. Under section 1888(e)(2)(A)(i) of the Act, covered SNF
services include post-hospital extended care services for which
benefits are provided under Part A, as well as those items and services
(other than a small number of excluded services, such as physicians'
services) for which payment may otherwise be made under Part B and
which are furnished to Medicare beneficiaries who are residents in a
SNF during a covered Part A stay. A comprehensive discussion of these
provisions appears in the May 12, 1998, interim final rule (63 FR
26252). In addition, a detailed discussion of the legislative history
of the SNF PPS is available online at https://www.cms.gov/Medicare/Medicare-Fee-for-Service-Payment/SNFPPS/Downloads/Legislative_History_2018-10-01.pdf.
Section 215(a) of the Protecting Access to Medicare Act of 2014
(PAMA) (Pub. L. 113-93, enacted April 1, 2014) added section 1888(g) to
the Act, requiring the Secretary to specify an all-cause all-condition
hospital readmission measure and an all-condition risk-adjusted
potentially preventable hospital readmission measure for the SNF
setting. Additionally, section 215(b) of PAMA added section 1888(h) to
the Act requiring the Secretary to implement a VBP program for SNFs. In
2014, section 2(c)(4) of the Improving Medicare Post-Acute Care
Transformation (IMPACT) Act of 2014 (Pub. L. 113-185, enacted October
6, 2014) amended section 1888(e)(6) of the Act, which requires the
Secretary to implement a QRP for SNFs under which SNFs report data on
measures and resident assessment data. Finally, section 111 of the
Consolidated Appropriations Act, 2021 (CAA, 2021) (Pub. L. 116-260,
enacted December 27, 2020) amended section 1888(h) of the Act,
authorizing the Secretary to apply up to nine additional measures to
the VBP program for SNFs.
B. Initial Transition for the SNF PPS
Under sections 1888(e)(1)(A) and (e)(11) of the Act, the SNF PPS
included an initial, three-phase transition that blended a facility-
specific rate (reflecting the individual facility's historical cost
experience) with the Federal case-mix adjusted rate. The transition
extended through the facility's first 3 cost reporting periods under
the PPS, up to and including the one that began in FY 2001. Thus, the
SNF PPS is no longer operating under the transition, as all facilities
have been paid at the full Federal rate effective with cost reporting
periods beginning in FY 2002. As we now base payments for SNFs entirely
on the adjusted Federal per diem rates, we no longer include adjustment
factors under the transition related to facility-specific rates for the
upcoming FY.
C. Required Annual Rate Updates
Section 1888(e)(4)(E) of the Act requires the SNF PPS payment rates
to be updated annually. The most recent annual update occurred in a
final rule that set forth updates to the SNF PPS payment rates for FY
2024 (88 FR 53200, August 7, 2023), as amended by the subsequent
correction document (88 FR 68486, October 4, 2023).
Section 1888(e)(4)(H) of the Act specifies that we provide for
publication annually in the Federal Register the following:
The unadjusted Federal per diem rates to be applied to
days of covered SNF services furnished during the upcoming FY.
The case-mix classification system to be applied for these
services during the upcoming FY.
The factors to be applied in making the area wage
adjustment for these services.
Along with other revisions discussed later in this preamble, this
final rule will set out the required annual updates to the per diem
payment rates for SNFs for FY 2025.
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III. Analysis and Responses to Public Comments on the FY 2025 SNF PPS
Proposed Rule
A. General Comments on the FY 2025 SNF PPS Proposed Rule
We received public comments on these proposals. The following is a
summary of the comments we received and our responses.
Comment: Some commenters expressed concerns regarding several items
outside the scope of this rule or outside the scope of CMS's current
authorities. These comments included issues related to the recently
finalized nursing home staffing rule (outside of issues related to that
rule and calculation of the SNF market basket, which are addressed
later in this rule), and a request that CMS remove the 3-day qualifying
hospital stay (QHS) prerequisite for Part A SNF coverage.
Response: With regard to those comments related to the recently
finalized nursing home staffing rule, any such issues are out of scope
for this rule and should be directed to
[email protected]. With regard to the request that
we remove the QHS requirement for Part A SNF coverage, we maintain that
we do not have the statutory authority to pursue this change at this
time. Moreover, we have previously conducted analyses of the associated
cost of removing the 3-day stay requirement and found that it would
significantly increase Medicare outlays.
Comment: Several commenters raised concerns with therapy treatment
under PDPM, specifically related to reductions in the amount of therapy
furnished to SNF patients since PDPM was implemented. Some of these
commenters stated that CMS should revise the existing limit on
concurrent and group therapy to provide a financial penalty in cases
where the facility exceeds this limit. These commenters also
recommended that CMS direct its review contractors to examine the
practices of facilities that changed their therapy service provision
after PDPM was implemented. Additionally, commenters want CMS to
release the results of any monitoring efforts around therapy provision.
Some commenters stated that the therapy items in O0400 should be
maintained to track therapy provision. Finally, some commenters stated
that CMS should reinstate the assessment schedule that had existed
prior to implementing PDPM.
Response: We appreciate commenters raising these concerns around
therapy provision under PDPM, as compared the Resource Utilization
Groups, Version IV (RUG-IV). We agree with commenters that the amount
of therapy that is furnished to patients under PDPM is less than that
delivered under RUG-IV. As we stated in the FY 2020 SNF PPS final rule,
we believe that close, real-time monitoring is essential to identifying
any adverse trends under PDPM. While we have identified the same
reduction in therapy services and therapy staff, we believe that these
findings must be considered within the context of patient outcomes. To
the extent that facilities are able to maintain or improve patient
outcomes, we believe that this supersedes changes in service provision,
whether this be in the amount of therapy furnished or the mode in which
it is furnished. We continue to monitor all aspects of PDPM and advise
our review contractors on any adverse trends. With regard to
implementing a specific penalty for exceeding the group and concurrent
therapy threshold, based on our current data, we have not identified
any widespread misuse of this limit. Should we identify such misuse,
either at a provider-level or at a broader level, we will pursue an
appropriate course of action.
With regard to eliminating certain therapy tracking items in O0400,
while the O0400 items are able to track therapy minutes, these items
only track therapy provision for the seven days up to and including the
assessment reference date. We agree with the commenters that items
should exist to track therapy provision over the course of a full
Medicare stay, which is the purpose of the O0425 items on the
assessment.
Finally, with regard to the recommendation that we reinstate
something akin to the assessment schedule that was in effect under RUG-
IV, given that PDPM does not reimburse on the basis of therapy minutes,
we do not believe that such an increase in administrative burden on
providers would have an impact on therapy provision. That being said,
we strongly encourage interested parties to continue to provide
suggestions on how to ensure that SNF patients receive the care they
need based on their unique characteristics and goals.
Comment: One commenter requested that we consider including
recreational therapy time provided to SNF residents by recreational
therapists into the case- mix adjusted therapy component of PDPM,
rather than having it be considered part of the nursing component. This
commenter further suggested that CMS begin collecting data, as part of
a demonstration project, on the utilization of recreational therapy, as
a distinct and separate service, and its impact on patient care cost
and quality.
Response: We appreciate the commenter raising this issue, but we do
not believe there is sufficient evidence at this time regarding the
efficacy of recreational therapy interventions. More notably, we do not
believe there are data that would substantiate a determination of the
effect on payment of such interventions, as such services were not
considered separately when the PDPM was being developed, unlike
physical, occupational and speech-language pathology services. That
being said, we would note that Medicare Part A originally paid for
institutional care in various provider settings, including SNF, on a
reasonable cost basis, but now makes payment using PPS methodologies,
such as the SNF PPS. To the extent that one of these SNFs furnished
recreational therapy to its inpatients under the previous, reasonable
cost methodology, the cost of the services would have been included in
the base payments when SNF PPS payment rates were derived. Under the
PPS methodology, Part A makes a comprehensive payment for the bundled
package of items and services that the facility furnishes during the
course of a Medicare-covered stay. This package encompasses nearly all
services that the beneficiary receives during the course of the stay--
including any medically necessary recreational therapy--and payment for
such services is included within the facility's comprehensive SNF PPS
payment for the covered Part A stay itself. With regard to developing a
demonstration project focused on this particular service, we do not
believe that creating such a project would substantially improve the
accuracy of the SNF PPS payment rates. Moreover, in light of comments
discussed previously in this section on the impact of PDPM
implementation on therapy provision more generally, we believe that
carving out recreational therapy as a separate discipline will not have
a significant impact on access to recreational therapy services for SNF
patients.
IV. SNF PPS Rate Setting Methodology and FY 2025 Payment Update
A. Federal Base Rates
Under section 1888(e)(4) of the Act, the SNF PPS uses per diem
Federal payment rates based on mean SNF costs in a base year (FY 1995)
updated for inflation to the first effective period of the PPS. We
developed the Federal payment rates using allowable costs from
hospital-based and freestanding SNF cost reports for reporting periods
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beginning in FY 1995. The data used in developing the Federal rates
also incorporated a Part B add-on, which is an estimate of the amounts
that, prior to the SNF PPS, would be payable under Part B for covered
SNF services furnished to individuals during the course of a covered
Part A stay in a SNF.
In developing the rates for the initial period, we updated costs to
the first effective year of the PPS (the 15-month period beginning July
1, 1998) using the SNF market basket, and then standardized for
geographic variations in wages and for the costs of facility
differences in case-mix. In compiling the database used to compute the
Federal payment rates, we excluded those providers that received new
provider exemptions from the routine cost limits, as well as costs
related to payments for exceptions to the routine cost limits. Using
the formula that the BBA 1997 prescribed, we set the Federal rates at a
level equal to the weighted mean of freestanding costs plus 50 percent
of the difference between the freestanding mean and weighted mean of
all SNF costs (hospital-based and freestanding) combined. We computed
and applied separately the payment rates for facilities located in
urban and rural areas and adjusted the portion of the Federal rate
attributable to wage-related costs by a wage index to reflect
geographic variations in wages.
B. SNF Market Basket Update
1. SNF Market Basket
Section 1888(e)(5)(A) of the Act requires us to establish a SNF
market basket that reflects changes over time in the prices of an
appropriate mix of goods and services included in covered SNF services.
Accordingly, we have developed a SNF market basket that encompasses the
most commonly used cost categories for SNF routine services, ancillary
services, and capital-related expenses. In the SNF PPS final rule for
FY 2022 (86 FR 42444 through 42463), we rebased and revised the SNF
market basket, which included updating the base year from 2014 to 2018.
In the SNF PPS proposed rule for FY 2025 (89 FR 23427 through 23451),
we proposed to rebase and revise the SNF market basket and update the
base year from 2018 to 2022. We are finalizing the 2022-based SNF
market basket as proposed, as discussed in section VI.A. of this final
rule. The SNF market basket is used to compute the market basket
percentage increase that is used to update the SNF Federal rates on an
annual basis, as required by section 1888(e)(4)(E)(ii)(IV) of the Act.
This market basket percentage increase is adjusted by a forecast error
adjustment, if applicable, and then further adjusted by the application
of a productivity adjustment as required by section 1888(e)(5)(B)(ii)
of the Act and described in section IV.B.4. of this final rule.
As outlined in the proposed rule, we proposed a FY 2025 SNF market
basket percentage increase of 2.8 percent based on IHS Global Inc.'s
(IGI's) fourth-quarter 2023 forecast of the proposed 2022-based SNF
market basket (before application of the forecast error adjustment and
productivity adjustment). We also proposed that if more recent data
subsequently became available (for example, a more recent estimate of
the market basket and/or the productivity adjustment), we would use
such data, if appropriate, to determine the FY 2025 SNF market basket
percentage increase, labor-related share relative importance, forecast
error adjustment, or productivity adjustment in this SNF PPS final
rule.
Since the proposed rule, we have updated the FY 2025 market basket
percentage increase based on IGI's second quarter 2024 forecast with
historical data through the first quarter of 2024. The FY 2025 growth
rate of the 2022-based SNF market basket is estimated to be 3.0
percent.
2. Market Basket Update for FY 2025
Section 1888(e)(5)(B) of the Act defines the SNF market basket
percentage increase as the percentage change in the SNF market basket
from the midpoint of the previous FY to the midpoint of the current FY.
For the Federal rates outlined in the proposed rule, we used the
percentage change in the SNF market basket to compute the update factor
for FY 2025. This factor was based on the FY 2025 percentage increase
in the proposed 2022-based SNF market basket reflecting routine,
ancillary, and capital-related expenses. Sections 1888(e)(4)(E)(ii)(IV)
and (e)(5)(B)(i) of the Act require that the update factor used to
establish the FY 2025 unadjusted Federal rates be at a level equal to
the SNF market basket percentage increase. Accordingly, we determined
the total growth from the average market basket level for the period of
October 1, 2023, through September 30, 2024, to the average market
basket level for the period of October 1, 2024, through September 30,
2025. As outlined in the proposed rule, we proposed a FY 2025 SNF
market basket percentage increase of 2.8 percent. For this final rule,
based on IGI's second quarter 2024 forecast with historical data
through the first quarter of 2024, the FY 2025 growth rate of the 2022-
based SNF market basket is estimated to be 3.0 percent.
As further explained in section IV.B.3. of this final rule, as
applicable, we adjust the percentage increase by the forecast error
adjustment from the most recently available FY for which there is final
data and apply this adjustment whenever the difference between the
forecasted and actual percentage increase in the market basket exceeds
a 0.5 percentage point threshold in absolute terms. Additionally,
section 1888(e)(5)(B)(ii) of the Act requires us to reduce the market
basket percentage increase by the productivity adjustment (the 10-year
moving average of changes in annual economy-wide private nonfarm
business total factor productivity (TFP) for the period ending
September 30, 2025) which is estimated to be 0.5 percentage point, as
described in section IV.B.4. of this final rule.
We also note that section 1888(e)(6)(A)(i) of the Act provides
that, beginning with FY 2018, SNFs that fail to submit data, as
applicable, in accordance with sections 1888(e)(6)(B)(i)(II) and (III)
of the Act for a fiscal year will receive a 2.0 percentage point
reduction to their market basket update for the fiscal year involved,
after application of section 1888(e)(5)(B)(ii) of the Act (the
productivity adjustment) and section 1888(e)(5)(B)(iii) of the Act (the
market basket increase). In addition, section 1888(e)(6)(A)(ii) of the
Act states that application of the 2.0 percentage point reduction
(after application of section 1888(e)(5)(B)(ii) and (iii) of the Act)
may result in the market basket percentage change being less than zero
for a fiscal year and may result in payment rates for a fiscal year
being less than such payment rates for the preceding fiscal year.
Section 1888(e)(6)(A)(iii) of the Act further specifies that the 2.0
percentage point reduction is applied in a noncumulative manner, so
that any reduction made under section 1888(e)(6)(A)(i) of the Act
applies only to the fiscal year involved, and that the reduction cannot
be taken into account in computing the payment amount for a subsequent
fiscal year.
The following is a of the public comments received on the proposed
FY 2025 SNF market basket percentage increase to the SNF PPS rates,
along with our responses.
Comment: Many commenters stated that they appreciate and support
the proposed net 4.1 percent payment update and forecast error
adjustment; however, some commenters expressed concerns about missed
forecasts and whether the market basket is appropriately capturing
inflation.
[[Page 64053]]
Commenters cited a report from the AHA, which found that hospital
employee compensation has grown by 45 percent since 2014, and workforce
shortages that may persist into the future could continue to drive
labor-related inflation higher. As a result, providers have turned to
more expensive contract labor to sustain operations. Several commenters
noted themselves or their members experiencing high rates of inflation
in equipment and supplies, and questioned whether the inflation is
being properly captured in the market basket.
A few commenters noted that there have now been four consecutive
years of under-forecasts, and that growth in the Consumer Price Index
All Urban totaled 16.8 percent between 2021 and 2023 while SNF market
basket growth totaled only 15.5 percent over the same time period.
Several commenters also expressed that the proposed 4.1 percent payment
update will fall short of covering the costs of the finalized minimum
staffing rule. Two commenters urged CMS to consider a prospective
adjustment for labor inflation. Two commenters urged CMS to use more
recent data to determine the FY SNF market basket update in the final
rule.
Response: We recognize commenters' concerns in relation to forecast
error during a high inflationary period. SNF PPS market basket updates
are set prospectively, which means that the market basket update relies
on a mix of both historical data for part of the period for which the
update is calculated and forecasted data for the remainder. For
instance, the FY 2025 market basket update in this final rule reflects
historical data through the first quarter of 2024 and forecasted data
through the third quarter of 2025. IHS Global Inc. (IGI) is a
nationally recognized economic and financial forecasting firm with
which CMS contracts to forecast the components of the market baskets.
We believe that basing the prospective update on these forecasts is an
appropriate method, while also acknowledging that these are
expectations of trends and may differ from actual experience.
We also understand commenters' concerns regarding the minimum
staffing rule not being taken into account. The 2022-based SNF market
basket is a fixed-weight, Laspeyres-type price index that measures the
change in price, over time, of the same mix of goods and services
purchased in the base period. Any changes in the quantity or mix of
goods and services (that is, intensity) purchased over time relative to
a base period are not measured. The cost weights in this final rule are
based on the most recent set of complete and comprehensive cost data
for the universe of SNF providers available at the time of rulemaking,
and the price proxies for each cost category include expectations of
the inflationary pressures for each category of expenses in the market
basket. Any changes in intensity relative to the 2022-based SNF market
basket will be reflected in future Medicare cost reports and thus
captured in the next rebasing. We will continue to monitor Medicare
cost report data for freestanding SNFs as it becomes available to
assess whether the 2022-based SNF market basket cost weights continue
to be appropriate in the coming years.
We recognize the challenges facing SNFs in operating during a high
inflationary environment. Due to SNF payments under PPS being set
prospectively, we rely on a projection of the SNF market basket that
reflects both recent historical trends, as well as forecast
expectations over the next 18 months. The forecast error for a market
basket update is calculated as the actual market basket increase for a
given year, less the forecasted market basket increase. Due to the
uncertainty regarding future price trends, forecast errors can be both
positive or negative. We are confident that the forecast error
adjustments built into the SNF market basket update factor will account
for these discrepancies over time.
The proposed FY 2025 SNF market basket percentage increase of 2.8
percent reflected the most-recent forecast available at that time of
rulemaking. As stated in the SNF PPS proposed rule for FY 2025 (89 FR
23451), we also proposed that if more recent data subsequently became
available (for example, a more recent estimate of the market basket
and/or the productivity adjustment), we would use such data, if
appropriate, to determine the FY 2025 SNF market basket percentage
increase, labor-related share relative importance, forecast error
adjustment, or productivity adjustment in the SNF PPS final rule. For
this final rule, we have incorporated the most recent historical data
and forecasts provided by IGI to capture the expected price and wage
pressures facing SNFs in FY 2025. For this final rule, based on IGI's
second-quarter 2024 forecast with historical data through first-quarter
2024, the FY 2025 growth rate of the 2022-based SNF market basket is
3.0 percent. By incorporating the most recent estimates available of
the market basket percentage increase, we believe these data reflect
the best available projection of input price inflation faced by SNFs in
FY 2025.
After consideration of the comments received on the FY 2025 SNF
market basket proposals, we are finalizing a FY 2025 SNF market basket
percentage increase of 3.0 percent (prior to the application of the
forecast error adjustment and productivity adjustment, which are
discussed later in this section).
3. Forecast Error Adjustment
As discussed in the June 10, 2003 supplemental proposed rule (68 FR
34768) and finalized in the August 4, 2003 final rule (68 FR 46057
through 46059), Sec. 413.337(d)(2) provides for an adjustment to
account for market basket forecast error. The initial adjustment for
market basket forecast error applied to the update of the FY 2003 rate
for FY 2004 and took into account the cumulative forecast error for the
period from FY 2000 through FY 2002, resulting in an increase of 3.26
percent to the FY 2004 update. Subsequent adjustments in succeeding FYs
take into account the forecast error from the most recently available
FY for which there is final data and apply the difference between the
forecasted and actual change in the market basket when the difference
exceeds a specified threshold. We originally used a 0.25 percentage
point threshold for this purpose; however, for the reasons specified in
the FY 2008 SNF PPS final rule (72 FR 43425), we adopted a 0.5
percentage point threshold effective for FY 2008 and subsequent FYs. As
we stated in the final rule for FY 2004 that first issued the market
basket forecast error adjustment (68 FR 46058), the adjustment will
reflect both upward and downward adjustments, as appropriate.
For FY 2023 (the most recently available FY for which there is
final data), the forecasted or estimated increase in the SNF market
basket was 3.9 percent, and the actual increase for FY 2023 was 5.6
percent, resulting in the actual increase being 1.7 percentage points
higher than the estimated increase. Accordingly, as the difference
between the estimated and actual amount of change in the market basket
exceeds the 0.5 percentage point threshold, under the policy previously
described (comparing the forecasted and actual market basket percentage
increase), the FY 2025 market basket percentage increase of 3.0 percent
is adjusted upward to account for the forecast error adjustment of 1.7
percentage points, resulting in a SNF market basket percentage increase
of 4.7 percent, which is then reduced by the productivity adjustment of
0.5
[[Page 64054]]
percentage point, discussed in section IV.B.4. of this final rule. This
results in a SNF market basket update for FY 2025 of 4.2 percent.
Table 2 shows the forecasted and actual market basket increases for
FY 2023.
[GRAPHIC] [TIFF OMITTED] TR06AU24.001
A discussion of the public comments received on the forecast error
adjustment, along with our responses, can be found below.
Comment: Several commenters noted that while they appreciate the
forecast error adjustment, forecast error adjustments are made two
years after the year in question and SNFs must contend with the
underpayment for two years before it is reconciled. One commenter
suggested updating the method to use more timely data that would
capture increased costs in recent years.
Response: While we understand that earlier forecast error
adjustments might be preferable, a two-year lag is necessary because
historical data for the current fiscal year are not available until
after the following year's update is determined.
Comment: One commenter stated that not including Federal relief
funds, the aggregate fee-for-service (FFS) Medicare margin for
freestanding SNFs in 2022 was over 18 percent, the 23rd consecutive
year this this margin has exceeded 10 percent. They note that high
margins indicate that a reduction is needed to more closely align
aggregate payments to aggregate costs.
The commenter also noted that although CMS is required by statute
to update the payment rates each year by the estimated change in the
market basket, CMS is not required to make automatic forecast error
corrections. They maintain that they do not support forecast error
adjustments for three reasons. First, in some years, such as the one
addressed by the proposed rule for FY 2025, the forecast error
correction results in making a larger payment increase in addition to
the statutory update, even as the aggregate FFS Medicare margin is
high. Second, the adjustments result in more variable updates than had
no adjustment been made. Since FY 2004, when CMS implemented the
adjustment, forecast error corrections have ranged from a 3.26 percent
increase (in FY 2004) to a -0.8 percent reduction (in FY 2022).
Eliminating the adjustment for forecast errors would result in more
stable updates. Third, the adjustment results in inconsistent
approaches to updates across settings: except for the updates to the
capital payments to acute care hospitals, CMS does not apply forecast
error adjustments to any other market basket updates.
Response: We appreciate the commenter's input and suggestions. We
note that apart from the last several years of various unprecedented
market shocks and resulting volatility, forecast errors have generally
been relatively small and clustered near zero. We agree that forecast
error adjustments have potential to introduce more variable and
unstable updates. As a result, for FY 2008 and subsequent years we
increased the threshold at which adjustments are triggered from 0.25
percentage point to 0.5 percentage point. Our intent in raising the
threshold was to distinguish typical statistical variances from more
major unanticipated impacts, such as unforeseen disruptions of the
economy or unexpected inflationary patterns.
As was stated when the SNF forecast error adjustment was introduced
in the FY 2004 SNF PPS final rule (68 FR 46035), our goal continues to
be to ``pay the appropriate amount, to the correct provider, for the
proper service, at the right time.'' Accordingly, we are optimistic
that market volatility will soon subside to a point where forecast
errors will not be frequently triggered. Nonetheless, we will continue
to monitor the effects of forecast error adjustments, and their
appropriateness in responding to unforeseen inflationary patterns. Any
changes, if deemed necessary, would be proposed through notice and
comment rulemaking.
After consideration of the comments received, we are finalizing the
application of the proposed forecast error adjustment without
modification. As stated above, based on IGI's second-quarter 2024
forecast with historical data through the first quarter of 2024, the FY
2025 growth rate of the 2022-based SNF market basket is estimated to be
3.0 percent. Accordingly, as the difference between the estimated and
actual amount of change in the market basket exceeds the 0.5 percentage
point threshold, under the policy previously described (comparing the
forecasted and actual market basket percentage increase), the FY 2025
market basket percentage increase of 3.0 percent is adjusted upward to
account for the forecast error adjustment of 1.7 percentage points,
resulting in a SNF market basket percentage increase of 4.7 percent,
which is then reduced by the productivity adjustment as discussed later
in this section.
4. Productivity Adjustment
Section 1888(e)(5)(B)(ii) of the Act, as added by section 3401(b)
of the Patient Protection and Affordable Care Act (Affordable Care Act)
(Pub. L. 111-148, enacted March 23, 2010) requires that, in FY 2012 and
in subsequent FYs, the market basket percentage under the SNF payment
system (as described in section 1888(e)(5)(B)(i) of the Act) is to be
reduced annually by the productivity adjustment described in section
1886(b)(3)(B)(xi)(II) of the Act. Section 1886(b)(3)(B)(xi)(II) of the
Act, in turn, defines the productivity adjustment to be equal to the
10-year moving average of changes in annual economy-wide, private
nonfarm business multifactor productivity (MFP) (as projected by the
Secretary for the 10-year period ending with the applicable FY, year,
cost-reporting period, or other annual period).
The U.S. Department of Labor's Bureau of Labor Statistics (BLS)
publishes the official measure of productivity for the U.S. We note
that previously the productivity measure referenced at section
1886(b)(3)(B)(xi)(II) of the Act was published by BLS as private
nonfarm business multifactor
[[Page 64055]]
productivity. Beginning with the November 18, 2021, release of
productivity data, BLS replaced the term MFP with TFP. BLS noted that
this is a change in terminology only and will not affect the data or
methodology. As a result of the BLS name change, the productivity
measure referenced in section 1886(b)(3)(B)(xi)(II) of the Act is now
published by BLS as private nonfarm business total factor productivity.
We refer readers to the BLS website at www.bls.gov for the BLS
historical published TFP data. A complete description of the TFP
projection methodology is available on our website at https://www.cms.gov/Research-Statistics-Data-and-Systems/Statistics-Trends-and-Reports/MedicareProgramRatesStats/MarketBasketResearch. In addition, in
the FY 2022 SNF final rule (86 FR 42429) we noted that, effective with
FY 2022 and forward, we changed the name of this adjustment to refer to
it as the ``productivity adjustment,'' rather than the ``MFP
adjustment.''
Per section 1888(e)(5)(A) of the Act, the Secretary shall establish
a SNF market basket that reflects changes over time in the prices of an
appropriate mix of goods and services included in covered SNF services.
Section 1888(e)(5)(B)(ii) of the Act, added by section 3401(b) of the
Affordable Care Act, requires that for FY 2012 and each subsequent FY,
after determining the market basket percentage described in section
1888(e)(5)(B)(i) of the Act, the Secretary shall reduce such percentage
by the productivity adjustment described in section
1886(b)(3)(B)(xi)(II) of the Act. Section 1888(e)(5)(B)(ii) of the Act
further states that the reduction of the market basket percentage by
the productivity adjustment may result in the market basket percentage
being less than zero for a FY and may result in payment rates under
section 1888(e) of the Act being less than such payment rates for the
preceding fiscal year. Thus, if the application of the productivity
adjustment to the market basket percentage calculated under section
1888(e)(5)(B)(i) of the Act results in a productivity-adjusted market
basket percentage that is less than zero, then the annual update to the
unadjusted Federal per diem rates under section 1888(e)(4)(E)(ii) of
the Act would be negative, and such rates would decrease relative to
the prior FY.
Based on the data available for this FY 2025 SNF PPS final rule,
the productivity adjustment (the 10-year moving average of changes in
annual economy-wide private nonfarm business TFP for the period ending
September 30, 2025) is projected to be 0.5 percentage point.
Comment: A few commenters noted that they are disappointed in the
productivity adjustment, and that CMS should closely monitor the effect
of such productivity adjustments and explore ways to use its authority
to offset or waive them.
Response: Section 1888(e)(5)(B)(ii) of the Act requires the
application of the productivity adjustment described in section
1886(b)(3)(xi)(II) of the Act to the SNF PPS market basket increase
factor. As required by statute, the FY 2025 productivity adjustment is
derived based on the 10-year moving average growth in economy-wide
productivity for the period ending in FY 2025. We recognize the
concerns of the commenters regarding the appropriateness of the
productivity adjustment; however, we are required under section
1888(e)(5)(B)(ii) of the Act to apply the specific productivity
adjustment described here in this section.
As stated previously, in the proposed rule the productivity
adjustment was estimated to be 0.4 percentage point based on IGI's
fourth-quarter 2024 forecast. For this final rule, based on IGI's
second-quarter 2024 forecast, the productivity adjustment (the 10-year
moving average of changes in annual economy-wide private nonfarm
business TFP for the period ending September 30, 2025) is 0.5
percentage point.
Consistent with section 1888(e)(5)(B)(i) of the Act and Sec.
413.337(d)(2), and as outlined previously in section IV.B.1. of this
final rule, the market basket percentage increase for FY 2025 for the
SNF PPS is based on IGI's second quarter 2024 forecast of the SNF
market basket percentage increase, which is estimated to be 3.0
percent. This market basket percentage increase is then increased by
1.7 percentage points, due to application of the forecast error
adjustment outlined earlier in section IV.B.3. of this final rule.
Finally, as outlined earlier in this section, we are applying a 0.5
percentage point productivity adjustment to the FY 2025 SNF market
basket percentage increase. Therefore, the resulting productivity-
adjusted FY 2025 SNF market basket update is equal to 4.2 percent,
which reflects a market basket percentage increase of 3.0 percent, plus
the 1.7 percentage points forecast error adjustment, and reduced by the
0.5 percentage point productivity adjustment. Thus, we apply a net SNF
market basket update factor of 4.2 percent in our determination of the
FY 2025 SNF PPS unadjusted Federal per diem rates.
5. Unadjusted Federal Per Diem Rates for FY 2025
As discussed in the FY 2019 SNF PPS final rule (83 FR 39162), in FY
2020 we implemented a new case-mix classification system to classify
SNF patients under the SNF PPS, the PDPM. As discussed in section
V.B.1. of that final rule (83 FR 39189), under PDPM, the unadjusted
Federal per diem rates are divided into six components, five of which
are case-mix adjusted components (Physical Therapy (PT), Occupational
Therapy (OT), Speech-Language Pathology (SLP), Nursing, and Non-Therapy
Ancillaries (NTA)), and one of which is a non-case-mix component, as
existed under the previous RUG-IV model. We proposed to use the SNF
market basket, adjusted as outlined previously in sections III.B.1.
through III.B.4. of the proposed rule, to adjust each per diem
component of the Federal rates forward to reflect the change in the
average prices for FY 2024 from the average prices for FY 2023. We also
proposed to further adjust the rates by a wage index budget neutrality
factor, outlined in section III.D. of the proposed rule.
Further, in the past, we used the revised Office of Management and
Budget (OMB) delineations adopted in the FY 2015 SNF PPS final rule (79
FR 45632, 45634), with updates as reflected in OMB Bulletin Nos. 15-01
and 17-01, to identify a facility's urban or rural status for the
purpose of determining which set of rate tables apply to the facility.
As discussed in the FY 2021 SNF PPS proposed and final rules, we
adopted the revised OMB delineations identified in OMB Bulletin No. 18-
04 (available at https://www.whitehouse.gov/wp-content/uploads/2018/09/Bulletin-18-04.pdf) to identify a facility's urban or rural status
effective beginning with FY 2021. However, as further outlined in
section V.A of the proposed rule, the current CBSAs are based on OMB
standards contained in Bulletin 20-01, which is based on data collected
during the 2010 Decennial Census. In this final rule, we are updating
the SNF PPS wage index using the CBSAs defined within Bulletin 23-01.
Tables 3 and 4 reflect the proposed unadjusted Federal rates for FY
2025, prior to adjustment for case-mix.
[[Page 64056]]
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C. Case-Mix Adjustment
Under section 1888(e)(4)(G)(i) of the Act, the Federal rate also
incorporates an adjustment to account for facility case-mix, using a
classification system that accounts for the relative resource
utilization of different patient types. The statute specifies that the
adjustment is to reflect both a resident classification system that the
Secretary establishes to account for the relative resource use of
different patient types, as well as resident assessment data and other
data that the Secretary considers appropriate. In the FY 2019 final
rule (83 FR 39162, August 8, 2018), we finalized a new case-mix
classification model, the PDPM, which took effect beginning October 1,
2019. The previous RUG-IV model classified most patients into a therapy
payment group and primarily used the volume of therapy services
provided to the patient as the basis for payment classification, thus
creating an incentive for SNFs to furnish therapy regardless of the
individual patient's unique characteristics, goals, or needs. PDPM
eliminates this incentive and improves the overall accuracy and
appropriateness of SNF payments by classifying patients into payment
groups based on specific, data-driven patient characteristics, while
simultaneously reducing the administrative burden on SNFs.
The PDPM uses clinical data from the MDS to assign case-mix
classifiers to each patient that are then used to calculate a per diem
payment under the SNF PPS, consistent with the provisions of section
1888(e)(4)(G)(i) of the Act. As outlined in section IV.A. of the
proposed rule, the clinical orientation of the case-mix classification
system supports the SNF PPS's use of an administrative presumption that
considers a beneficiary's initial case-mix classification to assist in
making certain SNF level of care determinations. Further, because the
MDS is used as a basis for payment, as well as a clinical assessment,
we have provided extensive training on proper coding and the timeframes
for MDS completion in our Resident Assessment Instrument (RAI) Manual.
As we have stated in prior rules, for an MDS to be considered valid for
use in determining payment, the MDS assessment should be completed in
compliance with the instructions in the RAI Manual in effect at the
time the assessment is completed. For payment and quality monitoring
purposes, the RAI Manual consists of both the Manual instructions and
the interpretive guidance and policy clarifications posted on the
appropriate MDS website at https://www.cms.gov/Medicare/Quality-Initiatives-Patient-Assessment-Instruments/NursingHomeQualityInits/MDS30RAIManual.html.
Under section 1888(e)(4)(H) of the Act, each update of the payment
rates must include the case-mix classification methodology applicable
for the upcoming FY. The FY 2025 payment rates set forth in this final
rule reflect the use of the PDPM case-mix classification system from
October 1, 2023, through September 30, 2024. The case-mix adjusted PDPM
payment rates for FY 2025 are listed separately for urban and rural
SNFs, in Tables 5 and 6 with corresponding case-mix values.
Given the differences between the previous RUG-IV model and PDPM in
terms of patient classification and billing, it was important that the
format of Tables 5 and 6 reflect these differences. More specifically,
under both RUG-IV and PDPM, providers use a Health Insurance
Prospective Payment System (HIPPS) code on a claim to bill for covered
SNF services. Under RUG-IV, the HIPPS code included the three-character
RUG-IV group into which the patient classified, as well as a two-
character assessment indicator code that represented the assessment
used to generate this code. Under PDPM, while providers still use a
HIPPS code, the characters in that code represent different things. For
example, the first character represents the PT and OT group into which
the patient classifies. If the patient is classified into the PT and OT
group ``TA'', then the first character in the patient's HIPPS code
would be an A. Similarly, if the patient is classified into the SLP
group ``SB'', then the second character in the patient's HIPPS code
would be a B. The third character represents the Nursing group into
which the patient classifies. The fourth character represents the NTA
group into which the patient classifies. Finally, the fifth character
represents the assessment used to generate the HIPPS code.
Tables 5 and 6 reflect the PDPM's structure. Accordingly, Column 1
of Tables 5 and 6 represents the character in the HIPPS code associated
with a given PDPM component. Columns 2 and 3 provide the case-mix index
and associated case-mix adjusted component rate, respectively, for the
relevant PT group. Columns 4 and 5 provide the case-mix index and
associated case-mix adjusted component rate, respectively, for the
relevant OT group. Columns 6 and 7 provide the case-mix index and
associated case-mix adjusted component rate, respectively, for the
relevant SLP group. Column 8 provides the nursing case-mix group (CMG)
that is connected with a given PDPM HIPPS character. For example, if
the patient qualified for the nursing group CBC1, then the third
character in the patient's HIPPS code would be a ``P.'' Columns 9 and
10 provide the case-mix index and associated case-mix adjusted
component rate, respectively, for the relevant nursing group. Finally,
columns 11 and 12 provide the case-mix index and associated case-mix
adjusted component rate, respectively, for the relevant NTA group.
Tables 5 and 6 do not reflect adjustments which may be made to the
SNF PPS rates as a result of the SNF VBP Program, outlined in section
VII. of this final rule, or other adjustments,
[[Page 64057]]
such as the variable per diem adjustment.
BILLING CODE 4120-01-P
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[[Page 64058]]
[GRAPHIC] [TIFF OMITTED] TR06AU24.005
BILLING CODE 4120-01-C
D. Wage Index Adjustment
Section 1888(e)(4)(G)(ii) of the Act requires that we adjust the
Federal rates to account for differences in area wage levels, using a
wage index that the Secretary determines appropriate. Since the
inception of the SNF PPS, we have used hospital inpatient wage data in
developing a wage index to be applied to SNFs. We will continue this
practice for FY 2025, as we continue to believe that in the absence of
SNF-specific wage data, using the hospital inpatient wage index data is
appropriate and reasonable for the SNF PPS. As explained in the update
notice for FY 2005 (69 FR 45786), the SNF PPS does not use the hospital
area wage index's occupational mix adjustment, as this adjustment
serves specifically to define the occupational categories more clearly
in a hospital setting; moreover, the collection of the occupational
wage data under the inpatient prospective payment system (IPPS) also
excludes any wage data related to SNFs. Therefore, we believe that
using the updated wage data exclusive of the occupational mix
adjustment continues to be appropriate for SNF payments. As in previous
years, we continue to use the pre-reclassified IPPS hospital wage data,
without applying the occupational mix, rural floor, or outmigration
adjustment, as the basis for the SNF PPS wage index. For FY 2025, the
updated wage data are for hospital cost reporting periods beginning on
or after October 1, 2020, and before October 1, 2021 (FY 2021 cost
report data).
We note that section 315 of the Medicare, Medicaid, and SCHIP
Benefits Improvement and Protection Act of 2000 (BIPA) (Pub. L. 106-
554, enacted December 21, 2000) gave the Secretary the discretion to
establish a geographic reclassification procedure specific to SNFs, but
only after collecting the data necessary to establish a SNF PPS wage
index that is based on wage data from nursing homes. To date, this has
proven to be unfeasible due to the volatility of existing SNF wage data
and the significant amount of resources that would be required to
improve the quality of the data. More specifically, auditing all SNF
cost reports, similar to the process used to audit inpatient hospital
cost reports for purposes of the IPPS wage index, would place a burden
on providers in terms of recordkeeping and completion of the cost
report worksheet. Adopting such an approach would require a significant
commitment of resources by CMS and the Medicare Administrative
Contractors (MACs), potentially far in excess of those required under
the IPPS, given that there are nearly five times as many SNFs as there
are inpatient hospitals. While we do not believe this undertaking is
feasible at this time, we will continue to explore implementation of a
spot audit process to improve SNF cost reports to ensure they are
adequately accurate for cost development purposes, in such a manner as
to permit us to establish a SNF-specific wage index in the future.
In addition, we will continue to use the same methodology discussed
in the SNF PPS final rule for FY 2008 (72 FR 43423) to address those
geographic areas in which there are no hospitals, and thus, no hospital
wage index data on which to base the calculation of the FY 2025 SNF PPS
wage index. For rural geographic areas that do not have hospitals and,
therefore, lack hospital wage data on which to base an area wage
adjustment, we will continue
[[Page 64059]]
using the average wage index from all contiguous Core-Based Statistical
Areas (CBSAs) as a reasonable proxy. For FY 2025, the only rural area
without wage index data available is North Dakota. We have determined
that the borders of 18 rural counties are local and contiguous with 8
urban counties. Therefore, under this methodology, the wage indexes for
the counties of Burleigh/Morton/Oliver (CBSA 13900: 0.9020), Cass (CBSA
22020: 0.8763), Grand Forks (CBSA 24220: 0.7865), and McHenry/Renville/
Ward (CBSA 33500: 0.7686) are averaged, resulting in an imputed rural
wage index of 0.8334 for rural North Dakota for FY 2025. In past years
for rural Puerto Rico, we did not apply this methodology due to the
distinct economic circumstances there; due to the close proximity of
almost all of Puerto Rico's various urban and non-urban areas, this
methodology will produce a wage index for rural Puerto Rico that is
higher than that in half of its urban areas. However, because rural
Puerto Rico now has hospital wage index data on which to base an area
wage adjustment, we will not apply this policy for FY 2025. For urban
areas without specific hospital wage index data, we will continue using
the average wage indexes of all urban areas within the State to serve
as a reasonable proxy for the wage index of that urban CBSA. For FY
2025, the only urban area without wage index data available is CBSA
25980, Hinesville-Fort Stewart, GA.
In the SNF PPS final rule for FY 2006 (70 FR 45026, August 4,
2005), we adopted the changes discussed in OMB Bulletin No. 03-04 (June
6, 2003), which announced revised definitions for MSAs and the creation
of micropolitan statistical areas and combined statistical areas. In
adopting the CBSA geographic designations, we provided for a 1-year
transition in FY 2006 with a blended wage index for all providers. For
FY 2006, the wage index for each provider consisted of a blend of 50
percent of the FY 2006 MSA-based wage index and 50 percent of the FY
2006 CBSA-based wage index (both using FY 2002 hospital data). We
referred to the blended wage index as the FY 2006 SNF PPS transition
wage index. As discussed in the SNF PPS final rule for FY 2006 (70 FR
45041), after the expiration of this 1-year transition on September 30,
2006, we used the full CBSA-based wage index values.
In the FY 2015 SNF PPS final rule (79 FR 45644 through 45646), we
finalized changes to the SNF PPS wage index based on the newest OMB
delineations, as described in OMB Bulletin No. 13-01, beginning in FY
2015, including a 1-year transition with a blended wage index for FY
2015. OMB Bulletin No. 13-01 established revised delineations for
Metropolitan Statistical Areas, Micropolitan Statistical Areas, and
Combined Statistical Areas in the United States and Puerto Rico based
on the 2010 Census and provided guidance on the use of the delineations
of these statistical areas using standards published in the June 28,
2010 Federal Register (75 FR 37246 through 37252). Subsequently, on
July 15, 2015, OMB issued OMB Bulletin No. 15-01, which provided minor
updates to and superseded OMB Bulletin No. 13-01 that was issued on
February 28, 2013. The attachment to OMB Bulletin No. 15-01 provided
detailed information on the update to statistical areas since February
28, 2013. The updates provided in OMB Bulletin No. 15-01 were based on
the application of the 2010 Standards for Delineating Metropolitan and
Micropolitan Statistical Areas to Census Bureau population estimates
for July 1, 2012, and July 1, 2013, and were adopted under the SNF PPS
in the FY 2017 SNF PPS final rule (81 FR 51983, August 5, 2016). In
addition, on August 15, 2017, OMB issued Bulletin No. 17-01 which
announced a new urban CBSA, Twin Falls, Idaho (CBSA 46300), which was
adopted in the SNF PPS final rule for FY 2019 (83 FR 39173, August 8,
2018).
As discussed in the FY 2021 SNF PPS final rule (85 FR 47594), we
adopted the revised OMB delineations identified in OMB Bulletin No. 18-
04 (available at https://www.whitehouse.gov/wp-content/uploads/2018/09/Bulletin-18-04.pdf) beginning October 1, 2020, including a 1-year
transition for FY 2021 under which we applied a 5 percent cap on any
decrease in a hospital's wage index compared to its wage index for the
prior fiscal year (FY 2020). The updated OMB delineations more
accurately reflect the contemporary urban and rural nature of areas
across the country, and the use of such delineations allows us to
determine more accurately the appropriate wage index and rate tables to
apply under the SNF PPS.
In the FY 2023 SNF PPS final rule (87 FR 47521 through 47525), we
finalized a policy to apply a permanent 5 percent cap on any decreases
to a provider's wage index from its wage index in the prior year,
regardless of the circumstances causing the decline. We amended the SNF
PPS regulations at 42 CFR 413.337(b)(4)(ii) to reflect this permanent
cap on wage index decreases. Additionally, we finalized a policy that a
new SNF would be paid the wage index for the area in which it is
geographically located for its first full or partial FY with no cap
applied because a new SNF would not have a wage index in the prior FY.
A full discussion of the adoption of this policy is found in the FY
2023 SNF PPS final rule.
As we previously stated in the FY 2008 SNF PPS proposed and final
rules (72 FR 25538 through 25539, and 72 FR 43423), this and all
subsequent SNF PPS rules and notices are considered to incorporate any
updates and revisions set forth in the most recent OMB bulletin that
applies to the hospital wage data used to determine the current SNF PPS
wage index. OMB issued further revised CBSA delineations in OMB
Bulletin No. 20-01, on March 6, 2020 (available on the web at https://www.whitehouse.gov/wp-content/uploads/2020/03/Bulletin-20-01.pdf).
However, we determined that the changes in OMB Bulletin No. 20-01 do
not impact the CBSA-based labor market area delineations adopted in FY
2021. Therefore, we did not propose to adopt the revised OMB
delineations identified in OMB Bulletin No. 20-01 for FY 2022 through
FY 2024.
On July 21, 2023, OMB issued OMB Bulletin No. 23-01 which updates
and supersedes OMB Bulletin No. 20-01 based on the decennial census.
OMB Bulletin No. 23-01 revised delineations for CBSAs which are made up
of counties and equivalent entities (for example, boroughs, a city and
borough, and a municipality in Alaska, planning regions in Connecticut,
parishes in Louisiana, municipios in Puerto Rico, and independent
cities in Maryland, Missouri, Nevada, and Virginia). For FY 2025, we
proposed to adopt the revised OMB delineations identified in OMB
Bulletin No. 23-01 (available at https://www.whitehouse.gov/wp-content/uploads/2023/07/OMB-Bulletin-23-01.pdf). The wage index applicable to
FY 2025 is set forth in Table A and B, available on the CMS website at
https://www.cms.gov/Medicare/Medicare-Fee-for-Service-Payment/SNFPPS/WageIndex.html.
Once calculated, we will apply the wage index adjustment to the
labor-related portion of the Federal rate. Each year, we calculate a
labor-related share, based on the relative importance of labor-related
cost categories (that is, those cost categories that are labor-
intensive and vary with the local labor market) in the input price
index. In the SNF PPS final rule for FY 2022 (86 FR 42437), we
finalized a proposal to revise the labor-related share to reflect the
relative importance of the 2018-based SNF market basket cost weights
for the
[[Page 64060]]
following cost categories: Wages and Salaries; Employee Benefits;
Professional Fees: Labor-Related; Administrative and Facilities Support
Services; Installation, Maintenance, and Repair Services; All Other:
Labor-Related Services; and a proportion of Capital-Related expenses.
The methodology for calculating the labor-related portion beginning in
FY 2022 is discussed in detail in the FY 2022 SNF PPS final rule (86 FR
42461 through 42463). Effective beginning in FY 2025, as described in
section VI.A. of this final rule, we are rebasing and revising the
labor-related share to reflect the relative importance of the 2022-
based SNF market basket cost weights for the following categories:
Wages and Salaries; Employee Benefits; Professional Fees: Labor-
Related; Administrative and Facilities Support Services; Installation,
Maintenance, and Repair Services; All Other: Labor-Related Services;
and a proportion of Capital-Related expenses. The methodology for
calculating the labor-related share of the 2022-based SNF market basket
is detailed in section VI.A.4. of this final rule.
We calculate the labor-related relative importance from the SNF
market basket, and it approximates the labor-related portion of the
total costs after taking into account historical and projected price
changes between the base year and FY 2025. The price proxies that move
the different cost categories in the market basket do not necessarily
change at the same rate, and the relative importance captures these
changes. Accordingly, the relative importance figure more closely
reflects the cost share weights for FY 2025 than the base year weights
from the SNF market basket. We calculate the labor-related relative
importance for FY 2025 in four steps. First, we compute the FY 2025
price index level for the total market basket and each cost category of
the market basket. Second, we calculate a ratio for each cost category
by dividing the FY 2025 price index level for that cost category by the
total market basket price index level. Third, we determine the FY 2025
relative importance for each cost category by multiplying this ratio by
the base year (2022) weight. Finally, we add the FY 2025 relative
importance for each of the labor-related cost categories (Wages and
Salaries; Employee Benefits; Professional Fees: Labor-Related;
Administrative and Facilities Support Services; Installation,
Maintenance, and Repair Services; All Other: Labor-Related Services;
and a portion of Capital-Related expenses) to produce the FY 2025
labor-related relative importance.
For the proposed rule, the labor-related share for FY 2025 was
based on IGI's fourth quarter 2023 forecast of the proposed 2022-based
SNF market basket with historical data through third-quarter 2023. For
this final rule, as proposed, we estimate the labor-related share for
FY 2025 based on IGI's more recent second quarter 2024 forecast, with
historical data through the first quarter of 2024. Table 7 summarizes
the labor-related share for FY 2025, based on IGI's second quarter 2024
forecast of the 2022-based SNF market basket, compared to the labor-
related share that was used for the FY 2024 SNF PPS final rule.
[GRAPHIC] [TIFF OMITTED] TR06AU24.006
To calculate the labor portion of the case-mix adjusted per diem
rate, we will multiply the total case-mix adjusted per diem rate, which
is the sum of all five case-mix adjusted components into which a
patient classifies, and the non-case-mix component rate, by the FY 2025
labor-related share percentage provided in Table 7. The remaining
portion of the rate will be the non-labor portion. Under the previous
RUG-IV model, we included tables which provided the case-mix adjusted
RUG-IV rates, by RUG-IV group, broken out by total rate, labor portion
and non-labor portion, such as Table 9 of the FY 2019 SNF PPS final
rule (83 FR 39175). However, as we discussed in the FY 2020 final rule
(84 FR 38738), under PDPM, as the total rate is calculated as a
combination of six different component rates, five of which are case-
mix adjusted, and given the sheer volume of possible combinations of
these five case-mix adjusted components, it is not feasible to provide
tables similar to those that existed in the prior rulemaking.
Therefore, to aid interested parties in understanding the effect of
the wage index on the calculation of the SNF per diem rate, we have
included a hypothetical rate calculation in Table 9.
Section 1888(e)(4)(G)(ii) of the Act also requires that we apply
this wage index in a manner that does not result in aggregate payments
under the SNF PPS that are greater or less than would otherwise be made
if the wage
[[Page 64061]]
adjustment had not been made. For FY 2025 (Federal rates effective
October 1, 2023), we apply an adjustment to fulfill the budget
neutrality requirement. We meet this requirement by multiplying each of
the components of the unadjusted Federal rates by a budget neutrality
factor, equal to the ratio of the weighted average wage adjustment
factor for FY 2025 to the weighted average wage adjustment factor for
FY 2025. For this calculation, we will use the same FY 2023 claims
utilization data for both the numerator and denominator of this ratio.
We define the wage adjustment factor used in this calculation as the
labor portion of the rate component multiplied by the wage index plus
the non-labor portion of the rate component. The budget neutrality
factor for FY 2025 is 1.0005.
In the proposed rule, we noted that if more recent data became
available (for example, revised wage data), we would use such data, if
appropriate, to determine the wage index budget neutrality factor in
the SNF PPS final rule.
E. SNF Value-Based Purchasing Program
Beginning with payment for services furnished on October 1, 2018,
section 1888(h) of the Act requires the Secretary to reduce the
adjusted Federal per diem rate determined under section 1888(e)(4)(G)
of the Act otherwise applicable to a SNF for services furnished during
a fiscal year by 2 percent, and to adjust the resulting rate for a SNF
by the value-based incentive payment amount earned by the SNF based on
the SNF's performance score for that fiscal year under the SNF VBP
Program. To implement these requirements, we finalized in the FY 2019
SNF PPS final rule the addition of Sec. 413.337(f) to our regulations
(83 FR 39178).
Please see section VIII. of this final rule for further discussion
of the updates we are finalizing for the SNF VBP Program.
F. Adjusted Rate Computation Example
Tables 8 through 10 provide examples generally illustrating payment
calculations during FY 2025 under PDPM for a hypothetical 30-day SNF
stay, involving the hypothetical SNF XYZ, located in Frederick, MD
(Urban CBSA 23224), for a hypothetical patient who is classified into
such groups that the patient's HIPPS code is NHNC1. Table 8 shows the
adjustments made to the Federal per diem rates (prior to application of
any adjustments under the SNF VBP Program as discussed) to compute the
provider's case-mix adjusted per diem rate for FY 2025, based on the
patient's PDPM classification, as well as how the variable per diem
(VPD) adjustment factor affects calculation of the per diem rate for a
given day of the stay. Table 9 shows the adjustments made to the case-
mix adjusted per diem rate from Table 8 to account for the provider's
wage index. The wage index used in this example is based on the FY 2025
SNF PPS wage index that appears in Table A available on the CMS website
at https://www.cms.gov/Medicare/Medicare-Fee-for-Service-Payment/SNFPPS/WageIndex.html. Finally, Table 10 provides the case-mix and wage
index adjusted per-diem rate for this patient for each day of the 30-
day stay, as well as the total payment for this stay. Table 10 also
includes the VPD adjustment factors for each day of the patient's stay,
to clarify why the patient's per diem rate changes for certain days of
the stay. As illustrated in Table 10, SNF XYZ's total PPS payment for
this particular patient's stay would equal $23,032.18.
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BILLING CODE 4120-01-C
V. Additional Aspects of the SNF PPS
A. SNF Level of Care--Administrative Presumption
The establishment of the SNF PPS did not change Medicare's
fundamental requirements for SNF coverage. However, because the case-
mix classification is based, in part, on the beneficiary's need for
skilled nursing care and therapy, we have attempted, where possible, to
coordinate claims review procedures with the existing resident
assessment process and case-mix classification system outlined in
section III.C. of the proposed rule. This approach includes an
administrative presumption that utilizes a beneficiary's correct
assignment, at the outset of the SNF stay, of one of the case-mix
classifiers designated for this purpose to assist in making certain SNF
level of care determinations.
In accordance with Sec. 413.345, we include in each update of the
Federal payment rates in the Federal Register a discussion of the
resident classification system that provides the basis for case-mix
adjustment. We also designate those specific classifiers under the
case-mix classification system that represent the required SNF level of
care, as provided in 42 CFR 409.30. This designation reflects an
administrative presumption that those beneficiaries who are correctly
assigned one of the designated case-mix classifiers on the initial
Medicare assessment are automatically classified as meeting the SNF
level of care definition up to and including the assessment reference
date (ARD) for that assessment.
A beneficiary who does not qualify for the presumption is not
automatically classified as either meeting or not meeting the level of
care definition, but instead receives an individual determination on
this point using the existing administrative criteria. This presumption
recognizes the strong likelihood that those beneficiaries who are
correctly assigned one of the designated case-mix classifiers during
the immediate post-hospital period would require a covered level of
care, which would be less likely for other beneficiaries.
In the July 30, 1999 final rule (64 FR 41670), we indicated that we
would announce any changes to the guidelines for Medicare level of care
determinations related to modifications in the case-mix classification
structure. The FY 2018 final rule (82 FR 36544) further specified that
we would henceforth disseminate the standard description of the
administrative presumption's designated groups via the SNF PPS website
at https://www.cms.gov/Medicare/Medicare-Fee-for-Service-Payment/
SNFPPS/
[[Page 64063]]
index.html (where such designations appear in the paragraph entitled
``Case Mix Adjustment'') and would publish such designations in
rulemaking only to the extent that we actually intend to propose
changes in them. Under that approach, the set of case-mix classifiers
designated for this purpose under PDPM was finalized in the FY 2019 SNF
PPS final rule (83 FR 39253) and is posted on the SNF PPS website
(https://www.cms.gov/Medicare/Medicare-Fee-for-Service-Payment/SNFPPS/index.html), in the paragraph entitled ``Case Mix Adjustment.''
However, we note that this administrative presumption policy does
not supersede the SNF's responsibility to ensure that its decisions
relating to level of care are appropriate and timely, including a
review to confirm that any services prompting the assignment of one of
the designated case-mix classifiers (which, in turn, serves to trigger
the administrative presumption) are themselves medically necessary. As
we explained in the FY 2000 SNF PPS final rule (64 FR 41667), the
administrative presumption is itself rebuttable in those individual
cases in which the services actually received by the resident do not
meet the basic statutory criterion of being reasonable and necessary to
diagnose or treat a beneficiary's condition (according to section
1862(a)(1) of the Act). Accordingly, the presumption would not apply,
for example, in those situations where the sole classifier that
triggers the presumption is itself assigned through the receipt of
services that are subsequently determined to be not reasonable and
necessary. Moreover, we want to stress the importance of careful
monitoring for changes in each patient's condition to determine the
continuing need for Part A SNF benefits after the Assessment Reference
Date (ARD) of the initial Medicare assessment.
B. Consolidated Billing
Sections 1842(b)(6)(E) and 1862(a)(18) of the Act (as added by
section 4432(b) of the BBA 1997) require a SNF to submit consolidated
Medicare bills to its Medicare Administrative Contractor (MAC) for
almost all of the services that its residents receive during the course
of a covered Part A stay. In addition, section 1862(a)(18) of the Act
places the responsibility with the SNF for billing Medicare for
physical therapy, occupational therapy, and speech-language pathology
services that the resident receives during a noncovered stay. Section
1888(e)(2)(A) of the Act excludes a small list of services from the
consolidated billing provision (primarily those services furnished by
physicians and certain other types of practitioners), which remain
separately billable under Part B when furnished to a SNF's Part A
resident. These excluded service categories are discussed in greater
detail in section V.B.2. of the May 12, 1998 interim final rule (63 FR
26295 through 26297). Effective with services furnished on or after
January 1, 2024, section 4121(a)(4) of the Consolidated Appropriations
Act, 2023 (CAA, 2023) (Pub. L. 117-328, enacted December 29, 2022)
added marriage and family therapists and mental health counselors to
the list of practitioners at section 1888(e)(2)(A)(ii) of the Act whose
services are excluded from the consolidated billing provision.
Section 103 of the Medicare, Medicaid, and SCHIP Balanced Budget
Refinement Act of 1999 (BBRA 1999) (Pub. L. 106-113, enacted November
29, 1999) amended section 1888(e)(2)(A)(iii) of the Act by further
excluding a number of individual high-cost, low probability services,
identified by Healthcare Common Procedure Coding System (HCPCS) codes,
within several broader categories (chemotherapy items, chemotherapy
administration services, radioisotope services, and customized
prosthetic devices) that otherwise remained subject to the provision.
We discuss this BBRA 1999 amendment in greater detail in the SNF PPS
proposed and final rules for FY 2001 (65 FR 19231 through 19232, April
10, 2000, and 65 FR 46790 through 46795, July 31, 2000), as well as in
Program Memorandum AB-00-18 (Change Request #1070), issued March 2000,
which is available online at www.cms.gov/transmittals/downloads/ab001860.pdf.
As explained in the FY 2001 proposed rule (65 FR 19232), the
amendments enacted in section 103 of the BBRA 1999 not only identified
for exclusion from this provision a number of particular service codes
within four specified categories (that is, chemotherapy items,
chemotherapy administration services, radioisotope services, and
customized prosthetic devices), but also gave the Secretary the
authority to designate additional, individual services for exclusion
within each of these four specified service categories. In the proposed
rule for FY 2001, we also noted that the BBRA 1999 Conference report
(H.R. Conf. Rep. No. 106-479 at 854 (1999)) characterizes the
individual services that this legislation targets for exclusion as
high-cost, low probability events that could have devastating financial
impacts because their costs far exceed the payment SNFs receive under
the PPS. According to the conferees, section 103(a) of the BBRA 1999 is
an attempt to exclude from the PPS certain services and costly items
that are provided infrequently in SNFs. By contrast, the amendments
enacted in section 103 of the BBRA 1999 do not designate for exclusion
any of the remaining services within those four categories (thus,
leaving all of those services subject to SNF consolidated billing),
because they are relatively inexpensive and are furnished routinely in
SNFs.
Effective with items and services furnished on or after October 1,
2021, section 134 in Division CC of the CAA, 2021 established an
additional fifth category of excluded codes in section
1888(e)(2)(A)(iii)(VI) of the Act, for certain blood clotting factors
for the treatment of patients with hemophilia and other bleeding
disorders along with items and services related to the furnishing of
such factors under section 1842(o)(5)(C) of the Act. Like the
provisions enacted in the BBRA 1999, section 1888(e)(2)(A)(iii)(VI) of
the Act gives the Secretary the authority to designate additional items
and services for exclusion within the category of items and services
related to blood clotting factors, as described in that section.
A detailed discussion of the legislative history of the
consolidated billing provision is available on the SNF PPS website at
https://www.cms.gov/Medicare/Medicare-Fee-for-Service-Payment/SNFPPS/Downloads/Legislative_History_2018-10-01.pdf.
As we further explained in the final rule for FY 2001 (65 FR
46790), and as is consistent with our longstanding policy, any
additional service codes that we might designate for exclusion under
our discretionary authority must meet the same statutory criteria used
in identifying the original codes excluded from consolidated billing
under section 103(a) of the BBRA 1999: they must fall within one of the
five service categories specified in the BBRA 1999 and CAA, 2021; and
they also must meet the same standards of high cost and low probability
in the SNF setting, as discussed in the BBRA 1999 Conference report.
Accordingly, we characterized this statutory authority to identify
additional service codes for exclusion as essentially affording the
flexibility to revise the list of excluded codes in response to changes
of major significance that may occur over time (for example, the
development of new medical technologies or other advances in the state
of medical practice) (65 FR 46791).
In the proposed rule, we specifically solicited public comments
identifying HCPCS codes in any of these five
[[Page 64064]]
service categories (chemotherapy items, chemotherapy administration
services, radioisotope services, customized prosthetic devices, and
blood clotting factors) representing recent medical advances that might
meet our criteria for exclusion from SNF consolidated billing. We
considered excluding a particular service if it met our criteria for
exclusion as specified previously in this section of the preamble. We
requested that commenters identify in their comments the specific HCPCS
code that is associated with the service in question, as well as their
rationale for requesting that the identified HCPCS code(s) be excluded.
We noted that the original BBRA amendment and the CAA, 2021
identified a set of excluded items and services by means of specifying
individual HCPCS codes within the designated categories that were in
effect as of a particular date (in the case of the BBRA 1999, July 1,
1999, and in the case of the CAA, 2021, July 1, 2020), as subsequently
modified by the Secretary. In addition, as noted previously in this
section of the preamble, the statute (sections 1888(e)(2)(A)(iii)(II)
through (VI) of the Act) gives the Secretary authority to identify
additional items and services for exclusion within the five specified
categories of items and services described in the statute, which are
also designated by HCPCS code. Designating the excluded services in
this manner makes it possible for us to utilize program issuances as
the vehicle for accomplishing routine updates to the excluded codes to
reflect any minor revisions that might subsequently occur in the coding
system itself, such as the assignment of a different code number to a
service already designated as excluded, or the creation of a new code
for a type of service that falls within one of the established
exclusion categories and meets our criteria for exclusion.
Accordingly, we stated in the proposed rule that if we identify
through the current rulemaking cycle any new services that meet the
criteria for exclusion from SNF consolidated billing, we will identify
these additional excluded services by means of the HCPCS codes that are
in effect as of a specific date (in this case, October 1, 2024). By
making any new exclusions in this manner, we can similarly accomplish
routine future updates of these additional codes through the issuance
of program instructions. The latest list of excluded codes can be found
on the SNF Consolidated Billing website at https://www.cms.gov/Medicare/Billing/SNFConsolidatedBilling.
We received public comments on these proposals. The following is a
summary of the comments we received and our responses.
Comment: A few commenters suggested CMS consider several items for
exclusion from SNF consolidated billing which have already been
suggested and considered in previous rulemaking, including: Imatinib;
Erleada; Venetoclax; Dasatinib; Ponatinib; Cabozantinib; Sunitinib;
Lenalidomide; and Lupron (leuprolide).
Response: We have considered each of these suggestions in previous
rulemaking and we reiterate that these items cannot be excluded from
SNF consolidated billing. We refer commenters to previous SNF final
rules in which these suggestions were addressed, including FY 2024 (88
FR 53200, August 7, 2023) and FY 2021 (85 FR 47609 through 47610,
August 5, 2020).
Comment: Commenters suggested several specific HCPCS codes for
exclusion that have not already been addressed in previous rulemaking:
Jakafi (ruxolitinib), Tafinlar (dabrafenib), Nilotinib, and Tumor
Treating Fields (``TTFields'') therapy.
Response: With regard to Jakafi, Tafinlar, and Nilotinib, these
three services are all targeted medications that ``target'' specific
signals involved in cancer growth, but they are not chemotherapy
treatments. Chemotherapy is a specific subset of cancer treatment
characterized by its systemic attacking of cell growth. Likewise, Tumor
Treating Fields therapy is a type of electromagnetic field therapy used
to treat cancer and is not a form of chemotherapy. As these are not
considered chemotherapy services, the suggestions do not fit the
chemotherapy category or any other of the five service categories in
which we have statutory authority to add exclusions, and therefore we
may not exclude these items from SNF consolidated billing. Excluding
such items would require an act of Congress to modify the law.
Comment: Commenters reiterated several general comments that are
outside of the agency's statutory authority and/or have already been
addressed in prior rulemaking cycles. Comments stated that CMS should
modify consolidated billing rules for SNFs to use a ``price/cost
threshold'' rather than base the program on specific HCPCS codes.
Comments requested CMS exclude non-chemotherapy cancer treatments.
Another comment requested the exclusion of HIV drugs and associated
administration and other less commonly used medication and
administration drugs and treatments that exceed SNF reimbursement
rates.
Response: As previously specified in this section of the preamble,
the authority afforded to us under the law to modify the list of
services excluded from SNF consolidated billing is limited to adding or
removing HCPCS codes representing high-cost low-probability services
from the five specific service categories identified in the statute.
Any of the modifications to consolidated billing and/or the SNF program
suggested by the previously mentioned comments would require an act of
Congress to modify the law.
Comment: A commenter requested that CMS consider adopting a
formalized process in which entities may propose an item, service, or
drug be added to the excluded list for consolidated billing on a case-
by-case or permanent basis.
Response: In addition to conducting our own routine internal
reviews of new and modified HCPCS codes, we solicit feedback from
interested parties on consolidated billing exclusions through this
annual rulemaking process. At this time, we consider this process
sufficient to identify services that should be excluded.
Comment: Commenters stated general appreciation for CMS soliciting
public comments to identify HCPCS codes that meet the criteria for
exclusion from consolidated billing. Comments stated they would
continue to try to identify such HCPCS codes.
Response: We thank commenters for their review.
C. Payment for SNF-Level Swing-Bed Services
Section 1883 of the Act permits certain small, rural hospitals to
enter into a Medicare swing-bed agreement, under which the hospital can
use its beds to provide either acute- or SNF-level care, as needed. For
critical access hospitals (CAHs), Part A pays on a reasonable cost
basis for SNF-level services furnished under a swing-bed agreement.
However, in accordance with section 1888(e)(7) of the Act, SNF-level
services furnished by non-CAH rural hospitals are paid under the SNF
PPS, effective with cost reporting periods beginning on or after July
1, 2002. As explained in the FY 2002 final rule (66 FR 39562), this
effective date is consistent with the statutory provision to integrate
swing-bed rural hospitals into the SNF PPS by the end of the transition
period, June 30, 2002.
Accordingly, all non-CAH swing-bed rural hospitals have now come
under the SNF PPS. Therefore, all rates and wage indexes outlined in
earlier
[[Page 64065]]
sections of this proposed rule for the SNF PPS also apply to all non-
CAH swing-bed rural hospitals. As finalized in the FY 2010 SNF PPS
final rule (74 FR 40356 through 40357), effective October 1, 2010, non-
CAH swing-bed rural hospitals are required to complete an MDS 3.0
swing-bed assessment which is limited to the required demographic,
payment, and quality items. As discussed in the FY 2019 SNF PPS final
rule (83 FR 39235), revisions were made to the swing bed assessment to
support implementation of PDPM, effective October 1, 2019. A discussion
of the assessment schedule and the MDS effective beginning FY 2020
appears in the FY 2019 SNF PPS final rule (83 FR 39229 through 39237).
The latest changes in the MDS for swing-bed rural hospitals appear on
the SNF PPS website at https://www.cms.gov/Medicare/Medicare-Fee-for-Service-Payment/SNFPPS/index.html.
VI. Other SNF PPS Issues
A. Rebasing and Revising the SNF Market Basket
Section 1888(e)(5)(A) of the Act requires the Secretary to
establish a market basket that reflects the changes over time in the
prices of an appropriate mix of goods and services included in covered
SNF services. Accordingly, we have developed a SNF market basket that
encompasses the most commonly used cost categories for SNF routine
services, ancillary services, and capital-related expenses.
The SNF market basket is used to compute the market basket
percentage increase that is used to update the SNF Federal per diem
rates on an annual basis, as required by section 1888(e)(4)(E)(ii)(IV)
of the Act. This market basket percentage increase is adjusted by a
forecast error adjustment, if applicable, and then further adjusted by
the application of a productivity adjustment as required by section
1888(e)(5)(B)(ii) of the Act and described in section III.B.4. of the
proposed rule. The SNF market basket is also used to determine the
labor-related share on an annual basis.
The SNF market basket is a fixed-weight, Laspeyres-type price
index. A Laspeyres price index measures the change in price, over time,
of the same mix of goods and services purchased in the base period. Any
changes in the quantity or mix of goods and services (that is,
intensity) purchased over time relative to a base period are not
measured.
The index itself is constructed in three steps. First, a base
period is selected (the base period is 2022) and total base period
costs are estimated for a set of mutually exclusive and exhaustive
spending categories and the proportion of total costs that each
category represents is calculated. These proportions are called cost
weights. Second, each cost category is matched to an appropriate price
or wage variable, referred to as a price proxy. In nearly every
instance, these price proxies are derived from publicly available
statistical series that are published on a consistent schedule
(preferably at least on a quarterly basis). Finally, the cost weight
for each cost category is multiplied by the level of its respective
price proxy. The sum of these products (that is, the cost weights
multiplied by their price levels) for all cost categories yields the
composite index level of the market basket in a given period. Repeating
this step for other periods produces a series of market basket levels
over time. Dividing an index level for a given period by an index level
for an earlier period produces a rate of growth in the input price
index over that timeframe.
Since the inception of the SNF PPS, the market basket used to
update SNF PPS payments has been periodically rebased and revised. We
last rebased and revised the market basket applicable to the SNF PPS in
the FY 2022 SNF PPS final rule (86 FR 42444 through 42463) where we
adopted a 2018-based SNF market basket. References to the historical
market baskets used to update SNF PPS payments are listed in the FY
2022 SNF PPS final rule (86 FR 42445).
Effective for FY 2025 and subsequent fiscal years, we proposed to
rebase and revise the market basket to reflect 2022 Medicare-allowable
total cost data (routine, ancillary, and capital-related) from
freestanding SNFs and to revise applicable cost categories and price
proxies used to determine the market basket. Medicare-allowable costs
are those costs that are eligible to be paid under the SNF PPS. For
example, the SNF market basket excludes home health agency (HHA) costs
as these costs would be paid under the HHA PPS, and therefore, these
costs are not SNF PPS Medicare-allowable costs. We proposed to maintain
our policy of using data from freestanding SNFs, of which about 91
percent of SNFs that submitted a Medicare cost report for 2022 are
represented in our sample shown in Table 11. We believe using
freestanding SNF Medicare cost report data, as opposed to the hospital-
based SNF Medicare cost report data, for the cost weight calculation is
most appropriate because of the complexity of hospital-based data and
the representativeness of the freestanding data. Because hospital-based
SNF expenses are embedded in the hospital cost report, any attempt to
incorporate data from hospital-based facilities requires more complex
calculations and assumptions regarding the ancillary costs related to
the hospital-based SNF unit. We believe the use of freestanding SNF
cost report data is technically appropriate for reflecting the cost
structures of SNFs serving Medicare beneficiaries.
We proposed to use 2022 as the base year as we believe that the
2022 Medicare cost reports represent the most recent, complete set of
Medicare cost report data available to develop cost weights for SNFs at
the time of rulemaking. We believe it is important to regularly rebase
and revise the SNF market basket to reflect more recent data.
Historically, the cost weights change minimally from year to year as
they represent the percent of total costs rather than cost levels;
however, given the COVID-19 Public Health Emergency (PHE), we have been
monitoring the Medicare cost report data to see if a more frequent
rebasing schedule is necessary than our recent historical precedent of
about every 4 years. Accordingly, while it has been only three years
since the last SNF rebasing, we proposed to incorporate data that is
more reflective of recent SNF expenses that have been impacted over the
most recent few years. The 2022 Medicare cost reports are for cost
reporting periods beginning on and after October 1, 2021 and before
October 1, 2022. While these dates appear to reflect fiscal year data,
we noted in the proposed rule that a Medicare cost report that begins
in this timeframe is generally classified as a ``2022 cost report''.
For example, we found that of the available 2022 Medicare cost reports
for SNFs, approximately 7 percent had an October 1, 2021, begin date,
approximately 75 percent of the reports had a January 1, 2022, begin
date, and approximately 12 percent had a July 1, 2022 begin date. For
this reason, we are defining the base year of the market basket as
``2022-based'' instead of ``FY 2022-based''.
We received approximately 22 comments on the proposed rebasing and
revising of the SNF market basket. A discussion of these comments, with
our responses, appears throughout this section.
Comment: Several commenters noted that they support CMS' decision
to rebase the SNF market basket 1 year earlier than is typical, and
that rebasing and revising the market basket more frequently than the
recent historical precedent of approximately every 4
[[Page 64066]]
years is warranted to more accurately reflect costs faced by SNFs at
this time.
Response: We thank the commenters for their support in rebasing and
revising of the SNF market basket, and we will continue to monitor the
data that inform the frequency of the rebasing.
Comment: One commenter stated that the need for both auditing cost
reports and requiring SNFs to submit audited cost reports is especially
critical this year as CMS plans to rebase the SNF market basket using
cost report data from 2022. They stated that there are too many
indications of flawed and possibly fraudulent data, and CMS cannot
simply assume that cost report data are accurate.
Response: We recognize the commenter's concerns and reiterate that
accurate and complete reporting of all data on the Medicare cost
reports by SNFs help to ensure that the cost weights for the SNF market
basket are reflective of the cost structure of SNFs. We also note that
we analyze the Medicare cost report data to evaluate their
representativeness; for example, we reweight the data reported by
ownership type and urban/rural so that it reflects the universe of
providers and compare it to the proposed cost weights that are based on
reported data. Our analysis shows the proposed cost weights are
representative across these dimensions. In addition, we also trim the
data to eliminate outliers as described in section VI.A.1.a of this
final rule.
As stated in the FY 2024 SNF PPS final rule (88 FR 53212), auditing
all SNF cost reports, similar to the process used to audit inpatient
hospital cost reports for purposes of the IPPS wage index, would place
a burden on providers in terms of recordkeeping and completion of the
cost report worksheet. Adopting such an approach would require a
significant commitment of resources by CMS and the Medicare
Administrative Contractors (MACs), potentially far in excess of those
required under the IPPS, given that there are nearly five times as many
SNFs as there are IPPS hospitals. We continue to believe that the
development of such an audit process could improve SNF cost reports,
but we do not believe this undertaking is feasible at this time.
Final Decision: We are finalizing our proposal to rebase the SNF
market basket to reflect a 2022 base year for FY 2025.
We provide a summary of the more detailed public comments received
on our proposed methodology for developing the 2022-based SNF market
basket and our responses in the sections that follow.
We proposed to develop cost category weights for the proposed 2022-
based SNF market basket in two stages. The major types of costs
underlying the proposed 2022-based SNF market basket are derived from
the 2022 Medicare cost report data (CMS Form 2540-10, OMB NO. 0938-
0463) for freestanding SNFs. Specifically, we used the Medicare cost
reports for seven specific costs: Wages and Salaries; Employee
Benefits; Contract Labor; Pharmaceuticals; Professional Liability
Insurance; Home Office/Related Organization Contract Labor; and
Capital-related. A residual ``All Other'' category is then estimated
and reflects all remaining costs that are not captured in the seven
types of costs identified above. The 2018-based SNF market basket
similarly used 2018 Medicare cost report data. Second, we proposed to
divide the residual ``All Other'' cost category into more detailed
subcategories, using U.S. Department of Commerce Bureau of Economic
Analysis' (BEA) 2017 Benchmark Input-Output (I-O) ``The Use Table
(Supply-Use Framework)'' for the Nursing and Community Care Facilities
industry (North American Industry Classification System (NAICS) code
623A00) aged to 2022 using applicable price proxy growth for each
category of costs. Furthermore, we proposed to continue to use the same
overall methodology as was used for the 2018-based SNF market basket to
develop the capital related cost weights of the proposed 2022-based SNF
market basket.
1. Development of Cost Categories and Weights
a. Use of Medicare Cost Report Data To Develop Major Cost Weights
In order to create a market basket that is representative of
freestanding SNF providers serving Medicare patients and to help ensure
accurate major cost weights (which is the percent of total Medicare-
allowable costs, as defined below), we proposed to apply edits to
remove reporting errors and outliers. Specifically, the SNF Medicare
cost reports used to calculate the market basket cost weights exclude
any providers that reported costs less than or equal to zero for the
following categories: total facility costs (Worksheet B, part 1, column
18, line 100); total operating costs (Worksheet B, part 1, column 18,
line 100 less Worksheet B, part 2, column 18, line 100); Medicare
general inpatient routine service costs (Worksheet D, part 1, column 1,
line 1); and Medicare PPS payments (Worksheet E, part 3, column 1, line
1). We also limited our sample to providers that had a Medicare cost
report reporting period that was between 10 and 14 months. The final
sample used included roughly 13,100 Medicare cost reports (about 90
percent of the universe of SNF Medicare cost reports for 2022). The
sample of providers is representative of the national universe of
providers by region (each region is represented within plus or minus 1
percentage point of universe distribution), by ownership-type
(proprietary, nonprofit, and government) (within 0.8 percentage point
of universe), and by urban/rural status (within 0.1 percentage point of
universe). Of the providers that were excluded from our final sample,
86 percent were due to having a cost reporting period less than 10
months or greater than 14 months, 10 percent were due to total facility
costs or total operating costs not being greater than zero, and 4
percent were due to Medicare general inpatient routine service costs or
Medicare PPS payments not being greater than zero.
Additionally, for all of the major cost weights, except Home
Office/Related Organization Contract Labor costs, the data are trimmed
to remove outliers (a standard statistical process) by: (1) requiring
that major expenses (such as Wages and Salaries costs) and total
Medicare-allowable costs are greater than zero; and (2) excluding the
top and bottom 5 percent of the major cost weight (for example, Wages
and Salaries costs as a percent of total Medicare-allowable costs). We
noted in the proposed rule that missing values are assumed to be zero,
consistent with the methodology for how missing values are treated in
the 2018-based SNF market basket methodology.
For the Home Office/Related Organization Contract Labor cost
weight, we proposed to first exclude providers whose Home Office/
Related Organization Contract Labor costs are greater than Medicare-
allowable total costs and then apply a trim that excludes those
reporters with a Home Office/Related Organization Contract Labor cost
weight above the 99th percentile. This allows providers with no Home
Office/Related Organization Contract Labor costs to be included in the
Home Office/Related Organization Contract Labor cost weight
calculation. If we were to trim the top and bottom Home Office/Related
Organization Contract Labor cost weight, we would exclude providers
with a cost weight of zero (84 percent of the sample) and the Medicare
cost report data (Worksheet S-2 line 45) indicate that not all SNF
providers have a home office. Providers
[[Page 64067]]
without a home office would report administrative costs that might
typically be associated with a home office in the Wages and Salaries
and Employee Benefits cost weights, or in the residual ``All-Other''
cost weight if they purchased these types of services from external
contractors. We believe the trimming methodology that excludes those
who report Home Office/Related Organization Contract Labor costs above
the 99th percentile is appropriate as it removes extreme outliers while
also allowing providers with zero Home Office/Related Organization
Contract Labor costs, which is the majority of providers, to be
included in the Home Office/Related Organization Contract Labor cost
weight calculation.
The trimming process is done individually for each cost category so
that providers excluded from one cost weight calculation are not
automatically excluded from another cost weight calculation. We noted
in the proposed rule that these trimming methods are the same types of
edits performed for the 2018-based SNF market basket, as well as other
PPS market baskets (including but not limited to the IPPS market basket
and home health market basket). We believe this trimming process
improves the accuracy of the data used to compute the major cost
weights by removing possible data misreporting.
The final weights of the proposed 2022-based SNF market basket are
based on weighted means. For example, the aggregate Wages and Salaries
cost weight, after trimming, is equal to the sum of total Medicare-
allowable wages and salaries (as defined in the ``Wages and Salaries''
section that follows) of all providers divided by the sum of total
Medicare-allowable costs (as defined in the next paragraph) for all
providers in the sample (as defined above in this section). This
methodology is consistent with the methodology used to calculate the
2018-based SNF market basket cost weights and other PPS market basket
cost weights. We noted in the proposed rule that for each of the cost
weights, we evaluated the distribution of providers and costs by
region, by ownership-type, and by urban/rural status. For all of the
cost weights, the trimmed sample was nationally representative.
For all of the cost weights, we used Medicare-allowable total costs
as the denominator (for example, Wages and Salaries cost weight = Wages
and Salaries costs divided by Medicare-allowable total costs).
Medicare-allowable total costs were equal to total costs (after
overhead allocation) from Worksheet B part I, column 18, for lines 30,
40 through 49, 51, 52, and 71 plus estimated Medicaid drug costs, as
defined below. We included estimated Medicaid drug costs in the
pharmacy cost weight, as well as the denominator for total Medicare-
allowable costs. This is the same methodology used for the 2018-based
SNF market basket. The inclusion of Medicaid drug costs was finalized
in the FY 2008 SNF PPS final rule (72 FR 43425 through 43430), and for
the same reasons set forth in that final rule, we proposed to continue
to use this methodology in the proposed 2022-based SNF market basket.
We describe the detailed methodology for obtaining costs for each
of the eight cost categories determined from the Medicare Cost Report
below. The methodology used in the 2018-based SNF market basket can be
found in the FY 2022 SNF PPS final rule (86 FR 42446 through 42452).
(1) Wages and Salaries
To derive Wages and Salaries costs for the Medicare-allowable cost
centers, we proposed first to calculate total facility wages and
salaries costs as reported on Worksheet S-3, part II, column 3, line 1.
We then proposed to remove the wages and salaries attributable to non-
Medicare-allowable cost centers (that is, excluded areas), as well as a
portion of overhead wages and salaries attributable to these excluded
areas. Excluded area wages and salaries are equal to wages and salaries
as reported on Worksheet S-3, part II, column 3, lines 3, 4, and 7
through 11 plus nursing facility and non-reimbursable salaries from
Worksheet A, column 1, lines 31, 32, 50, and 60 through 63.
Overhead wages and salaries are attributable to the entire SNF
facility; therefore, we proposed to include only the proportion
attributable to the Medicare-allowable cost centers. We proposed to
estimate the proportion of overhead wages and salaries attributable to
the non-Medicare-allowable costs centers in two steps. First, we
proposed to estimate the ratio of excluded area wages and salaries (as
defined above) to non-overhead total facility wages and salaries (total
facility wages and salaries (Worksheet S-3, part II, column 3, line 1)
less total overhead wages and salaries (Worksheet S-3, Part III, column
3, line 14)). Next, we proposed to multiply total overhead wages and
salaries by the ratio computed in step 1. We excluded providers whose
excluded areas wages and salaries were greater than total facility
wages and salaries and/or their excluded area overhead wages and
salaries were greater than total facility wages and salaries (about 50
providers). This is the same methodology used to derive Wages and
Salaries costs in the 2018-based SNF market basket.
(2) Employee Benefits
Medicare-allowable employee benefits are equal to total facility
benefits as reported on Worksheet S-3, part II, column 3, lines 17
through 19 minus non-Medicare-allowable (that is, excluded area)
employee benefits and minus a portion of overhead benefits attributable
to these excluded areas. Excluded area employee benefits are derived by
multiplying total excluded area wages and salaries (as defined above in
the `Wages and Salaries' section) times the ratio of total facility
benefits to total facility wages and salaries. This ratio of benefits
to wages and salaries is defined as total facility benefit costs to
total facility wages and salary costs (as reported on Worksheet S-3,
part II, column 3, line 1). Likewise, the portion of overhead benefits
attributable to the excluded areas is derived by multiplying overhead
wages and salaries attributable to the excluded areas (as defined in
the ``Wages and Salaries'' section) times the ratio of total facility
benefit costs to total facility wages and salary costs (as defined
above). Similar to the Wages and Salaries costs, we excluded providers
whose excluded areas benefits were greater than total facility benefits
and/or their excluded area overhead benefits were greater than total
facility benefits (zero providers were excluded because of this edit).
This is the same methodology used to derive Employee Benefits costs in
the 2018-based SNF market basket.
(3) Contract Labor
We proposed to derive Medicare-allowable contract labor costs from
Worksheet S-3, part II, column 3, line 14, which reflects costs for
contracted direct patient care services (that is, nursing, therapeutic,
rehabilitative, or diagnostic services furnished under contract rather
than by employees and management contract services). This is the same
methodology used to derive the Contract Labor costs in the 2018-based
SNF market basket.
(4) Pharmaceuticals
We proposed to calculate pharmaceuticals costs using the non-salary
costs from the Pharmacy cost center (Worksheet B, part I, column 0,
line 11 less Worksheet A, column 1, line 11) and the Drugs Charged to
Patients' cost center (Worksheet B, part I, column 0, line 49 less
Worksheet A, column 1, line 49). Since these drug costs were
attributable to the entire SNF and not limited to Medicare-allowable
services,
[[Page 64068]]
we proposed to adjust the drug costs by the ratio of Medicare-allowable
pharmacy total costs (Worksheet B, part I, column 11, for lines 30, 40
through 49, 51, 52, and 71) to total pharmacy costs from Worksheet B,
part I, column 11, line 11. Worksheet B, part I allocates the general
service cost centers, which are often referred to as ``overhead costs''
(in which pharmacy costs are included) to the Medicare-allowable and
non-Medicare-allowable cost centers. This adjustment was made for those
providers who reported Pharmacy cost center expenses. Otherwise, we
assumed the non-salary Drugs Charged to Patients costs were Medicare-
allowable. Since drug costs for Medicare patients are included in the
SNF PPS per diem rate, a provider with Medicare days should have also
reported costs in the Drugs Charged to Patient cost center. We found a
small number of providers (roughly 90) did not report Drugs Charged to
Patients' costs despite reporting Medicare days (an average of about
2,000 Medicare days per provider), and therefore, these providers were
excluded from the Pharmaceuticals cost weight calculations. This is the
same methodology used for the 2018-based SNF market basket.
Second, as was done for the 2018-based SNF market basket, we
proposed to continue to adjust the drug expenses reported on the
Medicare cost report to include an estimate of total Medicaid drug
costs, which are not represented in the Medicare-allowable drug cost
weight. As stated previously in this section, the proposed 2022-based
SNF market basket reflects total Medicare-allowable costs (that is,
total costs for all payers for those services reimbursable under the
SNF PPS). For the FY 2006-based SNF market basket (72 FR 43426),
commenters noted that the total pharmaceutical costs reported on the
Medicare cost report did not include pharmaceutical costs for dual-
eligible Medicaid patients as these were directly reimbursed by
Medicaid. Since all of the other cost category weights reflect expenses
associated with treating Medicaid patients (including the compensation
costs for dispensing these drugs), we made an adjustment to include
these Medicaid drug expenses so the market basket cost weights would be
calculated consistently.
Similar to the 2018-based SNF market basket, we proposed to
estimate Medicaid drug costs based on data representing dual-eligible
Medicaid beneficiaries. Medicaid drug costs are estimated by
multiplying Medicaid dual-eligible drug costs per day times the number
of Medicaid days as reported in the Medicare-allowable skilled nursing
cost center (Worksheet S-3, part I, column 5, line 1) in the SNF
Medicare cost report. Medicaid dual-eligible drug costs per day (where
the day represents an unduplicated drug supply day) were estimated
using 2022 Part D claims for those dual-eligible beneficiaries who had
a Medicare SNF stay during the year. The total drug costs per
unduplicated day for 2022 of $27.43 represented all drug costs
(including the drug ingredient cost, the dispensing fee, vaccine
administration fee and sales tax) incurred during the 2022 calendar
year (CY) for those dual-eligible beneficiaries who had a SNF Medicare
stay during CY 2022. Therefore, they include drug costs incurred during
a Medicaid SNF stay occurring in CY 2022. By comparison, the 2018-based
SNF market basket also relied on data from the Part D claims, which
yielded a dual-eligible Medicaid drug cost per day of $24.48 for 2018.
We continue to believe that Medicaid dual-eligible beneficiaries
are a reasonable proxy for the estimated drug costs per day incurred by
Medicaid patients staying in a skilled nursing unit under a Medicaid
stay. The skilled nursing unit is the Medicare-allowable unit in a SNF,
which encompasses more skilled nursing and rehabilitative care compared
to a nursing facility or long-term care unit. We believe that Medicaid
patients receiving this skilled nursing care would on average have
similar drug costs per day to dual-eligible Medicare beneficiaries who
have received Medicare skilled nursing care in the skilled nursing care
unit during the year. We noted in the proposed rule that our previous
analysis of the Part D claims data showed that Medicare beneficiaries
with a SNF stay during the year have higher drug costs than Medicare
patients without a SNF stay during the year. Also, in 2022, dual-
eligible beneficiaries with a SNF stay during the year had drug costs
per day of $27.43, which were approximately two times higher than the
drug costs per day of $15.83 for nondual-eligible beneficiaries with a
SNF Part A stay during the year.
The Pharmaceuticals cost weight using only 2022 Medicare cost
report data (without the inclusion of the Medicaid dual-eligible drug
costs) is 2.0 percent, compared to the proposed Pharmaceuticals cost
weight (including the adjustment for Medicaid dual-eligible drug costs)
of 6.4 percent. The 2018-based SNF market basket had a Pharmaceuticals
cost weight using only 2018 Medicare cost report data without the
inclusion of the Medicaid dual-eligible drug costs of 2.6 percent and a
total Pharmaceuticals cost weight of 7.5 percent. Therefore, the 1.1
percentage point decrease in the Pharmaceuticals cost weight between
2018 and 2022 is a result of a 0.5-percentage point decrease in the
Medicaid dual-eligible drug cost weight (reflecting the 12 percent
increase in the Medicaid dual-eligible drug costs per day, and a 14
percent decrease in Medicaid inpatient days between 2018 and 2022) and
a 0.6-percentage point decrease in the Medicare cost report drug cost
weight. The decrease in the Medicare cost report drug cost weight was
consistent, in aggregate, across urban and rural status SNFs, as well
as across for-profit, government, and nonprofit ownership type SNFs.
(5) Professional Liability Insurance
We proposed to calculate the professional liability insurance (PLI)
costs from Worksheet S-2 of the Medicare cost reports as the sum of
premiums; paid losses; and self-insurance (Worksheet S-2, Part I,
columns 1 through 3, line 41). This was the same methodology used to
derive the Professional Liability costs for the 2018-based SNF market
basket.
About 60 percent of SNFs (about 7,700) reported professional
liability costs. After trimming, about 6,900 (reflecting about 730,000
Skilled Nursing unit beds) were included in the calculation of the PLI
cost weight for the proposed 2022-based SNF market basket. These
providers treated roughly 750,000 Medicare beneficiaries and had a
Medicare length of stay (LOS) of 58 days, a skilled nursing unit
occupancy rate of 72 percent, and an average skilled nursing unit bed
size of 106 beds, which are all consistent with the national averages.
We also verified that this sample of providers are representative of
the national distribution of providers by ownership-type, urban/rural
status, and region.
We believe the Medicare cost report data continues to be the most
appropriate data source to calculate the PLI cost weight for the
proposed 2022-based SNF market basket as it is representative of SNFs
serving Medicare beneficiaries and reflects PLI costs (premiums, paid
losses, and self-insurance) incurred during the provider's cost
reporting year. A fuller discussion of the Medicare cost report data on
PLI costs compared to other sources is available in the FY 2022 SNF PPS
final rule (86 FR 42448).
(6) Capital-Related
We proposed to derive the Medicare-allowable capital-related costs
from Worksheet B, part II, column 18 for lines
[[Page 64069]]
30, 40 through 49, 51, 52, and 71. This is the same methodology to
derive capital-related costs used in the 2018-based SNF market basket.
(7) Home Office/Related Organization Contract Labor Costs
We proposed to calculate Medicare-allowable Home Office/Related
Organization Contract Labor costs to be equal to data reported on
Worksheet S-3, part II, column 3, line 16. About 7,100 providers (about
54 percent) in 2022 reported having a home office (as reported on
Worksheet S-2, part I, line 45) about the same share of providers as
those in the 2018-based SNF market basket. As outlined in section
V.A.1. of the proposed rule, providers without a home office can incur
these expenses directly by having their own staff, for which the costs
would be included in the Wages and Salaries and Employee Benefits cost
weights. Alternatively, providers without a home office could also
purchase related services from external contractors for which these
expenses would be captured in the residual ``All-Other'' cost weight.
For this reason, unlike the other major cost weights described
previously, we did not exclude providers that did not report Home
Office/Related Organization Contract Labor costs. This is the same
methodology that was used in the 2018-based SNF market basket.
(8) All Other (Residual)
The ``All Other'' cost weight is a residual, calculated by
subtracting the major cost weights (Wages and Salaries, Employee
Benefits, Contract Labor, Pharmaceuticals, Professional Liability
Insurance, Capital-Related, and Home Office/Related Organization
Contract Labor) from 100.
We did not receive public comments on our proposed major cost
weights, nor their respective methodologies of derivation. For the
reasons discussed above and in the FY 2025 SNF PPS proposed rule, we
are finalizing the major cost weights as proposed, without
modification.
Table 11 shows the major cost categories and their respective cost
weights as derived from the 2022 Medicare cost reports.
[GRAPHIC] [TIFF OMITTED] TR06AU24.010
As we did for the 2018-based SNF market basket (86 FR 42449), we
proposed to allocate contract labor costs to the Wages and Salaries and
Employee Benefits cost weights based on their relative proportions
under the assumption that contract labor costs are composed of both
wages and salaries and employee benefits. The contract labor allocation
proportion for wages and salaries is equal to the Wages and Salaries
cost weight as a percent of the sum of the Wages and Salaries cost
weight and the Employee Benefits cost weight. Using the 2022 Medicare
cost report data, this percentage is 85 percent (1 percentage point
higher than the percentage in the 2018-based SNF market basket);
therefore, we proposed to allocate approximately 85 percent of the
Contract Labor cost weight to the Wages and Salaries cost weight and 15
percent to the Employee Benefits cost weight.
We did not receive public comments on our proposed allocation of
contract labor costs to Wages and Salaries and Employee Benefits. For
the reasons discussed above and in the FY 2025 SNF PPS proposed rule,
we are finalizing the allocation methodology and percentages as
proposed, without modification.
Table 12 shows the Wages and Salaries and Employee Benefits cost
weights after contract labor allocation for the 2022-based SNF market
basket and the 2018-based SNF market basket.
[GRAPHIC] [TIFF OMITTED] TR06AU24.011
[[Page 64070]]
Compared to the 2018-based SNF market basket, the Wages and
Salaries cost weight and the Employee Benefits cost weight as
calculated directly from the Medicare cost reports each decreased by
0.8 percentage point. The Contract Labor cost weight increased 2.6
percentage points and so in aggregate, the Compensation cost weight
increased 1.0 percentage point from 60.2 percent to 61.2 percent.
b. Derivation of the Detailed Operating Cost Weights
To further divide the ``All Other'' residual cost weight estimated
from the 2022 Medicare cost report data into more detailed cost
categories, we proposed to use the 2017 Benchmark I-O ``The Use Table
(Supply-Use Framework)'' for Nursing and Community Care Facilities
industry (NAICS 623A00), published by the Census Bureau's, Bureau of
Economic Analysis (BEA). These data are publicly available at https://www.bea.gov/industry/input-output-accounts-data. The BEA Benchmark I-O
data are generally scheduled for publication every 5 years with 2017
being the most recent year for which data are available. The 2017
Benchmark I-O data are derived from the 2017 Economic Census and are
the building blocks for BEA's economic accounts; therefore, they
represent the most comprehensive and complete set of data on the
economic processes or mechanisms by which output is produced and
distributed.\1\ BEA also produces Annual I-O estimates. However, while
based on a similar methodology, these estimates are less comprehensive
and provide less detail than benchmark data. Additionally, the annual
I-O data are subject to revision once benchmark data become available.
For these reasons, we proposed to inflate the 2017 Benchmark I-O data
aged forward to 2022 by applying the annual price changes from the
respective price proxies to the appropriate market basket cost
categories that are obtained from the 2017 Benchmark I-O data. Next,
the relative shares of the cost shares that each cost category
represents to the total residual I-O costs are calculated. These
resulting 2022 cost shares of the I-O data are applied to the ``All
Other'' residual cost weight to obtain detailed cost weights for the
residual costs for the proposed 2022-based SNF market basket. For
example, the cost for Food: Direct Purchases represents 12.8 percent of
the sum of the ``All Other'' 2017 Benchmark I-O Expenditures inflated
to 2022. Therefore, the Food: Direct Purchases cost weight is 2.8
percent of the proposed 2022-based SNF market basket (12.8 percent x
22.2 percent = 2.8 percent). For the 2018-based SNF market basket (86
FR 42449), we used a similar methodology utilizing the 2012 Benchmark
I-O data (aged to 2018).
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Using this methodology, we proposed to derive 19 detailed SNF
market basket cost category weights from the proposed 2022-based SNF
market basket ``All Other'' residual cost weight (22.2 percent). These
categories are: (1) Fuel: Oil and Gas; (2) Electricity and Other Non-
Fuel Utilities; (3) Food: Direct Purchases; (4) Food: Contract
Services; (5) Chemicals; (6) Medical Instruments and Supplies; (7)
Rubber and Plastics; (8) Paper and Printing Products; (9) Apparel; (10)
Machinery and Equipment; (11) Miscellaneous Products; (12) Professional
Fees: Labor-Related; (13) Administrative and Facilities Support
Services; (14) Installation, Maintenance, and Repair Services; (15) All
Other: Labor-Related Services; (16) Professional Fees: Nonlabor-
Related; (17) Financial Services; (18) Telephone Services; and (19) All
Other: Nonlabor-Related Services. These are the same detailed cost
categories as those that were used in the 2018-based SNF market basket.
We noted in the proposed rule that the machinery and equipment
expenses are for equipment that is paid for in a given year and not
depreciated over the asset's useful life. Depreciation expenses for
movable equipment are accounted for in the capital component of the
proposed 2022-based SNF market basket (described in section V.A.1.c. of
the proposed rule).
We did not receive any public comments on our proposed methodology
for deriving the detailed operating cost weights. Therefore, for the
reasons discussed above and in the FY 2025 SNF PPS proposed rule, we
are finalizing the detailed operating cost weights and methodology as
proposed, without modification.
c. Derivation of the Detailed Capital Cost Weights
Similar to the 2018-based SNF market basket, we further divided the
Capital-related cost weight into: Depreciation, Interest, Lease and
Other Capital-related cost weights.
We calculated the depreciation cost weight (that is, depreciation
costs excluding leasing costs) using depreciation costs from Worksheet
S-2, column 1, lines 20 and 21. Since the depreciation costs reflect
the entire SNF facility (Medicare and non-Medicare-allowable units), we
used total facility capital costs (Worksheet B, Part I, column 18, line
100) as the denominator. This methodology assumes that the depreciation
of an asset is the same regardless of whether the asset was used for
Medicare or non-Medicare patients. This methodology yielded
depreciation costs as a percent of capital costs of 22.6 percent for
2022. We then apply this percentage to the proposed 2022-based SNF
market basket Medicare-allowable Capital-related cost weight of 8.3
percent, yielding a proposed Medicare-allowable depreciation cost
weight (excluding leasing expenses, which is described in more detail
below) of 1.9 percent for 2022. To further disaggregate the Medicare-
allowable depreciation cost weight into fixed and movable depreciation,
we proposed to use the 2022 SNF Medicare cost report data for end-of-
the-year capital asset balances as reported on Worksheet A-7. The 2022
SNF Medicare cost report data showed a fixed/movable split of 86/14.
The 2018-based SNF market basket, which utilized the same data from the
2018 Medicare cost reports, also had a fixed/movable split of 86/14.
We derived the interest expense share of capital-related expenses
from 2022 SNF Medicare cost report data, specifically from Worksheet A,
column 2, line 81. Similar to the depreciation cost weight, we
calculated the interest cost weight using total facility capital costs.
This methodology yielded interest costs as a percent of capital costs
of 17.7 percent for 2022. We then apply this percentage to the proposed
2022-based SNF market basket Medicare-allowable Capital-related cost
weight of 8.3 percent, yielding a Medicare-allowable interest cost
weight (excluding leasing expenses) of 1.5 percent. As done with the
last rebasing (86 FR 42450), we proposed to determine the split of
interest expense between for-profit and not-for-profit facilities based
on the distribution of long-term debt outstanding by type of SNF (for-
profit or not-for-profit/government) from the 2022 SNF Medicare cost
report data. We estimated the split between for-profit and not-for-
profit interest expense to be 30/70 percent compared to the 2018-based
SNF market basket with 25/75 percent.
Because the detailed data were not available in the Medicare cost
reports, we used the most recent 2021 Census Bureau Service Annual
Survey (SAS) data to derive the capital-related expenses attributable
to leasing and other capital-related expenses. The 2018-based SNF
market basket used the 2017 SAS data.
[[Page 64071]]
Based on the 2021 SAS data, we determined that leasing expenses are
65 percent of total leasing and capital-related expenses costs. In the
2018-based SNF market basket, leasing costs represent 62 percent of
total leasing and capital-related expenses costs. We then apply this
percentage to the 2022-based SNF market basket residual Medicare-
allowable capital costs of 4.9 percent derived from subtracting the
Medicare-allowable depreciation cost weight and Medicare-allowable
interest cost weight from the 2022-based SNF market basket of total
Medicare-allowable capital cost weight (8.3 percent-1.9 percent-1.5
percent = 4.9 percent). This produces the 2022-based SNF Medicare-
allowable leasing cost weight of 3.2 percent and all-other capital-
related cost weight of 1.7 percent.
Lease expenses are not broken out as a separate cost category in
the SNF market basket, but are distributed among the cost categories of
depreciation, interest, and other capital-related expenses, reflecting
the assumption that the underlying cost structure and price movement of
leasing expenses is similar to capital costs in general. As was done
with past SNF market baskets and other PPS market baskets, we assumed
10 percent of lease expenses are overhead and assigned them to the
other capital-related expenses cost category. This is based on the
assumption that leasing expenses include not only depreciation,
interest, and other capital-related costs but also additional costs
paid to the lessor. We distributed the remaining lease expenses to the
three cost categories based on the proportion of depreciation,
interest, and other capital-related expenses to total capital costs,
excluding lease expenses.
We did not receive any public comments on our proposed methodology
for deriving the detailed capital cost weights. Therefore, for the
reasons discussed above and in the FY 2025 SNF PPS proposed rule, we
are finalizing the detailed capital cost weights and methodology as
proposed, without modification.
Table 13 shows the capital-related expense distribution (including
expenses from leases) in the 2022-based SNF market basket and the 2018-
based SNF market basket.
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Table 14 presents the 2022-based SNF market basket and the 2018-
based SNF market basket cost categories and cost weights.
BILLING CODE 4120-01-P
[[Page 64072]]
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BILLING CODE 4120-01-C
2. Price Proxies Used To Measure Operating Cost Category Growth
After developing the 27 cost weights for the 2022-based SNF market
basket, we selected the most appropriate wage and price proxies
currently available to represent the rate of change for each cost
category. With four exceptions (three for the capital-related expenses
cost categories and one for PLI), we base the wage and price proxies on
Bureau of Labor Statistics (BLS) data, and group them into one of the
following BLS categories:
Employment Cost Indexes. Employment Cost Indexes (ECIs)
measure the rate of change in
[[Page 64073]]
employment wage rates and employer costs for employee benefits per hour
worked. These indexes are fixed-weight indexes and strictly measure the
change in wage rates and employee benefits per hour. ECIs are superior
to Average Hourly Earnings (AHE) as price proxies for input price
indexes because they are not affected by shifts in occupation or
industry mix, and because they measure pure price change and are
available by both occupational group and by industry. The industry ECIs
are based on the NAICS and the occupational ECIs are based on the
Standard Occupational Classification System (SOC).
Producer Price Indexes. Producer Price Indexes (PPIs)
measure the average change over time in the selling prices received by
domestic producers for their output. The prices included in the PPI are
from the first commercial transaction for many products and some
services (https://www.bls.gov/ppi/).
Consumer Price Indexes. Consumer Price Indexes (CPIs)
measure the average change over time in the prices paid by urban
consumers for a market basket of consumer goods and services (https://www.bls.gov/cpi/). CPIs are only used when the purchases are similar to
those of retail consumers rather than purchases at the producer level,
or if no appropriate PPIs are available.
We evaluate the price proxies using the criteria of reliability,
timeliness, availability, and relevance:
Reliability. Reliability indicates that the index is based
on valid statistical methods and has low sampling variability. Widely
accepted statistical methods ensure that the data were collected and
aggregated in a way that can be replicated. Low sampling variability is
desirable because it indicates that the sample reflects the typical
members of the population. (Sampling variability is variation that
occurs by chance because only a sample was surveyed rather than the
entire population.)
Timeliness. Timeliness implies that the proxy is published
regularly, preferably at least once a quarter. The market baskets are
updated quarterly, and therefore, it is important for the underlying
price proxies to be up-to-date, reflecting the most recent data
available. We believe that using proxies that are published regularly
(at least quarterly, whenever possible) helps to ensure that we are
using the most recent data available to update the market basket. We
strive to use publications that are disseminated frequently, because we
believe that this is an optimal way to stay abreast of the most current
data available.
Availability. Availability means that the proxy is
publicly available. We prefer that our proxies are publicly available
because this will help ensure that our market basket updates are as
transparent to the public as possible. In addition, this enables the
public to be able to obtain the price proxy data on a regular basis.
Relevance. Relevance means that the proxy is applicable
and representative of the cost category weight to which it is applied.
We believe that the CPIs, PPIs, and ECIs that we have selected meet
these criteria. Therefore, we believe that they continue to be the best
measure of price changes for the cost categories to which they would be
applied.
Table 19 lists all price proxies for the 2022-based SNF market
basket. Below is a detailed explanation of the price proxies we
proposed to use for each operating cost category.
a. Wages and Salaries
We proposed to use the ECI for Wages and Salaries for Private
Industry Workers in Nursing Care Facilities (NAICS 6231; BLS series
code CIU2026231000000I) to measure price growth of this category. NAICS
623 includes facilities that provide a mix of health and social
services, with many of the health services requiring some level of
nursing services. Within NAICS 623 is NAICS 6231, which includes
nursing care facilities primarily engaged in providing inpatient
nursing and rehabilitative services. These facilities, which are most
comparable to Medicare-certified SNFs, provide skilled nursing and
continuous personal care services for an extended period of time, and,
therefore, have a permanent core staff of registered or licensed
practical nurses. This is the same index used in the 2018-based SNF
market basket.
b. Employee Benefits
We proposed to use the ECI for Benefits for Nursing Care Facilities
(NAICS 6231) to measure price growth of this category. The ECI for
Benefits for Nursing Care Facilities is calculated using BLS's total
compensation (BLS series ID CIU2016231000000I) for nursing care
facilities series and the relative importance of wages and salaries
within total compensation. We believe this constructed ECI series is
technically appropriate for the reason stated previously in the Wages
and Salaries price proxy section of this final rule. This is the same
index used in the 2018-based SNF market basket.
c. Electricity and Other Non-Fuel Utilities
We proposed to use the PPI Commodity for Commercial Electric Power
(BLS series code WPU0542) to measure the price growth of this cost
category as Electricity costs account for 93 percent of these expenses.
This is the same index used for the Electricity cost category in the
2018-based SNF market basket.
d. Fuel: Oil and Gas
We proposed to use a blended proxy composed of the PPI Industry for
Petroleum Refineries (NAICS 324110) (BLS series code PCU32411-32411),
the PPI Commodity for Natural Gas (NAICS 221200)(BLS series code
WPU0531), and the PPI for Other Petroleum and Coal Products
manufacturing (NAICS 324190)(BLS series code PCU32419-32419).
Our analysis of 2017 Benchmark I-O data for Nursing and Community
Care Facilities found that these three NAICS industries account for
approximately 93 percent of SNF Fuel: Oil and Gas expenses. The
remaining 7 percent of SNF Fuel: Oil and Gas expenses are for two other
incidental NAICS industries including Coal Mining and Petrochemical
Manufacturing. We proposed to create a blended index based on the three
NAICS Fuel: Oil and Gas expenses listed above that account for 93
percent of SNF Fuel: Oil and Gas expenses. We created this blend based
on each NAICS' expenses as a share of their sum. These expenses as a
share of their sum are listed in Table 15.
The 2018-based SNF market basket used a blended Fuel: Oil and Gas
proxy that was based on 2012 Benchmark I-O data. We believe the Fuel:
Oil and Gas blended index for the 2022-based SNF market basket is
technically appropriate as it reflects more recent data on SNFs
purchasing patterns. Table 15 provides the weights for the 2022- and
2018-based blended Fuel: Oil and Gas index.
[[Page 64074]]
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e. Professional Liability Insurance
We proposed to use the CMS Hospital Professional Liability
Insurance Index to measure price growth of this category. We were
unable to find a reliable data source that collects SNF-specific PLI
data. Therefore, we proposed to use the CMS Hospital Professional
Liability Index, which tracks price changes for commercial insurance
premiums for a fixed level of coverage, holding non-price factors
constant (such as a change in the level of coverage). This is the same
index used in the 2018-based SNF market basket. We believe this is an
appropriate proxy to measure the price growth associated of SNF PLI as
it captures the price inflation associated with other medical
institutions that serve Medicare patients.
Comment: One commenter mentioned a 2006 case study on the nursing
home liability insurance market in Florida that relied on information
from the National Conference of State Legislatures Health Policy
Tracking Service and suggested that CMS should be looking for credible
sources of information about SNF liability insurance rather than using
the CMS Hospital Professional Liability Insurance Index as this market
basket's price proxy.
Response: The criteria we use to evaluate and select price proxies
are: timeliness (published and available on a regular basis, preferably
at least quarterly, with little lag), reliability (consistent
historical time-series as well as being technically and
methodologically sound), availability (the proxy is publicly
available), and relevance (the proxy is applicable and representative
of the cost category weight to which it is applied). While we are
unaware of any data sources that would meet these criteria and serve as
an appropriate substitute at this time, we are interested in
information on this topic and will continue to search for, and remain
open to, any credible data source that meets the aforementioned
criteria. Nonetheless, we continue to believe that the CMS Hospital
Professional Liability Insurance Index is an appropriate price proxy as
it captures the price inflation associated with other medical
institutions that serve Medicare patients, which includes hospital-
based SNFs. Any changes to this price proxy in the future would be set
forth through notice and comment rulemaking.
f. Pharmaceuticals
We proposed to use the PPI Commodity for Pharmaceuticals for Human
Use, Prescription (BLS series code WPUSI07003) to measure the price
growth of this cost category. This is the same index used in the 2018-
based SNF market basket.
g. Food: Direct Purchases
We proposed to use the PPI Commodity for Processed Foods and Feeds
(BLS series code WPU02) to measure the price growth of this cost
category. This is the same index used in the 2018-based SNF market
basket.
h. Food: Contract Services
We proposed to use the CPI All Urban for Food Away From Home (All
Urban Consumers) (BLS series code CUUR0000SEFV) to measure the price
growth of this cost category. This is the same index used in the 2018-
based SNF market basket.
i. Chemicals
For measuring price change in the Chemicals cost category, we
proposed to use a blended PPI composed of the Industry PPIs for Other
Basic Organic Chemical Manufacturing (NAICS 325190) (BLS series code
PCU32519-32519), Soap and Cleaning Compound Manufacturing (NAICS
325610) (BLS series code PCU32561-32561), and All Other Chemical
Product and Preparation Manufacturing (NAICS 3259A0) (BLS series code
PCU325998325998).
Using the 2017 Benchmark I-O data, we found that these three NAICS
industries accounted for approximately 95 percent of SNF chemical
expenses. The remaining 5 percent of SNF chemical expenses are for
three other incidental NAICS chemicals industries such as Paint and
Coating Manufacturing. We proposed to create a blended index based on
the three NAICS chemical expenses listed above that account for 95
percent of SNF chemical expenses. We create this blend based on each
NAICS' expenses as a share of their sum. These expenses as a share of
their sum are listed in Table 16.
The 2018-based SNF market basket used a blended chemical proxy that
was based on 2012 Benchmark I-O data. We believe the chemical blended
index for the 2022-based SNF market basket is technically appropriate
as it reflects more recent data on SNFs purchasing patterns. Table B6
provides the weights for the 2022-based blended chemical index and the
2018-based blended chemical index.
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[[Page 64075]]
j. Medical Instruments and Supplies
For measuring price change in the Medical Instruments and Supplies
cost category, we proposed to use a blended proxy. The 2017 Benchmark
I-O data shows 62 percent of medical instruments and supply costs are
for Surgical and medical instrument manufacturing costs (NAICS 339112)
and 38 percent are for Surgical appliance and supplies manufacturing
costs (NAICS 339113). To proxy the price changes associated with NAICS
339112, we proposed using the PPI--Commodity--Surgical and medical
instruments (BLS series code WPU1562). To proxy the price changes
associated with NAICS 339113, we proposed to use 50 percent for the
PPI--Commodity--Medical and surgical appliances and supplies (BLS
series code WPU1563) and 50 percent for the PPI Commodity data for
Miscellaneous products--Personal safety equipment and clothing (BLS
series code WPU1571). The latter price proxy would reflect personal
protective equipment including but not limited to face shields and
protective clothing. The 2017 Benchmark I-O data does not provide
specific expenses for personal protective equipment (which would be
reflected in the NAICS 339113 expenses); however, we recognize that
this category reflects costs faced by SNFs. In absence of any specific
cost data on personal protective equipment, we proposed to include the
PPI Commodity data for Miscellaneous products--Personal safety
equipment and clothing (BLS series code WPU1571) in the blended proxy
for Medical Instruments and Supplies cost category with a weight of 19
percent (that is, 50 percent of the NAICS 339113 expenses as a percent
of the sum of NAICS 339113 and NAICS 339112 expenses from the I-O).
The 2018-based SNF market basket used a blended Medical Instruments
and Supplies proxy that was based on 2012 Benchmark I-O data. We
believe the blended index for the 2022-based SNF market basket is
technically appropriate as it reflects more recent data on SNFs
purchasing patterns. Table 17 provides the Medical Instruments and
Supplies cost weight blended price proxy.
[GRAPHIC] [TIFF OMITTED] TR06AU24.016
k. Rubber and Plastics
We proposed to use the PPI Commodity for Rubber and Plastic
Products (BLS series code WPU07) to measure price growth of this cost
category. This is the same index used in the 2018-based SNF market
basket.
l. Paper and Printing Products
We proposed to use a 86/14 blend of the PPI Commodity for Converted
Paper and Paperboard Products (BLS series code WPU0915) and the PPI
Commodity for Publications Printed Matter and Printing Material (BLS
Series Code WPU094) to measure the price growth of this cost category.
The 2017 Benchmark I-O data shows that 86 percent of paper and printing
expenses are for paper manufacturing (NAICS 322) and the remaining
expenses are for Printing (NAICS 323110). The 2018-based SNF market
basket used the PPI Commodity for Converted Paper and Paperboard
Products (BLS series code WPU0915) to measure the price growth of this
cost category.
m. Apparel
We proposed to use the PPI Commodity for Apparel (BLS series code
WPU0381) to measure the price growth of this cost category. This is the
same index used in the 2018-based SNF market basket.
n. Machinery and Equipment
We proposed to use the PPI Commodity for Machinery and Equipment
(BLS series code WPU11) to measure the price growth of this cost
category. This is the same index used in the 2018-based SNF market
basket.
o. Miscellaneous Products
For measuring price change in the Miscellaneous Products cost
category, we proposed to use the PPI Commodity for Finished Goods less
Food and Energy (BLS series code WPUFD4131). Both food and energy are
already adequately represented in separate cost categories and should
not also be reflected in this cost category. This is the same index
used in the 2018-based SNF market basket.
p. Professional Fees: Labor-Related
We proposed to use the ECI for Total Compensation for Private
Industry Workers in Professional and Related (BLS series code
CIU2010000120000I) to measure the price growth of this category. This
is the same index used in the 2018-based SNF market basket.
q. Administrative and Facilities Support Services
We proposed to use the ECI for Total Compensation for Private
Industry Workers in Office and Administrative Support (BLS series code
CIU2010000220000I) to measure the price growth of this category. This
is the same index used in the 2018-based SNF market basket.
r. Installation, Maintenance and Repair Services
We proposed to use the ECI for Total Compensation for All Civilian
Workers in Installation, Maintenance, and Repair (BLS series code
CIU1010000430000I) to measure the price growth of this new cost
category. This is the same index used in the 2018-based SNF market
basket.
s. All Other: Labor-Related Services
We proposed to use the ECI for Total Compensation for Private
Industry Workers in Service Occupations (BLS series code
CIU2010000300000I) to measure the price growth of this cost
[[Page 64076]]
category. This is the same index used in the 2018-based SNF market
basket.
t. Professional Fees: Non-Labor-Related
We proposed to use the ECI for Total Compensation for Private
Industry Workers in Professional and Related (BLS series code
CIU2010000120000I) to measure the price growth of this category. This
is the same index used in the 2018-based SNF market basket.
u. Financial Services
We proposed to use the ECI for Total Compensation for Private
Industry Workers in Financial Activities (BLS series code
CIU201520A000000I) to measure the price growth of this cost category.
This is the same index used in the 2018-based SNF market basket.
v. Telephone Services
We proposed to use the CPI All Urban for Telephone Services (BLS
series code CUUR0000SEED) to measure the price growth of this cost
category. This is the same index used in the 2018-based SNF market
basket.
w. All Other: Non-Labor-Related Services
We proposed to use the CPI All Urban for All Items Less Food and
Energy (BLS series code CUUR0000SA0L1E) to measure the price growth of
this cost category. This is the same index used in the 2018-based SNF
market basket.
After consideration of the public comments we received, for the
reasons discussed above and in the FY 2025 SNF PPS proposed rule, we
are finalizing the price proxies of the operating cost categories as
proposed, without modification.
3. Price Proxies Used To Measure Capital Cost Category Growth
We proposed to apply the same capital price proxies as were used in
the 2018-based SNF market basket, and below is a detailed explanation
of the price proxies used for each capital cost category. We also
proposed to continue to vintage weight the capital price proxies for
Depreciation and Interest to capture the long-term consumption of
capital. This vintage weighting method is the same method that was used
for the 2018-based SNF market basket and is described below.
Depreciation--Building and Fixed Equipment: We proposed to
use the BEA Chained Price Index for Private Fixed Investment in
Structures, Nonresidential, Hospitals and Special Care (BEA Table
5.4.4. Price Indexes for Private Fixed Investment in Structures by
Type). This BEA index is intended to capture prices for construction of
facilities such as hospitals, nursing homes, hospices, and
rehabilitation centers. This is the same index used in the 2018-based
SNF market basket.
Depreciation--Movable Equipment: We proposed to use the
PPI Commodity for Machinery and Equipment (BLS series code WPU11). This
price index reflects price inflation associated with a variety of
machinery and equipment that would be utilized by SNFs, including but
not limited to medical equipment, communication equipment, and
computers. This is the same index used in the 2018-based SNF market
basket.
Nonprofit Interest: We proposed to use the average yield
on Municipal Bonds (Bond Buyer 20-bond index). This is the same index
used in the 2018-based SNF market basket.
For-Profit Interest: For the For-Profit Interest cost
category, we proposed to use the iBoxx AAA Corporate Bond Yield index.
This is the same index used in the 2018-based SNF market basket.
Other Capital: Since this category includes fees for
insurances, taxes, and other capital-related costs, we proposed to use
the CPI for Rent of Primary Residence (BLS series code CUUS0000SEHA),
which would reflect the price growth of these costs. This is the same
index used in the 2018-based SNF market basket.
We believe that these price proxies are the most appropriate
proxies for SNF capital costs that meet our selection criteria of
relevance, timeliness, availability, and reliability.
As stated previously in this final rule, we proposed to continue to
vintage weight the capital price proxies for Depreciation and Interest
to capture the long-term consumption of capital. To capture the long-
term nature, the price proxies are vintage-weighted and the vintage
weights are calculated using a two-step process. First, we determine
the expected useful life of capital and debt instruments held by SNFs.
Second, we identify the proportion of expenditures within a cost
category that is attributable to each individual year over the useful
life of the relevant capital assets, or the vintage weights.
We rely on Bureau of Economic Analysis (BEA) fixed asset data to
derive the useful lives of both fixed and movable capital, which is the
same data source used to derive the useful lives for the 2018-based SNF
market basket. The specifics of the data sources used are explained
below.
a. Calculating Useful Lives for Movable and Fixed Assets
Estimates of useful lives for movable and fixed assets for the
2022-based SNF market basket are 9 and 27 years, respectively. These
estimates are based on three data sources from the BEA: (1) current-
cost average age; (2) historical-cost average age; and (3) industry-
specific current cost net stocks of assets.
BEA current-cost and historical-cost average age data by asset type
are not available by industry but are published at the aggregate level
for all industries. The BEA does publish current-cost net capital
stocks at the detailed asset level for specific industries. There are
64 detailed movable assets (including intellectual property) and there
are 32 detailed fixed assets in the BEA estimates. Since we seek
aggregate useful life estimates applicable to SNFs, we developed a
methodology to approximate movable and fixed asset ages for nursing and
residential care services (NAICS 623) using the published BEA data. For
the 2022-based SNF market basket, we use the current-cost average age
for each asset type from the BEA fixed assets Table 2.9 for all assets
and weight them using current-cost net stock levels for each of these
asset types in the nursing and residential care services industry,
NAICS 6230. For example, nonelectro medical equipment current-cost net
stock (accounting for about 29 percent of total movable equipment
current-cost net stock in 2022 is multiplied by an average age of 4.8
years for nonelectro medical equipment for all industries. Current-cost
net stock levels are available for download from the BEA website at
https://apps.bea.gov/iTable/index_FA.cfm. We then aggregate the
``weighted'' current-cost net stock levels (average age multiplied by
current-cost net stock) into movable and fixed assets for NAICS 6230.
We then adjust the average ages for movable and fixed assets by the
ratio of historical-cost average age (Table 2.10) to current-cost
average age (Table 2.9).
This produces historical cost average age data for fixed
(structures) and movable (equipment and intellectual property) assets
specific to NAICS 6230 of 13.6 and 4.4 years for 2022, respectively.
This reflects the average age of an asset at a given point in time,
whereas we want to estimate a useful life of the asset. To do this, we
multiply each of the average age estimates by two to convert to average
useful lives with the assumption that the average age reflects the
midpoint of useful life and is normally distributed (about half of the
assets are below the average at a given
[[Page 64077]]
point in time, and half above the average at a given point in time).
This produces estimates of likely useful lives of 27.2 and 8.8 years
for fixed and movable assets, which we round to 27 and 9 years,
respectively. We proposed an interest vintage weight time span of 25
years, obtained by weighting the fixed and movable vintage weights (27
years and 9 years, respectively) by the fixed and movable split (86
percent and 14 percent, respectively). This is the same methodology
used for the 2018-based SNF market basket, which had useful lives of 26
years and 9 years for fixed and movable assets, respectively.
b. Constructing Vintage Weights
Given the expected useful life of capital (fixed and movable
assets) and debt instruments, we must determine the proportion of
capital expenditures attributable to each year of the expected useful
life for each of the three asset types: building and fixed equipment,
movable equipment, and interest. These proportions represent the
vintage weights. We were not able to find a historical time series of
capital expenditures by SNFs. Therefore, we approximated the capital
expenditure patterns of SNFs over time using alternative SNF data
sources. For building and fixed equipment, we used the stock of beds in
nursing homes from the National Nursing Home Survey (NNHS) conducted by
the National Center for Health Statistics (NCHS) for 1962 through 1999.
For 2000 through 2018, we extrapolated the 1999 bed data forward using
measurements of the moving average rate of growth in the number of beds
as reported in SNF Medicare cost report data on Worksheet S-3, part I,
column 1, line 8. A more detailed discussion of this methodology was
published in the FY 2022 SNF final rule (86 FR 42457). We proposed to
continue this methodology for the 2022-based SNF market basket by
extrapolating the 2018 bed data forward using the average growth in the
number of beds over the 2019 to 2022 time period. We then proposed to
use the change in the stock of beds each year to approximate building
and fixed equipment purchases for that year. This procedure assumes
that bed growth reflects the growth in capital-related costs in SNFs
for building and fixed equipment. We believe that this assumption is
reasonable because the number of beds reflects the size of a SNF, and
as a SNF adds beds, it also likely adds fixed capital.
As was done for the 2018-based SNF market basket (as well as prior
market baskets), we proposed to estimate movable equipment purchases
based on the ratio of ancillary costs to routine costs. The time series
of the ratio of ancillary costs to routine costs for SNFs measures
changes in intensity in SNF services, which are assumed to be
associated with movable equipment purchase patterns. The assumption
here is that as ancillary costs increase compared to routine costs, the
SNF caseload becomes more complex and would require more movable
equipment. The lack of movable equipment purchase data for SNFs over
time required us to use alternative SNF data sources. A more detailed
discussion of this methodology was published in the FY 2008 SNF final
rule (72 FR 43428). We believe the resulting two time series,
determined from beds and the ratio of ancillary to routine costs,
reflect real capital purchases of building and fixed equipment and
movable equipment over time.
To obtain nominal purchases, which are used to determine the
vintage weights for interest, we converted the two real capital
purchase series from 1963 through 2022 determined above to nominal
capital purchase series using their respective price proxies (the BEA
Chained Price Index for Nonresidential Construction for Hospitals &
Special Care Facilities and the PPI for Machinery and Equipment). We
then combined the two nominal series into one nominal capital purchase
series for 1963 through 2022. Nominal capital purchases are needed for
interest vintage weights to capture the value of debt instruments.
Once we created these capital purchase time series for 1963 through
2022, we averaged different periods to obtain an average capital
purchase pattern over time: (1) for building and fixed equipment, we
averaged 34, 27-year periods; (2) for movable equipment, we averaged
52, 9-year periods; and (3) for interest, we averaged 36, 25-year
periods. We calculate the vintage weight for a given year by dividing
the capital purchase amount in any given year by the total amount of
purchases during the expected useful life of the equipment or debt
instrument.
We did not receive any public comments on our proposed price
proxies used for each of the detailed capital cost categories or on our
methodology for deriving the vintage weights. For the reasons discussed
above and in the FY 2025 SNF PPS proposed rule, we are finalizing the
price proxies of the capital cost categories, the vintage weights, and
the methodology for deriving the vintage weights, as proposed without
modification.
The vintage weights for the 2022-based SNF market basket and the
2018-based SNF market basket are presented in Table 18.
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The process of creating vintage-weighted price proxies requires
applying the vintage weights to the price proxy index where the last
applied vintage weight in Table 18 is applied to the most recent data
point. We have provided on the CMS website an example of how the
vintage weighting price proxies are calculated, using example vintage
weights and example price indices. The example can be found at https://www.cms.gov/Research-Statistics-Data-and-Systems/Statistics-Trends-and-Reports/MedicareProgramRatesStats/MarketBasketResearch.html in the zip
file titled ``Weight Calculations as described in this IPPS FY 2010
Proposed Rule.''
After consideration of public comments, we are finalizing the 2022-
based SNF market basket as proposed. Table 19 shows all the price
proxies for the 2022-based SNF market basket.
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4. Labor-Related Share
We define the labor-related share (LRS) as those expenses that are
labor-intensive and vary with, or are influenced by, the local labor
market. Each year, we calculate a revised labor-related share based on
the relative importance of labor-related cost categories in the input
price index. Effective for FY 2025, we proposed to revise and update
the labor-related share to reflect the relative importance of the 2022-
based SNF market basket cost categories that we believe are labor-
intensive and vary with, or are influenced by, the local labor market.
For the 2022-based SNF market basket these are: (1) Wages and Salaries
(including allocated contract labor costs as described above); (2)
Employee Benefits (including allocated contract labor costs as
described above); (3) Professional Fees: Labor-Related; (4)
Administrative and Facilities Support Services; (5) Installation,
Maintenance, and Repair Services; (6) All Other: Labor-Related
Services; and (7) a proportion of capital-related expenses. We proposed
to continue to include a proportion of capital-related expenses because
a portion of these expenses are deemed to be labor-intensive and vary
with, or are influenced by, the local labor market. For example, a
proportion of construction costs for a medical building would be
attributable to local construction workers' compensation expenses.
Consistent with previous SNF market basket revisions and rebasings,
the All Other: Labor-related services cost category is mostly comprised
of building maintenance and security services (including, but not
limited to, landscaping services, janitorial services, waste management
services services) and dry cleaning and laundry services. Because these
services tend to be labor-intensive and are mostly performed at the SNF
facility or in the local area (and therefore, unlikely to be purchased
in the national market), we believe that they meet our definition of
labor-related services.
These are the same cost categories we have included in the labor-
related share for the 2018-based SNF market basket rebasing (86 FR
42461), as well as the same categories included in the labor-related
share for the 2021-based inpatient rehabilitation facility (IRF) market
basket (88 FR 50984), and 2021-based inpatient psychiatric facility
(IPF) market basket (88 FR 51078).
As discussed in the FY 2022 SNF PPS final rule (86 FR 42462), in an
effort to determine more accurately the share of nonmedical
professional fees (included in the 2022-based SNF market basket
Professional Fees cost categories) that should be included in the
labor-related share, we surveyed SNFs regarding the proportion of those
fees that are attributable to local firms and the proportion that are
purchased from national firms. Based on these weighted results, we
determined that SNFs purchase, on average, the following portions of
contracted professional services inside their local labor market:
78 percent of legal services.
86 percent of accounting and auditing services.
89 percent of architectural, engineering services.
87 percent of management consulting services.
Together, these four categories represent 3.6 percentage points of
the total costs for the proposed 2022-based SNF market basket. We
applied the percentages from this special survey to their respective
SNF market basket weights to separate them into labor-related and
nonlabor-related costs. As a result, we are designating 2.8 of the 3.6
percentage points total to the labor-related share, with the remaining
0.8 percentage point categorized as nonlabor-related.
In addition to the professional services as previously listed, for
the 2022-based SNF market basket, we proposed to allocate a proportion
of the Home Office/Related Organization Contract Labor cost weight,
calculated using the Medicare cost reports as previously stated, into
the Professional Fees: Labor-Related and Professional Fees: Nonlabor-
Related cost categories. We proposed to classify these expenses as
labor-related and nonlabor-related as many facilities are not located
in the same geographic area as their home office, and, therefore, do
not meet our definition for the labor-related share that requires the
services to be purchased in the local labor market.
Similar to the 2018-based SNF market basket, we proposed for the
2022-based SNF market basket to use the Medicare cost reports for SNFs
to determine the home office labor-related percentages. The Medicare
cost report requires a SNF to report information regarding its home
office provider. Using information on the Medicare cost report, we
compared the location of the SNF with the location of the SNF's home
office. We proposed to classify a SNF with a home office located in
their respective labor market if the SNF and its home office are
located in the same Metropolitan Statistical Area (MSA). Then we
determined the proportion of the Home Office/Related Organization
Contract Labor cost weight that should be allocated to the labor-
related share based on the percent of total Home Office/Related
Organization Contract Labor costs for those SNFs that had home offices
located in their respective local labor markets of total Home Office/
Related Organization Contract Labor costs for SNFs with a home office.
We determined a SNF's and its home office's MSA using their zip code
information from the Medicare cost report.
Using this methodology, we determined that 25 percent of SNFs' Home
Office/Related Organization Contract Labor costs were for home offices
located in their respective local labor markets. Therefore, we proposed
to allocate 25 percent of the Home Office/Related Organization Contract
Labor cost weight (0.1 percentage point = 0.6 percent x 25 percent) to
the Professional Fees: Labor-Related cost weight and 75 percent of the
Home Office/Related Organization Contract Labor cost weight to the
Professional Fees: Nonlabor-Related cost weight (0.4 percentage point =
0.6 percent x 75 percent). The 2018-based SNF market basket used a
similar methodology for allocating the Home Office/Related Organization
Contract Labor cost weight to the labor-related share.
In summary, based on the two allocations mentioned earlier, we
proposed to apportion 2.9 percentage points into the Professional Fees:
Labor-Related cost category consisting of the Professional Fees (2.8
percentage points) and Home Office/Related Organization Contract Labor
(0.1 percentage point) cost weights. This amount was added to the
portion of professional fees that we already identified as labor-
related using the I-O data such as contracted advertising and marketing
costs (approximately 0.6 percentage point of total costs) resulting in
a Professional Fees: Labor-Related cost weight of 3.6 percent.
Based on IHS Global, Inc.'s fourth-quarter 2023 forecast with
historical data through the third quarter of 2023, we proposed a FY
2025 labor-related share of 71.9 percent.
Comment: One commenter did not support any increases in the labor-
related share because facilities with a wage index less than 1.0 will
suffer financially from a rise in the labor-related share. They stated
that across the country, there is a growing disparity between the high-
wage and low-wage States.
Response: We appreciate the commenter's concern. However, for this
final rule, we are finalizing our proposal to rebase the SNF market
basket to reflect a 2022 base year so that we can
[[Page 64081]]
incorporate more recent data on SNF cost structures. In addition, we
calculate a labor-related share based on the relative importance of
labor-related cost categories, to account for historical and projected
price changes between the base year and the payment year (FY 2025 in
this rule). The price proxies for the different cost categories in the
market basket do not necessarily change at the same rate, and the
relative importance measure captures these changes. We recognize that a
change in the labor-related share can have differential impacts for
providers, but we believe it is important to continue to update the
labor-related share to reflect the current SNF cost environment.
As was stated in the FY 2025 SNF PPS proposed rule (89 FR 23451),
if more recent data subsequently became available, we would use such
data, if appropriate, to determine the FY 2025 SNF labor-related share
relative importance. Accordingly, based on IGI's second-quarter 2024
forecast with historical data through the first quarter of 2024, the
labor-related share for FY 2025 based on the finalized 2022-based SNF
market basket is 72.0 percent.
Table 20 compares the FY 2025 labor-related share based on the
2022-based SNF market basket relative importance and the FY 2024 labor-
related share based on the 2018-based SNF market basket relative
importance as finalized in the FY 2024 SNF final rule (88 FR 53213).
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The FY 2025 SNF labor-related share is 0.9 percentage point higher
than the FY 2024 SNF labor-related share (based on the 2018-based SNF
market basket). The higher labor-related share is primarily due to
incorporating the 2022 Medicare cost report data, which resulted in a
higher Compensation cost weight, as well as higher relative importance
of the Capital cost category.
5. FY 2025 Market Basket Percentage Increase for the SNF PPS Update
As discussed previously in this rule, beginning with the FY 2025
SNF PPS update, we are adopting the 2022-based SNF market basket as the
appropriate market basket of goods and services for the SNF PPS.
Consistent with historical practice, we estimate the market basket
update for the SNF PPS based on IHS Global Inc.'s (IGI) forecast. IGI
is a nationally recognized economic and financial forecasting firm with
which CMS contracts to forecast the components of the market baskets
and total factor productivity (TFP).
Based on IGI's fourth-quarter 2023 forecast with historical data
through the third quarter of 2023, the proposed 2022-based SNF market
basket update for FY 2025 was estimated to be 2.8 percent--which was
0.1 percentage point lower than the FY 2025 percent change of the 2018-
based SNF market basket. We are also proposed that if more recent data
subsequently became available (for example, a more recent estimate of
the market basket and/or the TFP), we would use such data, if
appropriate, to determine the FY 2025 SNF market basket percentage
increase, labor-related share, forecast error adjustment, or
productivity adjustment in the SNF PPS final rule. Accordingly, based
on IGI's second-quarter 2024 forecast with historical data through the
first quarter of 2024, the most recent estimate of the 2022-based SNF
market basket percentage increase for FY 2025 is 3.0 percent.
Table 21 compares the 2022-based SNF market basket and the 2018-
based SNF market basket percent changes. While there are slight
differences of up to 0.2 percentage point in certain years, there is no
difference in the average growth rates between the two market baskets
in the historical period (FY 2020-FY 2023) and a 0.1 percentage point
difference in the forecast period (FY 2024-FY 2026) when rounded to one
decimal place.
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B. Changes to SNF PPS Wage Index
1. Core-Based Statistical Areas (CBSAs) for the FY 2025 SNF PPS Wage
Index
a. Background
Section 1888(e)(4)(G)(ii) of the Act requires that we adjust the
Federal rates to account for differences in area wage levels, using a
wage index that the Secretary determines appropriate. Since the
inception of the SNF PPS, we have used hospital inpatient wage data in
developing a wage index to be applied to SNFs. We proposed to continue
this practice for FY 2025, as we continue to believe that in the
absence of SNF-specific wage data, using the hospital inpatient wage
index data is appropriate and reasonable for the SNF PPS. As explained
in the update notice for FY 2005 (69 FR 45786), the SNF PPS does not
use the hospital area wage index's occupational mix adjustment, as this
adjustment serves specifically to define the occupational categories
more clearly in a hospital setting; moreover, the collection of the
occupational wage data under the IPPS also excludes any wage data
related to SNFs. Therefore, we believe that using the updated wage data
exclusive of the occupational mix adjustment continues to be
appropriate for SNF payments. As in previous years, we would continue
to use, as the basis for the SNF PPS wage index, the IPPS hospital wage
data, unadjusted for occupational mix, without taking into account
geographic reclassifications under section 1886(d)(8) and (d)(10) of
the Act, and without applying the rural floor under section 4410 of the
BBA 1997 and the outmigration adjustment under section 1886(d)(13) of
the Act. For FY 2025, the updated wage data are for hospital cost
reporting periods beginning on or after October 1, 2020, and before
October 1, 2021 (FY 2021 cost report data).
The applicable SNF PPS wage index value is assigned to a SNF on the
basis of the labor market area in which the SNF is geographically
located. In the SNF PPS final rule for FY 2006 (70 FR 45026, August 4,
2005), we adopted the changes discussed in OMB Bulletin No. 03-04 (June
6, 2003), which announced revised definitions for Metropolitan
Statistical Area (MSA) and the creation of micropolitan statistical
areas and combined statistical areas. In adopting the Core-Based
Statistical Areas (CBSA) geographic designations, we provided for a 1-
year transition in FY 2006 with a blended wage index for all providers.
For FY 2006, the wage index for each provider consisted of a blend of
50 percent of the FY 2006 MSA-based wage index and 50 percent of the FY
2006 CBSA-based wage index (both using FY 2002 hospital data). We
referred to the blended wage index as the FY 2006 SNF PPS transition
wage index. As discussed in the SNF PPS final rule for FY 2006 (70 FR
45041), since the expiration of this 1-year transition on September 30,
2006, we have used the full CBSA-based wage index values.
In the FY 2015 SNF PPS final rule (79 FR 45644 through 45646), we
finalized changes to the SNF PPS wage index based on the newest OMB
delineations, as described in OMB Bulletin No. 13-01, beginning in FY
2015, including a 1-year transition with a blended wage index for FY
2015. OMB Bulletin No. 13-01 established revised delineations for MSAs,
Micropolitan Statistical Areas, and Combined Statistical Areas in the
United States and Puerto Rico based on the 2010 Census, and provided
guidance on the use of the delineations of these statistical areas
using standards published in the June 28, 2010 Federal Register (75 FR
37246 through 37252). Subsequently, on July 15, 2015, OMB issued OMB
Bulletin No. 15-01, which provided minor updates to and superseded OMB
Bulletin No. 13-01 that was issued on February 28, 2013. The attachment
to OMB Bulletin No. 15-01 provided detailed information on the update
to statistical areas since February 28, 2013. The updates provided in
OMB Bulletin No. 15-01 were based on the application of the 2010
Standards for Delineating Metropolitan and Micropolitan Statistical
Areas to Census Bureau population estimates for July 1, 2012 and July
1, 2013. In addition, on August 15, 2017, OMB issued Bulletin No. 17-01
which announced a new urban CBSA, Twin Falls, Idaho (CBSA 46300). As we
previously stated in the FY 2008 SNF PPS proposed and final rules (72
FR 25538 through 25539, and 72 FR 43423), and as we noted in the
proposed rule, this and all subsequent SNF PPS rules and notices are
considered to incorporate any updates and revisions set forth in the
most recent OMB bulletin that applies to the hospital wage data used to
determine the current SNF PPS wage index.
On April 10, 2018, OMB issued OMB Bulletin No. 18-03 which
superseded the August 15, 2017 OMB Bulletin No. 17-01. Subsequently, on
September 14, 2018, OMB issued OMB Bulletin No. 18-04, which superseded
the April 10, 2018 OMB Bulletin No. 18-03. These bulletins established
revised delineations for MSAs, Micropolitan Statistical Areas, and
Combined Statistical Areas, and provided guidance on the use of the
delineations of these statistical areas. A copy of OMB Bulletin No. 18-
04, may be obtained at https://www.whitehouse.gov/wp-content/uploads/2018/09/Bulletin-18-04.pdf.
[[Page 64083]]
While OMB Bulletin No. 18-04 is not based on new census data, it
includes some material changes to the OMB statistical area
delineations, including some new CBSAs, urban counties that would
become rural, rural counties that would become urban, and existing
CBSAs that would be split apart. OMB issued further revised CBSA
delineations in OMB Bulletin No. 20-01, on March 6, 2020 (available on
the web at https://www.whitehouse.gov/wp-content/uploads/2020/03/Bulletin-20-01.pdf). However, we determined that the changes in OMB
Bulletin No. 20-01 do not impact the CBSA-based labor market area
delineations adopted in FY 2021. Therefore, CMS did not propose to
adopt the revised OMB delineations identified in OMB Bulletin No. 20-01
for FY 2022 through FY 2024.
On July 21, 2023, OMB issued OMB Bulletin No. 23-01 (available at
https://www.whitehouse.gov/wp-content/uploads/2023/07/OMB-Bulletin-23-01.pdf) which updates and supersedes OMB Bulletin No. 20-01 based upon
the 2020 Standards for Delineating Core Based Statistical Areas (``the
2020 Standards'') published by the Office of Management and Budget
(OMB) on July 16, 2021 (86 FR 37770). OMB Bulletin No. 23-01 revised
CBSA delineations which are comprised of counties and equivalent
entities (for example, boroughs, a city and borough, and a municipality
in Alaska, planning regions in Connecticut, parishes in Louisiana,
municipios in Puerto Rico, and independent cities in Maryland,
Missouri, Nevada, and Virginia). For FY 2025, we are adopting the
revised OMB delineations identified in OMB Bulletin No. 23-01.
To implement these changes for the SNF PPS beginning in FY 2025, it
is necessary to identify the revised labor market area delineation for
each affected county and provider in the country. The revisions OMB
published on July 21, 2023 contain a number of significant changes. For
example, under the revised OMB delineations, there would be new CBSAs,
urban counties that would become rural, rural counties that would
become urban, and existing CBSAs that would split apart. We discussed
these changes in more detail in the proposed rule.
b. Implementation of Revised Labor Market Area Delineations
We typically delay implementing OMB labor market area delineations
to allow for sufficient time to assess the new changes. For example, as
discussed in the FY 2014 SNF PPS proposed rule (78 FR 26448) and final
rule (78 FR 47952), we delayed implementing the revised OMB statistical
area delineations described in OMB Bulletin No. 13-01 to allow for
sufficient time to assess the new changes. We believe it is important
for the SNF PPS to use the latest labor market area delineations
available as soon as is reasonably possible to maintain a more accurate
and up-to-date payment system that reflects the reality of population
shifts and labor market conditions. We further believe that using the
delineations reflected in OMB Bulletin No. 23-01 would increase the
integrity of the SNF PPS wage index system by creating a more accurate
representation of geographic variations in wage levels. We have
reviewed our findings and impacts relating to the revised OMB
delineations set forth in OMB Bulletin No. 23-01 and find no compelling
reason to further delay implementation. Because we believe we have
broad authority under section 1888(e)(4)(G)(ii) of the Act to determine
the labor market areas used for the SNF PPS wage index, and because we
believe the delineations reflected in OMB Bulletin No. 23-01 better
reflect the local economies and wage levels of the areas in which
hospitals are currently located, we proposed to implement the revised
OMB delineations as described in the July 21, 2023 OMB Bulletin No. 23-
01, for the SNF PPS wage index effective beginning in FY 2025. In
addition, we will apply the permanent 5 percent cap policy in FY 2025
on decreases in a hospital's wage index compared to its wage index for
the prior fiscal year (FY 2024) to assist providers in adapting to the
revised OMB delineations (if we finalize the implementation of such
delineations for the SNF PPS wage index beginning in FY 2025). This
policy is discussed in more detail in the proposed rule. We solicited
comments on these proposals.
We received public comments on these proposals. The following is a
summary of the comments we received and our responses.
Comment: Commenters generally support the proposed policies for FY
2025. One commenter stated that it ``seems to strike a balance between
fairly compensating SNFs, promoting quality care, and enhancing
regulatory oversight.'' Another commenter appreciates that CMS is not
requiring the commitment resources needed to do cost report audits at
this time. However, a number of these commenters also recommend CMS
continue to reform the wage index policies. These recommendations
included suggestions such as modifying the current methodology by
developing a reclassification policy similar to the hospital wage index
reclassification policy or developing a SNF-specific wage index.
Response: We appreciate the commenters' support of the wage index
proposed policies for FY 2025. In the absence of a SNF-specific wage
index, we continue to believe the use of the pre-reclassified and pre-
floor hospital wage data (without the occupational mix adjustment)
continue to be an appropriate and reasonable proxy for the SNF PPS. For
a detailed discussion of the rationale for our current wage index
policies and for responses to these recurring comments, we refer
readers to the FY 2024 SNF PPS final rule (88 FR 53211 through 53215)
and the FY 2016 SNF PPS final rule (80 FR 46401 through 46402).
Comment: One commenter, who disagrees with the proposed delineation
changes, specifically expressed concerns with the wage index decrease
of both Rock County, Minnesota, and McHenry County, North Dakota. Both
counties will transition from rural to urban designation and in turn
will experience slightly over a 12 percent decrease from FY 2024 to FY
2025. Due to the decline in wage index, the commenter strongly requests
CMS to review the wage index data for Trinity Health (the only rural
PPS hospital in North Dakota prior to the proposed designation change).
Response: We understand that some CBSAs may experience a wage index
decline compared to the previous fiscal year. For North Dakota, our
investigation discovered the wage data for Trinity Health (provider
350006) was audited in FY 2025 with no issues reported. The average
hourly wage reported for Trinity Health declined 7 percent since FY
2024. For the purposes of the SNF PPS, if a SNF (not hospital)
experience a rural or urban redesignation due to the proposed
delineation changes for FY 2025 and their wage index resulted in
decline since FY 2024, the 5 percent cap policy will be applied.
Therefore, we continue to believe that the 5 percent cap policy will
mitigate any significant decreases a SNF may experience due to the
revised OMB delineations. Additional details on the wage index
transition policy for FY 2025 is discussed further below in this
section. After consideration of public comments, we are finalizing our
proposal regarding the implementation of the revised labor market area
delineations for FY 2025.
(1) Micropolitan Statistical Areas
As discussed in the FY 2006 SNF PPS proposed rule (70 FR 29093
through 29094) and final rule (70 FR 45041), we
[[Page 64084]]
considered how to use the Micropolitan Statistical Area definitions in
the calculation of the wage index. OMB defines a ``Micropolitan
Statistical Area'' as a CBSA ``associated with at least one urban
cluster that has a population of at least 10,000, but less than
50,000'' (75 FR 37252). We refer to these as Micropolitan Areas. After
extensive impact analysis, consistent with the treatment of these areas
under the IPPS as discussed in the FY 2005 IPPS final rule (69 FR 49029
through 49032), we determined the best course of action would be to
treat Micropolitan Areas as ``rural'' and include them in the
calculation of each State's SNF PPS rural wage index (see 70 FR 29094
and 70 FR 45040 through 45041).
Thus, the SNF PPS statewide rural wage index is determined using
IPPS hospital data from hospitals located in non-MSA areas, and the
statewide rural wage index is assigned to SNFs located in those areas.
Because Micropolitan Areas tend to encompass smaller population centers
and contain fewer hospitals than MSAs, we determined that if
Micropolitan Areas were to be treated as separate labor market areas,
the SNF PPS wage index would have included significantly more single-
provider labor market areas. As we explained in the FY 2006 SNF PPS
proposed rule (70 FR 29094), recognizing Micropolitan Areas as
independent labor markets would generally increase the potential for
dramatic shifts in year-to-year wage index values because a single
hospital (or group of hospitals) could have a disproportionate effect
on the wage index of an area. Dramatic shifts in an area's wage index
from year-to-year are problematic and create instability in the payment
levels from year-to-year, which could make fiscal planning for SNFs
difficult if we adopted this approach. For these reasons, we adopted a
policy to include Micropolitan Areas in the State's rural wage area for
purposes of the SNF PPS wage index and have continued this policy
through the present.
We believe that the best course of action would be to continue the
policy established in the FY 2006 SNF PPS final rule and include
Micropolitan Areas in each State's rural wage index. These areas
continue to be defined as having relatively small urban cores
(populations of 10,000 to 49,999). We do not believe it would be
appropriate to calculate a separate wage index for areas that typically
may include only a few hospitals for the reasons discussed in the FY
2006 SNF PPS proposed rule, and as discussed earlier. Therefore, in
conjunction with our implementing of the revised OMB labor market
delineations beginning in FY 2025 and consistent with the treatment of
Micropolitan Areas under the IPPS, we proposed to continue to treat
Micropolitan Areas as ``rural'' and to include Micropolitan Areas in
the calculation of the State's rural wage index.
(2) Urban Counties That Would Become Rural Under the Revised OMB
Delineations
As previously discussed, we proposed to implement the new OMB
statistical area delineations (based upon the 2020 decennial Census
data) beginning in FY 2025 for the SNF PPS wage index. Our analysis
shows that a total of 54 counties (and county equivalents) that are
currently considered part of an urban CBSA will be considered located
in a rural area, for SNF PPS payment beginning in FY 2025, when we
adopt the new OMB delineations. Table 22 lists the 54 urban counties
that will be rural when we finalized our proposal to implement the new
OMB delineations.
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We proposed that, for purposes of determining the wage index under
the SNF PPS, the wage data for all hospitals located in the counties
listed in Table 22 would be considered rural when calculating their
respective State's rural wage index under the SNF PPS. We recognize
that rural areas typically have lower area wage index values than urban
areas, and SNFs located in these counties may experience a negative
impact in their SNF PPS payment due to the adoption of the revised OMB
delineations. Furthermore, for SNF providers currently located in an
urban county that will be considered rural when this proposal will be
finalized, we will utilize the rural unadjusted per diem rates, found
in Table 14, as the basis for determining payment rates for these
facilities beginning on October 1, 2024.
(3) Rural Counties That Would Become Urban Under the Revised OMB
Delineations
As previously discussed, we proposed to implement the revised OMB
statistical area delineations based upon OMB Bulletin No. 18-04
beginning in FY 2025. Analysis of these OMB statistical area
delineations shows that a total of 54 counties (and county equivalents)
that are currently located in rural areas will be located in urban
areas when we finalize our proposal to implement the revised OMB
delineations.
Table 23 lists the 54 rural counties that will be urban when we
finalize this proposal.
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We proposed that, for purposes of calculating the area wage index
under the SNF PPS, the wage data for hospitals located in the counties
listed in Table 23 will be included in their new respective urban
CBSAs. Typically, SNFs located in an urban area will receive a wage
index value higher than or equal to SNFs located in their State's rural
area. Furthermore, for SNFs currently located in a rural county that
will be considered urban when this proposal be finalized, we will
utilize the urban unadjusted per diem rates found in Table 23, as the
basis for determining the payment rates for these facilities beginning
October 1, 2024.
(4) Urban Counties That Would Move to a Different Urban CBSA Under the
Revised OMB Delineations
In addition to rural counties becoming urban and urban counties
becoming rural, several urban counties will shift from one urban CBSA
to another urban CBSA under adoption of the new OMB delineations. In
other cases, when we adopt the new OMB delineations, counties will
shift between existing and new CBSAs, changing the constituent makeup
of the CBSAs.
In one type of change, an entire CBSA will be subsumed by another
CBSA. For example, CBSA 31460 (Madera, CA) currently is a single county
(Madera, CA) CBSA. Madera County will be a part of CBSA 23420 (Fresno,
CA) under the new OMB delineations.
In another type of change, some CBSAs have counties that would
split off to become part of, or to form, entirely new labor market
areas. For example, CBSA 29404 (Lake County-Kenosha County, IL-WI)
currently is comprised of two counties (Lake County, IL, and Kenosha
County, WI). Under the new OMB delineations, Kenosha county will split
off and form the new CBSA 28450 (Kenosha, WI), while Lake county would
remain in CBSA 29404.
Finally, in some cases, a CBSA will lose counties to another
existing CBSA when we adopt the new OMB delineations. For example,
Meade County, KY, will move from CBSA 21060 (Elizabethtown-Fort Knox,
KY) to CBSA 31140 (Louisville/Jefferson County, KY-IN). CBSA 21060 will
still exist in the new labor market delineations with fewer constituent
counties. Table 24 lists the urban counties that will move from one
urban CBSA to another urban CBSA under the new OMB delineations.
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If providers located in these counties move from one CBSA to
another under the new OMB delineations, there may be impacts, both
negative and positive, upon their specific wage index values.
In other cases, adopting the revised OMB delineations will involve
a change only in CBSA name and/or number, while the CBSA continues to
encompass the same constituent counties. For example, CBSA 19430
(Dayton-Kettering, OH) will experience a change to its name and become
CBSA 19430 (Dayton-Kettering-Beavercreek, OH), while all of its three
constituent counties will remain the same. We consider these changes
(where only the CBSA name and/or number will change) to be
inconsequential changes with respect to the SNF PPS wage index. Table
25 sets forth a list of such CBSAs where there will be a change in CBSA
name and/or number only when we adopt the revised OMB delineations.
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5. Change to County-Equivalents in the State of Connecticut
The June 6, 2022 Census Bureau Notice (87 FR 34235-34240), OMB
Bulletin No. 23-01 replaced the 8 counties in Connecticut with 9 new
``Planning Regions.'' Planning regions now serve as county-equivalents
within the CBSA system. We proposed to adopt the planning regions as
county equivalents for wage index purposes. We believe it is necessary
to adopt this migration from counties to planning region county-
equivalents in order to maintain consistency with OMB updates. As
outlined in the proposed rule, we are providing the following crosswalk
with the current and proposed FIPS county and county-equivalent codes
and CBSA assignments.
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2. Transition Policy for FY 2025 Wage Index Changes
Overall, we believe that implementing the new OMB delineations will
result in wage index values being more representative of the actual
costs of labor in a given area. We recognize that some SNFs (43
percent) will experience decreases in their area wage index values as a
result of this change, though less than 1 percent of providers will
experience a significant decrease (that is, greater than 5 percent) in
their area wage index value. We also realize that many SNFs (57
percent) will have higher area wage index values after adopting the
revised OMB delineations.
CMS recognizes that SNFs in certain areas may experience reduced
payment due to the adoption of the revised OMB delineations and has
finalized transition policies to mitigate negative financial impacts
and provide stability to year-to-year wage index variations. In FY
2023, the 5 percent cap policy was made permanent for all SNFs. This 5
percent cap on reductions policy is discussed in further detail in FY
2023 final rule at 87 FR 47521 through 47523. It is CMS' long held
opinion that revised labor market delineations should be adopted as
soon as is possible to maintain the integrity the wage index system. We
believe the 5 percent cap policy will sufficiently mitigate significant
disruptive financial impacts on SNFs negatively affected by the
adoption of the revised OMB delineations. We do not believe any
additional transition is necessary considering that the current cap on
wage index decreases, which was not in place when implementing prior
decennial census updates in FY 2006 and FY 2015, ensures that a SNF's
wage index will not be less than 95 percent of its final wage index for
the prior year.
Furthermore, consistent with the requirement at section
1888(e)(4)(G)(ii) of the Act that wage index adjustments must be made
in a budget neutral manner, the applied 5 percent cap on the decrease
in an SNF's wage index will not result in any change in estimated
aggregate SNF PPS payments by applying a budget neutrality factor to
the unadjusted Federal per diem rates. The methodology for calculating
this budget neutrality factor is outlined in section III.D of the
proposed rule.
We solicited comments on our proposed implementation of revised
labor market area delineations. The proposed wage index applicable to
FY 2025 is set forth in Table A and B available on the CMS website at
https://cms.gov/Medicare/Medicare-Fee-for-Service-Payment/SNFPPS/WageIndex.html.
We received public comments on these proposals. The following is a
summary of the comments we received and our responses.
Comment: Several commenters support the existing 5 percent
permanent cap policy but raised concerns on varying impacts it has on
different providers. A commenter recommends that the 5 percent cap be
applied in a non-budget neutral manner. Another commenter suggest that
CMS apply a 1-year transition period to allow time to study the impact
of the delineation changes. A commenter suggest CMS lower the cap
amount to mitigate changes caused by revisions to the CBSA
delineations.
Response: We appreciate the commenters' support of the permanent 5
percent cap on wage index decreases policy. When the permanent 5
percent cap policy was established in FY 2023, our provider level
impact analysis determined approximately 97 percent of SNFs would
experience a wage index change within 5 percent. Therefore, we believe
applying a 5-percent cap on all wage index decreases each year,
regardless of the reason for the decrease, would effectively mitigate
instability in SNF PPS payments due to any significant wage index
decreases that may affect providers in any year. As discussed earlier
in this section, it is CMS' long held opinion that revised labor market
delineations should be adopted as soon as is possible to maintain the
integrity the wage index system. We believe the 5 percent cap policy
will sufficiently mitigate significant disruptive financial impacts on
SNFs negatively affected by the proposed adoption of the revised OMB
delineations. As for budget neutrality, we do not believe that the
permanent 5 percent cap policy for the SNF wage index should be applied
in a non-budget-neutral manner. As a matter of fact, the statute at
section 1888(e)(4)(G)(ii) of the Act requires that adjustments for
geographic variations in labor costs for a FY are made in a budget-
neutral manner. We refer readers to the FY 2023 SNF PPS final rule (87
FR 47521 through 47523) for a detailed discussion and for responses to
these and other comments relating to the wage index cap policy.
After consideration of public comments, we are finalizing our
proposal regarding the wage index adjustment for FY 2025.
C. Technical Updates to the PDPM ICD-10 Mappings
1. Background
In the FY 2019 SNF PPS final rule (83 FR 39162), we finalized the
implementation of the Patient Driven Payment Model (PDPM), effective
October 1, 2019. The PDPM utilizes the International Classification of
Diseases, 10th Revision, Clinical Modification (ICD-10-CM, hereafter
referred to as ICD-10) codes in several ways, including using the
patient's primary diagnosis to assign patients to clinical categories
under several PDPM components, specifically the PT, OT,
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SLP, and NTA components. While other ICD-10 codes may be reported as
secondary diagnoses and designated as additional comorbidities, the
PDPM does not use secondary diagnoses to assign patients to clinical
categories. The PDPM ICD-10 code to clinical category mapping, ICD-10
code to SLP comorbidity mapping, and ICD-10 code to NTA comorbidity
mapping (hereafter collectively referred to as the PDPM ICD-10 code
mappings) are available on the CMS website at https://www.cms.gov/Medicare/Medicare-Fee-for-Service-Payment/SNFPPS/PDPM.
In the FY 2020 SNF PPS final rule (84 FR 38750), we outlined the
process by which we maintain and update the PDPM ICD-10 code mappings,
as well as the SNF Grouper software and other such products related to
patient classification and billing, to ensure that they reflect the
most up to date codes. Beginning with the updates for FY 2020, we apply
non-substantive changes to the PDPM ICD-10 code mappings through a sub-
regulatory process consisting of posting the updated PDPM ICD-10 code
mappings on the CMS website at https://www.cms.gov/Medicare/Medicare-Fee-for-Service-Payment/SNFPPS/PDPM. Such nonsubstantive changes are
limited to those specific changes that are necessary to maintain
consistency with the most current PDPM ICD-10 code mappings.
On the other hand, substantive changes that go beyond the intention
of maintaining consistency with the most current PDPM ICD-10 code
mappings, such as changes to the assignment of a code to a clinical
category or comorbidity list, would be through notice and comment
rulemaking because they are changes that affect policy. We noted in the
proposed rule that in the case of any diagnoses that are either
currently mapped to Return to Provider or that we are finalizing to
classify into this category, this is not intended to reflect any
judgment on the importance of recognizing and treating these
conditions. Rather, we believe that there are more specific or
appropriate diagnoses that would better serve as the primary diagnosis
for a Part-A covered SNF stay.
2. Clinical Category Changes for New ICD-10 Codes for FY 2025
Each year, we review the clinical category assigned to new ICD-10
diagnosis codes and proposed changing the assignment to another
clinical category if warranted. This year, we proposed changing the
clinical category assignment for the following four new codes that were
effective on October 1, 2023.
E88.10 Metabolic Syndrome was initially mapped to the
clinical category of Medical Management. The National Institutes of
Health (NIH) defines metabolic syndrome as the presence of at least
three of the following traits: Large waist, elevated triglyceride
levels, reduced high-density lipoprotein (HDL) cholesterol, increased
blood pressure, and/or elevated fasting blood glucose. Metabolic
syndrome is a cluster of metabolic risk factors for cardiovascular
diseases and type 2 diabetes mellitus. The root causes of metabolic
syndrome are overweight/obesity, physical inactivity, and genetic
factors. Given this, treatment for Metabolic Syndrome typically occurs
outside of a Part A SNF stay and we do not believe it would serve
appropriately as the primary diagnosis for a Part A-covered SNF stay.
For this reason, we proposed to change the mapping of this code from
Medical Management to the clinical category of Return to Provider.
E88.811 Insulin Resistance Syndrome, Type A was initially
mapped to the clinical category of Medical Management. Type A insulin
resistance syndrome (TAIRS) is a rare disorder characterized by severe
insulin resistance due to defects in insulin receptor signaling and
treatment typically occurs outside of a Part A SNF stay. For this
reason, we proposed to change the mapping of this code from Medical
Management to the clinical category of Return to Provider.
E88.818 Other Insulin Resistance was initially mapped to
the clinical category of Medical Management. Other Insulin Resistance
is used to specify a medical diagnosis of other insulin resistance such
as Insulin resistance, Type B. Treatment typically occurs outside of a
Part A SNF stay. For this reason, we proposed to change the mapping of
this code from Medical Management to the clinical category of Return to
Provider.
E88.819 Insulin Resistance, Unspecified was initially
mapped to the clinical category of Medical Management and is utilized
to indicate when a specific type of insulin resistance has not been
specifically identified. Treatment typically occurs outside of a Part A
SNF stay. For this reason, we proposed to change the mapping of this
code from Medical Management to the clinical category of Return to
Provider.
We solicited comments on the proposed substantive changes to the
PDPM ICD-10 code mappings outlined in this section, as well as comments
on additional substantive and non-substantive changes that commenters
believe are necessary.
We received public comments on these proposals. The following is a
summary of the comments we received and our responses.
Comment: Several commenters supported the proposed reclassification
of the PDPM ICD-10 mappings of E88.10 Metabolic Syndrome, E88.811
Insulin Resistance Syndrome, E88.818 Other Insulin Resistance, and
E88.819 Insulin Resistance, Unspecified from Medical Management to the
Return to Provider (RTP) category. Commenters agreed these mapping
changes would improve billing accuracy, promote more appropriate
diagnoses for SNF stays, and ultimately improve patient care.
Response: We appreciate the support for these proposed ICD-10
mapping changes.
Comment: One commenter stated CMS should reconsider mapping ICD-10
code M62.81, Muscle Weakness (Generalized) from RTP to alternative
category and be used as a primary diagnosis.
Response: We considered this request and, as noted in 87 FR 47524,
continue to believe, as discussed in the FY 2023 SNF PPS final rule (87
FR 47524), that M62.81 Muscle Weakness (Generalized) is nonspecific and
if the original condition is resolved, but the resulting muscle
weakness persists because of the known original diagnosis, there are
more specific codes that exist that would account for why the muscle
weakness is on-going. Many musculoskeletal conditions are the result of
a previous injury or trauma to a site or are recurrent conditions. This
symptom, without any specification of the etiology or severity, is not
a reason for daily skilled care in a SNF. Patients with Muscle Weakness
(Generalized) should obtain a more specific diagnosis causing the
generalized muscle weakness. The specific diagnosis should be used to
develop an appropriate care plan for the patient.
Comment: Several commenters recommended that CMS consider
additional changes to the ICD-10 mappings. These include additional
dysphagia code mappings for the Speech Language Pathology component,
changes to how PDPM classifies dialysis patients, and adding codes that
will reflect complications related to the GI devices.
Response: We appreciate the comments and, to the extent that these
changes represent substantive changes to the ICD-10 code mappings, we
will consider these comments for future rulemaking.
After consideration of public comments, we are finalizing the
changes described above, as proposed.
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D. Request for Information: Update to PDPM Non-Therapy Ancillary
Component
1. Background
In the FY 2019 SNF PPS final rule (83 FR 39162), we finalized the
implementation of the PDPM, effective October 1, 2019. Under the PDPM,
payment is determined through the combination of six payment
components. Five of the components (PT, OT, SLP, NTA, and nursing) are
case-mix adjusted. Additionally, there is a non-case-mix adjusted
component to cover utilization of SNF resources that do not vary
according to patient characteristics.
The NTA component utilizes a comorbidity score to assign the
patient to an NTA component case-mix group, which is determined by the
presence of conditions or the use of extensive services (henceforth
also referred to as comorbidities) that were found to be correlated
with increases in NTA costs for SNF patients. The presence of these
comorbidities is reported by providers on certain items of the Minimum
Data Set (MDS) resident assessment, with some comorbidities being
identified by ICD-10-CM diagnosis codes (hereafter referred to as ICD-
10 codes) that are coded in Item I8000 of the MDS. MDS Item I8000 is an
open-ended item on the MDS assessment where the provider can fill in
additional active diagnoses for the patient that are either not
explicitly on the MDS, or are more severe or specific diagnoses, in the
form of ICD-10 codes. For conditions and extensive services where the
source is indicated as MDS Item I8000, CMS posts an NTA comorbidity to
ICD-10 mapping, available at https://www.cms.gov/medicare/payment/prospective-payment-systems/skilled-nursing-facility-snf/patient-driven-model, that provides a crosswalk between the listed condition
and the ICD-10 codes that may be coded to qualify that condition to
serve as part of the patient's NTA classification.
During the development of PDPM, CMS identified a list of 50
conditions and extensive services that were associated with increases
in NTA costs. Each of the 50 comorbidities used under PDPM for NTA
classification is assigned a certain number of points based on its
relative costliness. To determine the patient's NTA comorbidity score,
a provider would identify all the comorbidities for which a patient
would qualify and then add the points for each comorbidity together.
The resulting sum represents the patient's NTA comorbidity score, which
is then used to classify the patient into an NTA component
classification group. More information about the creation of the NTA
component scoring method can be found in section 3.7 of the SNF PDPM
Technical Report, available at https://www.cms.gov/medicare/payment/prospective-payment-systems/skilled-nursing-facility-snf/pps-model-research.
In response to feedback from interested parties, CMS stated in the
FY 2019 SNF PPS final rule that we would consider revisiting both the
list of comorbidities used under the NTA component and the points
assigned to each condition or extensive service based on changes in the
patient population and care practices over time (83 FR 39224).
Accordingly, in the FY 2025 SNF PPS proposed rule, we released a
request for information (RFI) soliciting comment on the methodology CMS
is currently considering for updating the NTA component (89 FR 23459
through 89 FR 23461).
2. Updates to the Study Population and Methodology
We are considering several changes to the NTA study population as a
foundation upon which to update the NTA component. First, we are
considering updating the years used for data corresponding to Medicare
Part A SNF stays, including claims, assessments, and cost reports. To
develop PDPM, CMS used a study population of Medicare Part A SNF stays
with admissions from FY 2014 through FY 2017 (see FY 2019 SNF PPS final
rule, 83 FR 39220). This methodology is described in more detail in
section 3.2.1 of the SNF PDPM technical report, available at https://www.cms.gov/medicare/payment/prospective-payment-systems/skilled-nursing-facility-snf/pps-model-research. The updated study population
will instead use Medicare Part A SNF stays with admissions from FY 2019
through FY 2022. However, as discussed in the FY 2023 SNF PPS final
rule (87 FR 47526 through 47528), data from much of this time period
was affected by the national COVID-19 PHE with significant impacts on
nursing homes. We are therefore considering using the same subset
population used for the PDPM parity adjustment recalibration by
excluding stays with either a COVID-19 diagnosis or stays using a
COVID-19 PHE-related modification under section 1812(f) of the Act.
Next, we are considering making certain methodological changes to
reflect more accurate and reliable coding of NTA conditions and
extensive services on SNF Part A claims and the MDS after PDPM
implementation. We had taken a broad approach when creating the initial
list of conditions and services used under the NTA component to predict
what NTA coding practices would be after PDPM implementation, given the
absence of analogous data in the previous Resource Utilization Groups,
Version IV (RUG-IV) payment model. The initial list of comorbidities
used under the NTA component was therefore created using data from a
variety of different sources, including using Medicare inpatient,
outpatient, and Part B claims to identify the presence of condition
categories from the Medicare Parts C and D risk adjustment models
(hereafter referred to as CCs and RxCCs, respectively). More
information about this methodology can be found in section 3.7 of the
SNF PDPM Technical Report, available at https://www.cms.gov/medicare/payment/prospective-payment-systems/skilled-nursing-facility-snf/pps-model-research. Given that we now have several years of post-PDPM
implementation data, we believe it would more accurately reflect the
coding of conditions and extensive services under PDPM to rely
exclusively upon SNF PPS Part A claims and the MDS. We are therefore
considering updating the methodology to only utilize SNF Part A claims
and the MDS, and not claim types from other Medicare settings.
Additionally, we are considering modifying the overlap methodology
to rely more upon the MDS items that use a checkbox to record the
presence of conditions and extensive services whenever possible, while
allowing for potentially more severe or specific diagnoses to be
indicated on MDS Item I8000 when it would be useful for more accurate
patient classification under PDPM. During the development of the NTA
component, CMS included both MDS items and ICD-10 diagnoses from the
Medicare Part C CCs and Part D RxCCs. Because the CCs were developed to
predict utilization of Medicare Part C services, while the RxCCs were
developed to predict Medicare Part D drug costs, the largest component
of NTA costs, we stated in the FY 2019 SNF PPS final rule that we
believed using both sources allowed us to define the conditions and
extensive services potentially associated with NTA utilization more
comprehensively (83 FR 39220). In cases where there was considerable
overlap between an MDS item and its CC or RxCC definition, to ensure
accurate estimation of statistically significant regression results, we
chose the CC or RxCC definition if it had higher average NTA cost per
day than the MDS item before
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running the final regression analysis. More information about this
methodology can be found in section 3.7 of the SNF PDPM Technical
Report, available at https://www.cms.gov/medicare/payment/prospective-payment-systems/skilled-nursing-facility-snf/pps-model-research.
Since the implementation of PDPM, we believe patient conditions and
extensive services are now more accurately and reliably reported by
providers using MDS items. We are therefore considering prioritizing
the reporting of conditions on the MDS by raising the cost threshold
for selecting the overlapping CC or RxCC definitions from any
additional cost to 5 dollars in average NTA cost per day, which is the
amount that we observe to be generally associated with a 1-point NTA
increase. Specifically, since any dollar amount less than 5 dollars
would render the two options indistinguishable from each other in the
point assignment when comparing relative costliness, choosing MDS items
over the overlapping CC or RxCC definitions will not lead to any loss
of the most expensive representations of the conditions and services in
the regression model.
3. Updates to Conditions and Extensive Services Used for NTA
Classification
Table 27 provides the list of conditions and extensive services
that would be used for NTA classification following the various changes
to the methodology described in the RFI. For each comorbidity, we have
also included the frequency of stays, the average NTA cost per day, the
ordinary least squares (OLS) estimate of its impact on NTA costs per
day, and the assigned number of points based on its relative impact on
a patient's NTA costs. Conditions and extensive services with a greater
impact on NTA costs were assigned more points, while those with less of
an impact were assigned fewer points. More information about this
methodology can be found in section 3.7 of the SNF PDPM Technical
Report, available at https://www.cms.gov/medicare/payment/prospective-payment-systems/skilled-nursing-facility-snf/pps-model-research.
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We solicited comments on the RFI for updates to the NTA component
of PDPM. The following is a summary of the comments we received.
Commenters supported some additions and opposed some removals to
the list of conditions and services used under the NTA component. Some
commenters thanked CMS for the additions of rheumatoid arthritis and
mobility devices for limb prosthesis. Other commenters objected to the
removal of several conditions, such as proliferative diabetic
retinopathy and vitreous hemorrhage, ostomy, malnutrition and at risk
for malnutrition, feeding tube, infection of and open lesions on the
foot, radiation, tracheostomy, pulmonary fibrosis and other chronic
lung disorders, and systemic lupus erythematosus, other connective
tissue disorders, and inflammatory spondylopathies.
Commenters requested that CMS consider other suggestions for the
list of conditions and services used under the NTA component, such as
increasing point values, adding other conditions, or not making any
changes to the list. For example, some commenters objected to decreased
points for parenteral IV feeding, invasive mechanical ventilator or
respirator, wound infections, and HIV/AIDS. Some commenters also
questioned the underlying data behind the OLS cost estimate decreases
for multi-drug resistant organism and morbid obesity, even though the
NTA point allocation did not change for those conditions, with some
commenters requesting increased points for morbid obesity. Commenters
further suggested that CMS consider adding comorbidities such as end-
stage renal disease, mental health-related diagnoses such as
schizophrenia and major depression, chemotherapy, end-of life
prognosis, and unstageable pressure injuries with slough or eschar. One
commenter objected to any changes to the current allocation of NTA
points, noting that reducing points for comorbidities that are commonly
admitted to SNFs, while adding points for comorbidities that are not as
commonly admitted, may result in reduced payment to facilities for
conditions that are frequently cared for. Similarly, another commenter
stated that while adding comorbidities makes sense, removing
comorbidities does not because the correlated increased cost was set by
the CMS data-driven studies completed for PDPM implementation.
Many commenters specifically objected to the removal of
malnutrition and at risk for malnutrition. These commenters emphasized
that malnutrition is prevalent among beneficiaries in the post-acute
care setting, with undiagnosed and untreated malnutrition potentially
resulting in a gradual deterioration of overall health and a decline in
both physical and cognitive capabilities. In turn, malnutrition can
lead to extended hospital stays, increased readmission rates, a wide
range of chronic health issues (commonly the development of pressure
injuries, infections, decreased ability to complete activities of daily
living, and frailty/fractures), and fatalities. Additionally, if
malnutrition is not identified and treated early, the need and
incidence for placement of an enteral feeding tube is heightened, which
precipitates more risk and expense. Commenters were concerned that
removing malnutrition from the list of comorbidities used under the NTA
component could prevent needed resources from going to this population
and reduce the importance of the role of registered dietitians, who are
integral members of the patient care team. Many commenters suggested
that malnutrition should increase to two NTA points while leaving at
risk for malnutrition and tube feeding at one NTA point. One commenter
suggested that malnutrition should become a stand-alone therapy for
increased reimbursement separate from the list of conditions and
services used under the NTA component.
Other commenters suggested that the criteria for defining
malnutrition could be further refined, rather than being removed
entirely from the list of comorbidities used under the NTA component.
For example, commenters noted that registered dietitian nutritionists
receive evidenced-based training to identify malnutrition using the
validated Academy of Nutrition and Dietetics and American Society for
Parenteral and Enteral Nutrition (ASPEN) indicators of malnutrition
(AAIM) and suggested that CMS adopt the AAIM criteria in the RAI manual
for MDS Item I5600 malnutrition (protein or calorie) or at risk for
malnutrition. Some commenters suggested that CMS utilize the ICD-10
diagnosis code range E40 through E46 to define malnutrition and exclude
at risk of malnutrition because there is no official ICD-10 diagnosis
code. Many commenters suggested that CMS provide clear guidance
consisting of specific examples and coding criteria in the RAI manual
for malnutrition or at risk for malnutrition, which would ensure
consistency and accuracy in coding practices across healthcare
facilities.
We also received some comments about the data and methodology that
we presented in this RFI for how CMS revised the list of comorbidities
used under the NTA component. Some commenters supported updating the
NTA study methodology with more recent data, while excluding those with
COVID-19 diagnoses. However, other commenters stated that there was
insufficient information provided in the RFI to provide meaningful and
specific feedback. Commenters recommended that CMS work through
potential NTA component changes in a more transparent manner, such as
publishing more detailed data and considering other opportunities to
gain additional feedback from interested parties.
[[Page 64099]]
Commenters objected to the use of FY 2019 through FY 2022 data because
of the COVID-19 PHE and the effects of this PHE on the SNF patient
population and data collected during this time, suggesting that CMS
should instead use more stable data from FY 2022 onwards with no COVID-
19 related data exclusions. Some commenters recommended that CMS wait
until it has at least three years of data after the end of the COVID-19
PHE. Commenters generally agreed with CMS' methodological approaches to
only utilize SNF Part A claims and the MDS and not claim types from
other Medicare settings that were used as a proxy to develop PDPM, but
requested the flexibility to use such data in the future to include new
NTA conditions as needed, such as emergent diagnoses, treatment
innovations, or costs associated with certain CMS policies such as
Enhanced Barrier Precautions (EBP) in nursing homes. Lastly, commenters
generally agreed with modifying the overlap methodology to rely more
upon MDS items that use a checkbox to record the presence of conditions
and extensive services, but disagreed with CMS' method of prioritizing
the MDS items by raising the cost threshold for selecting the
overlapping CC or RxCC definitions (comprised of ICD-10 diagnosis codes
to be entered into MDS Item I8000) from any additional cost to five
dollars in average NTA cost per day.
Finally, commenters sought clarification on whether routine updates
to the NTA component would be needed or beneficial in the future, as
well as on the net financial impacts and if the changes would be
implemented in a budget-neutral manner.
We thank commenters for their responses to the NTA RFI and we will
take these comments under advisement as we consider proposed changes to
the NTA component of PDPM in future rulemaking.
VII. Skilled Nursing Facility Quality Reporting Program (SNF QRP)
A. Background and Statutory Authority
The Skilled Nursing Facility Quality Reporting Program (SNF QRP) is
authorized by section 1888(e)(6) of the Act, and it applies to
freestanding SNFs, SNFs affiliated with acute care facilities, and all
non-critical access hospital (CAH) swing-bed rural hospitals. Section
1888(e)(6)(A)(i) of the Act requires the Secretary to reduce by 2
percentage points the annual market basket percentage increase
described in section 1888(e)(5)(B)(i) of the Act applicable to a SNF
for a fiscal year (FY), after application of section 1888(e)(5)(B)(ii)
of the Act (the productivity adjustment) and section 1888(e)(5)(B)(iii)
of the Act, in the case of a SNF that does not submit data in
accordance with sections 1888(e)(6)(B)(i)(II) and (III) of the Act for
that FY. Section 1890A of the Act requires that the Secretary establish
and follow a pre-rulemaking process, in coordination with the
consensus-based entity (CBE) with a contract under section 1890(a) of
the Act, to solicit input from certain groups regarding the selection
of quality and efficiency measures for the SNF QRP. We have codified
our program requirements in our regulations at Sec. 413.360.
In the proposed rule, we proposed to require SNFs to collect and
submit through the Minimum Data Set (MDS) four new items and modify one
item on the MDS as described in section VI.C. of the proposed rule. In
section VI.E.3. of the proposed rule, we proposed to adopt a similar
validation process for the SNF QRP that we adopted for the SNF VBP, and
to amend regulation text at Sec. 413.360 to implement the validation
process we proposed. We also sought information on future measure
concepts for the SNF QRP in section VI.D. of the proposed rule.
B. General Considerations Used for the Selection of Measures for the
SNF QRP
For a detailed discussion of the considerations we use for the
selection of SNF QRP quality, resource use, or other measures, we refer
readers to the FY 2016 SNF PPS final rule (80 FR 46429 through 46431).
1. Quality Measures Currently Adopted for the SNF QRP
The SNF QRP currently has 15 adopted measures, which are listed in
Table 28. For a discussion of the factors used to evaluate whether a
measure should be removed from the SNF QRP, we refer readers to Sec.
413.360(b)(2).
[[Page 64100]]
[GRAPHIC] [TIFF OMITTED] TR06AU24.032
We did not propose to adopt any new measures for the SNF QRP.
C. Collection of Four New Items as Standardized Patient Assessment Data
Elements and Modification of One Item Collected as a Standardized
Patient Assessment Data Element Beginning With the FY 2027 SNF QRP
In the proposed rule, we proposed to require SNFs to report the
following four new items \2\ as standardized patient assessment data
elements under the social determinants of health (SDOH) category: one
item for Living Situation; two items for Food; and one item for
Utilities. We also proposed to modify one of the current items
collected as a standardized patient assessment data element under the
SDOH category (the Transportation item), as described in section
VI.C.5. of the proposed rule.\3\
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\2\ Items may also be referred to as ``data elements.''
\3\ As noted in section VI.C.3 of the proposed rule and section
VII.C.3 of this final rule, hospitals are required to report whether
they have screened patients for five standardized SDOH categories:
housing instability, food insecurity, utility difficulties,
transportation needs, and interpersonal safety.
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1. Definition of Standardized Patient Assessment Data
Section 1888(e)(6)(B)(i)(III) of the Act requires SNFs to submit
standardized patient assessment data required under section 1899B(b)(1)
of the Act. Section 1899B(b)(1)(A) of the Act requires post-acute care
(PAC) providers to submit standardized patient assessment data under
applicable reporting provisions (which, for SNFs, is the SNF QRP) with
respect to the admission and discharge of an individual (and more
frequently as the Secretary deems appropriate) using a standardized
patient assessment instrument. Section 1899B(a)(1)(C) of the Act
requires, in part, the Secretary to modify the PAC assessment
instruments in order for PAC providers, including SNFs, to submit
standardized patient assessment data under the Medicare program. SNFs
are currently required to report standardized patient assessment data
through the patient assessment instrument, referred to as the MDS.
Section 1899B(b)(1)(B) of the Act describes standardized patient
assessment data as data required for at least the quality measures
described in section 1899B(c)(1) of the Act and that is with respect to
the following categories: (1) functional status, such as mobility and
self-care at admission to a PAC provider and before discharge from a
PAC provider; (2) cognitive function, such as ability to express ideas
and to understand, and mental status, such as depression and dementia;
(3) special services, treatments, and interventions, such as need for
ventilator use, dialysis, chemotherapy, central line placement, and
total parenteral nutrition; (4) medical conditions and comorbidities,
such as diabetes, congestive heart failure, and pressure ulcers; (5)
impairments, such as incontinence and an impaired ability to hear, see,
or swallow, and (6) other categories deemed necessary and appropriate
by the Secretary.
2. Social Determinants of Health Collected as Standardized Patient
Assessment Data Elements
Section 1899B(b)(1)(B)(vi) of the Act authorizes the Secretary to
collect standardized patient assessment data elements with respect to
other categories deemed necessary and appropriate. Accordingly, we
finalized the creation of the SDOH category of
[[Page 64101]]
standardized patient assessment data elements in the FY 2020 SNF PPS
final rule (84 FR 38805 through 38817), and defined SDOH as the
socioeconomic, cultural, and environmental circumstances in which
individuals live that impact their health.\4\ According to the World
Health Organization, research shows that the SDOH can be more important
than health care or lifestyle choices in influencing health, accounting
for between 30 to 55 percent of health outcomes.\5\ This is part of a
growing body of research that highlights the importance of SDOH on
health outcomes. Subsequent to the FY 2020 SNF PPS final rule, we
expanded our definition of SDOH: SDOH are the conditions in the
environments where people are born, live, learn, work, play, worship,
and age that affect a wide range of health, functioning, and quality-
of-life outcomes and risks.6 7 8 This expanded definition
aligns our definition of SDOH with the definition used by HHS agencies,
including OASH, the Centers for Disease Control and Prevention (CDC)
and the White House Office of Science and Technology
Policy.9 10 We currently collect seven items in this SDOH
category of standardized patient assessment data elements: ethnicity,
race, preferred language, interpreter services, health literacy,
transportation, and social isolation (84 FR 38805 through 38817).\11\
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\4\ FY 2020 SNF PPS final rule (84 FR 38805).
\5\ World Health Organization. Social determinants of health.
Available at https://www.who.int/health-topics/social-determinants-of-health#tab=tab_1.
\6\ Using Z Codes: The Social Determinants of Health (SDOH).
Data Journey to Better Outcomes.
\7\ Improving the Collection of Social Determinants of Health
(SDOH) Data with ICD-10-CM Z Codes. https://www.cms.gov/files/document/cms-2023-omh-z-code-resource.pdf.
\8\ CMS.gov. Measures Management System (MMS). CMS Focus on
Health Equity. Health Equity Terminology and Quality Measures.
https://mmshub.cms.gov/about-quality/quality-at-CMS/goals/cms-focus-on-health-equity/health-equity-terminology.
\9\ Centers for Disease Control and Prevention. Social
Determinants of Health (SDOH) and PLACES Data.
\10\ ``U.S. Playbook To Address Social Determinants Of Health''
from the White House Office Of Science And Technology Policy
(November 2023).
\11\ These SDOH data are also collected for purposes outlined in
section 2(d)(2)(B) of the Improving Medicare Post-Acute Care
Transitions Act (IMPACT Act). For a detailed discussion on SDOH data
collection under section 2(d)(2)(B) of the IMPACT Act, see the FY
2020 SNF PPS final rule (84 FR 38805 through 38817).
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In accordance with our authority under section 1899B(b)(1)(B)(vi)
of the Act, we similarly finalized the creation of the SDOH category of
standardized patient assessment data elements for Inpatient
Rehabilitation Facilities (IRFs) in the FY 2020 IRF PPS final rule (84
FR 39149 through 39161), for Long-Term Care Hospitals (LTCHs) in the FY
2020 Inpatient Prospective Payment System (IPPS)/LTCH PPS final rule
(84 FR 42577 through 84 FR 42588), and for Home Health Agencies (HHAs)
in the Calendar Year (CY) 2020 HH PPS final rule (84 60597 through
60608). We also collect the same seven SDOH items in these PAC
providers' respective patient assessment instruments (84 FR 39161, 84
FR 42590, and 84 FR 60610, respectively).
Access to standardized data relating to SDOH on a national level
permits us to conduct periodic analyses, and to assess their
appropriateness as risk adjustors or in future quality measures. Our
ability to perform these analyses relies on existing data collection of
SDOH items from PAC settings. We adopted these SDOH items using common
standards and definitions across the four PAC providers to promote
interoperable exchange of longitudinal information among these PAC
providers, including SNFs, and other providers. We believe this
information may facilitate coordinated care, continuity in care
planning, and the discharge planning process from PAC settings.
We noted in the FY 2020 SNF PPS final rule that each of the items
we were adopting at that time was identified in the 2016 National
Academies of Sciences, Engineering, and Medicine (NASEM) report as
impacting care use, cost and outcomes for Medicare beneficiaries (84 FR
38806). At that time, we acknowledged that other items may also be
useful to understand. The SDOH items we proposed to adopt as
standardized patient assessment data elements under the SDOH category
in the proposed rule were also identified in the 2016 NASEM report \12\
or the 2020 NASEM report \13\ as impacting care use, cost and outcomes
for Medicare beneficiaries. The items have the capacity to take into
account treatment preferences and care goals of residents and their
caregivers, to inform our understanding of resident complexity and SDOH
that may affect care outcomes, and ensure that SNFs are in a position
to impact them through the provision of services and supports, such as
connecting residents and their caregivers with identified needs with
social support programs.
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\12\ National Academies of Sciences, Engineering, and Medicine.
2016. Accounting for Social Risk Factors in Medicare Payment:
Identifying Social Risk Factors. Washington, DC: The National
Academies Press. https://doi.org/10.17226/21858.
\13\ National Academies of Sciences, Engineering, and Medicine.
2020. Leading Health Indicators 2030: Advancing Health, Equity, and
Well-Being. Washington, DC: The National Academies Press. https://doi.org/10.17226/25682.
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Health-related social needs (HRSNs) are individual-level, adverse
social conditions that negatively impact a person's health or health
care,\14\ and are the resulting effects of SDOH. Examples of HRSNs
include lack of access to food, housing, or transportation, and have
been associated with poorer health outcomes, greater use of emergency
departments and hospitals, and higher health care costs.\15\ Certain
HRSNs can directly influence an individual's physical, psychosocial,
and functional status. This is particularly true for food security,
housing stability, utilities security, and access to
transportation.\16\
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\14\ Centers for Medicare & Medicaid Services. ``A Guide to
Using the Accountable Health Communities Health-Related Social Needs
Screening Tool: Promising Practices and Key Insights.'' August 2022.
Available at https://www.cms.gov/priorities/innovation/media/document/ahcm-screeningtool-companion.
\15\ Berkowitz, S.A., T.P. Baggett, and S.T. Edwards,
``Addressing Health-Related Social Needs: Value-Based Care or
Values-Based Care?'' Journal of General Internal Medicine, vol. 34,
no. 9, 2019, pp. 1916-1918, https://doi.org/10.1007/s11606-019-05087-3.
\16\ Hugh Alderwick and Laura M. Gottlieb, ``Meanings and
Misunderstandings: A Social Determinants of Health Lexicon for
Health Care Systems: Milbank Quarterly,'' Milbank Memorial Fund,
November 18, 2019, https://www.milbank.org/quarterly/articles/meanings-and-misunderstandings-a-social-determinants-of-health-lexicon-for-health-care-systems/.
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We proposed to require SNFs to collect and submit four new items in
the MDS as standardized patient assessment data elements under the SDOH
category because these items would collect information not already
captured by the current SDOH items. Specifically, we believe the
ongoing identification of SDOH would have three significant benefits.
First, promoting screening for these SDOH could serve as evidence-based
building blocks for supporting healthcare providers in actualizing
their commitment to address disparities that disproportionately impact
underserved communities. Second, screening for SDOH improves health
equity through identifying potential social needs so the SNF may
address those with the resident, their caregivers, and community
partners during the discharge planning process, if indicated.\17\
Third, these SDOH items could support our ongoing SNF QRP initiatives
by providing data with which to stratify SNF's performance on
[[Page 64102]]
measures and in future quality measures.
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\17\ American Hospital Association (2020). Health Equity,
Diversity & Inclusion Measures for Hospitals and Health System
Dashboards. December 2020. Accessed: January 18, 2022. Available at
https://ifdhe.aha.org/system/files/media/file/2020/12/ifdhe_inclusion_dashboard.pdf.
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Collection of additional SDOH items would permit us to continue
developing the statistical tools necessary to maximize the value of
Medicare data and improve the quality of care for all beneficiaries.
For example, we recently developed and released the Health Equity
Confidential Feedback Reports, which provided data to SNFs on whether
differences in quality measure outcomes are present for their residents
by dual-enrollment status and race and ethnicity.\18\ We noted in the
proposed rule that advancing health equity by addressing the health
disparities that underlie the country's health system is one of our
strategic pillars \19\ and a Biden-Harris Administration priority.\20\
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\18\ In October 2023, we released two new annual Health Equity
Confidential Feedback Reports to SNFs: The Discharge to Community
(DTC) Health Equity Confidential Feedback Report and the Medicare
Spending Per Beneficiary (MSPB) Health Equity Confidential Feedback
Report. The PAC Health Equity Confidential Feedback Reports
stratified the DTC and MSPB measures by dual-enrollment status and
race/ethnicity. For more information on the Health Equity
Confidential Feedback Reports, please refer to the Education and
Outreach materials available on the SNF QRP Training web page at
https://www.cms.gov/Medicare/Quality-Initiatives-Patient-Assessment-Instruments/NursingHomeQualityInits/Skilled-Nursing-Facility-Quality-Reporting-Program/SNF-Quality-Reporting-Program-Training.
\19\ Brooks-LaSure, C. (2021). My First 100 Days and Where We Go
from Here: A Strategic Vision for CMS. Centers for Medicare &
Medicaid. Available at https://www.cms.gov/blog/my-first-100-days-and-where-we-go-here-strategic-vision-cms.
\20\ The Biden-Harris Administration's strategic approach to
addressing health related social needs can be found in The U.S.
Playbook to Address Social Determinants of Health (SDOH) (2023):
https://www.whitehouse.gov/wp-content/uploads/2023/11/SDOH-Playbook-3.pdf.
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3. Collection of Four New Items as Standardized Patient Assessment Data
Elements Beginning With the FY 2027 SNF QRP
We proposed to require SNFs to collect and submit four new items as
standardized patient assessment data elements under the SDOH category
using the MDS: one item for Living Situation, as described in section
VI.C.3.(a) of the proposed rule; two items for Food, as described in
section VI.C.3.(b) of the proposed rule; and one item for Utilities, as
described in section VI.C.3.(c) of the proposed rule.
We selected the SDOH items from the Accountable Health Communities
(AHC) Health-Related Social Needs (HRSN) Screening Tool developed for
the AHC Model.\21\ The AHC HRSN Screening Tool is a universal,
comprehensive screening for HRSNs that addresses five core domains as
follows: (1) housing instability (for example, homelessness, poor
housing quality); (2) food insecurity; (3) transportation difficulties;
(4) utility assistance needs; and (5) interpersonal safety concerns
(for example, intimate-partner violence, elder abuse, child
maltreatment).\22\
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\21\ The AHC Model was a 5-year demonstration project run by the
Centers for Medicare & Medicaid Innovation between May 1, 2017 and
April 30, 2023. For more information go to https://www.cms.gov/priorities/innovation/innovation-models/ahcm.
\22\ More information about the AHC HRSN Screening Tool is
available on the website at https://innovation.cms.gov/Files/worksheets/ahcm-screeningtool.pdf.
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We believe that requiring SNFs to report the Living Situation,
Food, Utilities, and Transportation items that are included in the AHC
HRSN Screening Tool will further standardize the screening of SDOH
across quality programs. For example, as outlined in the proposed rule,
our proposal will align, in part, with the requirements of the Hospital
Inpatient Quality Reporting (IQR) Program and the Inpatient Psychiatric
Facility Quality Reporting (IPFQR) Program. As of January 2024,
hospitals are required to report whether they have screened patients
for the standardized SDOH categories of housing instability, food
insecurity, utility difficulties, transportation needs, and
interpersonal safety to meet the Hospital IQR Program requirements.\23\
Additionally, beginning January 2025, IPFs will also be required to
report whether they have screened patients for the same set of SDOH
categories.\24\ As we continue to standardize data collection across
PAC settings, we believe using common standards and definitions for new
items is important to promote interoperable exchange of longitudinal
information between SNFs and other providers to facilitate coordinated
care, continuity in care planning, and the discharge planning process.
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\23\ Centers for Medicare & Medicaid Services, FY2023 IPPS/LTCH
PPS final rule (87 FR 49202 through 49215).
\24\ Centers for Medicare & Medicaid Services, FY2024 Inpatient
Psychiatric Prospective Payment System--Rate Update (88 FR 51107
through 51121).
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Below we describe each of the four items in more detail.
(a) Living Situation
Healthy People 2030 prioritizes economic stability as a key SDOH,
of which housing stability is a component.25 26 Lack of
housing stability encompasses several challenges, such as having
trouble paying rent, overcrowding, moving frequently, or spending the
bulk of household income on housing.\27\ These experiences may
negatively affect one's physical health and access to health care.
Housing instability can also lead to homelessness, which is housing
deprivation in its most severe form.\28\ On a single night in 2023,
roughly 653,100 people, or 20 out of every 10,000 people in the United
States, were experiencing homelessness.\29\ Studies also found that
people who are homeless have an increased risk of premature death and
experience chronic disease more often than among the general
population.\30\ We believe that SNFs can use information obtained from
the Living Situation item during a resident's discharge planning. For
example, SNFs could work in partnership with community care hubs and
community-based organizations to establish new care transition
workflows, including referral pathways, contracting mechanisms, data
sharing strategies, and implementation training that can track HRSNs to
ensure unmet needs, such as housing, are successfully addressed through
closed loop referrals and follow-up.\31\ SNFs could also take action to
help alleviate a resident's other related costs of living, like food,
by
[[Page 64103]]
referring the resident to community-based organizations that would
allow the resident's additional resources to be allocated towards
housing without sacrificing other needs.\32\ Finally, SNFs could use
the information obtained from the Living Situation item to better
coordinate with other healthcare providers, facilities, and agencies
during transitions of care, so that referrals to address a resident's
housing stability are not lost during vulnerable transition periods.
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\25\ Office of Disease Prevention and Health Promotion. (n.d.).
Healthy People 2030 [verbar] Priority Areas: Social Determinants of
Health. Retrieved from U.S. Department of Health and Human Services:
https://health.gov/healthypeople/priority-areas/social-determinants-health.
\26\ Healthy People 2030 is a long-term, evidence-based effort
led by the U.S. Department of Health and Human Services (HHS) that
aims to identify nationwide health improvement priorities and
improve the health of all Americans.
\27\ Kushel, M.B., Gupta, R., Gee, L., & Haas, J.S. (2006).
Housing instability and food insecurity as barriers to health care
among low-income Americans. Journal of General Internal Medicine,
21(1), 71-77. doi: 10.1111/j.1525-1497.2005.00278.x.
\28\ Homelessness is defined as ``lacking a regular nighttime
residence or having a primary nighttime residence that is a
temporary shelter or other place not designed for sleeping.''
Crowley, S. (2003). The affordable housing crisis: Residential
mobility of poor families and school mobility of poor children.
Journal of Negro Education, 72(1), 22-38. https://doi.org/10.2307/3211288.
\29\ The 2023 Annual Homeless Assessment Report (AHAR) to
Congress. The U.S. Department of Housing and Urban Development 2023.
https://www.huduser.gov/portal/sites/default/files/pdf/2023-AHAR-Part-1.pdf.
\30\ Baggett, T.P., Hwang, S.W., O'Connell, J.J., Porneala,
B.C., Stringfellow, E.J., Orav, E.J., Singer, D.E., & Rigotti, N.A.
(2013). Mortality among homeless adults in Boston: Shifts in causes
of death over a 15-year period. JAMA Internal Medicine, 173(3), 189-
195. https://doi.org/10.1001/jamainternmed.2013.1604. Schanzer, B.,
Dominguez, B., Shrout, P.E., & Caton, C.L. (2007). Homelessness,
health status, and health care use. American Journal of Public
Health, 97(3), 464-469. doi: https://doi.org/10.2105/ajph.2005.076190.
\31\ U.S. Department of Health & Human Services (HHS), Call to
Action, ``Addressing Health Related Social Needs in Communities
Across the Nation.'' November 2023. https://aspe.hhs.gov/sites/default/files/documents/3e2f6140d0087435cc6832bf8cf32618/hhs-call-to-action-health-related-social-needs.pdf.
\32\ Henderson, K.A., Manian, N., Rog, D.J., Robison, E., Jorge,
E., AlAbdulmunem, M. ``Addressing Homelessness Among Older Adults''
(Final Report). Washington, DC: Office of the Assistant Secretary
for Planning and Evaluation, U.S. Department of Health and Human
Services. October 26, 2023.
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Due to the potential negative impacts housing instability can have
on a resident's health, we proposed to adopt the Living Situation item
as a new standardized patient assessment data element under the SDOH
category. The proposed Living Situation item is based on the Living
Situation item collected in the AHC HRSN Screening
Tool,33 34 and was adapted from the Protocol for Responding
to and Assessing Patients' Assets, Risks, and Experiences (PRAPARE)
tool.\35\ The proposed Living Situation item asks, ``What is your
living situation today?'' The proposed response options are: (0) I have
a steady place to live; (1) I have a place to live today, but I am
worried about losing it in the future; (2) I do not have a steady place
to live; (7) Resident declines to respond; and (8) Resident unable to
respond. A draft of the Living Situation item proposed as a
standardized patient assessment data element under the SDOH category
can be found in the Downloads section of the SNF QRP Measures and
Technical Information web page at https://www.cms.gov/medicare/quality/snf-quality-reporting-program/measures-and-technical-information.
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\33\ More information about the AHC HRSN Screening Tool is
available on the website at https://innovation.cms.gov/Files/worksheets/ahcm-screeningtool.pdf.
\34\ The AHC HRSN Screening Tool Living Situation item includes
two questions. In an effort to limit SNF burden, we only proposed
the first question.
\35\ National Association of Community Health Centers and
Partners, National Association of Community Health Centers,
Association of Asian Pacific Community Health Organizations,
Association OPC, Institute for Alternative Futures. ``PRAPARE.''
2017. https://prapare.org/the-prapare-screening-tool/.
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(b) Food
The U.S. Department of Agriculture, Economic Research Service
defines a lack of food security as a household-level economic and
social condition of limited or uncertain access to adequate food.\36\
Adults who are food insecure may be at an increased risk for a variety
of negative health outcomes and health disparities. For example, a
study found that food-insecure adults may be at an increased risk for
obesity.\37\ Another study found that food-insecure adults have a
significantly higher probability of death from any cause or
cardiovascular disease in long-term follow-up care, in comparison to
adults that are food secure.\38\
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\36\ U.S. Department of Agriculture, Economic Research Service
(n.d.). Definitions of food security. Retrieved March 10, 2022, from
https://www.ers.usda.gov/topics/food-nutrition-assistance/food-security-in-the-u-s/definitions-of-food-security/.
\37\ Hernandez, D.C., Reesor, L.M., & Murillo, R. (2017). Food
insecurity and adult overweight/obesity: Gender and race/ethnic
disparities. Appetite, 117, 373-378.
\38\ Banerjee, S., Radak, T., Khubchandani, J., & Dunn, P.
(2021). Food Insecurity and Mortality in American Adults: Results
From the NHANES-Linked Mortality Study. Health promotion practice,
22(2), 204-214. https://doi.org/10.1177/1524839920945927
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While having enough food is one of many predictors for health
outcomes, a diet low in nutritious foods is also a factor.\39\ The
United States Department of Agriculture (USDA) defines nutrition
security as ``consistent and equitable access to healthy, safe,
affordable foods essential to optimal health and well-being.'' \36\
Nutrition security builds on and complements long standing efforts to
advance food security. Studies have shown that older adults struggling
with food insecurity consume fewer calories and nutrients and have
lower overall dietary quality than those who are food secure, which can
put them at nutritional risk.\40\ Older adults are also at a higher
risk of developing malnutrition, which is considered a state of
deficit, excess, or imbalance in protein, energy, or other nutrients
that adversely impacts an individual's own body form, function, and
clinical outcomes.\41\ Up to 50 percent of older adults are affected by
or at risk for malnutrition, which is further aggravated by a lack of
food security and poverty.\42\ These facts highlight why the Biden-
Harris Administration launched the White House Challenge to End Hunger
and Build Health Communities.\43\
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\39\ National Center for Health Statistics (2022, September 6).
Exercise or Physical Activity. Retrieved from Centers for Disease
Control and Prevention: https://www.cdc.gov/nchs/fastats/exercise.htm.
\40\ Ziliak, J.P., & Gundersen, C. (2019). The State of Senior
Hunger in America 2017: An Annual Report. Prepared for Feeding
America. Available at https://www.feedingamerica.org/research/senior-hunger-research/senior.
\41\ The Malnutrition Quality Collaborative (2020). National
Blueprint: Achieving Quality Malnutrition Care for Older Adults,
2020 Update. Washington, DC: Avalere Health and Defeat Malnutrition
Today. Available at https://defeatmalnutrition.today/advocacy/blueprint/.
\42\ Food Research & Action Center (FRAC). ``Hunger is a Health
Issue for Older Adults: Food Security, Health, and the Federal
Nutrition Programs.'' December 2019. https://frac.org/wp-content/uploads/hunger-is-a-health-issue-for-older-adults-1.pdf.
\43\ The White House Challenge to End Hunger and Build Health
Communities (Challenge) was a nationwide call-to-action released on
March 24, 2023 to interested parties across all of society to make
commitments to advance President Biden's goal to end hunger and
reduce diet-related diseases by 2030--all while reducing
disparities. More information on the White House Challenge to End
Hunger and Build Health Communities can be found: https://www.whitehouse.gov/briefing-room/statements-releases/2023/03/24/fact-sheet-biden-harris-administration-launches-the-white-house-challenge-to-end-hunger-and-build-healthy-communities-announces-new-public-private-sector-actions-to-continue-momentum-from-hist/.
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We believe that adopting items to collect and analyze information
about a resident's food security at home could provide additional
insight to their health complexity and help facilitate coordination
with other healthcare providers, facilities, and agencies during
transitions of care, so that referrals to address a resident's food
security are not lost during vulnerable transition periods. For
example, a SNF's dietitian or other clinically qualified nutrition
professional could work with the resident and their caregiver to plan
healthy, affordable food choices prior to discharge.\44\ SNFs could
also refer a resident that indicates lack of food security to
government initiatives such as the Supplemental Nutrition Assistance
Program (SNAP) and food pharmacies (programs to increase access to
healthful foods by making them affordable), two initiatives that have
been associated with lower health care costs and reduced
hospitalization and emergency department visits.\45\
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\44\ Schroeder K, Smaldone A. Food Insecurity: A Concept
Analysis. Nurse Forum. 2015 Oct-Dec;50(4):274-84. doi: 10.1111/
nuf.12118. Epub 2015 Jan 21. PMID: 25612146; PMCID: PMC4510041.
\45\ Tsega M, Lewis C, McCarthy D, Shah T, Coutts K. Review of
Evidence for Health-Related Social Needs Interventions. July 2019.
The Commonwealth Fund. https://www.commwealthfund.org/sites/default/files/2019-07/ROI-evidence-review-final-version.pdf.
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We proposed to adopt two Food items as new standardized patient
assessment data elements under the SDOH category. These proposed items
are based on the Food items collected in the AHC HRSN Screening Tool
and were adapted from the USDA 18-item Household Food Security Survey
(HFSS).\46\ The first
[[Page 64104]]
proposed Food item states, ``Within the past 12 months, you worried
that your food would run out before you got money to buy more.'' The
second proposed Food item states, ``Within the past 12 months, the food
you bought just didn't last and you didn't have money to get more.'' We
proposed the same response options for both items: (0) Often true; (1)
Sometimes true; (2) Never True; (7) Resident declines to respond; and
(8) Resident unable to respond. A draft of the Food items proposed to
be adopted as standardized patient assessment data elements under the
SDOH category can be found in the Downloads section of the SNF QRP
Measures and Technical Information web page at https://www.cms.gov/medicare/quality/snf-quality-reporting-program/measures-and-technical-information.
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\46\ More information about the HFSS tool can be found at
https://www.ers.usda.gov/topics/food-nutrition-assistance/food-security-in-the-u-s/survey-tools/.
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(c) Utilities
A lack of energy (utility) security can be defined as an inability
to adequately meet basic household energy needs.\47\ According to the
United States Department of Energy, one in three households in the U.S.
are unable to adequately meet basic household energy needs.\48\ The
consequences associated with a lack of utility security are represented
by three primary dimensions: economic; physical; and behavioral.
Residents with low incomes are disproportionately affected by high
energy costs, and they may be forced to prioritize paying for housing
and food over utilities.\49\ Some residents may face limited housing
options, and therefore, are at increased risk of living in lower-
quality physical conditions with malfunctioning heating and cooling
systems, poor lighting, and outdated plumbing and electrical
systems.\50\ Residents with a lack of utility security may use negative
behavioral approaches to cope, such as using stoves and space heaters
for heat.\51\ In addition, data from the Department of Energy's U.S.
Energy Information Administration confirm that a lack of energy
security disproportionately affects certain populations, such as low-
income and African American households.\52\ The effects of a lack of
utility security include vulnerability to environmental exposures such
as dampness, mold, and thermal discomfort in the home, which have a
direct impact on a person's health.\53\ For example, research has shown
associations between a lack of energy security and respiratory
conditions as well as mental health-related disparities and poor sleep
quality in vulnerable populations such as the elderly, children, the
socioeconomically disadvantaged, and the medically vulnerable.\54\
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\47\ Hern[aacute]ndez D. Understanding `energy insecurity' and
why it matters to health. Soc Sci Med. 2016 Oct; 167:1-10. doi:
10.1016/j.socscimed.2016.08.029. Epub 2016 Aug 21. PMID: 27592003;
PMCID: PMC5114037.
\48\ US Energy Information Administration. ``One in Three U.S.
Households Faced Challenges in Paying Energy Bills in 2015.'' 2017
Oct 13. https://www.eia.gov/consumption/residential/reports/2015/energybills/.
\49\ Hern[aacute]ndez D. ``Understanding energy insecurity' and
why it matters to health.'' Soc Sci Med. 2016; 167:1-10.
\50\ Hern[aacute]ndez D. Understanding `energy insecurity' and
why it matters to health. Soc Sci Med. 2016 Oct;167:1-10. doi:
10.1016/j.socscimed.2016.08.029. Epub 2016 Aug 21. PMID: 27592003;
PMCID: PMC5114037.
\51\ Hern[aacute]ndez D. ``What `Merle' Taught Me About Energy
Insecurity and Health.'' Health Affairs, VOL.37, NO.3: Advancing
Health Equity Narrative Matters. March 2018. https://doi.org/10.1377/hlthaff.2017.1413.
\52\ US Energy Information Administration. ``One in Three U.S.
Households Faced Challenges in Paying Energy Bills in 2015.'' 2017
Oct 13. https://www.eia.gov/consumption/residential/reports/2015/energybills/.
\53\ Hern[aacute]ndez D. Understanding `energy insecurity' and
why it matters to health. Soc Sci Med. 2016 Oct;167:1-10. doi:
10.1016/j.socscimed.2016.08.029. Epub 2016 Aug 21. PMID: 27592003;
PMCID: PMC5114037.
\54\ Hern[aacute]ndez D, Siegel E. Energy insecurity and its ill
health effects: A community perspective on the energy-health nexus
in New York City. Energy Res Soc Sci. 2019 Jan;47:78-83. doi:
10.1016/j.erss.2018.08.011. Epub 2018 Sep 8. PMID: 32280598; PMCID:
PMC7147484.
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We believe adopting an item to collect information about a
resident's utility security would facilitate the identification of
residents who may not have utility security and who may benefit from
engagement efforts. For example, SNFs may be able to use the
information on utility security to help connect some residents in need
to programs that can help older adults pay for their home energy
(heating/cooling) costs, like the Low-Income Home Energy Assistance
Program (LIHEAP).\55\ SNFs may also be able to partner with community
care hubs and community-based organizations to assist the resident in
applying for these and other local utility assistance programs, as well
as helping them navigate the enrollment process.\56\
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\55\ U.S. Department of Health & Human Services. Office of
Community Services. Low Income Home Energy Assistance Program
(LIHEAP). https://www.acf.hhs.gov/ocs/programs/liheap.
\56\ National Council on Aging (NCOA). ``How to Make It Easier
for Older Adults to Get Energy and Utility Assistance.'' Promising
Practices Clearinghouse for Professionals. Jan. 13, 2022. https://www.ncoa.org/article/how-to-make-it-easier-for-older-adults-to-get-energy-and-utility-assistance.
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We proposed to adopt a new item, Utilities, as a new standardized
patient assessment data element under the SDOH category. This proposed
item is based on the Utilities item collected in the AHC HRSN Screening
Tool, and was adapted from the Children's Sentinel Nutrition Assessment
Program (C-SNAP) survey.\57\ The proposed Utilities item asks, ``In the
past 12 months, has the electric, gas, oil, or water company threatened
to shut off services in your home?'' The proposed response options are:
(0) Yes; (1) No; (2) Already shut off; (7) Resident declines to
respond; and (8) Resident unable to respond. A draft of the Utilities
item proposed as a standardized patient assessment data element under
the SDOH category can be found in the Downloads section of the SNF QRP
Measures and Technical Information web page at https://www.cms.gov/medicare/quality/snf-quality-reporting-program/measures-and-technical-information.
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\57\ This validated survey was developed as a clinical indicator
of household energy security among pediatric caregivers. Cook, J.T.,
D.A. Frank., P.H. Casey, R. Rose-Jacobs, M.M. Black, M. Chilton, S.
Ettinger de Cuba, et al. ``A Brief Indicator of Household Energy
Security: Associations with Food Security, Child Health, and Child
Development in US Infants and Toddlers.'' Pediatrics, vol. 122, no.
4, 2008, pp. e874-e875. https://doi.org/10.1542/peds.2008-0286.
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4. Interested Parties Input
We developed our updates to add these items after considering
feedback we received in response to our request for information (RFI)
on ``Principles for Selecting and Prioritizing SNF QRP Quality Measures
and Concepts Under Consideration for Future Years'' in the FY 2024 SNF
PPS final rule (88 FR 53265 through 53267). This RFI sought to obtain
input on a set of principles to identify SNF QRP measures, as well as
additional thoughts about measurement gaps, and suitable measures for
filling these gaps. In response to this solicitation, many commenters
generally stated that the inclusion of a malnutrition screening and
intervention measures would promote both quality and health equity.
Other measures and measurement concepts included health equity,
psychosocial issues, and caregiver status. The FY 2024 SNF PPS final
rule includes a summary of the public comments that we received in
response to the RFI and our responses to those comments (88 FR 53265
through 53267).
We also considered comments received in response to our Health
Equity Update in the FY 2024 SNF PPS final rule. Comments were
generally supportive of CMS' efforts to develop ways to measure and
mitigate health inequities. One commenter referenced their belief that
collection of SDOH would enhance holistic care, call attention to
impairments that might be
[[Page 64105]]
mitigated or resolved, and facilitate clear communication between
residents and SNFs. While there were commenters who urged CMS to
balance reporting requirements so as not to create undue administrative
burden, another commenter suggested CMS incentivize collection of data
on SDOH such as housing stability and food security. The FY 2024 SNF
PPS final rule (88 FR 53268 through 53269) includes a summary of the
public comments that we received in response to the Health Equity
Update and our responses to those comments.
Additionally, we considered feedback we received when we proposed
the creation of the SDOH category of standardized patient assessment
data elements in the FY 2020 SNF PPS proposed rule (84 FR 17671 through
17679). Commenters were generally in favor of the concept of collecting
SDOH items and stated that, if implemented appropriately, the data
could be useful in identifying and addressing health care disparities,
as well as refining the risk adjustment of outcome measures. The FY
2020 SNF PPS final rule (84 FR 38805 through 38818) includes a summary
of the public comments that we received and our responses to those
comments. We incorporated this input into the development of this
update.
We solicited comment on the proposal to adopt four new items as
standardized patient assessment data elements under the SDOH category
beginning with the FY 2027 SNF QRP: one Living Situation item; two Food
items; and one Utilities item.
We received public comments on these proposals. The following is a
summary of the comments we received and our responses.
Comment: Many commenters supported the proposed new SDOH assessment
items, viewing this as an important step towards identifying health
disparities, improving health outcomes, understanding diverse resident
needs, improving discharge planning and care coordination, and
fostering continuous quality improvement. Many of these commenters also
emphasized the importance of SDOH data collection in achieving health
equity, and one commenter emphasized the importance of identifying,
documenting, and addressing SDOH to provide equitable, high-quality,
holistic, resident-centered care. Several commenters noted the
importance of the proposed new SDOH assessment items in facilitating
discharge planning strategies that can account for a person's housing,
food, utilities, and transportation needs. One of these commenters
agreed that risk factors such as a person's living situation in the
community, and access to adequate nutrition and utilities necessary for
a safe and health-promoting environment, need to be identified and
addressed in the plan of care. This commenter went on to say that
reducing housing, food, utility, and transportation security barriers
as part of a SNF's discharge planning processes can reduce the risk for
negative outcomes, such as hospital readmissions and readmission to the
nursing facility for long-term care, when they return to the community.
One of these commenters noted that collecting more granular SDOH data
is crucial, especially for those residents who transition from SNFs to
home or community-based settings. Two of these commenters also noted
that the lack of information on residents' social risk factors is a
barrier to providing social services to high-risk and underserved
populations and believe the value of including data collection on these
new assessment items outweighs the additional administrative burden.
Response: We appreciate the support. We agree that the collection
of the new SDOH assessment items will support SNFs that wish to
understand the health disparities that affect their resident
populations, facilitate coordinated care, foster continuity in care
planning, and assist with the discharge planning process from the SNF
setting.
Comment: One commenter supported CMS's decision to align and
standardize new SDOH data collection in the SNF QRP with data already
being collected in other settings, such as the Hospital Inpatient
Quality Reporting (IQR) Program and the Inpatient Psychiatric Facility
Quality Reporting (IPFQR) Program requirements.
Response: We thank the commenter for recognizing that our proposal
aligns, in part, with the requirements of the Hospital IQR Program and
the IPFQR Program. as we continue to standardize data collection across
settings, we believe using common standards and definitions for new
assessment items is important to promote interoperable exchange of
longitudinal information between SNFs and other providers. We also
believe collecting this information may facilitate coordinated care,
continuity in care planning, and the discharge planning process from
PAC settings, including SNFs.
Comment: Several commenters agreed with the importance of
collecting SDOH assessment items through the MDS, but also expressed
concerns about the additional administrative burden associated with
collecting the proposed SDOH data beginning in FY 2025 for the FY 2027
SNF QRP. Several of these commenters noted that data collection is
financially burdensome and increases burden on already overextended
staff. One commenter noted that because CMS proposed to add the
assessment items to the MDS, SNFs would also be required to collect
this data on Medicaid residents as well, which would add to the
reporting and administrative burden. Another commenter requested
additional funding for the increased costs associated with what they
noted to be tasks outside the normal day-to-day operations of the
facilities.
Response: Although the addition of four new SDOH assessment items
to the MDS will increase the burden associated with completing the MDS,
we carefully considered this increased burden against the benefits of
adopting the assessment items for the MDS. Collection of additional
SDOH assessment items will permit us to continue developing the
statistical tools necessary to maximize the value of Medicare data and
improve the quality of care for all beneficiaries, and therefore we do
not want to delay the implementation of the new SDOH assessment items.
As noted in section VI.C.2 of the proposed rule (89 FR 23464) and
section VII.C.2 of this final rule, we recently developed and released
the Health Equity Confidential Feedback Reports, which provided data to
SNFs on whether differences in quality measure outcomes are present for
their residents by dual-enrollment status and race and ethnicity.\58\
In balancing the reporting burden for SNFs, we prioritized our policy
objective to collect additional SDOH standardized patient assessment
data elements that will inform care planning and coordination and
quality improvement across care settings.
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\58\ In October 2023, we released two new annual Health Equity
Confidential Feedback Reports to SNFs: The Discharge to Community
(DTC) Health Equity Confidential Feedback Report and the Medicare
Spending Per Beneficiary (MSPB) Health Equity Confidential Feedback
Report. The PAC Health Equity Confidential Feedback Reports
stratified the DTC and MSPB measures by dual-enrollment status and
race/ethnicity. For more information on the Health Equity
Confidential Feedback Reports, please refer to the Education and
Outreach materials available on the SNF QRP Training web page at
https://www.cms.gov/Medicare/Quality-Initiatives-Patient-Assessment-Instruments/NursingHomeQualityInits/Skilled-Nursing-Facility-Quality-Reporting-Program/SNF-Quality-Reporting-Program-Training.
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Regarding the comment requesting additional funding for the
increased costs associated with collecting data on these new assessment
items, we find the comment unclear. We interpret the commenter to mean
that they do not believe that current SNF PPS payments
[[Page 64106]]
are sufficient to cover the increased burden (specifically, costs)
associated with collection of this additional data for the proposed new
SDOH assessment items. As discussed previously, we carefully considered
the increased burden associated with collection of these four new SDOH
assessment items against the benefits of adopting these items for the
MDS. This collection could be useful to SNFs as they identify the
discharge needs of each resident. This includes developing and
implementing an effective discharge planning process that focuses on
the resident's discharge goals, preparing residents to be active
partners, effectively transitioning them to post-discharge care, and
reducing factors leading to preventable readmissions. The new SDOH
assessment items we proposed to adopt were identified in the 2016 NASEM
report \59\ or the 2020 NASEM report \60\ as impacting care use, cost,
and outcomes for Medicare beneficiaries. We believe the proposed new
SDOH assessment items have the potential to generate actionable data
SNFs can use to implement effective discharge planning processes that
can reduce the risk for negative outcomes such as hospital readmissions
and admission to a nursing facility for long-term care. Given that SNFs
must develop and implement an effective discharge planning process that
ensures the discharge needs of each resident are identified, we believe
SNFs are likely collecting some of this data already. Collection of
these new SDOH items will provide key information to SNFs to support
effective discharge planning.
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\59\ National Academies of Sciences, Engineering, and Medicine.
2016. Accounting for Social Risk Factors in Medicare Payment:
Identifying Social Risk Factors. Washington, DC: The National
Academies Press. https://doi.org/10.17226/21858.
\60\ National Academies of Sciences, Engineering, and Medicine.
2020. Leading Health Indicators 2030: Advancing Health, Equity, and
Well-Being. Washington, DC: The National Academies Press. https://doi.org/10.17226/25682.
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Regarding the commenter's concern that SNFs would be required to
collect this data on Medicaid residents, it is unclear specifically
what the commenter's concerns are. In section VII.E.3. of this final
rule, we proposed to adopt four new SDOH assessment items for the SNF
QRP. For the SNF QRP, SNFs are required to collect and submit data for
MDS items specified by CMS for Medicare Part A fee-for service
residents receiving skilled services. We did not propose and would not
require SNFs to collect and submit data for the four new SDOH
assessment items and modified Transportation item on Medicaid residents
residing in the nursing facility.
Finally, we plan to provide training resources in advance of the
initial collection of the new SDOH assessment items to ensure that SNFs
have the tools necessary to administer these new items and reduce the
burden to SNFs having to create their own training resources. These
training resources may include online learning modules, tip sheets,
questions and answers documents and/or recorded webinars and videos. We
anticipate that we will make these materials available to SNFs in mid-
2025, which will give SNFs several months prior to required collection
and reporting to take advantage of the learning opportunities.
Comment: One commenter who supported the proposal to collect the
new and modified SDOH assessment items, also encouraged CMS to ensure
the new assessment items are valid and reliable. Two commenters, who
did not support the proposal, noted concerns with the validity and
reliability of the proposed new and modified SDOH assessment items, and
one of these commenters recommended further testing of the proposed
items.
Response: We disagree that the proposed new SDOH assessment items
require further testing prior to requiring SNFs to collect them on the
MDS for the SNF QRP. The AHC HRSN Screening Tool is evidence-based and
informed by practical experience. With input from a panel of national
experts convened by our contractor, We developed the tool under the
Center for Medicare and Medicaid Innovation (CMMI) by conducting a
review of existing screening tools and questions focused on core and
supplemental HRSN domains, including housing instability, food
insecurity, transportation difficulties, utility assistance needs, and
interpersonal safety concerns.\61\ These domains were chosen based upon
literature review and expert consensus utilizing the following three
criteria: (1) availability of high-quality scientific evidence linking
a given HRSN to adverse health outcomes and increased healthcare
utilization, including hospitalizations and associated costs; (2)
ability for a given HRSN to be screened and identified in the inpatient
setting prior to discharge, addressed by community-based services, and
potentially improve healthcare outcomes, including reduced
readmissions; and (3) evidence that a given HRSN is not systematically
addressed by healthcare providers.\62\ In addition to established
evidence of their association with health status, risk, and outcomes,
these domains were selected because they can be assessed across the
broadest spectrum of individuals in a variety of
settings.63 64
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\61\ https://nam.edu/standardized-screening-for-health-related-social-needs-in-clinical-settings-the-accountable-health-communities-screening-tool/.
\62\ Billioux, A., Verlander, K., Anthony, S., & Alley, D.
(2017). Standardized Screening for Health-Related Social Needs in
Clinical Settings: The Accountable Health Communities Screening
Tool. NAM Perspectives, 7(5). Available at https://doi.org/10.31478/201705b. Accessed on June 9, 2024.
\63\ Billioux, A., Verlander, K., Anthony, S., & Alley, D.
(2017). Standardized Screening for Health-Related Social Needs in
Clinical Settings: The Accountable Health Communities Screening
Tool. NAM Perspectives, 7(5). Available at https://doi.org/10.31478/201705b. Accessed on June 9, 2024.
\64\ Centers for Medicare & Medicaid Services (2021).
Accountable Health Communities Model. Accountable Health Communities
Model [verbar] CMS Innovation Center. Available at https://innovation.cms.gov/innovation-models/ahcm. Accessed on February 20,
2023.
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Through this process, over 50 screening tools totaling more than
200 questions were compiled. To refine this list, CMS' contractor
consulted a technical expert panel (TEP) consisting of a diverse group
of tool developers, public health and clinical researchers, clinicians,
population health and health systems executives, community-based
organization leaders, and Federal partners. Over the course of several
meetings, this TEP met to discuss opportunities and challenges involved
in screening for HRSNs; consider and pare down CMS's list of evidence-
based screening questions; and recommend a short list of questions for
inclusion in the final tool. The AHC HRSN Screening Tool was tested
across many care delivery sites in diverse geographic locations across
the United States. More than one million Medicare and Medicaid
beneficiaries have been screened using the AHC HRSN Screening Tool.
This tool was evaluated psychometrically and demonstrated evidence of
both reliability and validity, including inter-rater reliability and
concurrent and predictive validity. Moreover, the AHC HRSN Screening
Tool can be implemented in a variety of places where individuals seek
healthcare, including SNFs.
We selected these proposed assessment items for the SNF QRP from
the AHC HRSN Screening Tool because we believe that collecting
information on living situation, food, utilities, and transportation
could have a direct and positive impact on resident care in SNFs.
Specifically, collecting this information provides an opportunity for
the SNF to identify residents' potential HRSNs, and if indicated, to
address
[[Page 64107]]
those with the resident, their caregivers, and community partners
during the discharge planning process, potentially resulting in
improvements in resident outcomes.
Comment: One commenter referenced CMS' second evaluation of the AHC
model from 2018 through 2021,\65\ and said they interpret the Findings
at a Glance to conclude the AHC HRSN Screening Tool ``did not appear to
increase beneficiaries' connection to community services or HRSN
resolution.''
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\65\ https://www.cms.gov/priorities/innovation/data-and-reports/2023/ahc-second-eval-rpt-fg.
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Response: This two-page summary of the AHC Model 2018-2021 \66\
describes the results of testing whether systematically identifying and
connecting beneficiaries to community resources for their HRSNs
improved health care utilization outcomes and reduced costs. To ensure
consistency in the screening offered to beneficiaries across both an
individual community's clinical delivery sites and across all the
communities in the model, we developed a standardized HRSN screening
tool. This AHC HRSN Screening Tool was used to screen Medicare and
Medicaid beneficiaries for core HRSNs to determine their eligibility
for inclusion in the AHC Model. If a Medicare or Medicaid beneficiary
was eligible for the AHC Model, they were randomly assigned to one of
two tracks: (1) Assistance; or (2) Alignment. The Assistance Track
tested whether navigation assistance that connects navigation-eligible
beneficiaries with community services results in increased HRSN
resolution, reduced health care expenditures, and unnecessary
utilization. The Alignment Track tested whether navigation assistance,
combined with engaging key interested parties in continuous quality
improvement (CQI) to align community service capacity with
beneficiaries' HRSNs, results in greater increases in HRSN resolution
and greater reductions in health expenditures and utilization than
navigation assistance alone. Regardless of assigned track, all
beneficiaries received HRSN screening, community referrals, and
navigation to community services.\67\
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\66\ https://www.cms.gov/priorities/innovation/data-and-reports/2023/ahc-second-eval-rpt-fg.
\67\ Accountable Health Communities (AHC) Model Evaluation,
Second Evaluation Report. May 2023. This project was funded by the
Centers for Medicare & Medicaid Services under contract no. HHSM-
500-2014-000371, Task Order75FCMC18F0002. https://www.cms.gov/priorities/innovation/data-and-reports/2023/ahc-second-eval-rpt.
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We believe the commenter inadvertently misinterpreted the findings,
believing these findings were with respect to the effectiveness and
scientific validity of the AHC HRSN Screening Tool itself. The findings
section of this two-page summary described six key findings from the
AHC Model, which examined whether the Assistance Track or the Alignment
Track resulted in greater increases in HRSN resolution and greater
reductions in health expenditures and utilization. Particularly, the
AHC Model reduced emergency department visits among Medicaid and FFS
Medicare beneficiaries in the Assistance Track, which was suggestive
that navigation may help patients use the health care system more
effectively. We acknowledge that navigation alone did not increase
beneficiaries' connection to community services or HRSN resolution, and
this was attributed to gaps between community resource availability and
beneficiary needs. The AHC HRSN Screening Tool used in the AHC Model
was limited to identifying Medicare and Medicaid beneficiaries with at
least one core HRSN who could be eligible to participate in the AHC
Model. Our review of the AHC Model did not identify any issues with the
validity and scientific reliability of the AHC HRSN Screening Tool.
Finally, as part of our routine item and measure monitoring work,
we continually assess the implementation of new assessment items, and
we will include the four new proposed SDOH assessment items in our
monitoring work.
Comment: Two commenters requested that CMS articulate its vision
for how the data collected from the proposed SDOH standardized patient
assessment data elements will be used in quality and payment programs.
These commenters were concerned that CMS may use the SDOH assessment
data to develop a SNF QRP measure that would hold SNFs solely
accountable for social drivers of health that require resources and
engagement across an entire community to address. One of these
commenters recommended that CMS not finalize this proposal and instead
engage interested parties in the industry to understand the role that
SNFs can play in improving SDOH.
Response: We proposed the four new SDOH assessment items because
collection of additional SDOH items would permit us to continue
developing the statistical tools necessary to maximize the value of
Medicare data and improve the quality of care for all beneficiaries.
For example, we recently developed and released the Health Equity
Confidential Feedback Reports, which provided data to SNFs on whether
differences in quality measure outcomes are present for their residents
by dual-enrollment status and race and ethnicity.\68\ We note that
advancing health equity by addressing the health disparities that
underlie the country's health system is one of our strategic pillars
\69\ and a Biden-Harris Administration priority.\70\ Furthermore, any
updates to the SNF QRP measure set would be addressed through future
notice-and-comment rulemaking, as necessary.
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\68\ In October 2023, we released two new annual Health Equity
Confidential Feedback Reports to SNFs: The Discharge to Community
(DTC) Health Equity Confidential Feedback Report and the Medicare
Spending Per Beneficiary (MSPB) Health Equity Confidential Feedback
Report. The PAC Health Equity Confidential Feedback Reports
stratified the DTC and MSPB measures by dual-enrollment status and
race/ethnicity. For more information on the Health Equity
Confidential Feedback Reports, please refer to the Education and
Outreach materials available on the SNF QRP Training web page at
https://www.cms.gov/Medicare/Quality-Initiatives-Patient-Assessment-Instruments/NursingHomeQualityInits/Skilled-Nursing-Facility-Quality-Reporting-Program/SNF-Quality-Reporting-Program-Training.
\69\ Brooks-LaSure, C. (2021). My First 100 Days and Where We Go
from Here: A Strategic Vision for CMS. Centers for Medicare &
Medicaid. Available at https://www.cms.gov/blog/my-first-100-days-and-where-we-go-here-strategic-vision-cms.
\70\ The Biden-Harris Administration's strategic approach to
addressing health related social needs can be found in The U.S.
Playbook to Address Social Determinants of Health (SDOH) (2023):
https://www.whitehouse.gov/wp-content/uploads/2023/11/SDOH-Playbook-3.pdf.
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Comment: One commenter said they recognize the importance of
collecting standardized patient assessment data elements to better
serve residents' needs and for identifying and addressing potential
issues of equity. However, they urged CMS to reevaluate the utility of
collecting this information, particularly compared to the burden of
data collection. Specifically, they noted that CMS must keep the role
of the social worker in a SNF in mind when considering these assessment
items. They stated that a social worker's job in a SNF is to meet the
needs of SNF residents during their SNF stay and to coordinate services
for a successful return to the community, but the SNF social worker has
no control over what happens after the resident discharges from the SNF
and cannot become the resident's community social worker. Therefore,
they believe a SNF's responses to the proposed new and modified SDOH
assessment items would neither impact nor be impacted by the SNF stay.
Response: While we recognize the role that social workers have in
the SNF, we believe that the proposed new and modified SDOH assessment
items are relevant to the SNF's interdisciplinary
[[Page 64108]]
care team and could impact the discharge planning occurring during the
SNF stay. We proposed the collection of new and modified SDOH
assessment items at the time of admission to the SNF because we believe
that having information on residents' living situation, food, and
utilities will give SNFs an opportunity to better understand and
address the broader needs of their residents. We also believe this
information is essential for comprehensive resident care, potentially
leading to improved health outcomes and more effective discharge
planning. As we stated in the proposed rule and in section VII.C.2 of
this final rule, according to the World Health Organization, research
shows that SDOH can be more important than health care or lifestyle
choices in influencing health, accounting for between 30 to 55 percent
of health outcomes.\71\ This is part of a growing body of research that
highlights the importance of SDOH on health outcomes. As noted
previously, SNFs are already required by our regulation at Sec.
483.21(c)(1) to develop and implement an effective discharge planning
process.
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\71\ World Health Organization. Social determinants of health.
Available at https://www.who.int/health-topics/social-determinants-of-health#tab=tab_1.
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Comment: One of these commenters did not agree with CMS that the
proposed SDOH assessment items would produce interoperable data within
the CMS quality programs because the proposed requirements for SNF are
not standardized with the SDOH collection requirements in the Hospital
IQR Program and IPFQR Programs. This commenter noted that the Screening
for SDOH measures in the Hospital IQR and IPFQR Programs do not specify
when a patient is screened (for example, at admission) and how the
screening questions are asked (in other words, specific wording and
responses). Instead, providers reporting these measures under the
Hospital IQR and IPFQR Programs are only asked to document that a
patient was screened for the following domains: housing instability,
food insecurity, transportation difficulties, utility assistance needs,
and interpersonal safety concerns.
Response: We disagree that the proposed collection of four new SDOH
assessment items and one modified SDOH assessment item for the SNF QRP
and the requirements for the Hospital IQR and IPFQR Programs do not
promote standardization. Although hospitals and IPFs participating in
these programs can use a self-selected SDOH screening tool, the
Screening for SDOH and Screen Positive Rate for SDOH measures we have
adopted for the Hospital IQR and IPFQR Programs address the same SDOH
domains that we have proposed to collect as standardized patient
assessment data under the SNF QRP: housing instability, food
insecurity, utility difficulties, and transportation needs. We believe
that this partial alignment will facilitate longitudinal data
collection on the same topics across healthcare settings. As we
continue to standardize data collection, we believe using common
standards and definitions for new assessment items is important to
promote the interoperable exchange of longitudinal information between
SNFs and other providers to facilitate coordinated care, continuity in
care planning, and the discharge planning process. This is evidenced by
our recent proposals to add these four SDOH assessment items and one
modified SDOH assessment item in the IRF QRP (89 FR 22275 through
22280), LTCH QRP (89 FR 36345 through 36350), and Home Health QRP (89
FR 55383 through 55388).
(a) Comments on the Living Situation Assessment Item
Comment: Several commenters supported the proposal to adopt the
Living Situation item as a standardized patient assessment data element
in the MDS. Several of these commenters emphasized that having
information on living situation is critical for developing tailored and
effective discharge plans. Two of these commenters noted that this
information will allow providers to better understand social and
environmental factors that affect their residents' health outcomes, and
one of these commenters also noted that collecting and reporting living
situation data could encourage SNFs to care for residents who may have
more difficult discharges. Another commenter noted that having living
situation information enables better care coordination, identifies
support gaps, and allows SNFs to develop tailored care plans. Finally,
another commenter noted that understanding a person's living situation
can ensure the appropriate provision of necessary adaptive equipment to
address their needs.
Response: We agree that a person's living situation may negatively
affect their physical health and access to health care, and that SNFs
can use information obtained from the Living Situation item for
discharge planning, partnerships with community care hubs and
community-based organizations, and coordination with other healthcare
providers, facilities, and agencies during transitions of care.
Comment: One commenter recommended that the Living Situation item
incorporate information on whether a resident's living situation is
suitable for their potentially new complex care needs. This commenter
highlighted the changing nature of SNF residents' needs and noted that
some residents may have been housing secure prior to their condition,
but their prior living situation may no longer be suitable for their
current needs, which may include specific requirements such as mobility
equipment.
Response: While we proposed to require the collection of the Living
Situation item at admission only, the collection could potentially
prompt the SNF to initiate additional conversations with their
residents about their living situation needs throughout their stay. As
the commenter pointed out, it is important to think about the
resident's living situation in the context of their new care needs, and
collecting the Living Situation assessment item at admission would be
an important first step to that process. Additionally, SNFs may seek to
collect any additional information that they believe may be relevant to
their resident population to inform their care and discharge planning
process.
Comment: One commenter recommended that a timeframe be added to the
response options for the proposed Living Situation item. This commenter
suggested that adding a timeframe of one year or less to these response
options would allow healthcare providers to promptly intervene and
mitigate any eminent negative housing situations. They were concerned
that, if left open-ended, residents may respond yes, thinking about
many possible scenarios that may occur in the distant future.
Response: We interpret the comment to be suggesting that a time
frame be added to two of the Living Situation response options,
specifically: (1) I have a place to live today, but I am worried about
losing it in the future; and (2) I do not have a steady place to live.
We want to clarify that the proposed Living Situation item frames the
question as, ``What is your living situation today?'' The question
establishes the timeframe (the present) the resident should consider in
responding to the item.
Comment: Two commenters recommended that instead of collecting data
on the proposed Living Situation assessment item, CMS should propose an
item to collect information on financial insecurity. Both commenters
stressed that financial insecurity
[[Page 64109]]
underpins all the proposed SDOH items. One of these commenters
encouraged CMS to eventually develop a mechanism to ensure that such
needs are not only assessed but met with delivered services.
Response: We will consider this feedback as we evaluate future
policy options. We note that although we proposed to require the
collection of the Living Situation item for the SNF QRP, nothing would
preclude SNFs from choosing to screen their residents for additional
SDOH they believe are relevant for their resident population and the
community they serve, including financial insecurity.
(b) Comments on the Food Assessment Items
Comment: We received several comments supporting the collection of
the two proposed Food assessment items because of the importance of
nutrition and food access to SNF residents' health outcomes, and the
usefulness of this information for treatment and discharge planning.
Specifically, two of these commenters highlighted the association
between food insecurity and malnutrition with health outcomes, and one
of these commenters highlighted the importance of addressing food
insecurity among Medicare residents, particularly among elderly
residents or those with chronic conditions. This commenter noted that
addressing food security will help foster better health outcomes, lower
healthcare costs, and enhance quality of life. Another one of these
commenters noted that the responses to the Food assessment items would
help providers incorporate treatment strategies that address residents'
food access and guide the selection of interventions and training (for
example, meal planning) provided throughout the plan of care. Moreover,
another one of these commenters noted that the two proposed Food
assessment items are critical to facilitating coordination with other
healthcare providers and community-based organizations during
transitions of care for residents at risk for inadequate food intake or
who may need support in accessing healthy foods aligned with medically
tailored meals or prescription diets. Finally, another commenter
acknowledged the intersection between these proposed SDOH assessment
items, highlighting the important relationship between transportation
and a person's ability to access food. This commenter provided the
example that a person may have enough funds to purchase food, but not
have access to transportation to obtain food.
Response: We agree that a person's access to food affects their
health outcomes and risk for adverse events, and understanding the
potential needs of residents admitted to a SNF through the collection
of the two new Food assessment items can help SNFs facilitate resources
to better address a SNF resident's access to food when discharged.
Comment: One commenter did not support the proposed Food assessment
items stating that, although the assessment items are valid, they do
not provide clear information on nutritional status because there could
be family members or community organizations that provide food support.
Additionally, this commenter noted that ``food'' is a general term and
does not address selection or intake of food.
Response: While we acknowledge that the proposed Food assessment
items do not ask for specific information on residents' nutritional
status or whether they have family members or community organizations
that provide food support, our intent was to collect information on
whether the resident may have worries about their access to food or are
experiencing concerns about access to food. We believe that adopting
the proposed Food assessment items will help SNFs identify any
potential issues. Having this information could also help SNFs
coordinate care upon discharge of their residents. We also note that,
while the proposal would require the collection of the Food assessment
items at admission only, the collection could potentially prompt the
SNF to initiate conversations between the SNF and its residents about
their food needs throughout their stay. Finally, we remind the
commenter that nothing would preclude the SNF from choosing to screen
its residents for additional SDOH they believe are relevant for their
resident population and the community they serve, including family or
community support.
Comment: One commenter expressed concerns that the proposed Food
assessment items ask residents to rate the frequency of food shortages
using a three-point scale, which is inconsistent with other questions
on the MDS such as the resident mood, behavioral symptoms, and daily
preference assessment items, which use a four-point scale to determine
frequency. This commenter noted that this inconsistency may lead to
confusion for staff and residents.
Response: We clarify that the proposed draft Food assessment items
include three frequency responses in addition to response options in
the event the resident declines to respond or is unable to respond: (0)
Often true; (1) Sometimes true; (2) Never True; (7) Resident declines
to respond; and (8) Resident unable to respond. We acknowledge that
there are a number of resident interview assessment items on the MDS
that use a four-point scale, but there are also assessment items on the
MDS that do not use a four-point scale. For example, the Health
Literacy (B1300), Social Isolation (D0700), and the Pain Interference
with Therapy Activities (J0520) assessment items currently use a five-
point scale item. We chose the proposed Food assessment items from the
AHC HRSN Screening Tool, and they were tested and validated using a
three-point response scale. Since the MDS currently includes assessment
items that use varying response scales, we do not believe staff and
residents will be confused. we plan to develop resources SNF staff can
use to ensure residents understand the proposed item questions and
response options. For example, we developed cue cards to assist SNFs in
conducting the Brief Interview for Mental Status (BIMS) in Writing, the
Resident Mood Interview (PHQ-2 to 9), the Pain Assessment Interview,
and the Interview for Daily and Activity Preference.\72\
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\72\ These cue cards are currently available on the SNF QRP
Training web page at https://www.cms.gov/medicare/quality/snf-quality-reporting-program/training.
---------------------------------------------------------------------------
Comment: One commenter expressed concerns with the lack of evidence
supporting the proposed Food assessment items in the older adult
population and requested that CMS provide more detailed supporting
evidence, or not finalize the proposal until it can produce such
evidence. This commenter noted that the proposed Food assessment items
were based on a research study for families with young children, and
that they did not see information that would support their use in the
older population.
Response: We interpret the commenter to be referring to the
citation in the draft of the Food items posted on the SNF QRP Measures
and Technical Information web page at https://www.cms.gov/medicare/quality/snf-quality-reporting-program/measures-and-technical-information. We acknowledge that the AHC Screening Tool includes a
citation to a study that was done in children. However, as discussed in
section VI.C.3(b) of the proposed rule and section VII.C.3(b) of this
final rule, these items are also found in the USDA 18-item Household
Food Security Survey (HFSS). The HFSS has been extensively used with
adults both in the U.S. and
[[Page 64110]]
internationally. More information about its use and research over the
last 25 years can be found on the USDA website at https://www.ers.usda.gov/topics/food-nutrition-assistance/food-security-in-the-u-s/history-background/.
Comment: Two commenters were concerned with the 12-month look-back
period for the proposed Food assessment items, noting that this broad
look-back period may capture needs that occurred in the past, but have
been resolved. These commenters recommended a three-month look-back
period instead, to capture true concerns that should inform the SNFs'
care and discharge planning.
Response: We disagree that the 12-month look back period for the
proposed Food assessment items is too long and that it will not result
in reliable responses. We believe a 12-month look back period is more
appropriate than a shorter, three-month look-back period because a
person's Food situation may fluctuate over time. One study of Medicare
Advantage beneficiaries found that approximately half of U.S. adults
report one or more HRSNs over four quarters.\73\ However, at the
individual level, participants had substantial fluctuations: 47.4
percent of the participants fluctuated between 0 and 1 or more HRSNs
over the four quarters, and 21.7 percent of participants fluctuated
between one, two, three, or four or more HRSNs over the four quarters.
The researchers noted that the dynamic nature of individual-level HRSNs
requires consideration by healthcare providers screening for HRSNs.
---------------------------------------------------------------------------
\73\ Haff, N, Choudhry, N.K., Bhatkhande, G., Li, Y., Antol, D.,
Renda, A., Laufffenburger, J. Frequency of Quarterly Self-reported
Health-Related Social Needs Among Older Adults, 2020. JAMA Network
Open. 2022;5(6):e2219645. Doi:101001/jamanetworkopen.2022.19645.
Accessed June 9, 2024.
---------------------------------------------------------------------------
To account for potentially changing Food needs over time, we
believe it is important to use a longer look-back period to
comprehensively capture any Food needs a SNF resident may have had, so
that SNFs may consider them in their care and discharge planning.
Comment: Three commenters recognized the importance of collecting
information on residents' food access through a streamlined data
collection process, but recommended that CMS combine the two proposed
Food assessment items into a singular comprehensive assessment item to
enhance efficiency and reduce respondent burden, while still capturing
the nuanced aspects of food insecurity crucial for care planning and
recourse allocation. Two of these commenters also noted that
beneficiaries may be uncomfortable sharing this sensitive personal
information with facility staff and may be reluctant to respond to two
nearly identical questions.
Response: We appreciate the commenters' recommendation to combine
the two separate proposed Food assessment items into a single
comprehensive assessment item to reduce respondent burden. However,
past testing of the items found that the item sensitivity was higher
when using both Food assessment items, as opposed to just one.
Specifically, these analyses found that an affirmative response to just
one of the questions provided a sensitivity of 93 percent or 82
percent, depending on the item, whereas collecting both of the proposed
Food items, and evaluating whether there is an affirmative response to
the first and/or second item yielded a sensitivity of 97 percent.\74\
This means that only 3 percent of respondents who have food needs were
likely to be misclassified. Therefore, we believe it is important to
include both proposed Food assessment items.
---------------------------------------------------------------------------
\74\ Gundersen C, Engelhard E, Crumbaugh A, Seligman, H.K. Brief
assessment of Food insecurity Accurately Identifies High0Risk US
Adults. Public Health Nutrition, 2017. Doi: 10.1017/
S1368980017000180. https://childrenshealthwatch.org/wp-content/uploads/brief-assessment-of-food-insecurity-accurately-identifies-high-risk-us-adults.pdf. Accessed July 2, 2024.
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In response to commenters who noted that beneficiaries may be
uncomfortable sharing this sensitive personal information with facility
staff, we acknowledge that the Food assessment items require the
resident to be asked potentially sensitive questions. We recommend that
SNFs ensure residents feel comfortable answering these questions and
explain to residents that the information will be helpful to developing
an individualized plan of care and discharge plan. Additionally, the
proposed items include a response option, (7) Resident declines to
respond, for residents who may decline to respond to the proposed Food
assessment items. Information provided by residents in response to the
proposed Food assessment items may be protected health information
(PHI),\75\ and SNFs are responsible for adopting reasonable safeguards
to ensure that residents' information is not impermissibly disclosed
contrary to applicable confidentiality, security, and privacy laws.
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\75\ https://www.hhs.gov/answers/hipaa/what-is-phi/index.html.
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We plan to provide training resources in advance of the initial
collection of the proposed new Food assessment items to ensure that
SNFs have the tools necessary to administer the new proposed new Food
assessment items and reduce the burden to SNFs in creating their own
training resources. These training resources may include online
learning modules, tip sheets, questions and answers documents, and/or
recorded webinars and videos, and would be available to providers in
mid-2025, allowing SNFs several months to ensure their staff take
advantage of the learning opportunities.
(c) Comments on the Utilities Assessment Item
Comment: Several commenters supported the proposal to add a new
Utility assessment item to the MDS and highlighted that a resident's
access to utilities is crucial for maintaining a safe and healthy
living environment. These commenters noted that understanding
residents' utility needs will help SNFs in their discharge planning.
One of these commenters noted that by assessing a resident's utility
security, SNFs may be able to improve their access by referring them to
programs like the Low-Income Home Energy Assistance Program (LIHEAP)
\76\ or other organizations that provide assistance to those with
utility needs. Two commenters highlighted that SNF residents are often
discharged with equipment requiring constant, consistent electricity
(for example, supplemental oxygen, vents, continuous positive airway
pressure (CPAP), bilevel positive airway pressure (BiPAP), continuous
ambulatory delivery device (CADD) pumps for Dobutamine, and left
ventricular assist device (LVAD). If a resident does not have access to
a reliable power source for these critical supports, they are at risk
of not using the equipment as prescribed or dying.
---------------------------------------------------------------------------
\76\ U.S. Department of Health & Human Services. Office of
Community Services. Low Income Home Energy Assistance Program
(LIHEAP). https://www.acf.hhs.gov/ocs/programs/liheap. Accessed July
2, 2024.
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Response: We thank the commenters for their support and agree that
residents' utilities needs can affect SNF residents' health outcomes,
and the collection of the proposed Utilities assessment item can equip
SNFs with the information to inform care plans and discharge planning.
Comment: Two commenters were concerned with the 12-month look-back
period for the proposed Utility assessment item, noting that this broad
look-back period may not result in reliable responses, or their needs
may have been resolved. One of these commenters recommended a three-
month look-back period instead, to
[[Page 64111]]
provide more reliable, valid, timely, and actionable information for
the transition of care.
Response: We disagree that the 12-month look back period for the
proposed Utility assessment item is too long and that it will not
result in reliable responses. We believe a 12-month look-back period is
more appropriate than a shorter, 3-month look-back period because a
person's Utilities situation may fluctuate over time. As we noted in an
earlier response, a study of Medicare Advantage beneficiaries found
that approximately half of U.S. adults report one or more HRSNs over 4
quarters. However, at the individual level, participants had
substantial fluctuations: 47.4 percent of the participants fluctuated
between 0 and 1 or more HRSNs over the four quarters, and 21.7 percent
of participants fluctuated between one, two, three, or four or more
HRSNs over the 4 quarters.\77\ The researchers noted that the dynamic
nature of individual-level HRSNs requires consideration by healthcare
providers screening for HRSNs.
---------------------------------------------------------------------------
\77\ Haff, N, Choudhry, N.K., Bhatkhande, G., Li, Y., Antol, D.,
Renda, A., Laufffenburger, J. Frequency of Quarterly Self-reported
Health-Related Social Needs Among Older Adults, 2020. JAMA Network
Open. 2022;5(6):e2219645. Doi:101001/jamanetworkopen.2022.19645.
Accessed June 9, 2024.
---------------------------------------------------------------------------
To account for potentially changing Utilities needs over time, we
believe it is important to use a longer look-back period to
comprehensively capture any Utilities needs a SNF resident may have
had, so that SNFs may consider them in their care and discharge
planning.
Comment: Two commenters suggested that CMS consider assessing
family caregiver burden as well as services delivery, the latter of
which would capture whether referrals to appropriate services resulted
in actual service delivery. One of the commenters also recommended the
inclusion of assessment items to improve the overall resident care
among those with disabilities, such as: disability-status, residents'
independent living status, and ability to return to work.
Response: We agree that it is important to understand family
caregiver burden, service delivery, and the needs of residents with
disabilities. as we continue to evaluate SDOH standardized patient
assessment data elements and future policy options, we will consider
this feedback. We note that although we proposed to require the
collection of the Utilities item for the SNF QRP, nothing would
preclude SNFs from choosing to screen their residents for additional
SDOH they believe are relevant to their resident population and the
community they serve, including screening for caregiver burden and
service delivery.
After careful consideration of the public comments we received, we
are finalizing our proposal to adopt four new items as standardized
patient assessment data elements under the SDOH category beginning with
the FY 2027 SNF QRP: one Living Situation item; two Food items; and one
Utilities item.
5. Modification of the Transportation Item Beginning With the FY 2027
SNF QRP
Beginning October 1, 2023, SNFs began collecting seven items
adopted as standardized patient assessment data elements under the SDOH
category on the MDS.\78\ One of these items, Item A1250.
Transportation, collects data on whether a lack of transportation has
kept a resident from getting to and from medical appointments,
meetings, work, or from getting things they need for daily living. This
item was adopted as a standardized patient assessment data element
under the SDOH category in the FY 2020 SNF PPS final rule (84 FR 38805
through 38809). As we stated in the FY 2020 SNF PPS final rule (84 FR
38814 through 42588), we continue to believe that access to
transportation for ongoing health care and medication access needs,
particularly for those with chronic diseases, is essential to
successful chronic disease management and that the collection of a
Transportation item would facilitate the connection to programs that
can address identified needs (84 FR 38815 through 42588).
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\78\ The seven SDOH items are ethnicity, race, preferred
language, interpreter services, health literacy, transportation, and
social isolation (84 FR 38805 through 38818).
---------------------------------------------------------------------------
As part of our routine item and measure monitoring work, we
continually assess the implementation of the new SDOH items. We have
identified an opportunity to improve the data collection for A1250.
Transportation in the MDS by aligning it with the Transportation
category collected in our other programs.\79\ Specifically, we proposed
to modify the current Transportation item in the MDS so that it aligns
with a Transportation item collected on the AHC HRSN Screening Tool,
one of the potential tools the IPFQR and Hospital IQR Programs may
select for data collection for the Screening for SDOH measure, as
discussed previously.
---------------------------------------------------------------------------
\79\ Centers for Medicare & Medicaid Services, FY2024 Inpatient
Psychiatric Prospective Payment System--Rate Update (88 FR 51107
through 51121).
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A1250. Transportation collected in the MDS asks: ``Has lack of
transportation kept you from medical appointments, meetings, work, or
from getting things needed for daily living?'' The response options
are: (A) Yes, it has kept me from medical appointments or from getting
my medications; (B) Yes, it has kept me from non-medical meetings,
appointments, work, or from getting things that I need; (C) No; (X)
Resident unable to respond; and (Y) Resident declines to respond. The
Transportation item collected in the AHC HRSN Screening Tool asks, ``In
the past 12 months, has lack of reliable transportation kept you from
medical appointments, meetings, work or from getting things needed for
daily living?'' The two response options are: Yes; and No. Consistent
with the AHC HRSN Screening Tool and adapted from the PRAPARE tool, we
proposed to modify the A1250. Transportation item collected in the SNF
MDS in two ways: (1) revise the look-back period for when the resident
experienced lack of reliable transportation; and (2) simplify the
response options.
First, the modification of the Transportation item would use a
defined 12-month look back period, while the current Transportation
item uses a look back period of 6 to 12 months. We believe the
distinction of a 12-month look back period would reduce ambiguity for
both residents and clinicians, and therefore, improve the validity of
the data collected. Second, we proposed to simplify the response
options. Currently, SNFs separately collect information on whether a
lack of transportation has kept the patient from medical appointments
or from getting medications, and whether a lack of transportation has
kept the resident from non-medical meetings, appointments, work, or
from getting things they need. Although transportation barriers can
directly affect a person's ability to attend medical appointments and
obtain medications, a lack of transportation can also affect a person's
health in other ways, including accessing goods and services, obtaining
adequate food and clothing, and social activities.\80\ The modified
Transportation item would collect information on whether a lack of
reliable transportation has kept the resident from medical
appointments, meetings, work or from getting things
[[Page 64112]]
needed for daily living, rather than collecting the information
separately. As discussed previously, we believe reliable transportation
services are fundamental to a person's overall health, and as a result,
the burden of collecting this information separately outweighs its
potential benefit.
---------------------------------------------------------------------------
\80\ Victoria Transport Policy Institute (2016, August 25).
Basic access and basic mobility: Meeting society's most important
transportation needs. Retrieved from.
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For the reasons outlined in the proposed rule, we proposed to
modify A1250. Transportation based on the Transportation item adopted
for use in the AHC HRSN Screening Tool and adapted from the PRAPARE
tool. The Transportation item asks, ``In the past 12 months, has a lack
of reliable transportation kept you from medical appointments,
meetings, work or from getting things needed for daily living?'' The
response options are: (0) Yes; (1) No; (7) Resident declines to
respond; and (8) Resident unable to respond. A draft of the proposed
modified Transportation item can be found in the Downloads section of
the SNF QRP Measures and Technical Information web page at https://www.cms.gov/medicare/quality/snf-quality-reporting-program/measures-and-technical-information.
We solicited comment on the proposal to modify the current
Transportation item previously adopted as a standardized patient
assessment data element under the SDOH category beginning with the FY
2027 SNF QRP.
We received public comments on this proposal. The following is a
summary of the comments we received and our responses.
Comment: Several commenters supported the proposal to modify the
Transportation assessment item. Two commenters supported the simplified
response options, noting that it would make it easier for residents to
answer the question. These commenters also expressed support for the
new 12-month look-back period because it would help clarify the
question, improve resident comprehension of the proposed Transportation
assessment item, and reduce provider burden. Another commenter noted
that knowing this information will allow the SNF to connect residents,
particularly those who are dependent on a wheelchair or other assisted
device for mobility, with reliable transportation services.
Response: We thank the commenters for their support of the proposed
modification of the Transportation assessment item. We agree that the
proposed changes would help streamline the data collection process by
simplifying the item for both residents and SNF staff that collect the
data. The use of a 12-month look-back period will reduce ambiguity for
both residents and staff, and therefore, improve the validity of the
data collected.
Comment: Two commenters expressed concerns about the 12-month look-
back period, noting that it may not offer reliable and valid
information, and recommended a 3-month look-back period instead. Both
commenters also noted that there are limitations with the response
options because the responses do not allow for understanding the
frequency of the concern, the reasons why reliable transportation is
not available or the special accommodations a person may need for
transportation.
Response: We disagree that the 12-month look-back period for the
proposed modification to the Transportation assessment item is too long
and that it will not result in reliable responses. We believe a 12-
month look-back period is more appropriate than a shorter, three-month
look-back period because a person's Transportation needs may fluctuate
over time. As we have noted in an earlier response, a study of Medicare
Advantage beneficiaries found that approximately half of U.S. adults
report one or more HRSNs over 4 quarters. However, at the individual
level, participants had substantial fluctuations: 47.4 percent of the
participants fluctuated between 0 and 1 or more HRSNs over the 4
quarters, and 21.7 percent of participants fluctuated between one, two,
three, or four or more HRSNs over the 4 quarters.\81\ The researchers
noted that the dynamic nature of individual-level HRSNs requires
consideration by healthcare providers screening for HRSNs. To account
for potentially changing Transportation needs over time, we believe it
is important to use a longer look-back window to comprehensively
capture any Transportation needs a person may have had, so that SNFs
may consider them in their care and discharge planning.
---------------------------------------------------------------------------
\81\ Haff, N, Choudhry, N.K., Bhatkhande, G., Li, Y., Antol, D.,
Renda, A., Laufffenburger, J. Frequency of Quarterly Self-reported
Health-Related Social Needs Among Older Adults, 2020. JAMA Network
Open. 2022;5(6):e2219645. Doi:101001/jamanetworkopen.2022.19645.
Accessed June 9, 2024.
---------------------------------------------------------------------------
Regarding the comment stating the responses do not allow for
nuanced understanding of the resident's transportation needs (the
frequency of the concern, the reasons why reliable transportation is
not available, or the special accommodations a person may need for
transportation), we note that although the proposal would require the
collection of the Transportation assessment item at admission only, the
collection could potentially prompt the SNF to initiate conversations
with its residents about their specific Transportation needs.
Additionally, SNFs may seek to collect any additional information that
they believe may be relevant to their resident population to inform
their care and discharge planning process.
After careful consideration of the public comments we received, we
are finalizing our proposal to modify the current Transportation item
previously adopted as a standardized patient assessment data element
under the SDOH category beginning with the FY 2027 SNF QRP.
D. SNF QRP Quality Measure Concepts Under Consideration for Future
Years--Request for Information (RFI)
In the proposed rule, we solicited input on the importance,
relevance, appropriateness, and applicability of each of the concepts
under consideration listed in Table 29 for future years in the SNF QRP.
The FY 2024 SNF PPS proposed rule (88 FR 21353 through 21355) included
a request for information (RFI) on a set of principles for selecting
and prioritizing SNF QRP measures, identifying measurement gaps, and
suitable measures for filling these gaps. We also sought input on data
available to develop measures, approaches for data collection,
perceived challenges or barriers, and approaches for addressing
identified challenges. We refer readers to the FY 2024 SNF PPS final
rule (88 FR 53265 through 53267) for a summary of the public comments
we received in response to the RFI.
Subsequently, our measure development contractor convened a
Technical Expert Panel (TEP) on December 15, 2023, to obtain expert
input on the future measure concepts that could fill the measurement
gaps identified in our FY 2024 RFI.\82\ The TEP also discussed the
alignment of PAC and Hospice measures with CMS' ``Universal
Foundation'' of quality measures.\83\
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\82\ The Post-Acute Care (PAC) and Hospice Quality Reporting
Program Cross-Setting TEP summary report will be published in early
summer or as soon as technically feasible. SNFs can monitor the
Partnership for Quality Measurement website at https://mmshub.cms.gov/get-involved/technical-expert-panel/updates for
updates.
\83\ Centers for Medicare & Medicaid Services. Aligning Quality
Measures Across CMS--the Universal Foundation. November 17, 2023.
https://www.cms.gov/aligning-quality-measures-across-cms-universal-foundation.
---------------------------------------------------------------------------
In consideration of the feedback we have received through these
activities, we solicited input on four concepts for the SNF QRP (See
Table 29). One is a
[[Page 64113]]
composite of vaccinations \84\ which could represent overall
immunization status of residents such as the Adult Immunization Status
measure \85\ in the Universal Foundation. A second concept on which we
sought feedback is the concept of depression for the SNF QRP, which may
be similar to the Clinical Screening for Depression and Follow-up
measure \86\ in the Universal Foundation. Finally, we sought feedback
on the concepts of pain management and patient experience of care/
patient satisfaction for the SNF QRP.
---------------------------------------------------------------------------
\84\ A composite measure can summarize multiple measures through
the use of one value or piece of information. More information can
be found at https://www.cms.gov/medicare/quality-initiatives-patient-assessment-instruments/mms/downloads/composite-measures.pdf.
\85\ CMS Measures Inventory Tool. Adult immunization status
measure found at https://cmit.cms.gov/cmit/#/FamilyView?familyId=26.
\86\ MS Measures Inventory Tool. Clinical Depression Screening
and Follow-Up measure found at https://cmit.cms.gov/cmit/#/FamilyView?familyId=672.
[GRAPHIC] [TIFF OMITTED] TR06AU24.033
We received public comments on this RFI. The following is a summary of
the comments we received.
1. Vaccination Composite
Comment: Most commenters stated they understand CMS' efforts to
promote vaccination among residents, and many commenters supported the
idea of adding a composite vaccination measure like the Adult
Immunization Status (AIS) measure into the SNF QRP. One commenter noted
that a composite vaccination measure could improve vaccination rates
for those vaccines recommended by the Advisory Committee on
Immunization Practices (ACIP), reduce administrative burden through
alignment with the Universal Foundation,\87\ and potentially improve
immunization rates in PAC settings, including SNFs. Another commenter
noted that vaccines may not only help prevent illness, or minimize
symptoms, but also save lives, especially for key conditions including
COVID-19, influenza, respiratory syncytial virus (RSV), and pneumonia
that have the most severe impact on older adults and individuals with
multiple chronic conditions that receive post-acute or long-term care
in nursing homes. Another commenter noted that, while in previous years
they have shared concerns on the Patient/Resident COVID-19 Vaccine
measure in rulemaking comments, if this measure is rolled into a
composite vaccination measure, they would support the concept,
particularly if the weight of the COVID-19 vaccination for residents is
weighed appropriately in relation to the influenza vaccine.
---------------------------------------------------------------------------
\87\ Centers for Medicare & Medicaid Services. Aligning Quality
Measures Across CMS--the Universal Foundation. November 17, 2023.
https://www.cms.gov/aligning-quality-measures-across-cms-universal-foundation.
---------------------------------------------------------------------------
Several commenters, however, did not support the idea of adding a
composite vaccination measure into the SNF QRP for a number of reasons.
They questioned whether the SNF is the appropriate setting for
collecting vaccination rates, and pointed to several challenges SNFs
would experience in gathering information on vaccination status and
insuring the validity of the measure.
Two commenters suggested that a composite vaccination measure
should focus on primary care practices as the appropriate setting in
which to report vaccination status, and this information could be
shared with other healthcare providers when a resident requires
services in another setting. Another commenter did not support the use
of composite vaccination measures stating that they may mask specific
vaccination uptake and make it more difficult to interpret vaccination
status. This commenter recommended that CMS report on specific
vaccination rates because it would provide more actionable data to
SNFs. One of these commenters also questioned whether there would be
exclusions for medical contraindications and deeply held religious
beliefs, and how a measure reported by residents in the SNF would be
verified.
Three commenters also noted that there are numerous reasons beyond
health contraindications that residents may decide whether to receive
vaccinations, and these reasons are largely dependent on factors
outside of a SNF's control, such as where the facility is located and
personal preference of the residents. Two of these commenters suggested
that, by requiring a composite vaccination measure, a SNF could be
incentivized either not to offer admission to residents who are not up
to date with vaccinations or admit the resident and administer the
vaccinations, even when vaccine administration may increase the risk of
adverse health outcomes.
2. Pain Management
Comment: Most commenters supported the pain management measure
concept. One of these commenters noted that a resident's experience of
pain can affect numerous aspects of their care, including their ability
to tolerate therapy, their ability to gain function, their mental
health, and their overall experience of care. Another one of these
commenters stated that these measures could potentially inform future
efforts to address inequities in SNF care. Three of these commenters
urged CMS to recognize the value of nonpharmacological treatment
options, and one these commenters noted that collecting data on pain
management strategies would ensure the highest effectiveness, lowest
cost, and least invasive and addictive modalities are used in the
treatment of chronic or subacute pain. One of these commenters
supported the concept but also encouraged CMS to use the Centers for
Disease Control and Prevention (CDC) Clinical Practice Guideline for
[[Page 64114]]
Prescribing Opioids for Pain \88\ as some SNF residents may
appropriately need these medications, suggesting that there are key
populations that should be excluded from any measures that could reduce
their access to these medications. Another one of these commenters
stated that they were hopeful that the recently implemented MDS items
in section J0300-J0600 which assesses pain interference with daily
activities, sleep, and participation in therapy could provide a
foundation for future proposed measures, if it can overcome the
potential to incentivize inappropriate use of pain medication. They
also noted that one of the largest challenges in the nursing facility
environment is the high proportion of residents with cognitive deficits
who may be unable to effectively verbalize pain responses. This
commenter urged CMS to consider the fact that these residents may
convey pain in other ways including gestures, vocalizations, or
atypical behaviors and to consider how these residents could be
incorporated into a future pain measure.
---------------------------------------------------------------------------
\88\ Dowell D, Ragan KR, Jones CM, Baldwin GT, Chou R. CDC
Clinical Practice Guideline for Prescribing Opioids for Pain--United
States, 2022. MMWR Recomm Rep 2022;71(No. RR-3):1-95. DOI: https://dx.doi.org/10.15585/mmwr.rr7103a1.
---------------------------------------------------------------------------
One commenter opposed the measure concept, stating that pain
management is a challenging topic to address, including in the SNF, and
a SNF's goal is to manage the resident's pain and discomfort. This
commenter and others opposed the idea of a SNF QRP measure that
included an expectation of an improvement in pain since it could
unintentionally incentivize providers to lower resident pain levels by
prescribing medications, including opioids. One of these commenters
suggested that improving care and treatment for mental health substance
use disorders would be a better use of resources in the SNF QRP.
3. Depression
Comment: We received several comments on the concept of depression
for a future SNF QRP measure, and many commenters supported the
concept. One of these commenters noted that identifying a resident's
risk of depression early and implementing interventions to address
depression in the SNF setting can help to improve overall resident
outcomes and quality of life. Another one of these commenters
encouraged CMS to pursue development of this measure as part of larger
equity efforts within the program. Another one of these commenters
agreed, noting that mental health parity and access policies are
grounded in the health equity view that mental and behavioral health
treatment, access, and coverage should be the same as for physical
healthcare.
One commenter, who supported the measure concept, also noted that
groundwork is needed to identify the importance, relevance,
appropriateness, feasibility, and applicability of such a measure or
measures. This commenter noted that the MDS has two resident mood
screening tools, the Patient Health Questionnaire (PHQ)-2 to 9 (PHQ-2
to 9) and the Staff Assessment of Resident Mood PHQ-9-OV,\89\ creating
challenges with the data that would need to be considered if a
depression quality measure were developed using both MDS-based resident
mood depression screening tools. Another one of these commenters
recommended that CMS develop a measure that reports the number of
residents who are identified as having depression and then receive
follow up care, stating that recognizing when SNF's provide care to
such residents would be more meaningful than a measure that simply
reports the number of residents with depression.
---------------------------------------------------------------------------
\89\ Both the PHQ-2 to-9 and Staff Assessment of Resident Mood
PHQ-9-OV are collection on the MDS 3.0.
---------------------------------------------------------------------------
Two commenters opposed the measure concept of depression, noting
that a measure may require SNFs to have additional resources to treat
depression, to which they may not have access. One of these commenters
noted that they already collect information and use physician
documentation to identify mental health or other behavioral health
issues, stating that adding another screening requirement would not
improve the quality of care, but it would add cost and burden to the
SNF clinical team.
4. Patient Experience of Care/Patient Satisfaction
Comment: We received many comments on the concept of a patient
experience of care/patient satisfaction measure, and all commenters
supported the idea of further development. One commenter noted that the
lack of a patient experience of care/patient satisfaction measure is a
notable gap in quality measurement and patient reported measures should
be given equal consideration as data driven measures in the SNF QRP.
Two commenters called patient self-report the gold standard to assess
care quality, while another one recommended that patient experience
measures include a focus on activities that have a meaningful impact on
function rather than emphasizing activities that may be appealing to
residents and caregivers, but do not support improvement of function.
Two commenters noted the value in a patient experience of care/
patient satisfaction measure; specifically, noting that persons who
believe their personal goals, care preferences, and priorities (GPP)
are heard and followed-up on by the care team applying a person-
centered approach are more likely to participate in their environment,
be happier, and have better clinical outcomes. One of these commenters
also encouraged CMS to look at the activities of the Moving Forward
coalition in this area.
Two commenters made recommendations for a patient satisfaction
measure, like the CoreQ, or a patient experience measure, such as the
Consumer Assessment of Healthcare Providers and Systems (CAHPS), while
several other commenters made recommendations for the type of questions
that should be included, the number of questions a survey should have,
how it should be completed, potential submission methods, exclusion
criteria, psychometric properties, and CBE endorsement status.
5. Other Suggestions for Future Measure Concepts
Comment: In addition to comments received on the four measure
concepts of pain, depression, vaccination, and patient experience of
care/patient satisfaction, we also received a couple of comments urging
careful consideration of the feedback CMS receives to ensure that
future proposals account for the additional burden on providers,
evaluate the operational impact on SNFs, and minimize the risk of
gaming or inappropriately influencing performance results. Some
commenters also made suggestions for future measure concepts for the
SNF QRP.
One commenter suggested we consider measures that assessed
management of degenerative cognitive conditions, effectiveness of
disposition planning and care transitions, changes in resident
function, rates of follow-up care, and residents' access to appropriate
treatments and medications. Another commenter recommended measures
related to timely and appropriate referral to hospice, advance care
planning, and palliative care access and utilization. One commenter
recommended developing a measure addressing needs navigation, utilizing
the new Principal Illness Navigation (PIN) codes adopted in the 2025
[[Page 64115]]
Physician Fee Schedule,\90\ to provide insight into the type of
residents receiving these services and its utilization, while another
commenter recommended the Patient Active Measure (PAM[supreg])
instrument \91\ be added to the MDS or required in parallel to the MDS.
---------------------------------------------------------------------------
\90\ Principal Illness Navigation (PIN) services describe
services that auxiliary personnel, including care navigators or peer
support specialists, may perform incidental to the professional
services of a physician or other billing practitioner, under general
supervision. Two codes describe PIN services, and two codes describe
Principal Illness Navigation-Peer Support (PIN-PS) services, which
are intended more for patients with high-risk behavioral health
conditions and have slightly different service elements that better
describe the scope of practice of peer support specialists. In
general, where we describe aspects of PIN, it also applies to PIN-PS
unless otherwise specified. MLN9201074 January 2024. https://www.cms.gov/files/document/mln9201074-health-equity-services-2024-physician-fee-schedule-final-rule.pdf-0.
\91\ Patient Activation Measure[supreg] (PAM[supreg]). https://www.insigniahealth.com/pam/.
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Response: We thank all the commenters for responding to this RFI.
While we are not responding to specific comments in response to the RFI
in this final rule, we will take this feedback into consideration for
our future measure development efforts for the SNF QRP.
E. Form, Manner, and Timing of Data Submission Under the SNF QRP
1. Background
We refer readers to the current regulatory text at Sec. 413.360(b)
for information regarding the policies for reporting specified data for
the SNF QRP.
2. Reporting Schedule for the New Standardized Patient Assessment Data
Elements, and the Modified Transportation Data Element, Beginning
October 1, 2025, for the FY 2027 SNF QRP
As outlined in sections VI.C.3. and VI.C.5. of the proposed rule,
we proposed to adopt four new items as standardized patient assessment
data elements under the SDOH category (one Living Situation item, two
Food items, and one Utilities item) and to modify the Transportation
standardized patient assessment data element previously adopted under
the SDOH category beginning with the FY 2027 SNF QRP.
We proposed that SNFs would be required to report these new items
and the modified Transportation item using the MDS beginning with
residents admitted on October 1, 2025, through December 31, 2025, for
purposes of the FY 2027 SNF QRP. Starting in CY 2026, we proposed that
SNFs would be required to submit data for the entire calendar year for
each program year.
We also proposed that SNFs that submit the Living Situation, Food,
and Utilities items with respect to admission only would be deemed to
have submitted those items with respect to both admission and
discharge. We proposed that SNFs would be required to submit these four
items at admission only (and not at discharge) because it is unlikely
that the assessment of those items at admission would differ from the
assessment of the same item at discharge. This will align the data
collection for these proposed items with other SDOH items (that is,
Race, Ethnicity, Preferred Language, and Interpreter Services) which
are only collected at admission.\92\ A draft of the proposed items is
available in the Downloads section of the SNF QRP Measures and
Technical Information web page at https://www.cms.gov/medicare/quality/snf-quality-reporting-program/measures-and-technical-information.
---------------------------------------------------------------------------
\92\ FY 2020 SNF PPS final rule (84 FR 38817 through 38818).
---------------------------------------------------------------------------
As we noted in section VI.C.5 of the proposed rule and in section
VII.C.6 of this final rule, we continually assess the implementation of
the new SDOH items, including A1250. Transportation, as part of our
routine item and measure monitoring work. We received feedback from
interested parties in response to the FY 2020 SNF PPS proposed rule (84
FR 17676 through 17678) noting their concern with the burden of
collecting the Transportation item at admission and discharge.
Specifically, commenters stated that a resident's access to
transportation is unlikely to change between admission and discharge.
We analyzed the data SNFs reported from October 1, 2023, through
December 31, 2023 (Quarter 4 of CY 2023), and found that residents'
responses do not significantly change from admission to discharge.\93\
Specifically, the proportion of residents \94\ who responded ``Yes'' to
the Transportation item at admission versus at discharge differed by
only 0.60 percentage points during this period. We find these results
convincing, and therefore we proposed to require SNFs to collect and
submit the modified standardized patient assessment data element,
Transportation, at admission only.
---------------------------------------------------------------------------
\93\ Due to data availability of SNF SDOH standardized patient
assessment data elements, this is based on one quarter of
Transportation data.
\94\ The analysis is limited to residents who responded to the
Transportation item at both admission and discharge.
---------------------------------------------------------------------------
We solicited public comment on our proposal to collect data on the
following items proposed as standardized patient assessment data
elements under the SDOH category at admission only beginning with
October 1, 2025, SNF admissions: (1) Living Situation as described in
section VI.C.3(a) of the proposed rule; (2) Food as described in
section VI.C.3(b) of the proposed rule; and (3) Utilities as described
in section VI.C.3(c) of the proposed rule. We also solicited comment on
our proposal to collect the modified standardized patient assessment
data element, Transportation, at admission only beginning with October
1, 2025, SNF admissions as described in section VI.C.5 of the proposed
rule.
We received public comments on these proposals. The following is a
summary of the comments we received and our responses.
Comment: Several commenters supported the proposed collection of
the SDOH assessment items once, upon admission, noting that this would
mitigate the administrative burden of data collection and reduce
redundancy. One commenter acknowledged CMS's internal analysis of the
Transportation assessment item that demonstrated a less than one
percent change in the assessment item response between admission and
discharge.
Response: We appreciate the commenters' input on the timing of
collecting the proposed SDOH assessment items. We continually assess
the implementation of the new SDOH assessment items as part of our
routine item and measure monitoring work, and when we identify an
opportunity to improve data collection, we want to implement it. In the
FY 2025 SNF proposed rule (89 FR 23468 through 23469), we proposed to
collect these new and modified assessment items at admission only
because we believe it is unlikely that the assessment of these items at
admission would differ from the assessment of the same items at
discharge. We are mindful of provider burden and appreciate the support
from several commenters who agreed that collection at admission only,
rather than at both admission and discharge, would mitigate the
administrative burden of data collection on these new and modified
assessment items.
Comment: One commenter recommended CMS collect the proposed new
SDOH assessment items at discharge only, rather than at admission, to
facilitate discharge planning. One commenter expressed concerns about
data for the SDOH items being collected on every assessment, noting
that responses will not change during the resident's stay.
[[Page 64116]]
Response: We believe that collecting the SDOH assessment items at
discharge only would be too late for the SNF to act on the information
if it so chooses. As we explained in our proposal, obtaining this
information early in the resident's stay will ensure the SNF has
information that it could use to inform how it cares for the resident
and during the discharge planning processes.
Regarding the commenter who expressed concerns about collecting the
proposed new and modified assessment items on every assessment, we did
not propose that SNFs would collect these items on every assessment of
a resident. Rather, we proposed that SNFs would be required to report
these new assessment items and the modified Transportation item using
the MDS beginning with residents admitted on October 1, 2025, through
December 31, 2025, for purposes of the FY 2027 SNF QRP, and for the
entire calendar year for each program year thereafter. We note the SNF
QRP's reporting requirements currently only apply to residents
receiving skilled care in a SNF covered by Medicare Part A.
Comment: Two commenters suggested that CMS offer the flexibility
for SNFs to use SDOH data collected during the transition of care to
the SNF or during the look-back period, rather than requiring its
collection at admission. These commenters stated that they believed
CMS' focus should be on how SDOH information is used in care planning
and discharge planning, rather than requiring this information be
obtained via a resident's verbal responses during the look-back period
of the initial assessment.
Several commenters noted that CMS already collects many of the
proposed SDOH assessment items from other health care providers, such
as hospitals or other post-acute providers, prior to a SNF stay, and
encouraged CMS to consider supporting data portability and screening
interoperability across healthcare providers to avoid unnecessary
duplication of screenings and assessments.
Response: We interpret these commenters to be suggesting that CMS
should allow SNFs to obtain information collected in previous
healthcare settings, rather than requiring SNFs to obtain this
information from the resident upon the resident's admission to the SNF.
Obtaining information about the Living Situation, Food, Utilities, and
Transportation assessment items directly from the resident, sometimes
called ``hearing the resident's voice,'' is more reliable and accurate
than obtaining it from a health care provider that previously cared for
the resident for several reasons: the SNF would not know whether it was
collected from the resident or from a family member or other source;
the SNF would not know how the SDOH domain was defined--for example,
whether utilities included electricity, gas, oil, or water or only
asked about electricity; and the SNF would not be able to determine
whether the potential problem had been resolved since then. Most
importantly, we believe that by asking the resident these questions at
admission, it may prompt further discussion with the resident about
their needs and help formulate an appropriate discharge care plan.
We also appreciate the statements from commenters encouraging CMS
to support data portability and screening interoperability. As we noted
in the FY 2023 SNF PPS final rule (87 FR 47503 and 47504), to further
interoperability in post-acute care settings, CMS, and the Office of
the National Coordinator for Health Information Technology (ONC)
participate in the Post-Acute Care Interoperability Workgroup (PACIO)
to facilitate collaboration with interested parties to develop Health
Level Seven International[supreg] (HL7) Fast Healthcare
Interoperability Resource[supreg] (FHIR) standards. These standards
could support the exchange and reuse of patient assessment data derived
from the post-acute care (PAC) setting assessment tools, such as the
MDS, Inpatient Rehabilitation Facility--Patient Assessment Instrument
(IRF-PAI), Long-Term Care Hospital (LTCH) Continuity Assessment Record
and Evaluation (CARE) Data Set (LCDS), the Outcome and Assessment
Information Set (OASIS) used by Home Health Agencies, and other
sources. The CMS Data Element Library (DEL) continues to be updated and
serves as a resource for PAC assessment data elements, as well as
furthers CMS' goal of data standardization and interoperability. We
acknowledge that there are still opportunities to advance these goals,
and we will take these comments into consideration.
Comment: Several commenters offered suggestions or recommendations
for guidance related to collecting the proposed SDOH assessment items.
One commenter recommended that CMS include coding logic to allow
skipping the Utilities assessment item if a resident indicated that
they do not have a steady place to live, since it would be
inappropriate to ask about utilities if a resident has no place to
live.
Response: We appreciate all the comments we received about coding
these proposed new and modified SDOH assessment items, including the
Utilities assessment item. We proposed that SNFs would be required to
collect and submit information on the four new assessment items, to
have complete information. We do not agree that it would be
inappropriate to ask about utilities just because a resident does not
have a place to live at the time of the assessment. The resident may be
living in temporary housing or a shelter, and gathering this
information would still be important for their discharge planning.
Comment: Some commenters were also concerned that the proposed SDOH
assessment items will be challenging for SNF residents to respond to,
considering that many SNF residents have cognitive impairments or are
more severely ill than the average Medicare beneficiary for whom the
AHC HRSN Screening Tool was developed.
Response: We believe SNFs are accustomed to working with residents
with very complex medical conditions, including multiple comorbidities,
stroke, and cognitive decline, and we are confident in their ability to
collect this data in a consistent manner. There are currently several
resident interview assessment items on the MDS, and SNFs are accustomed
to administering these questions to cognitively impaired patients.
We also plan to provide training resources in advance of the
initial collection of the assessment items to ensure that SNFs have the
tools necessary to administer the new SDOH assessment items and reduce
the burden to SNFs in creating their own training resources. These
training resources may include online learning modules, tip sheets,
questions and answers documents, and/or recorded webinars and videos,
and would be available to providers in mid-2025, allowing SNFs several
months to ensure their staff take advantage of the learning
opportunities.
Comment: Another commenter expressed concerns about collecting data
on the Transportation assessment item from residents younger than 18
years old and recommended that CMS provide consideration for residents
requiring special accommodations. Additionally, one commenter
recommended that CMS consider a response option for SDOH assessment
items that residents refuse to answer due to concerns about
confidentiality or embarrassment.
Response: We are uncertain what the commenter's concerns are
related to collecting the Transportation assessment item from residents
younger than 18 years old, but we interpret the commenter to be
concerned that these residents would be too young to provide a response
or that these residents may be too young to have a driver's license,
[[Page 64117]]
so the question would not be applicable to them.
In response to the first potential concern that residents would be
too young to provide a response, we highlight that there is growing
recognition of the need for effective screening methods for HRSNs in
all patient populations, including pediatrics and adolescents. Children
are especially vulnerable to HRSN, as poverty in childhood correlates
to poor health outcomes.95 96 97 Although there is no
standardized protocol for screening in pediatric settings,\98\
organizations like the American Academy of Pediatrics provide toolkits
with suggestions for a screening protocol. Transportation has been
identified by hospitals and clinics 99 100 that care for
pediatric and adolescent patients as an important area to screen. One
hospital system began using the AHC HRSN Screening Tool, including the
proposed Transportation item, during selected well child visits at a
Federally Qualified Health Center, and found the tool was feasible to
administer and identified more than a third of patients with one or
more HRSNs.\101\
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\95\ Feltner C WI, Berkman N, et al. Screening for Intimate
Partner Violence, Elder Abuse, and Abuse of Vulnerable Adults: An
Evidence Review for the U.S. Preventive Services Task Force Agency
for Healthcare Research and Quality. 2018. Available at https://www.ncbi.nlm.nih.gov/books/NBK533720/.
\96\ National Academy of Science EaM. A Roadmap to Reducing
Child Poverty. The National Academies; 2019.
\97\ Wise PH. Child poverty and the promise of Human Capacity:
childhood as a foundation for healthy aging. Acad Pediatr.
2016;16(suppl 3):S37-S45.
\98\ Boch S, Keedy H, Chavez L, et al. An integrative review of
social determinants of health screenings used in primary care
settings. J Health Care Poor Underserved. 2020;31:603-622.
\99\ Halpin, K, Colvin, JD, Clements, MA, et al. Outcomes of
Health-Related Social Needs Screening in a Midwest Pediatric
Diabetes Clinic Network. Diabetes. 2023; Vol. 72; Iss: Supplement 1.
\100\ Nerlinger, AL, Kopsombut, G. Social determinants of health
screening in pediatric healthcare settings. Curr Opin Pediatr. 2023
Feb 1;35(1):14-21. Doi: 10.1097/MOP.0000000000001191.
\101\ Gray, T.W., Podewils, L.J., Rasulo, R.M., Weiss, R.P.,
Tomcho M.M. Examining the Implementation of Health-Related Social
Need (HRSN) Screenings at a Pediatric Community Health Center.
Journal of Primary Care & Community Health. 2023. Volume 14: 1-8.
https://doi.org/10.1177/21501319231171519.
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In response to the second potential concern that the question would
not be applicable to these residents because they may be too young to
have a driver's license, we believe that even if a patient younger than
18 years old cannot drive themselves, they may rely on others, or they
may use public transportation. As a result, they may still have
transportation access needs that should be identified.
We interpret the second part of the comment to be recommending that
we modify the response options to collect information about residents
requiring special transportation accommodations. Although the proposal
would require SNFs to collect the modified Transportation assessment
item as described in section VII.E.2. of this final rule, such
collection could potentially prompt the SNF to initiate conversations
with its residents about their potential Transportation needs, such as
special accommodations a resident may need to access transportation.
Additionally, SNFs may seek to collect any additional information that
they believe may be relevant to their resident population to inform
their care and discharge planning process.
Comment: One commenter recommended that CMS consider a response
option for SDOH assessment items that residents refuse to answer due to
concerns about confidentiality or embarrassment.
Response: As described in sections VII.C.3.(a), VII.C.3.(b),
VII.C.3.(c), and VII.C.5., each proposed new and modified SDOH item
includes response options for those scenarios where a resident declines
or is unable to provide information: (7) Resident declines to respond;
and (8) Resident is unable to respond.
Comment: A few commenters recommended provide SNFs more
flexibilities in collecting the new and modified SDOH assessment items.
Two of these commenters suggested the use of interviews, paper, and
electronic survey tools to administer the new and modified SDOH
assessment items. One of these commenters also noted that many provider
pre-admission processes now involve residents filling out pre-admission
questionnaires via paper, mobile apps, or resident portals.
Response: We appreciate the commenters' input on the mechanism of
collecting the new and modified SDOH assessment items. SNFs may use
different methods to collect the information from the resident, as long
as they are consistent with the coding guidance and defined look-back
periods in the MDS RAI manual.
Comment: One commenter expressed confusion with how CMS planned to
collect the proposed new SDOH assessment items, since the MDS does not
currently ask these questions.
Response: As stated in section VI.E.2 of the proposed rule, we
proposed adding these assessment items to a future version of the MDS
and requiring SNFs to begin collecting the assessment items for
residents admitted on or after October 1, 2025. A draft of the
assessment items can be found on the SNF QRP Measures and Technical
Information web page in the Downloads section at https://www.cms.gov/medicare/quality/snf-quality-reporting-program/measures-and-technical-information.
Comment: One commenter was concerned that SNFs would not be able to
collect the data on admission without knowledge of whether a patient is
expected to successfully rehabilitate and return home or would have to
remain in the nursing home as a long-stay resident.
Response: We acknowledge that residents' needs may change through
the course of their recovery in the SNF, but we also note that while
the proposal would require the collection of the SDOH items at
admission, we hope the questions would enable future conversations
between the SNF and residents about their potential SDOH needs. As the
commenter pointed out, it is important to think about the resident's
living situation in the context at multiple points during their care
journey, and collecting these items at admission would be an important
first step to that process.
Comment: Some commenters were concerned that the proposed SDOH
assessment items are not applicable to long-term residents receiving
skilled care under their Medicare Part A fee-for-service benefit, but
who have no plans to discharge back to the community. One commenter
specifically stated that the Utilities and Food assessment items are
not appropriate for these long-term residents because they reside in
the nursing home prior to their SNF stay. Two commenters recommended
that CMS consider adding a response option or a skip pattern for SNF
residents who are expected to be a long-term nursing home resident, or
for those who have resided in the facility during the 12-month look-
back period.
Response: We interpret these comments to be discussing long-term
residents of a nursing facility (NF) who become eligible for a SNF stay
and who are also not expected to be discharged from the SNF to the
community. If a resident has resided in a NF for at least 366 days
prior to the initiation of a new SNF stay, we acknowledge that such
long-term residents of the NF will have had the HRSNs that are the
subject of the proposed SDOH assessment items addressed by the NF
during the 12-month look-back period that applies to those items.
[[Page 64118]]
After consideration of these comments, we are finalizing a
modification to the data specifications of the new and modified SDOH
items so that they exclude any SNF residents who, immediately prior to
their hospitalization that preceded a new SNF stay, resided in a NF for
at least 366 continuous days. The SNF will not be required to ask the
resident regarding their specific living situation, food, utilities, or
transportation access during the 12-month look-back period because the
NF was responsible for providing these needed services. We believe
applying this criterion will decrease SNFs' burden of collecting these
SDOH items from SNF residents who have received services from a NF for
the entirety of the 12-month look-back period.
Comment: One commenter recommended we also require Medicare
Advantage (MA) plans to collect and submit SDOH data. They contend that
MA plans do not collect data on SDOH, but also make skilled coverage
and discharge decisions for plan enrollees. As a result, SDOH data is
not part of MA plans' decision-making process for discharge planning
and SNFs often disagree with the discharge and coverage decisions
issued by MA plans.
Response: We thank the commenter for their recommendation and
acknowledge that MA plans have a role to play in advancing health
equity. While this recommendation is outside the scope of this
rulemaking, we will consider this feedback for future policymaking. we
note the SNF QRP's reporting requirements currently only apply to
residents receiving skilled care covered by Medicare Part A.
Comment: One commenter spoke about how they convened multiple
interested parties to discuss the various social needs related
screening measures and how quality measures and quality programs can
best meet resident needs and policymakers' objectives. The result of
the meeting was ten principles for adoption, updating, and implementing
quality measures related to social needs, and they encouraged CMS to
consider these principles in furthering SDOH-related policies within
quality reporting and payment programs.
Response: We thank the commenter and note that we are not proposing
measures related to screening for HRSNs. We will consider this feedback
for future policymaking.
Comment: In response to the proposal to adopt two new Food
assessment items, one commenter urged CMS to require or strongly
encourage SNFs to immediately refer residents to social services to
provide residents and caregivers information on post-discharge
nutrition and food services (such as meal programs and oral nutrition
supplement options); as well as create a post-discharge nutrition/food
service plan to ensure services are provided as quickly as possible
after discharge from the SNF.
Response: We did not propose to require SNFs to do anything
specific with the information they obtain from the resident in response
to the Food items. SNFs already are required to develop and implement
an effective discharge planning process that focuses on the resident's
discharge goals, the preparation of residents to be active partners and
effectively transition them to post-discharge care, and the reduction
of factors leading to preventable readmissions. We believe the proposed
new SDOH assessment items have the potential to generate actionable
data SNFs can use to implement effective discharge planning processes
that can reduce the risk for negative outcomes such as hospital
readmissions and admission to a nursing facility for long-term care.
Given that SNFs must develop and implement an effective discharge
planning process that ensures the discharge needs of each resident are
identified, we believe collection of these new SDOH items will provide
key information to SNFs to support effective discharge planning.
Comment: Another commenter described the ongoing burden of CMS'
requirement for facilities to collect COVID-19 data. They noted the
lack of appropriate technology to manage regulatory requirements
necessitates the development of numerous internal processes, and
implementing the necessary technology requires significant time and
financial investment.
Response: This comment is out of scope for our proposals for the
SNF QRP. We will take this feedback into consideration with future
policy development work.
After careful consideration of the public comments we received, we
are finalizing our proposal to require SNFs to collect and submit data
on the following items adopted as standardized patient assessment data
elements under the SDOH category at admission only beginning with
October 1, 2025, SNF admissions: (1) Living Situation as described in
section VII.C.3(a) of this final rule; (2) Food as described in section
VII.C.3(b) of this final rule; and (3) Utilities as described in
section VII.C.3(c) of this final rule. We are also finalizing our
proposal to require SNFs to collect and submit the modified
standardized patient assessment data element, Transportation, at
admission only beginning with October 1, 2025, SNF admissions as
described in section VII.C.5 of this final rule. However, we are
finalizing a modification to the data specifications of the new and
modified SDOH items so that they exclude any SNF residents who,
immediately prior to their hospitalization that preceded a new SNF
stay, resided in a NF for at least 366 continuous days. SNFs can
monitor the MDS 3.0 Technical Information web page at https://www.cms.gov/medicare/quality/nursing-home-improvement/minimum-data-set-technical-information for updates.
3. Participation in a Validation Process Beginning With the FY 2027 SNF
QRP
Section 1888(h)(12)(A) of the Act (as added by section 111(a)(4) of
Division CC of the Consolidated Appropriations Act, 2021 (Pub. L. 116-
260)) requires the Secretary to apply a process to validate data
submitted under the SNF QRP. Accordingly, we proposed to require SNFs
to participate in a validation process that would apply to data
submitted using the MDS and SNF Medicare fee-for-service claims as a
SNF QRP requirement beginning with the FY 2027 SNF QRP. We proposed to
amend the regulation text at Sec. 413.360.
We are also considering additional validation methods that may be
appropriate to include in the future for the current measures submitted
through the National Healthcare Safety Network (NHSN), as well as for
other new measures we may consider for the program. Any updates to
specific program requirements related to the validation process would
be addressed through separate and future notice-and-comment rulemaking,
as necessary.
(a) Participation in a Validation Process for Assessment-Based Measures
The MDS is a resident assessment instrument that SNFs must complete
for all residents in a Medicare or Medicaid certified nursing facility,
and for residents whose stay is covered under SNF PPS in a non-critical
access hospital swing bed facility. The MDS includes the resident in
the assessment process, and uses standard protocols used in other
settings to improve clinical assessment and support the credibility of
programs that rely on MDS, like the SNF QRP.\102\
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\102\ Centers for Medicare and Medicaid Services (CMS) (2023,
March 29). Minimum Data Set (MDS) 3.0 for Nursing Homes and Swing
Bed Providers. https://www.cms.gov/medicare/quality-initiatives-patient-assessment-instruments/nursinghomequalityinits/nhqimds30.
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[[Page 64119]]
We proposed to adopt a validation process for the SNF QRP that is
similar to the validation process that we have adopted for the SNF
Value-Based Purchasing (VBP) program in the FY 2024 SNF PPS final rule
(88 FR 53323 through 53325) beginning with the FY 2027 SNF QRP. We
proposed that this process would closely align with the validation
process we have adopted for the SNF VBP program and would have the
following elements:
We proposed that our validation contractor would select,
on an annual basis, up to 1,500 SNFs that submit at least one MDS
record in the calendar year (CY) 3 years prior to the applicable FY SNF
QRP. For example, for the FY 2027 SNF QRP, we would choose up to 1,500
SNFs that submitted at least one MDS record in CY 2024. We also
proposed that the SNFs that are selected to participate in the SNF QRP
validation for a program year would be the same SNFs that are randomly
selected to participate in the SNF VBP validation process for the
corresponding SNF VBP program year.
We proposed that our validation contractor would request
up to 10 medical records from each of the selected SNFs. Each SNF
selected would only be required to submit records once in a fiscal
year, for a maximum of 10 records for each SNF selected. To decrease
the burden for the selected SNF, we proposed that the validation
contractor would request that the SNFs submit the same medical records,
at the same time, that are required from the same SNFs for purposes of
the SNF VBP validation.
We proposed that the selected SNFs would have the option
to submit digital or paper copies of the requested medical records to
the validation contractor and would be required to submit the medical
records within 45 days of the date of the request (as documented on the
request). If the validation contractor has not received the medical
records within 30 days of the date of the request, the validation
contractor would send the SNF a reminder in writing to inform the SNF
that it must submit the requested medical records within 45 days of the
date of the initial request.
We proposed that if a SNF does not submit the requested number of
medical records within 45 days of the initial request, we would, under
section 1888(e)(6)(A) of the Act, reduce the SNF's otherwise applicable
annual market basket percentage update by 2 percentage points. The
reduction would be applied to the payment update 2 fiscal years after
the fiscal year for which the validation contractor requested records.
For example, if the validation contractor requested records for FY
2027, and the SNF did not send them, we would reduce the SNF's
otherwise applicable annual market basket percentage update by 2
percentage points for the FY 2029 SNF QRP.
We also stated that we intended to propose in future rulemaking the
process by which we would evaluate the submitted medical records
against the MDS to determine the accuracy of the MDS data that the SNF
reported and that CMS used to calculate the measure results. We
solicited public comment on what that process could include.
We solicited public comments on our proposal to require SNFs that
participate in the SNF QRP to participate in a validation process for
assessment-based measures beginning with the FY 2027 SNF QRP.
We received public comments on these proposals. The following is a
summary of the comments we received and our responses.
Comment: Several commenters supported our proposal to require SNFs
to participate in a validation process that would apply to data
submitted using the MDS, and specifically to adopt a validation process
for the SNF QRP that is similar to the validation process we have
adopted for the SNF VBP program. Most of these commenters appreciated
the fact that we proposed using the same process that was adopted for
the SNF VBP program, and that records requested and submitted would
apply to the validation processes for both the SNF QRP and SNF VBP,
reducing provider burden.
Response: We agree that adopting a validation process for the SNF
QRP that is similar to the validation process that we adopted for the
SNF VBP program and using the same charts for both programs closely
aligns the validation processes and reduces burden for SNFs.
Comment: Several commenters noted that SNFs are required to submit
data for the SNF QRP and SNF VBP on different timelines and questioned
how the same records could be used for both programs. Specifically,
they pointed to the fact that SNFs submit data for the SNF QRP on a
calendar year (CY) basis, whereas SNFs submit data for the SNF VBP on a
fiscal year (FY) basis for purposes of both baseline and performance
period calculations. These commenters requested that CMS resolve the
apparent misalignment between the two programs' performance periods
prior to finalizing the proposal.
Response: Our intent is to use the same records, to the extent
feasible. However, we acknowledge that our proposal could have created
confusion for SNFs.
Therefore, we are finalizing this proposal with modification to
align the data collection period for the SNF QRP validation process
with the SNF VBP validation process so that the requested charts will
apply to the same FY program year for the SNF QRP and SNF VBP.
Specifically, we are finalizing that our validation contractor will
select, on an annual basis, up to 1,500 SNFs that submit at least one
MDS record in the fiscal year (FY) 2 years prior to the applicable FY
SNF QRP. For example, if the validation contractor requested records
for FY 2025, and the SNF did not submit them 45 days of the initial
request, we would reduce the SNF's otherwise applicable annual market
basket percentage update by 2 percentage points for the FY 2027 SNF QRP
(See Table 30). We are also finalizing conforming modifications to the
regulation text at Sec. 413.360(g)(1)(i), as discussed in section
VII.E.3(c) of this final rule.
This change will not affect the data collection or data submission
periods for the SNF QRP or the application of any reduction of the
SNF's otherwise applicable APU for meeting the SNF QRP reporting
requirements, including the required thresholds for the standardized
patient assessment data collected using the MDS or the data collected
and submitted through the CDC NHSN. This modification to our proposal
to use a FY period from which to identify MDS for validation rather
than a CY data collection period will only impact the new data
validation process requirement. We acknowledge that this will result in
SNFs having different data collection periods within the SNF QRP.
[[Page 64120]]
[GRAPHIC] [TIFF OMITTED] TR06AU24.034
Therefore, if the validation contractor requested records for FY
2025, and the SNF did not submit them within 45 days of the initial
request, the SNF would be found to be non-compliant with the SNF QRP
requirements for the FY 2027 SNF QRP. SNFs will be notified through the
already established methods if they are found to be non-compliant with
the SNF QRP requirements, including this new validation process as
finalized. Specifically, CMS issues notices of non-compliance to SNFs
via a letter distributed through at least one of the following
notification methods: the Non-Compliance Notification folders within
the internet Quality Improvement and Evaluation System (iQIES), the
United States Postal Service (USPS); or via an email from the SNFs
Medicare Administrative Contractor. For more information on this
process and timeline, see the SNF QRP Reconsideration and Exception &
Extension web page at https://www.cms.gov/medicare/quality/snf-quality-reporting-program/reconsideration-and-exception-extension.
Comment: Commenters questioned how one chart could be used to
validate data on measures that have different measure specifications in
the SNF QRP versus the SNF VBP and provided an example. They noted that
the SNF VBP program uses the Percent of Residents Experiencing One or
More Falls with Major Injury (Long stay) measure which reports the
percentage of long-stay nursing home residents with 101 or more
cumulative days in the facility and had one or more falls with major
injury reported, while the SNF QRP uses the Application of Percent of
Residents Experiencing One or More Falls with Major Injury (Long stay)
measure, which reports the percentage of Medicare Part A SNF stays
during which one or more falls with major injury were reported.
Response: We understand that measures used in the SNF QRP and the
SNF VBP program may have different measure specifications, including
the measure noted by the commenters. For example, Resident C and
Resident D were both residents of a SNF. Resident C was admitted to a
SNF for 26 days and then was discharged to home. Resident D, however,
had been a resident of a NF for 2 year and then received care as a
hospital inpatient making them eligible for a SNF stay. After Resident
D's hospital inpatient stay, they subsequently received skilled
services at the same NF/SNF.
If the validation contractor requested the medical records for
Resident C, the SNF would be subject to the 2 percentage penalty if
they failed to submit the medical record for the validation process. If
the validation contractor requested the medical records for Resident D,
the SNF QRP measures related to Resident D skilled stay are subject to
validation using the medical record and the SNF would be subject to the
2-percentage penalty if they failed to submit the medical record for
the validation process. With respect to the SNF VBP program measures,
Resident D's medical records would be used to validate the Percent of
Residents Experiencing One or More Falls with Major Injury (Long stay)
measure as required by the SNF VBP program validation process but will
not be subject to the SNF QRP penalty for failure to submit the medical
record. Any action for not submitting required medical records for the
SNF VBP program that are not part of the SNF QRP program will be
included in future rulemaking.
Comment: A commenter requested that CMS clarify that the 2
percentage point penalty would apply in total to both the SNF QRP and
SNF VBP program data validation processes.
Response: The 2 percentage point penalty would apply to the SNF QRP
only. There is currently no validation penalty in the SNF VBP.
Comment: A commenter requested that CMS clarify whether the 2
percentage point reduction to the applicable annual market basket
update when a SNF does not submit the requested number of medical
records within 45 days of the initial request is the same 2 percentage
point reduction that would apply to a SNF who did not meet the
reporting threshold, or whether there are two separate 2 percentage
point penalties. they are concerned a SNF will be penalized for the
same error in more than one way simultaneously, creating a double
jeopardy.
Response: We interpret the commenter's reference to a reporting
threshold to be referring to the data completion thresholds for
reporting measures data and standardized patient assessment data
collected using the MDS and the data collected and submitted through
the NHSN. In section VI.E.3.(c) of the proposed rule, we proposed to
add paragraph (f)(1)(iv) to our regulation at Sec. 413.360 to
establish that, if the SNF is selected for the validation process, the
SNF must submit 100 percent of medical records requested (up to 10), in
their entirety, within 45 days of the initial request. Failure to meet
this proposed data completeness requirement (submitting medical records
in their entirety as requested) or the required thresholds currently in
place (for the standardized patient assessment data collected using the
MDS or the data collected and submitted through the CDC NHSN) would
result in application of the 2 percentage point penalty to the SNF only
under the SNF QRP.
To summarize, we are finalizing that SNFs must comply with the
validation process to avoid application of the 2 percent penalty under
section 1888(e)(6)(A) of the Act. If the SNF fails to submit those
medical records within 45 days of the date on the initial request, then
we would apply the 2 percentage point penalty to FY 2027 SNF payments.
We would not apply more than one penalty to a SNF for the same program
year for failure to meet one or more of the SNF QRP's reporting
requirements for that program year.
Comment: Two commenters suggested CMS extend the time period for
SNFs to submit the medical records for data validation. One of these
commenters suggested an extension to 60 days. The other commenter
stated that only one
[[Page 64121]]
written notification sent and one follow-up after 30 days was not
adequate. They noted that written letters are easily misplaced,
especially in facilities with administration turnover, and requested
that CMS propose additional ways to notify providers of these reviews,
including placing the request on the claim remittance.
Response: We disagree with the commenters and believe that 45 days
with two notifications is the appropriate amount of notification. This
is consistent with other auditing time periods for SNFs. For example,
additional documentation requests (ADRs) sent by the Medicare
Administrative Contractors, Special Medicare Review Contractors and
Recovery Audit Contractors require records to be submitted within 45
days of the receipt of the letter.\103\
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\103\ https://www.cms.gov/data-research/monitoring-programs/medicare-fee-service-compliance-programs/medical-review-and-education/additional-documentation-request.
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Comment: One commenter requested further clarification on the
process by which a SNF would be notified they had been selected for a
validation audit and how CMS would provide confirmation that the
records had been received.
Response: SNFs selected for a validation audit will be notified via
a letter sent through the internet Quality Improvement and Evaluation
System (iQIES). We will notify SNFs that the medical records were
received via a letter sent through iQIES or via email.
Comment: Several commenters stated they were concerned about the
impact of a 2 percentage point payment adjustment to a randomly
selected SNF that was required to submit documentation to support one
MDS per year versus a randomly selected SNF that was required to submit
documentation to support a maximum of 10 MDSs per year. These
commenters stated that the risk of possibly dropping below an arbitrary
threshold for a SNF that was required to submit documentation to
support a maximum 10 MDS per year. They believe this barrier would be
extremely difficult to overcome in a fair manner.
Response: In section VII.E.3.(a) of this final rule, we proposed
that our validation contractor would request up to 10 medical records
from each of the randomly selected SNFs. If a SNF is selected for the
validation process and the SNF submits the requested number of medical
records within 45 days of the date of the initial letter, then the SNF
has met the proposed data completeness requirement for the validation
process. While we acknowledge the highly unlikely scenario of a SNF
being selected for validation on the basis of a single MDS submission
during the relevant time period, we believe it is necessary to
initially include all SNFs in the data validation process to meet the
statutory requirement to implement a validation process for all data
submitted for the SNF QRP.
We also noted in the same section of the rule that we intend to
propose in future rulemaking the process by which we would evaluate the
submitted medical records against the MDS to determine the accuracy of
the MDS data that the SNF reported and that CMS would use to calculate
the measure results (89 FR 23469). In establishing a validation
threshold in future rulemaking, we will consider feedback about small
sample sizes and/or uncertainty associated with sampling into account
in our statistical approach.
Comment: Several commenters were concerned that our proposed
timeline for implementation of the validation process for assessment-
based measures in the FY 2027 SNF QRP year does not allow time for
future rulemaking to determine the process by which we would evaluate
the submitted medical records against the MDS, determine the accuracy
of the MDS data the SNF reported, and provide subsequent notification
to the provider in a timely manner that would allow for reconsideration
requests, if needed.
They also stated they were concerned about a number of aspects of
the validation process that CMS did not describe in the proposed rule,
including the appeal process if a SNF disagreed with the validation
contractor's findings, the expected threshold for compliance with the
data validation, the penalty for noncompliance with the validation
threshold, and the penalty for noncompliance with the validation
threshold for the SNF VBP program. These commenters are concerned that
if CMS establishes an arbitrary minimum MDS accuracy threshold for the
SNF QRP validation process in the future without first establishing
clear guidelines understood by both the providers and the SNF QRP
validation contractors regarding support documentation requirements for
each SNF QRP assessment-based element, there could be severe variation
in the SNFs' performance scores. As a result, they believe that without
clear guidelines the results of a validation audit would be dependent
upon the SNF QRP validation contractor's independent determination
rather than on whether the MDS was accurately completed per CMS
requirements.
Response: Our proposal was limited to requiring SNFs that are
selected for validation to submit the requested medical records and to
impose a penalty if they do not comply with the request. Therefore, we
believe that our proposed implementation timeline is reasonable. We
intend to propose in future rulemaking a methodology for validating the
submitted medical records against the MDS to determine the accuracy of
the MDS data the SNF reported and CMS used to calculate the measure
results.
Comment: One commenter recommended that CMS not sample the same
facilities year over year if those facilities are performing well, but
rather target low performers so as not to impose undue burden on
facilities that are appropriately completing the MDS.
Response: We proposed to align the validation processes between the
SNF QRP and SNF VBP programs to reduce the potential burden associated
with the SNF QRP validation process. In the FY 2024 SNF PPS final rule
(88 FR 53324 through 53325), CMS adopted a SNF VBP program validation
process in which we would randomly select the SNFs to participate for
the corresponding SNF VBP program year. However, we also recognize that
SNFs would want an opportunity to provide input on potential criteria
we would use in a targeted selection process as well as need ample
notification regarding any targeted selection criteria. We will
consider moving to a targeted selection process for future rulemaking.
We note that beginning with a random selection process and moving
to a targeted selection process is consistent with the validation
process for the Hospital IQR Program. We began with random selection of
participating hospitals for the Reporting Hospital Quality Data for
Annual Payment Update (RHQDAPU) program (now the Hospital IQR Program)
for the FY 2012 payment determination (74 FR 43884 through 43889). For
the FY 2013 payment determination and subsequent years, we finalized
the adoption of an initial targeting criterion after soliciting
comments about potential targeting criteria (75 FR 50227 through
50229). As with the Hospital IQR Program's validation process, the SNF
QRP will start with a random selection process and consider moving to a
targeted selection process in future rulemaking. This is to ensure that
we gain experience in auditing the MDS and the corresponding SNF
medical records before we consider whether to propose a targeting
methodology. We believe that this experience will ensure a fair and
equitable audit process for all SNFs.
[[Page 64122]]
Comment: We received several comments related to the burden
associated with the proposals for SNFs to participate in a validation
process for assessment-based measures reported in the SNF QRP. Many of
these commenters were appreciative of our efforts to reduce burden
through using the same records for both SNF VBP validation and the SNF
QRP validation. Three of these commenters noted it would reduce the
risk of a SNF being audited in back-to-back validation cycles. Several
commenters stated they opposed the 2 percentage point penalty reduction
for failure to submit the requested medical records because SNFs cannot
afford continued decreases in their payments, and the proposal would
create additional administrative burden for SNFs that are already
suffering staffing deficiencies. One of these commenters noted that
adding validation audits is not effective in improving services in a
SNF.
Response: We acknowledge the commenters' concerns regarding the
potential burden associated with the proposals. We are aware of
potential provider burden and carefully considered the options
available to us to meet the statutory requirements while also
mitigating provider burden. As we previously noted in section VI.E.3.
of the proposed rule and section VII.E.3. of this final rule, section
1888(h)(12) of the Act requires that the Secretary apply a process to
validate data submitted under the SNF QRP. In addition, we are
interested in ensuring the validity of the data reported by SNFs
because use of these data has public reporting implications under the
SNF QRP. Valid and reliable quality measures are fundamental to the
effectiveness of our quality reporting programs. To ensure we receive
the medical records we request from selected SNFs, we proposed to
require timely submission of requested medical records for the SNF QRP
validation process. Specifically, we proposed to apply the SNF QRP's 2
percentage point reduction in accordance with section 1888(e)(6)(A) of
the Act if the selected SNF failed to submit 100 percent of the
requested medical records as specified. We believe these proposals will
ensure we receive the requested medical records so we may validate the
data they submitted for the SNF QRP.
Our goal is to minimize the burden we impose on SNFs under the SNF
QRP and we will continue considering this topic as we explore proposing
additional policies for the SNF QRP validation process. As discussed
further in section VI.E.3.(b) of this rule, we note that the claims-
based measures validation process we proposed does not impose any new
burden on SNFs.
We invited public comments on the future process by which we would
evaluate the submitted medical records against the MDS to determine the
accuracy of the MDS data that the SNF reported and that CMS would use
to calculate the measure results. We received several comments
providing various recommendations in response to this request.
Comment: One commenter urged CMS to ensure the reviews are done in
a fair and equitable manner, including having therapy professionals on
the review team when therapy services are provided to validate the
functional components associated with SNF QRP measures. Two commenters
noted that when the MDS was initially developed it was intended to be a
source record, particularly related to interview questions, and there
was no need to document elsewhere in the medical record redundant
assessment information. These commenters noted that as the MDS has
become a tool for reimbursement purposes, payment auditors have
penalized providers for not having this redundant documentation
repeated in the medical record, and also note that some States have
their own documentation requirements, sometimes contrasting with those
requirements published in the MDS Resident Assessment Instrument (RAI)
manual. Therefore, these commenters urged CMS to meet with SNFs,
including hosting a technical expert panel. Several commenters urged
CMS to have an appeals process SNFs could access if they disagree with
the validation contractor's findings, and a process through which SNFs
could apply for hardship exemption.
Finally, one commenter urged CMS to share this information as soon
as possible and provide ample time for evaluation and feedback prior to
finalizing and implementing a validation process to validate MDS
accuracy.
Response: We thank the commenters for their suggestions, and we
will consider this feedback as we consider future rulemaking.
After careful consideration of the public comments we received, we
are finalizing this proposal with modification that SNFs that
participate in the SNF QRP will be required to participate in a
validation process for assessment-based measures beginning with the FY
2027 SNF QRP. Specifically, our validation contractor will select, on
an annual basis, up to 1,500 SNFs that submit at least one MDS record
in the FY two years prior (rather than the CY 3 years prior) to the
applicable FY SNF QRP. For example, for the FY 2027 SNF QRP, we will
choose up to 1,500 SNFs that submitted at least one MDS record in FY
2025.
(b) Application of the Existing Validation Process for Claims-Based
Measures Reported in the SNF QRP
Beginning with the FY 2027 SNF QRP, we proposed to apply the
process we currently use to ensure the accuracy of the Medicare fee-
for-service claims to validate claims-based measures under the SNF QRP.
Specifically, information reported through Medicare Part A fee-for-
service claims are validated for accuracy by Medicare Administrative
Contractors (MACs) to ensure accurate Medicare payments. MACs use
software to determine whether billed services are medically necessary
and should be covered by Medicare, review claims to identify any
ambiguities or irregularities, and use a quality assurance process to
help ensure quality and consistency in claim review and processing.
They conduct prepayment and post-payment audits of Medicare claims,
using both random selection and targeted reviews based on analyses of
claims data.
We use data to calculate claims-based measures for the SNF QRP. We
believe that adopting the MAC's existing process of validating claims
for medical necessity through targeted and random audits would satisfy
the statutory requirement to adopt a validation process for data
submitted under the SNF QRP for claims-based measures at section
1888(h)(12)(A) of the Act (as added by section 111(a)(4) of Division CC
of the Consolidated Appropriations Act, 2021 (Pub. L. 116-260)).
We solicited public comment on our proposal to apply the MAC's
existing validation process for the SNF QRP claims-based measures
beginning with the FY 2027 program year.
We received public comments on these proposals. The following is a
summary of the comments we received and our responses.
Comment: Two commenters stated that the proposal was vague and
provides insufficient detail to estimate what the scope and burden
would be associated with this proposal. One commenter submitted a
number of questions seeking clarification on the process for claims-
based measure validation, including the number of SNF providers that
would be subject to the proposed claims-based SNF QRP validation
process, whether there was a limit to the number of claims for which a
provider must submit supporting
[[Page 64123]]
documentation to the MAC, what specific documentation would SNFs be
required to submit to the MAC, the specific criteria fee-for-service
payment contractors would use to validate the accuracy of the SNF
quality-related data, and how a fee-for-service payment auditor would
convert/apply their payment process to review claims. Finally, these
commenters recommended CMS rescind this proposal and meet with
interested parties to identify a more appropriate approach to be
presented in subsequent rulemaking.
Response: We interpret the commenters to be seeking further
clarification on several issues related to how claims would be
validated. As we noted in section VI.E.3.(b) of the proposed rule and
section VII.E.3.(b) of this final rule, we proposed to use the same
process for the SNF QRP claims-based measures as we adopted in the FY
2023 SNF PPS final rule (87 FR 47590 through 47591) for the SNF All-
Cause Readmission (SNFRM) measure in the SNF VBP, since many of SNF QRP
measures have already been adopted into the SNF VBP program.
Specifically, we believe that relying on the MACs' existing process
of validating claims for medical necessity through targeted and random
audits, as discussed in our proposal, satisfies our statutory
requirement to adopt a validation process for claims-based measures for
the SNF QRP. Given that we calculate SNFs' performance on claims-based
measures based on claims they submit for payment under Medicare Part A,
and SNFs do not submit any additional data for these claims-based
measures, the only information to be validated is whether the claim
accurately reflects the services the SNF provided. The MACs' existing
process for validating claims, including whether they are medically
necessary, addresses whether the information in the claims, which we
use to calculate the claim-based measures, is accurate. We also believe
that using the same validation process will reduce any additional
burden and mitigate any concerns from providers. On this basis, we
proposed to rely on the MACs' existing claims validation process to
validate the information we use to calculate claims-based measures for
SNFs. We clarify that we would deem the information reported through
claims, and used for claims-based measures, as validated based on the
MACs' existing process for validating the accuracy of claims; neither
SNFs nor CMS would take any further action to validate claims-based
measures under this proposal. If we decide to further validate claims-
based measures beyond the MAC's existing process, this would be done in
future rulemaking.
Comment: Two other commenters questioned how CMS' process to
validate claims for medical necessity is analogous to validating data
for accuracy in quality reporting and requests further clarification.
Response: Specifically, we believe that relying on the MACs'
existing process of validating claims for medical necessity through
targeted and random audits, as discussed in our proposal, satisfies our
statutory requirement to adopt a validation process for claims-based
measures for the SNF QRP. Given that we calculate SNFs' performance on
claims-based measures based on claims they submit for payment under
Medicare Part A, and SNFs do not submit any additional data for these
claims-based measures, the only information to be validated is whether
the claim accurately reflects the services the SNF provided. The MACs'
existing process for validating claims, including whether they are
medically necessary, addresses whether the information in the claims,
which we use to calculate the claim-based measures, is accurate. We
also believe that using the same validation process will reduce any
additional burden and mitigate any concerns from providers.
After careful consideration of the public comments we received, we
are finalizing our proposal to apply the MAC's existing validation
process for the SNF QRP claims-based measures beginning with the FY
2027 program year.
(c) Amending the Regulation Text at Sec. 413.360
We proposed to amend our regulation at Sec. 413.360 to reflect
these proposed policies. Specifically, we proposed to add paragraph (g)
to our regulation at Sec. 413.360, which would codify the procedural
requirements we proposed for these validation processes for SNF QRP. We
also proposed to add paragraph (f)(1)(iv) to our regulation at Sec.
413.360 to establish that, if the SNF is selected for the validation
process, the SNF must submit up to 10 medical records requested, in
their entirety. Finally, we proposed minor technical amendments for our
regulation at Sec. 413.360(f)(3) to apply to all data completion
thresholds implemented in Sec. 413.360(f)(1).
We solicited public comments on our proposal to amend our
regulation at Sec. 413.360. We received public comments on these
proposals. The following is a summary of the comments we received and
our responses.
Comment: We received one comment on our proposal to amend the
regulation text at Sec. 413.360. This commenter noted that in the
proposed rule on display at the Federal Register (89 FR 23494 column
2), it appears that the proposed Sec. 413.360(g)(1)(iii) may be
misworded. Specifically, paragraph (g)(1)(iii) is under Sec.
413.360(g), the description of MDS-assessment-based SNF QRP validation
process requirement to submit supporting medical records documentation
within 45 days of the date of the records request. However, it refers
to paragraph (g)(2) which is related to the claims-based SNF QRP
validation process, rather than referencing the MDS-based validation
process paragraph (g)(1).
Response: We thank the commenter for pointing out this
typographical error. We are finalizing Sec. 413.360(g)(1)(iii) with
modification to correct this minor technical error.
Comment: We received one comment on our proposal to add the
regulation text at Sec. 413.360(g)(2). This commenter requested that
paragraph (g)(2) should be rescinded from the proposed 413.360
revisions pending further consideration for reintroduction in a revised
manner in future rulemaking.
Response: We disagree with the commenter. As we noted in section
VI.E.3.(b) of the proposed rule and section VII.E.3.(b) of this final
rule, we proposed to use the same process for the SNF QRP claims-based
measures as we adopted in the FY 2023 SNF PPS final rule (87 FR 47590
through 47591) for the SNF All-Cause Readmission (SNFRM) measure in the
SNF VBP, since many of SNF QRP measures have already been adopted into
the SNF VBP program.
Specifically, we believe that relying on the MACs' existing process
of validating claims for medical necessity through targeted and random
audits, as discussed in our proposal, satisfies our statutory
requirement to adopt a validation process for claims-based measures for
the SNF QRP. Given that we calculate SNFs' performance on claims-based
measures based on claims they submit for payment under Medicare Part A,
and SNFs do not submit any additional data for these claims-based
measures, the only information to be validated is whether the claim
accurately reflects the services the SNF provided. The MACs' existing
process for validating claims, including whether they are medically
necessary, addresses whether the information in the claims, which we
use to calculate the claim-based measures, is accurate. We also believe
that using the same validation process will reduce any
[[Page 64124]]
additional burden and mitigate any concerns from providers. On this
basis, we proposed to rely on the MACs' existing claims validation
process to validate the information we use to calculate claims-based
measures for SNFs. We clarify that we would deem the information
reported through claims, and used for claims-based measures, as
validated based on the MACs' existing process for validating the
accuracy of claims; neither SNFs nor CMS would take any further action
to validate claims-based measures under this proposal. If we decide to
further validate claims-based measures beyond the MAC's existing
process, this would be done in future rulemaking.
Comment: We received one comment related to SNF QRP data collected
and submitted through NHSN that was out of scope of the proposals for
the SNF QRP assessment-based measures and claims-based measures
validation processes. This commenter requested CMS to engage with SNF
interested parties in potential future additional SNF QRP validation
approaches related to data submitted through NHSN. They note there have
been multiple challenges for providers over the years with both the
data submission processes to NHSN as well as data coordination between
the CDC that manages NHSN reporting processes, and CMS who manages the
SNF QRP requirements.
Response: This comment is out of scope for our proposals for the
SNF QRP. We will take the commenter's request into consideration for
our future policy making with respect to the validation process.
After careful consideration of the public comments we received, we
are finalizing our proposal to amend our regulation at Sec. 413.360 to
codify the data validation process for the SNF QRP with two
modifications. First, as discussed in section VII.E.3.(a) of this final
rule, we are finalizing our proposal for selection of SNFs for this
validation process with modification. We are finalizing that our
validation contractor will select, on an annual basis, up to 1,500 SNFs
that submit at least one MDS record in the FY 2 years prior, rather
than the CY 3 years prior, to the applicable FY SNF QRP. Therefore, we
are finalizing the regulation text at Sec. 413.360(g)(1)(i) with
modification to conform with this modification to our criteria for
selecting SNFs to participate in this validation process.
Second, we are modifying the regulation text at Sec.
413.360(g)(1)(iii) to correct a minor technical error, so it properly
cross-references paragraph (g)(1) instead of paragraph (g)(2).
F. Policies Regarding Public Display of Measure Data for the SNF QRP
As outlined in the proposed rule, we did not propose any new
policies regarding the public display of measure data in the FY 2025
SNF PPS proposed rule. For a discussion of our policies regarding
public display of SNF QRP measure data and procedures for the SNFs to
review and correct data and information prior to their publication, we
refer readers to the FY 2017 SNF PPS final rule (81 FR 52045 through
52048).
VIII. Updates to the Skilled Nursing Facility Value-Based Purchasing
(SNF VBP) Program
A. Statutory Background
Through the Skilled Nursing Facility Value-Based Purchasing (SNF
VBP) Program, we award incentive payments to SNFs to encourage
improvements in the quality of care provided to Medicare beneficiaries.
The SNF VBP Program is authorized by section 1888(h) of the Act, and it
applies to freestanding SNFs, SNFs affiliated with acute care
facilities, and all non-CAH swing bed rural hospitals. We believe the
SNF VBP Program has helped to transform how Medicare payment is made
for SNF care, moving increasingly towards rewarding better value and
outcomes instead of merely rewarding volume. Our codified policies for
the SNF VBP Program can be found in our regulations at 42 CFR
413.337(f) and 413.338.
1. Spotlight on the CMS National Quality Strategy
As part of the CMS National Quality Strategy,\104\ we are committed
to aligning measures across our quality programs and ensuring we
measure quality across the entire care continuum in a way that promotes
the best, safest, and most equitable care for all individuals.
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\104\ https://www.cms.gov/medicare/quality/meaningful-measures-initiative/cms-quality-strategy.
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We believe that improving alignment of measures across the CMS
quality programs will reduce provider burden while also improving the
effectiveness of quality programs. However, we also recognize that a
one-size-fits-all approach fails to capture important aspects of
quality in our healthcare system across populations and care settings.
To move towards a more streamlined approach that does not lose
sight of important aspects of quality, we are implementing a building-
block approach: a ``Universal Foundation'' of quality measures across
as many of our quality reporting and value-based care programs as
possible, with additional measures added on depending on the population
or setting (``add-on sets'').\105\
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\105\ https://www.cms.gov/aligning-quality-measures-across-cms-universal-foundation.
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Our goal with the Universal Foundation is to focus provider
attention on measures that are the most meaningful for patients and
patient outcomes, reduce provider burden by streamlining and aligning
measures, allow for consistent stratification of measures to identify
disparities in care between and among populations, accelerate the
transition to interoperable, digital quality measures, and allow for
comparisons across quality and value-based care programs to better
understand what drives quality improvement and what does not.
We select measures for the Universal Foundation that are of high
national impact, can be benchmarked nationally and globally, are
applicable to multiple populations and settings, are appropriate for
stratification to identify disparity gaps, have scientific
acceptability, support the transition to digital measurement, and have
no anticipated unintended consequences with widespread measure
implementation.
We believe that the creation of this Universal Foundation will
result in higher quality care for the more than 150 million Americans
covered by our programs and will serve as an alignment standard for the
rest of the healthcare system. We continue to collect feedback from
interested parties through listening sessions, requests for information
and proposed rulemaking, and other interactions to refine our approach
as we work to implement the Universal Foundation across our quality
programs. As we continue building the SNF VBP measure set, we intend to
align with the measures in the Universal Foundation, as well as the
post-acute care add-on measure set, to the extent feasible.
We received one comment on our discussion of the CMS National
Quality Strategy. The following is a summary of the comment we received
and our response.
Comment: One commenter supported CMS' intent to align the Program's
measure set with the Universal Foundation.
Response: We thank the commenter for their support.
B. Regulation Text Technical Updates
We proposed to make several technical updates to our regulation
text. First, we proposed to update
[[Page 64125]]
Sec. 413.337(f) to correct the cross-references in that section to
Sec. 413.338(a). Second, we proposed to update the definition of ``SNF
readmission measure'' in Sec. 413.338(a) by replacing the references
to the Skilled Nursing Facility Potentially Preventable Readmissions
(SNFPPR) measure with a reference to the Skilled Nursing Facility
Within-Stay Potentially Preventable Readmission (SNF WS PPR) measure,
by clarifying that we specified both measures under section 1888(g) of
the Act, and by clarifying that the SNF readmission measure will be the
SNF WS PPR measure beginning October 1, 2027. This change will align
the definition of ``SNF readmission measure'' with policies we have
previously finalized for the SNF VBP, including that we will not use
the SNFPPR and that we will replace the SNFRM with the SNF WS PPR
beginning October 1, 2027.
In addition, we proposed to redesignate the term ``performance
score'' at Sec. 413.338(a) with the term ``SNF performance score'' for
consistency with the terminology we are now using in the Program, and
to make conforming edits to the last sentence of Sec. 413.337(f). We
also proposed to replace the references to ``program year'' with
``fiscal year'' in the definitions of ``health equity adjustment (HEA)
bonus points,'' ``measure performance scaler'', ``top tier performing
SNF'', and ``underserved multiplier'' to align the terminology with
that used in the remainder of that section.
We also proposed to update Sec. 413.338(f) to redesignate
paragraphs (f)(1) through (4) as paragraphs (f)(2) through (5),
respectively. We also proposed to add a new paragraph (f)(1) and to
revise the newly redesignated paragraphs (f)(2) and (3).
In addition, we proposed to update Sec. 413.338(j)(3) to include
additional components of the MDS validation process that we finalized
in the FY 2024 SNF PPS final rule (88 FR 53324 through 53325). In
particular, we proposed to include the SNF selection, medical record
request, and medical record submission processes for MDS validation.
Further, we proposed to remove Sec. 413.338(d)(5) from the
regulation text because the only measure that will be in the SNF VBP
Program until the FY 2026 program year is the SNFRM, and to add new
paragraph (l)(1) which will state that the SNF VBP measure set for each
year includes the statutorily-required SNF readmission measure and,
beginning with the FY 2026 program year, up to nine additional measures
specified by CMS.
We invited public comment on these proposed technical updates to
our regulation text.
We did not receive public comments on these proposals, and
therefore, we are finalizing them as proposed.
C. SNF VBP Program Measures
1. Background
We refer readers to the FY 2024 SNF PPS final rule for background
on the measures we have adopted for the SNF VBP Program (88 FR 53276
through 53297).
Table 31 lists the measures that have been adopted for the SNF VBP
Program, along with their timeline for inclusion.
[GRAPHIC] [TIFF OMITTED] TR06AU24.035
[[Page 64126]]
2. Measure Selection, Retention, and Removal Policy Beginning With the
FY 2026 SNF VBP Program Year
Section 1888(h)(2) of the Act requires the Secretary to apply the
measure specified under section 1888(g)(1) (currently the SNFRM) and
replace that measure, as soon as practicable, with the measure
specified under section 1888(g)(2) (currently the SNF WS PPR measure).
Section 1888(h)(2) of the Act also allows the Secretary to apply, as
appropriate, up to nine additional measures to the SNF VBP Program, in
addition to the statutorily required SNF readmission measure. We have
now adopted seven additional measures for the Program (see the FY 2023
SNF PPS final rule (87 FR 47564 through 47580) and the FY 2024 SNF PPS
final rule (88 FR 53280 through 53296)).
Now that the SNF VBP Program includes measures in addition to the
SNFRM (which will be replaced with the SNF WS PPR measure beginning
with the FY 2028 program year), we stated in the FY 2025 SNF PPS
proposed rule (89 FR 23471 through 23472) that we believe it is
appropriate to adopt a policy that governs the retention of measures in
the Program, as well as criteria we will use to consider whether a
measure should be removed from the Program. These policies will help
ensure that the Program's measure set remains focused on the best and
most appropriate metrics for assessing care quality in the SNF setting.
We also believe that the proposed measure removal policy will
streamline the rulemaking process by providing a sub-regulatory process
that we can utilize to remove measures from the Program that raise
safety concerns while also providing sufficient opportunities for the
public to consider, and provide input on, future proposals to remove a
measure.
Other CMS quality programs, including the SNF QRP and Hospital
Inpatient Quality Reporting (IQR) Program, have adopted similar
policies. For example, in the FY 2016 SNF PPS final rule (80 FR 46431
through 46432), the SNF QRP adopted 7 removal factors and, in the FY
2019 SNF PPS final rule (83 FR 39267 through 39269), the SNF QRP
adopted an additional measure removal factor, such that a total of
eight measure removal factors are now used to determine whether a
measure should be removed. The SNF QRP also codified those factors at
Sec. 413.360(b)(2).
For the purposes of the SNF VBP Program, we proposed to adopt a
measure selection, retention, and removal policy beginning with the FY
2026 SNF VBP program year. The proposed policy would apply to all SNF
VBP measures except for the SNF readmission measure because we are
statutorily required to retain that measure in the measure set.
First, we proposed that when we adopt a measure for the SNF VBP
Program for a particular program year, that measure will be
automatically retained for all subsequent program years unless we
propose to remove or replace the measure. We believe that this policy
will make clear that when we adopt a measure for the SNF VBP Program,
we intend to include that measure in all subsequent program years. This
policy will also avoid the need to continuously propose a measure for
subsequent program years.
Second, we proposed that we will use notice and comment rulemaking
to remove or replace a measure in the SNF VBP Program to allow for
public comment. We also proposed that we will use the following measure
removal factors to determine whether a measure should be considered for
removal or replacement:
(1) SNF performance on the measure is so high and unvarying that
meaningful distinctions and improvements in performance can no longer
be made;
(2) Performance and improvement on a measure do not result in
better resident outcomes;
(3) A measure no longer aligns with current clinical guidelines or
practices;
(4) A more broadly applicable measure for the particular topic is
available;
(5) A measure that is more proximal in time to the desired resident
outcomes for the particular topic is available;
(6) A measure that is more strongly associated with the desired
resident outcomes for the particular topic is available;
(7) The collection or public reporting of a measure leads to
negative unintended consequences other than resident harm; and
(8) The costs associated with a measure outweigh the benefit of its
continued use in the Program.
Each of these measure removal factors represent instances where the
continued use of a measure in the Program would not support the
Program's objective, which is to incentivize improvements in quality of
care by linking SNF payments to performance on quality measures.
Therefore, we believe that these are appropriate criteria for
determining whether a measure should be removed or replaced.
Third, upon a determination by CMS that the continued requirement
for SNFs to submit data on a measure raises specific resident safety
concerns, we proposed that we may elect to immediately remove the
measure from the SNF VBP measure set. Upon removal of the measure, we
will provide notice to SNFs and the public, along with a statement of
the specific patient safety concerns that will be raised if SNFs
continue to submit data on the measure. We will also provide notice of
the removal in the Federal Register.
We proposed to codify this policy at Sec. 413.338(l)(2) and (3) of
our regulations.
We invited public comment on the proposed measure selection,
retention, and removal policy. We also invited public comment on our
proposal to codify this policy at Sec. 413.338(l)(2) and (3).
We received public comments on these proposals. The following is a
summary of the comments we received and our responses.
Comment: Many commenters supported CMS' proposal to adopt a measure
selection, retention, and removal policy. A few commenters appreciated
that the policy aligns with the policies used in other CMS quality
programs. A few commenters believed this policy allows CMS to
prioritize evidence-based quality measures that are focused on critical
aspects of quality and helps reduce the provider burden associated with
data collection when a measure that is no longer valuable is removed
from the Program. A few commenters supported the proposal to use notice
and comment rulemaking to propose removal or replacement of a measure
as well as to provide public notification when a measure is removed.
One commenter supported the measure removal criteria believing that
these criteria should be met before a measure is removed from the
Program. One commenter believed this policy provides CMS flexibility to
remove measures with safety concerns, which the commenter believed is
important for maintaining high standards of care. One commenter
believed this policy aligns with the criteria used by the Consensus-
Based Entity (CBE) during the measure endorsement process.
Response: We thank the commenters for their support. We agree that
this policy will help ensure that the Program's measure set remains
focused on the best and most appropriate metrics for assessing care
quality in the SNF setting.
Comment: A few commenters supported the measure selection,
retention, and removal policy but also provided recommendations related
to the proposed policy. One commenter encouraged CMS to seek input from
[[Page 64127]]
interested parties when deciding to remove a measure based on measure
removal factor 8 (the costs associated with a measure outweigh the
benefit of its continued use in the Program) because the cost/benefit
relationship may be viewed differently by different interested parties.
One commenter recommended that CMS create publicly available monitoring
reports that assess whether a measure shows or lacks meaningful
performance improvement because many factors influence the threshold
for determining when facilities can no longer make improvements, and
the commenter believed it is important for the industry to understand
these changes over time. One commenter recommended that CMS consider
the correlation between existing SNF VBP measures and alternative
metrics as part of the measure selection, retention, and removal
policy. The commenter believed that if the correlation for the same
desired outcome between the measures is high, CMS should also consider
the measure for removal.
Response: We thank the commenters for their recommendations. With
respect to the commenter's recommendation that we seek input from
interested parties when deciding to remove a measure based on measure
removal factor 8, we proposed to use notice and comment rulemaking to
remove or replace a measure in the SNF VBP Program unless we determine
that the continued requirement for SNFs to submit data on a measure
raises specific resident safety concerns. We believe this proposal
provides ample opportunity for interested parties to provide input.
With respect to commenters' other recommendations, we intend to take
these into consideration as part of our normal monitoring and
evaluation efforts related to SNF VBP Program policies.
Comment: One commenter recommended that measures not endorsed by
the CBE be removed and considered ineligible for inclusion in the SNF
VBP Program.
Response: Although section 1888(h) of the Act does not require that
measures adopted in the SNF VBP Program be endorsed by the CBE, we
consider CBE-endorsed measures when selecting new measures to propose
for the Program. In some cases, there is not a CBE-endorsed measure for
a measure topic that we consider important for inclusion in the SNF VBP
Program. For example, the Nursing Staff Turnover measure that we
adopted in the FY 2024 SNF PPS final rule (89 FR 53281 through 53286)
is not endorsed by the CBE, but we believe this measure is important
for the SNF VBP Program given the well-documented impact of nursing
staff turnover on resident outcomes.
Comment: One commenter did not support CMS' proposal to immediately
remove a measure that raises resident safety concerns because it was
not clear to the commenter how CMS would assess and make such a
determination. The commenter also believed that this policy would give
CMS the ability to make immediate decisions on removing measures
without public input and without explaining to the public how the
determination was made.
Response: We acknowledge the commenter's concern. We note that this
proposed SNF VBP policy to immediately remove a measure that raises
resident safety concerns is based on the policies finalized in other
Programs such as the SNF QRP, which finalized this policy in the FY
2016 SNF PPS final rule (80 FR 46431), and the Hospital Value-Based
Purchasing Program, which finalized this policy in the FY 2017 IPPS/
LTCH PPS final rule (83 FR 41446). We intend to use this proposed
authority narrowly and only in those circumstances where continued
reporting on a measure poses specific and serious resident safety
concerns. When making such a determination, we intend to review and
analyze the available evidence raising a specific and serious resident
safety concern and be transparent about our concerns and findings when
the measure is removed and during subsequent rulemaking. For example,
we announced in December 2008 that we would immediately remove the AMI-
6-Beta blockers at arrival measure from the Hospital IQR Program (then
known as the Reporting Hospital Quality Data for Annual Payment Update
(RHQDAPU) Program) following the release of updated clinical guidance
and evidence of increased mortality risk for some patients. We
subsequently confirmed the removal of the AMI-6-Beta blockers at
arrival measure in the FY 2010 IPPS final rule (74 FR 43863). We also
note that since we first adopted a version of this policy in FY 2010,
we have applied the policy only sparingly.
Further, as stated in the proposed rule (89 FR 23472), if we elect
to immediately remove a measure from the Program, we will provide
notice to SNFs and the public through regular communication channels,
along with a statement of the specific resident safety concerns that
result from the continued use of the measure in the Program. We will
also provide notice of the removal in the Federal Register.
After consideration of public comments, we are finalizing the
measure selection, retention, and removal policy beginning with the FY
2026 program year as proposed. We are also finalizing our proposal to
codify this policy at Sec. 413.338(l)(2) and (3) of our regulations.
3. Future Measure Considerations
Section 1888(h)(2) of the Act allows the Secretary to apply, as
appropriate, up to nine additional measures to the SNF VBP Program, in
addition to the statutorily required SNF readmission measure. These
measures may include measures of functional status, patient safety,
care coordination, or patient experience.
In the FY 2022 SNF PPS proposed rule (86 FR 20009 through 20011),
we requested public comment on potential future measures to include in
the expanded SNF VBP Program. After considering the public input we
received, we adopted three new measures in the FY 2023 SNF PPS final
rule (87 FR 47564 through 47580). Two of those measures will be scored
beginning with the FY 2026 program year: the SNF HAI and Total Nurse
Staffing measures; and the third measure will be scored beginning with
the FY 2027 program year: the DTC PAC SNF measure. In the FY 2024 SNF
PPS final rule (88 FR 53280 through 53296), we adopted four additional
measures. One of those measures, the Nursing Staff Turnover measure,
will be scored beginning with the FY 2026 program year, while the other
three measures will be scored beginning with the FY 2027 program year:
the Falls with Major Injury (Long Stay), DC Function, and Long Stay
Hospitalizations measures.
With the adoption of those seven measures, in addition to the
statutorily required SNF readmission measure, the SNF VBP Program will
include eight measures that cover a range of quality measure topics
important for assessing the quality of care in the SNF setting.
Therefore, as permitted under section 1888(h)(2)(A)(ii) of the Act, we
can add up to two additional measures in the Program unless and until
we remove measures in the future.
As part of our efforts to build a robust measure set for the SNF
VBP Program, we are considering several options related to new measures
and other measure set adjustments. First, we recognize that gaps remain
in the current measure set and therefore, we are considering which
measures are best suited to fill those gaps. Specifically, we are
assessing several resident experience measures to determine their
appropriateness and feasibility for
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inclusion in the Program. We are also testing the appropriateness of
measures that address other CMS priorities, such as interoperability
and health equity/social determinants of health.
Beyond the adoption of new measures, we are also considering other
measure set adjustments. For example, we are assessing the feasibility
of a staffing composite measure that would combine the two previously
adopted staffing measures. We are also considering whether measure
domains and domain weighting are appropriate for the SNF VBP Program.
While we did not propose any new measures or measure set
adjustments in the proposed rule, we will continue to assess and
determine which, if any, of these options would help us maximize the
impact of the SNF VBP Program measure set and further incentivize
quality of care improvements in the SNF setting. We welcomed
commenters' continuing feedback on potential new measure topics and
other measure set adjustments.
We received public comments related to future measure
considerations for the SNF VBP Program. The following is a summary of
the comments we received.
Comment: Several commenters supported CMS' consideration of an
interoperability measure for the SNF VBP Program. Specifically, a few
commenters recommended that a potential future interoperability measure
assess electronic exchange of data elements critical to care
transitions and that the measure be aligned with other Federal policies
on this topic. A few commenters also recommended that any future
measure on interoperability be paired with financial resources or other
assistance to support the adoption of electronic health records (EHRs)
and other health information technology (IT) resources in the SNF
setting, and that CMS provide a transition period of 3 to 5 years for
facilities to incorporate these technologies. One commenter suggested
exploring interoperability measures to enable more consistent care
across various health settings. One commenter recommended testing the
interoperability measure prior to inclusion in the Program.
A few commenters expressed support for the potential future
adoption of a resident experience measure noting that resident
experience is a key measure of a provider's quality and that the lack
of such a measure is the largest gap in the current SNF VBP measure
set. One commenter recommended adoption of the CoreQ measure as it is a
measure of resident satisfaction endorsed by the CBE. Another commenter
recommended that CMS consider the Patient Activation Measure[supreg]
performance measure (PAM-PM) for future application in the Program.
A few commenters recommended other measure topics that CMS should
consider for the SNF VBP Program including a vaccination measure,
specifically the Adult Immunization Status (AIS) measure, as well as
measure topics being considered for the SNF QRP, such as depression and
pain management. One commenter recommended that CMS consider a measure
that assesses SNF residents' access to physical medicine and
rehabilitation (PM&R) physicians because the commenter believes that
PM&R engagement is important in SNFs where staff may not have the
expertise to address medical complications or barriers to therapy
participation and progression. Another commenter recommended a measure
that evaluates the quality of health benefits being provided to direct
care workers. One commenter recommended measures that appropriately
incentivize and financially reward high-performing SNFs and identified
the Measures Under Consideration (MUC) process as especially important
to developing and refining measures.
One commenter recommended that CMS revise the specifications for
the Nursing Staff Turnover measure so that the measure only counts gaps
in employment of more than 120 days, instead of the current 60 days, as
turnover. The commenter expressed that there are many reasons an
employee may be on an extended leave of absence for more than 60 days
with the intention of returning to work. The commenter believed that
the current specifications may unfairly penalize providers and may
mislead the public.
One commenter did not support a staffing composite measure because
it could reduce the contribution of each staffing metric (Total Nurse
Staffing and Nursing Staff Turnover) in assessing a provider's
performance.
One commenter recommended that CMS exclude quality measures that
are unrelated to the Program's intent. Specifically, the commenter did
not support the use of the Total Nurse Staffing and Nursing Staff
Turnover measures in the Program because the commenter believed these
measures only add reporting and administrative burden for SNFs. Another
commenter did not support the inclusion of measures that have not been
captured or publicly reported for at least 3 years. This commenter
believed that new measures take time for SNFs to understand and
establish evidence-based practices for improving performance.
One commenter did not support the use of MDS-based measures in the
SNF VBP Program as the commenter believed MDS data are not sufficiently
accurate. Another commenter did not support the addition of long stay
measures, such as the Falls with Major Injury (Long Stay) and Long Stay
Hospitalization measures, because the commenter believed these do not
align with the intent of the Program, which is to link Medicare FFS
reimbursement with the care and outcomes of Medicare FFS beneficiaries.
Response: We thank the commenters for their continuing feedback. We
will take all of this feedback into consideration as we develop future
measure-related policies for the SNF VBP Program.
D. SNF VBP Performance Standards
1. Background
We refer readers to the FY 2024 SNF PPS final rule (88 FR 53299
through 53300) for a detailed history of our performance standards
policies.
In the FY 2024 SNF PPS final rule (88 FR 53300), we adopted the
final numerical values for the FY 2026 performance standards and the
final numerical values for the FY 2027 performance standards for the
DTC PAC SNF measure.
2. Performance Standards for the FY 2027 Program Year
In the FY 2024 SNF PPS final rule (88 FR 53300), we adopted the
final numerical values for the FY 2027 performance standards for the
DTC PAC SNF measure, which we provide for SNFs' reference at the bottom
of Table 32.
To meet the requirements at section 1888(h)(3)(C) of the Act, we
are providing the final numerical performance standards for the
remaining measures applicable for the FY 2027 program year: SNFRM, SNF
HAI, Total Nurse Staffing, Nursing Staff Turnover, Falls with Major
Injury (Long Stay), Long Stay Hospitalization, and DC Function
measures. In accordance with our previously finalized methodology for
calculating performance standards (81 FR 51996 through 51998), the
final numerical values for the FY 2027 program year performance
standards are shown in Table 32.
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3. Performance Standards for the FY 2028 Program Year
In the FY 2024 SNF PPS final rule (88 FR 53280 through 53281), we
finalized that the SNF WS PPR measure will replace the SNFRM beginning
with the FY 2028 program year. In that final rule (88 FR 53299 through
53300), we also finalized that the baseline and performance periods for
the SNF WS PPR measure will each be 2 consecutive years, and that FY
2025 and FY 2026 is the performance period for the SNF WS PPR measure
for the FY 2028 program year.
To meet the requirements at section 1888(h)(3)(C) of the Act, we
are providing the final numerical performance standards for the FY 2028
program year for the SNF WS PPR measure as well as the DTC PAC SNF
measure. In accordance with our previously finalized methodology for
calculating performance standards (81 FR 51996 through 51998), the
final numerical values for the FY 2028 program year performance
standards for the DTC PAC SNF and SNF WS PPR measures are shown in
Table 33.
We note that we will provide the estimated numerical performance
standards values for the remaining measures applicable in the FY 2028
program year in the FY 2026 SNF PPS proposed rule.
[GRAPHIC] [TIFF OMITTED] TR06AU24.037
4. Policy for Incorporating Technical Measure Updates Into Measure
Specifications and for Subsequent Updates to SNF VBP Performance
Standards Beginning With the FY 2025 Program Year
We are required under section 1888(h)(3) of the Act to establish
performance standards for SNF VBP measures for a performance period for
a fiscal year. Under that section, we are also required to establish
performance standards that include levels of achievement and
improvement, the higher of which is used to calculate the SNF
performance score, and to announce those performance standards no later
than 60 days prior to the beginning of the performance period for the
applicable fiscal year. We refer readers to the FY 2017 SNF PPS final
rule (81 FR 51995 through 51998) for details on our previously
finalized performance standards methodology.
In the FY 2019 SNF PPS final rule (83 FR 39276 through 39277), we
finalized a policy that allows us to update the numerical values of the
performance standards for a fiscal year if we discover an error in the
performance standards calculations. Under this policy, if we discover
additional errors with respect to that fiscal year, we will not further
update the numerical values for that fiscal year.
We currently calculate performance standards for SNF VBP measures
using baseline period data, which are then used, in conjunction with
performance period data, to calculate performance scores for SNFs on
each measure for the applicable program year. However, during the long
interval between the time we finalize the performance standards for the
measures and the time that we calculate the achievement and improvement
scores for those measures based on actual SNF performance, one or more
of the measures may have been technically updated in a way that
inhibits our ability to make appropriate comparisons between the
baseline and performance period. We believe that to calculate the most
accurate achievement and improvement scores for a measure, we should
calculate the performance standards, baseline period measure results,
and performance period measure results using the same measure
specifications.
Therefore, we proposed to adopt a policy that allows us to
incorporate technical measure updates into the measure specifications
we have adopted for the SNF VBP Program so that these measures remain
up-to-date and ensure that we can make fair comparisons between the
baseline and performance periods that we adopt under the Program.
Further, we proposed that we will incorporate these technical measure
updates in a sub-regulatory manner and that we will inform SNFs of any
technical measure updates for any measure through postings on our SNF
VBP website, listservs, and through other educational outreach efforts
to SNFs. These types of technical measure updates do not substantively
affect the measure rate calculation methodology. We also recognize that
some updates to measures are substantive in nature and may not be
appropriate to adopt without further rulemaking. In those instances, we
proposed to continue to use rulemaking to adopt substantive updates to
SNF VBP measures.
With respect to what constitutes substantive versus non-substantive
(technical) measure changes, we
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proposed to make this determination on a case-by-case basis. Examples
of technical measure changes may include, but are not limited to,
updates to the case-mix or risk adjustment methodology, changes in
exclusion criteria, or updates required to accommodate changes in the
content and availability of assessment data. Examples of changes that
we might consider to be substantive are those in which the changes are
so significant that the measure is no longer the same measure.
We also proposed to expand our performance standards correction
policy beginning with the FY 2025 program year such that we will be
able to update the numerical values for the performance standards for a
measure for a program year if a measure's specifications were
technically updated between the time that we published the performance
standards for a measure and the time that we calculate SNF performance
on that measure at the conclusion of the applicable performance period.
Any update we make to the numerical values would be announced via the
SNF VBP website, listservs, and through other educational outreach
efforts to SNFs. In addition, this policy would have the effect of
superseding the performance standards that we establish prior to the
start of the performance period for the affected measures, but we
stated that we believe them to be necessary to ensure that the
performance standards in the SNF VBP Program's scoring calculations
enable the fairest comparison of measure performance between the
baseline and performance period.
We noted that these proposed policies align with the Technical
Updates Policy for Performance Standards that we adopted for the
Hospital VBP Program in the FY 2015 IPPS/LTCH PPS final rule (79 FR
50077 through 50079).
Further, we proposed to codify these policies in our regulations.
Specifically, we proposed to codify our policy to incorporate technical
measure updates into previously finalized SNF VBP measure
specifications in a sub-regulatory manner by adding a new paragraph
(l)(4) to our regulations at Sec. 413.338. Our current performance
standards policies are codified at Sec. 413.338(d)(6) of our
regulations. However, we proposed to redesignate that paragraph as new
Sec. 413.338(n) of our regulations and to include in paragraph (n)
both the existing performance standards policies and this newly
proposed expansion of our performance standards correction policy.
We invited public comment on our proposal to adopt a policy for
incorporating technical measure updates into the SNF VBP measure
specifications and for subsequent updates to the SNF VBP performance
standards beginning with the FY 2025 program year. We also invited
public comment on our proposal to codify these policies in our
regulations.
We received public comments on this proposal. The following is a
summary of the comments we received and our responses.
Comment: One commenter supported CMS' proposal to use a sub-
regulatory process to incorporate technical measure updates into SNF
VBP measure specifications and to update the numerical values for a
measure's performance standards if that measure was technically updated
between the time we published the performance standards and the time
CMS calculates SNF performance on that measure. The commenter further
believed that CMS should use notice and comment rulemaking to make
substantive measure changes.
Response: We thank the commenter for their support. As stated in
the proposed rule (89 FR 23473), we will continue to use rulemaking to
adopt substantive updates to SNF VBP measures.
Comment: One commenter supported CMS' proposal to incorporate
technical measure updates into the measure specifications adopted for
the SNF VBP Program using a sub-regulatory process. However, the
commenter recommended that when CMS incorporates technical measure
updates for SNF VBP measures outside of regular rulemaking, CMS exclude
and suppress the affected measure(s) for all SNFs and base the SNF
performance score for the affected program year on the remaining
measures.
Response: We thank the commenter for their support of this
proposal. With regard to the commenter's recommendation to exclude and
suppress SNF VBP measures that have been technically updated, we
reiterate that these measure updates are technical in nature and are
not anticipated to impact SNF performance significantly. Therefore, we
do not see any reason to suppress or exclude these measures from a
SNF's performance score. Further, as stated in the proposed rule (89 FR
23473), we would continue to use notice and comment rulemaking to
propose and adopt substantive measure updates that significantly affect
the measure. These substantive measure updates would be adopted prior
to or in conjunction with our announcement of performance standards
that reflect the updated measure specifications for the measure for the
applicable program year. We would determine whether an update is
substantive or non-substantive on a case-by-case basis. Further, we
intend to evaluate the impacts of this policy on SNF performance as
part of our regular monitoring and evaluation efforts.
Comment: A few commenters did not support CMS' proposal to use a
sub-regulatory process to update the numerical values for a measure's
performance standards for a program year if that measure's
specifications were technically updated between the time we published
the performance standards and the time we calculate SNF performance on
that measure. The commenters believed that updating previously
established performance standards, without proper notice, would limit
SNFs' ability to set quality improvement goals and achieve adequate
performance, and it would cause confusion among SNFs and consumers
because the data are used in more than 1 program year.
Response: We proposed that a measure's specifications may be
technically updated between the time we publish the performance
standards and the time we calculate the achievement and improvement
scores for that measure based on actual SNF performance. We make
technical measure updates to measure specifications to ensure the
measure scores reflect SNF performance as accurately and completely as
possible. However, as stated earlier in this section, since these
updates would be technical in nature, they are not anticipated to
impact SNF performance significantly. We do not believe that it is fair
or appropriate to calculate performance period measure results using
the updated measure specifications and then compare those results to
the performance standards and baseline period measure results that were
calculated using the previous measure specifications to generate the
achievement and improvement scores. We view this policy, which allows
us to update the numerical values for a measure's performance standards
if that measure's specifications were technically updated, as necessary
to ensure the accuracy of SNF performance scores, which are based on
the performance standards.
We intend to announce updates to the numerical values of the
performance standards as soon as we can calculate the updated
performance standards after the measure specifications have been
technically updated. These
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announcements would be made via the SNF VBP website, listservs, and
through other educational outreach efforts to SNFs. Further, we would
not update the performance standards for a measure after the applicable
performance period has ended.
We disagree with commenters' suggestion that updating the
performance standards for a measure would impact a SNF's ability to set
quality improvement goals or their ability to achieve adequate
performance. We make technical updates to a measure's specifications to
ensure we measure SNF performance as accurately as possible. As stated
earlier in this section, we view this policy, which allows us to update
the numerical values for a measure's performance standards if that
measure's specifications were technically updated, as necessary to
ensure that the performance standards in the SNF VBP Program's scoring
calculations enable the fairest comparison of measure performance
between the baseline and performance period and to ensure the accuracy
of SNF performance scores. We also note that while the performance
standards we establish under the SNF VBP Program reflect levels of
achievement and improvement and are used for the purposes of assessing
SNF performance on the measures, they are not intended to be the
ceiling for SNF performance on a measure. Therefore, we encourage SNFs
to set quality improvements goals that are not limited to the measure
rates reflected in the performance standards. With respect to achieving
adequate performance, we note that accurate performance standards,
which is the goal of this proposed policy, are essential for
calculating measure scores and SNF performance scores that reflect the
actual provision of care in SNFs.
We also disagree with the commenters' suggestion that this policy
would cause confusion because the measure data are used for more than
one program year. It is true that measure data are used for more than
one program year. For example, the performance period for the DC
Function measure for the FY 2027 program year is FY 2025 and the
baseline period for the FY 2029 program year is also FY 2025. However,
if we make technical updates to a measure's specifications, all future
calculations related to that measure will utilize the updated measure
specifications. Therefore, we do not believe this would cause confusion
among SNFs. We would not be able to update calculations for prior
program years because SNFs would have already received their SNF
performance scores and payment adjustments. Using the same example as
above, if we make technical updates to the measure specifications for
the DC Function measure for the FY 2027 program year, we would announce
the updated performance standards before the end of the FY 2025
performance period. We would subsequently calculate baseline period
results and performance standards for the FY 2029 program year after
the end of the FY 2025 baseline period, which would automatically
utilize the updated measure specifications.
For our measures with 2-year baseline and performance periods, it
may be the case, due to performance periods overlapping, that we need
to update the performance standards for more than one program year. If
this situation arises, we intend to be as transparent as possible to
ensure SNFs have a clear understanding of the impact of the technical
measure updates.
In addition, as stated in the proposed rule (89 FR 23474), we
intend to announce any updates to the numerical values of the
performance standards for affected measures via the SNF VBP website,
listservs, and through other outreach efforts to SNFs.
After consideration of public comments, we are finalizing our
proposal to incorporate technical measure updates into measure
specifications and for subsequent updates to SNF VBP performance
standards beginning with the FY 2025 program year. We are also
finalizing our proposal to codify these policies in our regulations.
E. SNF VBP Performance Scoring Methodology
1. Background
We refer readers to the FY 2024 SNF PPS final rule (88 FR 53300
through 53304) for a detailed history of our performance scoring
methodology. Our performance scoring methodology is codified at Sec.
413.338(d) and (e) of our regulations. We have also codified the Health
Equity Adjustment (HEA) at Sec. 413.338(k) of our regulations.
While we did not propose any changes to the previously adopted case
minimum requirements, we received one comment. The following is a
summary of the comment and our response.
Comment: One commenter expressed concern that the existing case
minimum requirements in the SNF VBP Program may reward and penalize
random variation, not actual performance, for some providers. The
commenter recommended that CMS adopt case minimum requirements that
meet a reliability standard of 0.7, which could be accomplished by
increasing the minimum case counts to 60. The commenter defined the 0.7
reliability standard as 70 percent of the variation being explained by
differences in performance and 30 percent being attributed to random
chance. The commenter also suggested extending the performance periods
to include multiple years because they believe this will allow more
SNFs to meet the higher reliability threshold.
Response: We refer readers to the FY 2023 SNF PPS final rule (87 FR
47585 through 47587) and the FY 2024 SNF PPS final rule (88 FR 53301
through 53302) for the case minimums we have finalized for each of the
SNF VBP Program measures. We stated that those case minimums are
appropriate for the SNF VBP Program because they ensure the Program
requirements only apply to SNFs for which we can calculate reliable
measure rates and SNF performance scores. Our testing has also
indicated that increasing the case minimum requirements to achieve the
reliability standard of 0.7 would result in minimal improvements to a
measure's reliability while simultaneously increasing the number of
SNFs that would not meet the higher case minimum requirement, which
does not align with our goal to ensure as many SNFs as possible can
receive a score on a given measure. Therefore, we do not believe it is
currently necessary or feasible to adopt case minimum requirements that
meet a reliability standard of 0.7.
We also acknowledge the commenter's recommendation to increase
measure reliability through longer performance periods and baseline
periods and agree this could increase measure reliability. However, as
stated in the FY 2016 SNF PPS final rule (80 FR 46422) and the FY 2017
SNF PPS final rule (81 FR 51998 through 51999), we aim to balance
measure reliability with recency of data to ensure clear connections
between quality measurement and value-based payment. We do not believe
that adopting longer performance and baseline periods for all SNF VBP
measures appropriately balance these factors. Specifically, longer
performance and baseline periods would mean that SNF performance scores
and the resulting value-based payments would be based on data further
in the past, which is not consistent with our desire to calculate SNF
performance scores and value-based payments using as recent as possible
measure data.
[[Page 64132]]
2. Measure Minimum Policies
a. Background
We refer readers to the FY 2024 SNF PPS final rule (88 FR 53301
through 53303) for details on our previously adopted case minimums and
measure minimums. Our case minimum and measure minimum policies are
also codified at Sec. 413.338(b) of our regulations. In the proposed
rule, we proposed to apply the previously finalized FY 2027 measure
minimum to the FY 2028 program year and subsequent years. We did not
propose any changes to our previously finalized case minimums.
b. Application of the FY 2027 Measure Minimum to the FY 2028 SNF VBP
Program Year and Subsequent Years
In the FY 2024 SNF PPS final rule (88 FR 53301 through 53303), we
adopted an updated measure minimum for the FY 2027 program year.
Specifically, we finalized that for a SNF to receive a SNF performance
score and value-based incentive payment for the FY 2027 program year,
SNFs must report the minimum number of cases for four of the eight
measures during the applicable performance period. As discussed in the
proposed rule, we proposed to apply this measure minimum to the FY 2028
program year and subsequent years, such that SNFs must report the
minimum number of cases for at least four measures during the
applicable performance period. SNFs that do not meet this measure
minimum requirement would be excluded from the applicable program year
and receive their adjusted Federal per diem rate for that fiscal year.
Based on our analyses for the FY 2028 program year, which are also
applicable to subsequent program years for which we use the same
measure set, we estimated that, under this measure minimum,
approximately 6 percent of SNFs would be excluded from the Program
compared to the approximately 8 percent of SNFs that we estimate would
be excluded from the Program in FY 2027. This estimated decrease
indicates fewer SNFs would be excluded from the FY 2028 program year
than the FY 2027 program year due to the SNF WS PPR measure replacing
the SNFRM beginning in FY 2028. We also assessed the consistency of
incentive payment multipliers (IPMs), or value-based incentive payment
adjustment factors, between FY 2027 and FY 2028 as a proxy for SNF
performance score reliability. We found that applying the FY 2027
measure minimum to the FY 2028 program year would have minimal impact
on the percentage of SNFs that would receive a net positive IPM and
receive a net negative IPM between those 2 fiscal years, which
indicates that the reliability of the SNF performance score would be
minimally impacted if we applied the FY 2027 measure minimum to the FY
2028 program year. Based on these testing results for FY 2028, we
stated that applying the FY 2027 measure minimum to the FY 2028 program
year and subsequent years best balances SNF performance score
reliability with our desire to ensure that as many SNFs as possible can
receive a SNF performance score. We noted in the proposed rule that if
we propose in future years to revise the total number of measures in
the Program, we would reassess this measure minimum policy to ensure it
continues to meet our previously stated goals. If needed, we would
propose updates in future rulemaking.
We invited public comment on our proposal to apply the FY 2027
measure minimum to the FY 2028 SNF VBP program year and subsequent
program years, such that SNFs must report the minimum number of cases
for at least four measures during the applicable performance period.
We received public comments on this proposal. The following is a
summary of the comments we received and our responses.
Comment: A few commenters supported the proposed measure minimum
for the FY 2028 program year and subsequent years.
Response: We thank the commenters for their support of the measure
minimum for FY 2028 program year and subsequent years.
Comment: One commenter did not support the proposed measure minimum
and instead recommended that CMS increase the proposed measure minimum
to at least six of the eight measures to ensure the program addresses
quality in multiple areas.
Response: We disagree with the commenter's recommendation that we
adopt a measure minimum of six measures, which the commenter believes
would better ensure that the Program addresses quality in multiple
areas. As stated in the proposed rule (89 FR 23474), we believe that
requiring SNFs to report a minimum of four measures best balances SNF
performance score reliability with our desire to ensure that as many
SNFs as possible can receive a SNF performance score.
We note that swing bed facilities can report a maximum of four of
the eight SNF VBP measures because those facilities do not report
Payroll Based Journal (PBJ) data and they do not care for long stay
residents, which is defined as stays greater than 100 days.
Specifically, subsection 1128I(g) of the Act requires SNFs and NFs to
report staffing information based on payroll data. This requirement
does not apply to swing bed facilities. Further, the direct care staff
in a swing bed facility may not solely provide SNF care and therefore,
we do not believe that the payroll (PBJ) data would accurately reflect
the staffing levels for providing SNF care only. For this reason, we do
not believe that it is fair or appropriate to require swing bed
facilities to report PBJ data for the two SNF VBP staffing measures
(Total Nurse Staffing and Nursing Staff Turnover measures). In
addition, because swing bed facilities do not care for long stay
residents, those facilities do not meet the minimum case thresholds to
report the Long Stay Hospitalization and Falls with Major Injury (Long
Stay) measures. Therefore, if we increased the measure minimum to more
than four measures, all swing bed facilities would be excluded from the
Program. This does not align with our desire to ensure that as many
SNFs as possible are included in the Program and can receive a SNF
performance score.
Further, in our testing for the measure minimum of four measures,
we found that approximately 60 percent of SNFs would continue to be
scored on all eight measures, approximately 87 percent of SNFs would
continue to be scored on at least six measures, and as described
earlier in this section, over 90 percent will be scored on at least
four measures. Therefore, as indicated by our testing of a four measure
minimum, the vast majority of SNFs would be included in the Program and
would be assessed on their performance across multiple quality areas.
After consideration of public comments, we are finalizing the
measure minimum for the FY 2028 program year and subsequent program
years as proposed.
3. Potential Next Steps for Health Equity in the SNF VBP Program
In the FY 2024 SNF PPS final rule (88 FR 53304 through 53318), we
adopted a Health Equity Adjustment (HEA) that allows SNFs that provide
high quality care and care for high proportions of SNF residents who
are underserved to earn bonus points. We refer readers to that final
rule for an overview of our definition of health equity, current
disparities in quality of care in the SNF setting, our commitment to
advancing health equity, and the details of the HEA.
[[Page 64133]]
In the FY 2024 SNF PPS proposed rule (88 FR 21393 through 21396),
we also included a request for information (RFI) entitled ``Health
Equity Approaches Under Consideration for Future Program Years,'' where
we noted that significant disparities in quality of care persist in the
SNF setting. We stated that the goal of explicitly incorporating health
equity-focused components into the Program was to both measure and
incentivize equitable care in SNFs. Although the HEA rewards high
performing SNFs that care for high proportions of SNF residents with
underserved populations, it does not explicitly measure or reward high
provider performance among the underserved population. We remain
committed to achieving equity in health outcomes for residents by
promoting SNF accountability for addressing health disparities,
supporting SNFs' quality improvement activities to reduce these
disparities, and incentivizing better care for all residents. Through
the RFI, we solicited public comment on possible health equity
advancement approaches to incorporate into the Program in future
program years that could supplement or replace the HEA. We refer
readers to the FY 2024 SNF PPS final rule (88 FR 53322) for a summary
of the public comments we received in response to the health equity
RFI. We are considering these comments as we continue to develop
policies, quality measures, and measurement strategies on this
important topic.
We are currently exploring the feasibility of proposing future
health equity-focused metrics for the Program. Specifically, we are
considering different ways of measuring health equity that could be
incorporated into the Program as either a new measure, combined to form
a composite measure, or as an opportunity for SNFs to earn bonus points
on their SNF performance score. These performance metrics described in
more detail in the proposed rule would utilize the existing SNF HAI, DC
Function, DTC PAC SNF, and SNF WS PPR measures that we previously
adopted in the Program. We are considering the development of health-
equity-focused versions of these measures because they are either
cross-setting or could be implemented in multiple programs. The health-
equity focused measures or metrics for bonus points include:
A high-social risk factor (SRF) measure that utilizes an
existing Program measure where the denominator of the measure only
includes residents with a given SRF, which would allow for comparisons
of care for underserved populations across SNFs;
A worst-performing group measure that utilizes an existing
Program measure and compares the quality of care among residents with
and without a given SRF on that measure and places greater weight on
the performance of the worst-performing group with the goal of raising
the quality floor at every facility; and
A within-provider difference measure that assesses
performance differences between residents (those with and without a
given SRF) within a SNF on an existing Program measure, creating a new
measure of disparities within SNFs.
We are testing these various measure concepts to determine where
current across- and within-provider disparities exist in performance,
how we can best incentivize SNFs to improve their quality of care for
all residents, including those who may be underserved, and the
feasibility of incorporating a health equity-focused measure into the
Program.
As we explore these and other options, we are focusing on
approaches that:
Include as many SNFs as possible and are feasible to
implement;
Integrate feedback from interested parties;
Encourage high quality performance for all SNFs among all
residents and discourage low quality performance;
Are simple enough for SNFs to understand and can be used
to guide SNFs in improvement; and
Meet the goal of incentivizing equitable care to ensure
all residents in all SNFs receive high quality care.
We are also exploring how constraints, such as sample size
limitations, may impact our ability to effectively incorporate certain
approaches into the Program. Lastly, we continue to explore
opportunities to align with other CMS quality programs to minimize
provider burden.
We received public comments related to potential next steps for
health equity in the SNF VBP Program. The following is a summary of the
comments we received.
Comment: Several commenters supported incorporating additional
health equity components into the SNF VBP Program and offered
recommendations for doing so. A few commenters offered recommendations
related to health equity-focused measures. Specifically, one commenter
recommended a workforce equity metric to incentivize SNFs to promote
workforce equity and another commenter encouraged CMS to prioritize the
DC Function and DTC PAC SNF measures when assessing for different
performance outcomes based on the existence of social determinants of
health. One commenter requested that CMS not create additional burden
when developing health equity-focused measures and instead utilize
existing claims or MDS data. One commenter recommended that CMS
consider and incorporate feedback from interested parties, such as
nurses and other providers, when developing possible health equity-
focused measures. Another commenter encouraged CMS to work with the CBE
to develop meaningful health equity-focused measures.
A few commenters recommended that CMS consider utilizing proxies
other than DES for defining the underserved population. One commenter
recommended that CMS assess the impact of health equity measures in
non-SNF settings and develop a methodology that can be applied across
multiple care settings. Another commenter suggested that CMS should
require all SNFs to submit data on health equity to be eligible for SNF
VBP incentive payments. Lastly, one commenter recommended that CMS
offer education and resources that help SNFs learn how health equity
impacts their population and how to make changes and develop
interventions based on that information.
Response: We thank commenters for their recommendations. We will
take these into consideration as we continue our work on developing the
best approaches for incorporating health equity into the Program.
F. Updates to the SNF VBP Review and Correction Process
1. Background
We refer readers to the FY 2024 SNF PPS final rule (88 FR 53325
through 53326) and to Sec. 413.338(f) of our regulations for details
on the SNF VBP Program's public reporting requirements and the two-
phase review and correction process that we have adopted for the
Program. We also refer readers to the SNF VBP website (https://www.cms.gov/medicare/quality/nursing-home-improvement/value-based-purchasing/confidential-feedback-reporting-review-and-corrections) for
additional details on our review and correction process. In Phase One
of the review and correction process, we accept corrections for 30 days
after distributing the following quarterly confidential feedback
reports to SNFs: the two Full-Year Workbooks (one each for the baseline
period and
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performance period), generally released in December and June,
respectively. Corrections are limited to errors made by CMS or its
contractors when calculating a measure rate. In the FY 2022 SNF PPS
final rule (86 FR 42516 through 42517), we finalized that SNFs are not
able to correct any of the underlying administrative claims data used
to calculate a SNF's readmission measure rate during Phase One of the
SNF VBP review and correction process. For corrections to the
underlying administrative claims data to be reflected in the SNF VBP
Program's quarterly confidential feedback reports, the SNF must submit
the claims correction request to their MAC and the MAC must process the
correction before the ``snapshot date.'' For the SNFRM, the quarterly
confidential feedback reports will not reflect any claims corrections
processed after the date of the claims snapshot, which is 3 months
following the last index SNF admission in the applicable baseline
period or performance period.
In Phase Two of the review and correction process, SNFs may submit
corrections to SNF performance scores and rankings only. We accept
Phase Two corrections for 30 days after distributing the Performance
Score Report that we generally release in August of each year.
Under our current review and correction policy, the SNF must
identify the error for which it is requesting correction, explain its
reason for requesting the correction, and submit documentation or other
evidence, if available, supporting the request. SNFs must submit
correction requests to the SNF VBP Program Help Desk, which is
currently available at [email protected], and the requests must contain:
The SNF's CMS Certification Number (CCN),
The SNF's name,
The correction requested, and
The reason for requesting the correction, including any
available evidence to support the request.
For all review and correction requests, we will review the requests
and notify the requesting SNF of the final decision. We will also
implement any approved corrections before the affected data becomes
publicly available.
In the FY 2025 SNF PPS proposed rule (89 FR 23476), we proposed to
apply our existing Phase One review and correction process to all
measures adopted in the Program regardless of the data source for a
particular measure. We also proposed ``snapshot dates'' for the new SNF
VBP measures and to codify those snapshot dates at revised Sec.
413.338(f)(1). We also proposed to redesignate current Sec.
413.338(f)(1) as Sec. 413.338(f)(2) and to revise that paragraph to
state that the underlying data used to calculate measure rates cannot
be corrected by SNFs during the SNF VBP review and correction process.
We received comments on our review and correction proposals. The
following is a summary of the comments we received and our responses.
Comment: Several commenters expressed support for CMS' proposal to
apply the existing review and correction policies to additional measure
types.
Response: We thank the commenters for their support.
Comment: A few commenters recommended that CMS make additional
allowances in the review and correction process for SNFs. Specifically,
one commenter suggested that CMS extend the ``snapshot dates'' to
ensure that SNFs have adequate time to report accurate measure data.
Another commenter suggested that CMS adopt a waiver policy for data
errors that fall outside the ``snapshot dates'' that would allow SNFs
to incorporate corrections into their performance data provided that
the SNF otherwise complied with reporting deadlines.
Response: We thank the commenters for these suggestions. In
general, we adopt ``snapshot dates'' for the purposes of review and
correction so we can ensure that we have as much complete and accurate
data as possible to calculate measure scores and performance scores. We
proposed to calculate the measure rates using a static ``snapshot'' of
data accessed on a specific date. The use of a data ``snapshot''
enables us to provide as timely quality data as possible, both to SNFs
for the purpose of quality improvement, and to the public for the
purpose of transparency. After the data ``snapshot'' is taken through
our extraction of Medicare claims data, PBJ staffing data, or MDS
assessment data, it takes several months to incorporate other data
needed for the measure calculations, generate and check the
calculations, as well as program, populate, and deliver the
confidential quarterly reports and accompanying data to SNFs. Because
several months lead-time is necessary after acquiring the input data to
generate these calculations, if we were to delay our data extraction
point beyond the proposed measure snapshot dates, we believe this would
create an unacceptably long delay both for SNFs to receive timely data
for quality improvement and transparency, and incentive payments for
purposes of this Program. For the SNFRM and other claims-based
measures, we believe that a 3-month claims ``run-out'' period is a
reasonable period that allows SNFs time to correct their administrative
claims or add any missing claims before those claims are used for
measure calculation purposes while enabling us to timely calculate the
measure. For PBJ staffing data and MDS assessment data, the snapshot
date aligns with the timeline to which SNFs already adhere for
corrections to their data within the Nursing Home Quality Improvement
Program and SNF QRP, respectively. We believe this proposed policy
would address both fairness and operational concerns associated with
calculating measure rates and would provide consistency across value-
based purchasing programs. We understand that these ``snapshot dates''
may occasionally require SNFs to work quickly to review their
performance data, but we believe that these deadlines are necessary to
ensure that the scoring and payment calculations that we make are as
accurate as possible while also meeting our statutory deadlines.
2. Application of the Existing Phase One Review and Correction Policy
to All Claims-Based Measures Beginning With the FY 2026 Program Year
and ``Snapshot Dates'' for Recently Adopted SNF VBP Claims-Based
Measures
In the FY 2023 SNF PPS final rule, we adopted the SNF HAI measure
beginning with the FY 2026 SNF VBP program year (87 FR 47564 through
47570), and the DTC PAC SNF measure beginning with the FY 2027 SNF VBP
program year (87 FR 47576 through 47580). In the FY 2024 SNF PPS final
rule, we adopted the Long Stay Hospitalization measure beginning with
the FY 2027 SNF VBP program year (88 FR 53293 through 53296), as well
as the SNF WS PPR measure beginning with the FY 2028 SNF VBP program
year (88 FR 53277 through 53280). Each of these measures is calculated
using claims data.
We proposed to apply our existing Phase One review and correction
process to all SNF VBP Program measures calculated using claims data.
That is, Phase One corrections for claims-based measures would be
limited to errors made by CMS or its contractors when calculating the
measure rates. For corrections to the underlying administrative claims
data to be reflected in the SNF VBP Program's quarterly confidential
feedback reports, the SNF must submit any claims correction requests to
their MAC before the ``snapshot date'' to ensure that those corrections
are reflected fully in measure calculations. Any corrections made to
claims following the ``snapshot
[[Page 64135]]
date'' would not be reflected in our subsequent scoring calculations.
For the SNF HAI, DTC PAC SNF, and SNF WS PPR measures, we proposed
to define the ``snapshot date'' as 3 months following the last SNF
discharge in the applicable baseline period or performance period to
align with the ``snapshot date'' we previously adopted for the SNFRM.
We refer readers to the FY 2022 SNF PPS final rule (86 FR 42516 through
42517) where we explain our rationale for selecting 3 months as the
``snapshot date.''
For the Long Stay Hospitalization measure, we proposed to define
the ``snapshot date'' as 3 months following the final quarter of the
applicable baseline period or performance period. For example, for the
FY 2027 SNF VBP program year, the performance period is FY 2025. The
final quarter of the performance period is July 1 through September 30,
2025. The ``snapshot date'' for this performance period is December 31,
2025.
We invited public comment on our proposal to apply our existing
Phase One review and correction process to all SNF VBP claims-based
measures and to adopt ``snapshot dates'' for recently adopted SNF VBP
claims-based measures.
We received public comments on these proposals. The following is a
summary of the comments we received and our response.
Comment: A few commenters supported CMS' proposal to define the
``snapshot date'' for the Long Stay Hospitalization measure as the 3
months following the final quarter of the applicable baseline period or
performance period. One commenter noted that the proposed ``snapshot
date'' is consistent with the ``snapshot dates'' CMS previously adopted
for other claims-based measures, such as the SNFRM. Another commenter
agreed that three months should be sufficient for SNFs to identify HAIs
that may need to be corrected for the SNF HAI measure and therefore
supported our proposal to align its time period with previously adopted
``snapshot dates''.
Response: We thank the commenters for their support. We agree that
this ``snapshot date'' is consistent with other ``snapshot dates'' CMS
has previously adopted. In the FY 2022 SNF PPS final rule (86 FR 42516
through 42517), we noted that since several months of lead-time is
necessary after acquiring the input data to generate the SNFRM
calculations, if we were to delay our data extraction point beyond the
proposed measure ``snapshot date'', we believed this would create an
unacceptably long delay both for SNFs to receive timely data for
quality improvement and transparency, and incentive payments for
purposes of this program. We believe that this rationale for the SNFRM
also applies to the additional SNF VBP claims-based measures. We
believe that a 3-month claims ``run-out'' period allows SNFs time to
correct their administrative claims or add any missing claims before
those claims are used for measure calculation purposes, while enabling
us to timely calculate the measure.
After consideration of public comments, we are finalizing these
policies as proposed.
3. Application of the Existing Phase One Review and Correction Policy
to PBJ-Based Measures Beginning With the FY 2026 Program Year and
``Snapshot Dates'' for SNF VBP PBJ-Based Measures
In the FY 2023 SNF PPS final rule (87 FR 47570 through 47576), we
adopted the Total Nurse Staffing measure beginning with the FY 2026 SNF
VBP program year. Additionally, in the FY 2024 SNF PPS final rule (88
FR 53281 through 53286), we adopted the Nursing Staff Turnover measure
beginning with the FY 2026 SNF VBP program year. Each of these measures
is calculated using electronic staffing data submitted by each SNF for
each quarter through the Payroll Based Journal (PBJ) system, along with
daily resident census information derived from MDS 3.0 standardized
patient assessments in the case of the Total Nurse Staffing measure.
We proposed to apply our existing Phase One review and correction
process to SNF VBP Program measures calculated using PBJ staffing data.
That is, Phase One corrections would be limited to errors made by CMS
or its contractors when calculating the measure rates for the PBJ-based
measures applicable in the SNF VBP Program. For corrections to the
underlying PBJ data to be reflected in the SNF VBP Program's quarterly
confidential feedback reports, the SNF must make any corrections to the
underlying data within the PBJ system before the ``snapshot date.'' Any
corrections made to PBJ staffing data following the ``snapshot date''
would not be reflected in our subsequent scoring calculations.
For measures calculated using PBJ staffing data, we proposed to
define the ``snapshot date'' as 45 calendar days after the last day in
each fiscal quarter. This deadline is consistent with the CMS Nursing
Home Quality Improvement deadline, which requires that PBJ data
submissions must be received by the end of the 45th calendar day (11:59
p.m. Eastern Time (ET)) after the last day in each fiscal quarter to be
considered timely. We aim to align CMS quality programs to the extent
possible to reduce confusion and burden on providers. For more
information about submitting staffing data through the PBJ system, we
refer readers to the CMS Staffing Data Submission web page at https://www.cms.gov/medicare/quality/nursing-home-improvement/staffing-data-submission.
We invited public comment on our proposal to apply our existing
Phase One review and correction process to SNF VBP PBJ-based measures
and to adopt ``snapshot dates'' for SNF VBP PBJ-based measures.
We received public comments on these proposals. The following is a
summary of the comments we received and our responses.
Comment: One commenter recommended that CMS adopt a ``snapshot
date'' for PBJ-based measures that allows PBJ staffing data corrections
for up to 3 months after the end of the applicable baseline period or
performance period. The commenter believed that this ``snapshot date''
would provide consistency with the claims-based measures. The commenter
also suggested that, if CMS considers claims-based measures as the gold
standard of measurement, then CMS should treat other types of measures
similarly where possible.
Response: We thank the commenter for this feedback. However, as we
noted in the proposed rule (89 FR 23476), we proposed the ``snapshot
date'' for PBJ data as 45 calendar days after the last day in each
fiscal quarter to align with the CMS Nursing Home Quality Improvement
deadline. For the Nursing Home Quality Improvement Program, data
submissions must be received in PBJ by the end of the 45th calendar day
after the last day in each fiscal quarter to be considered timely. If
the SNF VBP Program were to allow corrections to this data past this
date as the commenter suggests, it could result in different reported
measure rates for the SNF VBP program and the Nursing Home Quality
Improvement for the same measures. This could result in confusion from
SNFs and the public when these data are publicly reported.
Comment: One commenter recommended that CMS provide SNFs a preview
report (like the 1705D PBJ Staffing Data Report) after the final
submission is complete for the quarter. The commenter further suggested
that facilities should be provided at least 15 days after this point to
review and correct the submitted PBJ data. The
[[Page 64136]]
commenter explained that, if a facility uses a vendor to submit data on
their behalf, the facility is held responsible for errors even if those
errors were made by the vendor and were outside of the SNF's control.
In addition, the commenter stated that there may be unexpected
circumstances where there are errors or missed information identified
by the facility later despite the facility's good faith efforts to
submit PBJ data accurately and in a timely manner. The commenter noted
that this additional time is important for PBJ-based measures, as the
recently developed Nursing Staff Turnover measure requires 6
consecutive months of PBJ data and if any quarter of data is missing or
unusable, the staff turnover rates may not be calculated or may be
flawed, leaving consumers without information on a facility's true
performance.
Response: We will consider whether it would be feasible to provide
SNFs with preview reports in addition to the quarterly confidential
feedback reports that we provide to SNFs under section 1888(g) and the
SNF performance score reports that we provide to notify SNFs of their
performance scores and incentive payment percentages. However, we note
that we proposed the 45-day ``snapshot date'' for PBJ data to align
with the CMS Nursing Home Quality Improvement deadline, and we continue
to believe that this alignment will help SNFs comply with measure and
data requirements across CMS quality programs. While the PBJ data is
used for multiple measures across CMS quality programs, SNFs are
required to submit the direct care staffing information in one
centralized location via the PBJ.
Further, we believe that SNFs must work closely with any vendors
with which they operate to ensure that data submissions are fully
accurate before they are provided to CMS.
After consideration of public comments, we are finalizing these
policies as proposed.
4. Application of the Existing Phase One Review and Correction Policy
to MDS-Based Measures Beginning With the FY 2027 Program Year and
``Snapshot Dates'' for SNF VBP MDS-Based Measures
In the FY 2024 SNF PPS final rule (88 FR 53286 through 53293), we
adopted the Falls with Major Injury (Long Stay) and DC Function
measures, both beginning with the FY 2027 SNF VBP program year. These
two measures are calculated using data reported by SNFs on the MDS 3.0.
We proposed to apply our existing Phase One review and correction
process to SNF VBP Program measures calculated using MDS data. That is,
Phase One corrections would be limited to errors made by CMS or its
contractors when calculating the measure rates for the MDS-based
measures applicable in the SNF VBP Program. For corrections to the
underlying MDS data to be reflected in the SNF VBP Program's quarterly
confidential feedback reports, the SNF must make any corrections to the
underlying data via the internet Quality Improvement Evaluation System
(iQIES) before the ``snapshot date.'' Any corrections made to the MDS
data following the ``snapshot date'' would not be reflected in our
subsequent scoring calculations.
For the DC Function and Falls with Major Injury (Long Stay)
measures, we proposed that the ``snapshot date'' is the February 15th
that is 4.5 months after the last day of the applicable baseline or
performance period. However, if February 15th falls on a Friday,
weekend, or Federal holiday, the data submission deadline is delayed
until 11:59 p.m. ET on the next business day. For example, for the FY
2027 SNF VBP program year, the performance period is FY 2025 (October
1, 2024, through September 30, 2025). The ``snapshot date'' for this
performance period would normally be February 15, 2026. However,
because February 15, 2026, falls on a Sunday, the snapshot date would
be extended until the next business day, which is Tuesday, February 17,
2026, due to Monday, February 16, 2026, being a Federal holiday. This
is consistent with the SNF QRP QM User's Manual available at https://www.cms.gov/files/document/snf-qm-calculations-and-reporting-users-manual-v50.pdf-0.
We invited public comment on our proposal to apply our existing
Phase One review and correction process to SNF VBP MDS-based measures
and to adopt ``snapshot dates'' for SNF VBP MDS-based measures.
We received one public comment on these proposals. The following is
a summary of the comment we received and our response.
Comment: One commenter supported CMS' proposal to define the
``snapshot date'' for MDS-based measures as 4.5 months after the last
day of the applicable baseline or performance period, noting that this
timeline closely aligns with deadlines for claims-based measures.
Response: We thank the commenter for their support.
After consideration of public comments, we are finalizing these
policies as proposed.
G. Updates to the SNF VBP Extraordinary Circumstances Exception Policy
1. Background
Our Extraordinary Circumstances Exception (ECE) policy, which
allows SNFs to request an exception to the SNF VBP requirements for one
or more calendar months when there are certain extraordinary
circumstances beyond the control of the SNF, is currently codified at
Sec. 413.338(d)(4) of our regulations. We proposed to redesignate that
paragraph as new Sec. 413.338(m) of our regulations to ensure the
policy remains effective beyond FY 2025. We also proposed to amend our
existing ECE policy to include the proposed changes discussed later in
this section, as well as to make other technical updates to enhance the
clarity of the ECE policy in our regulations.
2. Expanding the Reasons a SNF May Submit an Extraordinary Circumstance
Exception Request Beginning With the FY 2025 Program Year
Section 413.338(d)(4)(ii) of our regulations currently states that
a SNF may request an ECE if the SNF is able to demonstrate that an
extraordinary circumstance affected the care provided to its residents
and subsequent measure performance. We proposed to expand this policy
to also allow a SNF to request an ECE if the SNF can demonstrate that,
because of the extraordinary circumstance, it cannot report SNF VBP
data on one or more measures by the specified deadline. This expanded
policy would avoid penalizing SNFs due to circumstances out of their
control and would also align the SNF VBP ECE policy with the ECE
policies we have adopted for the SNF QRP and Home Health QRP.
If we grant an ECE to a SNF under the SNF VBP, we would, as
previously finalized, calculate a SNF performance score that does not
include the SNF's performance on the measure or measures during the
months the SNF was affected by the extraordinary circumstance.
We discuss the comments we received on this proposal and our
responses in the next section.
3. Updates to the Instructions for Requesting an Extraordinary
Circumstance Exception Beginning With the FY 2025 Program Year
Under our current ECE policy, when a SNF requests an ECE, the SNF
must
[[Page 64137]]
complete an Extraordinary Circumstances Request form (available on
https://qualitynet.cms.gov) and send the form, along with supporting
documentation, to the SNF VBP Program Help Desk within 90 days of the
date that the extraordinary circumstance occurred.
The most recent version of the ECE Request Form no longer includes
information related to the SNF VBP Program. Although the previous form
is still available, once it is replaced with the new version, SNFs will
no longer be able to use this new version of the form when submitting
an ECE request for the SNF VBP Program. Accordingly, we proposed to
update our policy to align with the current SNF QRP ECE request
submission process, which does not require the completion of a form and
instead requires SNFs to submit specific information via email to a
Help Desk. We proposed that, beginning with the FY 2025 program year, a
SNF may request an ECE by sending an email with the subject line ``SNF
VBP Extraordinary Circumstances Exception Request'' to the SNF VBP
Program Help Desk with the following information:
The SNF's CMS Certification Number (CCN);
The SNF's business name and business address;
Contact information for the SNF's chief executive officer
(CEO) or CEO-designated personnel, including all applicable names,
email addresses, telephone numbers, and the SNF's physical mailing
address (not a P.O. Box);
A description of the event, including the dates and
duration of the extraordinary circumstance;
Available evidence of the impact of the extraordinary
circumstance on the care the SNF provided to its residents or the SNF's
ability to report SNF VBP measure data, including, but not limited to,
photographs, media articles, and any other materials that would aid CMS
in determining whether to grant the ECE;
A date when the SNF believes it will again be able to
fully comply with the SNF VBP Program's requirements and a
justification for the proposed date.
We invited public comment on our proposals to expand the reasons a
SNF may request an extraordinary circumstances exception, to update the
instructions for requesting an extraordinary circumstances exception
under the SNF VBP Program, and to codify this expanded ECE policy in
our regulations.
We received public comments on these proposals. The following is a
summary of the comments we received and our responses.
Comment: A few commenters supported CMS' proposal to expand the ECE
policy to allow SNFs to request an ECE if the SNF can demonstrate that,
as a result of an extraordinary circumstance, the SNF cannot report SNF
VBP data on one or more measures by the specified deadline.
Response: We thank the commenters for their support. As we stated
in the proposed rule, we believe this policy will avoid penalizing SNFs
due to circumstances out of their control.
Comment: One commenter supported CMS' proposal to amend the
existing regulation text for the ECE policy so that the policy remains
in place past FY 2025.
Response: We thank the commenter for their support of this
proposal.
Comment: A few commenters supported CMS' proposal to update the
instructions for requesting an ECE because it will align the SNF VBP
process with the existing process used by the SNF QRP. One commenter
believed that eliminating the requirement to submit the distinct ECE
form will be effective and efficient.
Response: We thank the commenters for their support. We agree that
these updates will streamline the process and enhance alignment with
the SNF QRP process for requesting an ECE.
Comment: A few commenters recommended that CMS align and streamline
the process for submitting and receiving an ECE across programs, such
as the SNF VBP Program and SNF QRP, so that SNFs can easily request an
ECE. One commenter specifically recommended further streamlining the
process for submitting an ECE request so that if a SNF is granted an
ECE by CMS for another program, that ECE is automatically applied to
the SNF VBP Program. Another commenter recommended that CMS provide
clear information regarding the ECE request processes.
Response: We thank the commenters for their recommendations. We
will consider ways to further streamline the ECE process in future
rulemaking. We also intend to work to ensure that information related
to ECE request processes is accessible to providers. We note that the
current instructions for requesting an ECE are available on the SNF VBP
website (available at: https://www.cms.gov/medicare/quality/nursing-home-improvement/value-based-purchasing/extraordinary-circumstance-exception). We will update those instructions to include the changes
that we are finalizing in this final rule. Along with providing the new
ECE instructions on the SNF VBP website, we will consider additional
channels of communication that we can leverage to introduce the new ECE
request instructions and to clarify any details. Potential methods
include, but are not limited to Listservs, Open Door Forums, Listening
sessions and webinars, and the CMS News Bulletin. Furthermore, the SNF
VBP Program Help Desk, which is currently available at [email protected],
will be accessible to SNFs who are seeking support for the new ECE
request instructions or have any questions regarding them.
After consideration of public comments, we are finalizing our
proposals to expand the reasons a SNF may request an extraordinary
circumstances exception and to update the instructions for requesting
an extraordinary circumstances exception under the SNF VBP Program as
proposed. We are also finalizing our proposal to codify this expanded
ECE policy in our regulations.
IX. Nursing Home Enforcement
A. Background
The Biden-Harris Administration is committed to ensuring that all
residents living in nursing homes receive safe, high-quality care. This
includes making certain that all Americans, including older Americans
and people with disabilities, live in a society that is accessible,
inclusive, and equitable. To ensure that residents are receiving high-
quality, and safe care, Long-Term Care (LTC) facilities that
participate in the Medicare and/or Medicaid program, must be certified
as meeting Federal participation requirements. LTC facilities are
certified as a skilled nursing facility (SNF) in Medicare and a nursing
facility (NF) in Medicaid, or a dually-certified SNF/NF in both
programs, as specified in sections 1819 and 1919 of the Social Security
Act (Act), respectively, and in regulations at 42 CFR part 483, subpart
B.
Section 1864(a) of the Act authorizes the Secretary to enter into
agreements with State Survey Agencies (SSAs) to conduct surveys (that
is, inspections) to determine whether SNFs and NFs meet the Federal
participation requirements for Medicare (generally referred to as
requirements or Conditions of Participation (CoPs)). Section
1902(a)(33)(B) of the Act provides for SSAs to perform the same survey
tasks for facilities participating or seeking to participate in the
Medicaid program. See also, section 1919(g) of the Act. The results of
these surveys are used by CMS and the State Medicaid agency,
respectively, as the basis for a decision to enter into, deny, or
terminate a provider agreement with the facility.
[[Page 64138]]
They are also used to determine whether one or more enforcement
remedies should be imposed when noncompliance with requirements is
identified. Sections 1819(h) and 1919(h) of the Act. Surveyors observe
the provision of care and services to residents, conduct interviews,
and review facility and residents' documentation to determine
compliance with Federal requirements and ensure the residents' health
and safety are adequately protected.
Under sections 1819(f)(1) and 1919(f)(1) of the Act, the Secretary
must ensure that the enforcement of compliance with the participation
requirements is adequate to protect the health, safety, welfare, and
rights of the residents and to promote the effective use of public
money. Additionally, under sections 1819(h)(2)(B) and 1919(h)(3)(C) of
the Act, criteria must be specified as to when and how enforcement
remedies are applied, the amounts of fines, and the severity of each
remedy imposed. Criteria must also be designed to minimize the time
between the identification of violations and the final imposition of
the remedies. Under sections 1819(h)(2)(B) and 1919(h)(3)(C) of the
Act, civil money penalties (CMPs) are one of the Federal statutory
enforcement remedies available to the Secretary and the States to
address facility noncompliance with the requirements. Under sections
1819(h)(2)(B)(ii)(I) and 1919(h)(3)(C)(ii)(I) of the Act, CMPs may be
imposed to remedy noncompliance at amounts not to exceed $10,000 for
each day of noncompliance (as annually adjusted by inflation by the
Federal Civil Penalties Inflation Adjustment Act Improvements Act of
2015 (the 2015 Act). The statute also permits the Secretary and the
States to impose a CMP for each day of noncompliance, even if a
facility has since returned to substantial compliance as documented by
an intervening standard survey (sections 1819(h)(2)(A) and 1919(h)(1)
and (3) of the Act providing that if a facility is found to be in
compliance with the requirements, ``. . . but, as of a previous period,
did not meet such requirements, [the Secretary provide for] a civil
money penalty . . . for the days in which he finds that the facility
was not in compliance with such requirements''). The Secretary must
follow the procedures set out in section 1128A of the Act in processing
these CMP remedies. (Sections 1819(h)(2)(B)(ii)(I) and
1919(h)(3)(C)(ii)(I) of the Act)
The regulations that govern the imposition of CMPs and other
remedies authorized by the statute were published on November 10, 1994
(59 FR 56116), and subsequently revised on September 28, 1995 (60 FR
50118), March 18, 1999 (64 FR 13354 through 13360), March 18, 2011 (76
FR 15106), and September 6, 2016 (81 FR 61538). The nursing home
enforcement rules are set forth in 42 CFR part 488, subpart F, and the
provisions directly affecting CMPs imposed for noncompliance with the
requirements are set forth in Sec. Sec. 488.430 through 488.444. In
general, an enforcement action imposed is based on the severity of harm
or potential for more than minimal harm to residents that results and
the scope of how many residents were affected by the cited
noncompliance. This is intended to ensure prompt and sustained
compliance for the future, incentivizing the facility to take
appropriate actions to permanently correct their noncompliance and
protect residents' health and safety in the future. For example, if
residents experienced serious harm due to noncompliance (including
death), a less impactful enforcement remedy may not compel the facility
to take the appropriate actions to correct and prevent a similar event
from occurring in the future, leaving residents at risk for serious
harm, injury, or death.
Under 42 CFR 488.438, the amount of CMPs increases based on the
severity and/or extent of the harm or potential for more than minimal
harm that might result from noncompliance. Current regulations at Sec.
488.408 allow for penalties to be assessed in the upper range of $3,050
to $10,000 per day (PD) or $1,000 to $10,000 per instance (PI), as
annually adjusted for inflation for noncompliance that constitutes
immediate jeopardy (IJ) to resident health and safety, while penalties
in the lower range of $50 to $3,000 PD or $1,000 to $10,000 PI of
noncompliance, as annually adjusted for inflation, may be imposed where
immediate jeopardy does not exist.
Under the current regulations, the State and/or CMS must decide
whether to select either a PD or PI CMP when considering whether a CMP
will be used as a remedy. A PD CMP is an amount that may be imposed for
each day a facility is not in compliance until the facility corrects
the noncompliance and achieves substantial compliance. A PI CMP is an
amount imposed for each instance in which a facility is not in
substantial compliance. The current enforcement regulations at 42 CFR
part 488, subpart F, do not authorize the use of both types of CMPs
during the same survey, nor do they allow for multiple PI CMPs to be
imposed for multiple instances within the same noncompliance deficiency
that occurred on different days during a survey.
While there is no statutory limitation of both a PI and PD being
imposed on the same survey, we specified in the rulemaking that revised
Sec. 488.430(a) (published on March 18, 1999 (64 FR 13360)), that we
would not impose both PD and PI CMPs during a survey. Instead, the 1999
rule required that ``a concomitant decision must be made whether the
civil money penalty will be based on a determination of per instance or
per day'' (64 FR 13356). Additionally, we noted that an ``instance''
means a singular event of noncompliance or single deficiency under a
distinct regulatory area identified by an administrative ``F tag''
number used as reference on the CMS-2567, Statement of Deficiencies.
(Id.) We proposed revisions to this limitation to enable more types of
CMPs to be imposed during a survey once a CMP remedy is selected,
within the statutory and regulatory limits, allowing penalties to be
better aligned with the noncompliance identified during the survey and
for more consistency of CMP amount across the nation. PI CMPs are often
imposed in certain circumstances, such as when noncompliance existed
but was corrected prior to the survey and for isolated instances of
noncompliance unrelated to resident abuse. PI CMPs may also be imposed
in cases where a deficiency is found, but the facility has not had any
citations of actual or serious harm on any survey in the past three
years. A PI CMP has typically not been imposed for findings of abuse or
neglect, when there is continued noncompliance, or when the facility
has a history of the same type of noncompliance causing actual harm to
residents. PD CMPs, however, are generally imposed when these scenarios
do not exist, and the facility has a history of similar noncompliance.
For example, if a facility was found to be out of compliance with the
requirements to prevent accidents where a resident was injured during a
transfer from a wheelchair to the bed, and this was cited as an
isolated instance of noncompliance that caused actual harm to a
resident, a PI CMP may be imposed. We developed a Civil Money Penalty
Analytic Tool to help determine CMP amounts when a CMP is one of the
selected remedies, per sections 1819(h)(2)(B)(ii) and 1919(h)(3)(C)(ii)
of the Act; 42 CFR 488.404 and 488.438.
The Biden-Harris Administration is committed to ensuring that all
residents living in Medicare and Medicaid nursing homes receive safe,
high-quality care. Specifically, in February 2022,
[[Page 64139]]
alongside a suite of other reforms, CMS committed to expanding
financial penalties and other enforcement remedies to improve the
safety and quality of care in the Nation's certified nursing
homes.\106\ As part of this effort, CMS examined the use of PD and PI
CMPs and CMP impositions across states from January 1, 2022, to
December 31, 2022. Based on this analysis, CMS believes that the prior
approach regarding CMPs was not as effective as desired to improve
patient safety. We found national variations in the length of time PD
CMPs are imposed based on when the noncompliance occurred, when the
survey was performed, and when the facility was found to have corrected
the noncompliance. For example, from January 1, 2022, to December 31,
2022, the State with the shortest average number of days for PD CMP
imposition was 1 day, and the longest average number of days in a State
was 43 days. This results in vastly differing PD CMP amounts across the
States based on the number of days of noncompliance, as well as the
date the survey was conducted, rather than being more focused on the
potential or actual harm that a deficiency may cause to residents. In
other words, the same type of noncompliance could exist in two
facilities in different states, but the PD CMP amounts would be
different simply due to the number of days between the identification
of noncompliance by the surveyor and the date of correction by the
facility. We believe that this results in at least two problems. First,
it could create a perception of inequity in the total amount calculated
for a CMP. Second, it prevents us from holding some facilities
responsible for failing to adequately protect residents' health,
safety, and well-being. Take, for example, a survey that finds
noncompliance with the requirements of participation that increases the
likelihood of serious injury, harm, impairment, or death to residents--
such as when residents are susceptible to falls while not being
monitored (even when no resident actually fell as a result of the
failure to monitor). If this deficiency is identified to have started
100 days prior to the survey, a PD CMP would accrue for each of the 100
days and each additional day until the facility corrected its
noncompliance, resulting in a very high CMP. Conversely, another
facility's similar noncompliance might result in serious harm to a
resident, such as when two residents fall due to failures to monitor,
resulting in serious injury. However, if these falls are identified to
have occurred one and two days prior to the survey, a PD CMP would only
accrue for 2 days and each additional day until the noncompliance was
corrected, resulting in a relatively low CMP that may not encourage
prompt or lasting compliance.
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\106\ https://www.whitehouse.gov/briefing-room/statements-releases/2022/02/28/fact-sheet-protecting-seniors-and-people-with-disabilities-by-improving-safety-and-quality-of-care-in-the-nations-nursing-homes/.
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These scenarios show how the timing of a survey can potentially
result in a higher CMP for similar noncompliance that resulted in less
harm to residents. As such, we want to ensure that CMS retains the
authority to impose CMPs related to the nature of the harm that is
caused by--or could be caused by--a facility's noncompliance and the
length of such noncompliance, rather than the date that a standard
survey was conducted or a finding of noncompliance was identified, even
if the administration of imposing the CMP occurs after another survey
has been conducted. This approach can help prevent noncompliance from
occurring writ large, rather than just addressing it once identified.
Therefore, as discussed in the proposed rule, we proposed to expand
and strengthen our enforcement process by revising the regulations to
increase CMS's flexibility when a CMP is the selected remedy and allow
for multiple PI CMPs to be imposed for the same type of noncompliance,
allow for both PD and PI CMPs to be imposed for noncompliance findings
in the same survey, as well as ensure that the amount of a CMP does not
depend solely on the date that the most recent standard survey is
conducted or the date that surveyors identified a finding of
noncompliance. With these revisions, in certain circumstances, CMS or
the State may use the survey start date when imposing a PD CMP instead
of the beginning date of the noncompliance, which maintains the benefit
of CMPs accruing to incentivize swift correction to protect existing
residents' safety and continuous compliance to protect future
residents' safety. In other words, by creating the ability to impose a
PI CMP and PD CMP on the same survey, CMS or the State could impose a
PI CMP to address the noncompliance that occurred in the past or prior
to the survey, and a PD CMP beginning at the start of the survey and
continuing until the facility has corrected its noncompliance.
Additionally, if multiple instances of noncompliance occurred prior to
the survey, CMS or the State could impose multiple PI CMPs, as well as
a PD CMP. This helps ensure that similar types of noncompliance receive
similar CMPs regardless of how many days prior to the survey it
occurred and ensures facilities are motivated to correct their
noncompliance as soon as possible after the surveyors identify it.
These revisions are not intended to expand the type of deficiencies
that are subject to PD and PI CMPs. The States and CMS would continue
to follow the existing criteria for imposing a PD CMP or PI CMP,
including imposing a PD or PI CMP for noncompliance that occurred prior
to the start of a survey. Rather, these revisions would allow for more
consistent CMP amounts imposed across the nation and would expand the
current enforcement to allow for CMPs that more closely align with the
noncompliance that occurred. These actions will help to better ensure
that compliance is quickly achieved and is lasting to ensure resident
safety.
In the April 3, 2024, Federal Register (89 FR 23424), we published
the proposed rule setting forth our proposal for revising the
requirements for imposing CMPs. In the proposed rule, we stated that
our goal is to enable CMS and the States to impose CMPs to better
reflect the type of noncompliance that occurred.
1. Imposing Multiple Per Instance Civil Money Penalties for the Same
Type of Noncompliance
We proposed at Sec. 488.408(e)(2)(ii), that for each instance of
noncompliance, CMS and the State may impose a PD CMP of $3,050 to
$10,000 (as adjusted under 45 CFR part 102), a PI CMP of $1,000 to
$10,000 (adjusted under 45 CFR part 102), or both, in addition to the
remedies specified in Sec. 488.408(e)(2)(i).
2. Imposing Per Instance and Per Day Civil Money Penalties on the Same
Survey
We proposed at Sec. Sec. 488.408(e)(2)(ii) and 488.430(a) to
expand our authority to impose both a PI CMP and a PD CMP, not to
exceed the statutory and regulatory maximum amount on any given day,
even when combined, when surveyors identify noncompliance.
3. Timing of Enforcement
We proposed at Sec. 488.430(b) to allow the imposition of CMPs for
noncompliance that was identified since the last three standard
surveys.
[[Page 64140]]
B. Provisions of the Proposed Regulations
1. Imposing Multiple Per Instance Civil Money Penalties for the Same
Type of Noncompliance
Sections 1819(h)(2)(B)(ii) and 1919(h)(3)(C)(ii) of the Act
authorize the Secretary to impose a CMP for each day of noncompliance.
Section 1128A(d) of the Act further states that the Secretary shall
consider (1) the nature of claims and the circumstances under which
they were presented, (2) the degree of culpability, history of prior
offenses, and financial condition of the person presenting the claims,
and (3) such other matters as justice may require when determining the
amount or scope of any penalty. The regulations at Sec. 488.454(d)
state that, in the case of a CMP imposed for an instance of
noncompliance, the remedy is the specific amount of the CMP imposed for
the particular noncompliance deficiency. The meaning of an
``instance,'' therefore, focuses on a single deficiency citation of the
applicable requirements of part 483, subpart B, referenced on the
facility's statement of deficiencies (Form CMS-2567) and, under the
current regulations, only one type of CMP can be imposed per F tag
deficiency.
The statute grants the Secretary broad discretion to determine how
appropriate CMPs should be enforced and only limits the imposition to a
maximum daily amount. As discussed in the proposed rule, we proposed to
expand the circumstances in which a PI CMP can be imposed to allow for
more than one PI CMP to be imposed when multiple occurrences, or
``instances'' of a specific noncompliance are identified during a
survey, regardless of whether they are cited at the same regulatory
deficiency tag number in the statement of deficiencies.
As previously mentioned, CMS imposes CMPs based on sections
1819(h)(2)(B)(ii) and 1919(h)(3)(C)(ii) of the Act and Sec. Sec.
488.404 and 488.438 which provides the amount of penalty, the ranges,
the basis for penalty amount, increase/decrease of penalty amounts, and
factors affecting the amount. While we may impose various enforcement
remedies, CMPs are frequently imposed for deficiencies that result in
serious injury, harm, impairment, or death to nursing home residents.
Currently, we can only impose PI CMPs for different types of
noncompliance identified on a survey, while other instances of the same
noncompliance would not receive a CMP due to current regulatory
limitations.
To strengthen our enforcement policies, we proposed to revise Sec.
488.401 to define ``instance'' or ``instance of noncompliance'' as a
separate factual and temporal occurrence when a facility fails to meet
a participation requirement. We further proposed that each instance of
noncompliance would be sufficient to constitute a deficiency and that a
deficiency may be comprised of multiple instances of noncompliance. We
received combined comments in response to sections IX.B.1 and IX.B.2. A
summary of the comments and our responses are listed at the conclusion
of section IX.B.2 in this final rule. We received several comments in
support of the proposed revision to Sec. 488.401.
2. Imposing Per Instance and Per Day Civil Money Penalties on the Same
Survey
As we noted earlier, the Act does not limit the imposition of both
a PD and a PI on the same survey, but only limits the total amount a
penalty may be imposed for any individual day. Section
488.408(d)(2)(iii) through (iv) and (e)(1)(iii) through (iv) outline
the type of remedies that may be imposed based on the severity of the
noncompliance. However, these regulations do not state the manner in
which the remedies may be imposed.
Because CMPs are designed to spur permanent resolution of
deficiencies to maintain resident safety, we believe CMS and the States
need flexibility to determine the range of CMPs that can be imposed on
facilities that fail to meet the conditions of participation.
As discussed in the proposed rule, we proposed to revise Sec. Sec.
488.408(e)(2)(ii) and 488.430(a) to expand our authority to impose both
a PI CMP and a PD CMP, not to exceed the statutory and regulatory
maximum amount on any given day even when combined, when surveyors
identify noncompliance. Specifically, in Sec. 488.408(e)(2)(ii), we
proposed that for each instance of noncompliance, CMS and the State may
impose a PD CMP of $3,050 to $10,000 (as adjusted under 45 CFR part
102), a PI CMP of $1,000 to $10,000 (as adjusted under 45 CFR part
102), or both, in addition to the remedies specified in Sec.
488.408(e)(2)(i). Additionally, we proposed that when a survey contains
multiple instances of noncompliance, CMS and the State may impose any
combination of per instance or per day CMP for each instance of
noncompliance within the same survey. Additionally, we proposed to
revise Sec. 488.430(a) to allow for each instance of noncompliance, a
PD CMP, PI CMP, ``or both'' may be imposed, regardless of whether the
deficiencies constitute immediate jeopardy. We also proposed to add
that when a survey contains multiple instances of noncompliance, a
combination of PI and PD CMPs for each instance of noncompliance may be
imposed within the same survey.
Additionally, we proposed to make conforming changes by revising
Sec. 488.434(a)(2)(iii) to clarify that both PD and PI CMPs can be
imposed on the same survey and thus are included in the penalty notice
to the facility. Furthermore, we proposed to revise Sec.
488.434(a)(2)(v) to indicate that the date and instance of
noncompliance is not a singular event but rather can be multiple
``date(s) of the instance(s) of noncompliance.'' Lastly, we proposed to
revise Sec. 488.440(a)(2) to remove the phrase, ``for that particular
deficiency,'' and replace with, ``per instance,'' which will allow for
more than one PI CMP to be imposed on the same type of noncompliance or
``F tag'' citation. We sought public comment on these proposed
revisions and received over a 100 public comments on these proposals
from various parties interested in addressing LTC facilities' issues,
including advocacy groups, long-term care ombudsmen, providers and
provider industry associations, nursing home staff and administrators,
and others. The following is a summary of the comments we received and
our responses.
Comment: Several commenters supported the revised definition of
``instance(s) of noncompliance'' at Sec. 488.401 and the proposed
language at Sec. 488.434(a)(2)(v) that indicates instances of the same
noncompliance (F-tag) can occur on multiple dates. Commenters also
agreed with the revisions at Sec. 488.434(a)(2)(iii), clarifying that
both PD and PI CMPs can be imposed simultaneously in the same survey,
stating that both CMP types may be warranted based on the facility's
noncompliance. Commenters stated that these regulatory changes as
proposed, would allow for flexibility in imposing enforcement and align
with the goal of enforcement remedies to ensure facility compliance
with the Federal participation requirements.
Response: We appreciate the feedback from commenters and agree that
by improving the definition of instance(s), our authority to impose
multiple PI CMPs and both PI and PD in the same survey will strengthen
our enforcement and promote resident safety and quality of care and
life.
Comment: Many commenters opposed the change to impose multiple PI
CMPs for the same type of noncompliance and PD and PI CMPs in the same
survey.
[[Page 64141]]
One commenter noted that when the scope of a deficiency is cited, it
already reflects the extent of the noncompliance when scope and
severity are assigned to a deficiency, as doing so may unfairly punish
the facility. For example, a PI CMP is imposed based on the scope
(isolated, pattern, or widespread) of the cited deficiency, and the
revised provision will also allow for multiple PI CMPs imposed at the
same scope and severity for each instance of noncompliance. Essentially
this commenter noted that the revised process implies that the facility
would be fined twice with PI CMPs at the higher scope level of pattern
or widespread. Another commenter stated these changes would deviate
practices of CMP imposition significantly for nursing homes as compared
to other providers, such as hospitals, home health agencies, and
hospices causing inconsistencies across enforcement settings.
Additionally, they added that the use of CMPs in nursing homes would
thus be more extreme than in these other settings.
Response: We disagree with these comments. While the scope and
severity level of a deficiency does reflect the extent of the
noncompliance, under current regulations, the resultant CMP may not.
For example, imposing a single PI CMP may only reflect the scope of a
single instance of noncompliance that occurred on a day, but that may
not accurately reflect the type of noncompliance and harm to residents
that may have occurred on other days. Therefore, the proposed revision
will allow CMS to impose CMPs for multiple instances of noncompliance
to more accurately reflect the type of noncompliance that occurred on
multiple days, and does not represent that a facility would be fined
twice at the higher scope and severity level.
Furthermore, in response to comments opposing the imposition of PD
and PI CMPs in the same survey, we note that under a PD CMP, a facility
may already be fined for each day until the facility is in substantial
compliance. This may include the days where specific instances of
noncompliance occurred until the facility is determined to be in
substantial compliance. The proposed revision gives CMS the ability to
also impose a CMP for each instance that noncompliance occurred on
different days within that timeframe, rather than a broader CMP that
applies to all days from the start of the noncompliance until the
facility is in substantial compliance.
These changes are not intended to punish a facility, but rather to
ensure the imposition of CMPs, like all enforcement remedies imposed on
nursing homes voluntarily choosing to participate in the program,
``ensure[s] prompt compliance with program requirements'' and are
``applied on the basis of noncompliance found during surveys conducted
by CMS or by the State survey agency.'' 42 CFR 488.402(a) and (b).
Congress enacted sections 1819 and 1919 of the Act to provide the
Secretary with expansive authority to craft remedies to address
noncompliance with Federal standards for nursing home quality care,
which is what these revisions are designed to do. The legislative
history of the Nursing Home Reform Act of 1987 (NHRA) does not support
an assertion that changes cannot be made to the implementing
regulations after careful consideration and evaluation of new
information, nor that changes cannot be made to encourage achieving and
maintaining compliance. Congress has expressly instructed the Secretary
that the purpose of ``Federal Remedies'' is to ``assure compliance in
Medicaid facilities'' with the rules. H.R. Rep. No. 100-391, pt. 1 at
475 (1987). Congress also instructed the Secretary to create penalties
that would prevent ``yo-yo'' or ``roller coaster'' providers that
``correct their deficiencies, and then quickly lapse into
noncompliance.'' Id. at 471. See also id. at 474 (``The Committee is
particularly concerned with the patterns of repeated noncompliance
noted by both the [Institute of Medicine] Committee and the GAO.''). As
part of this authority, we have found that changes to the implementing
regulations are needed to better effectuate the Medicare and Medicaid
statutes and overall regulatory enforcement scheme, that is, ensuring
providers take all reasonable steps to care for a vulnerable population
and help them to ``attain or maintain [their] highest practicable
physical, mental, and psychosocial well-being.'' Sections 1819(b)(2)
and 1919(b)(2) of the Act. We are making these revisions precisely
because currently repeat noncompliance has been an issue, and these
changes will, we hope, remedy that problem.
Because CMPs are designed to spur permanent resolution of
deficiencies so that facilities achieve and maintain compliance, we
believe CMS and the States need flexibility to determine the range of
CMPs that can be imposed on facilities that fail to meet the conditions
of participation. For example, if a survey identifies isolated
noncompliance that occurred prior to the start of the survey and also
identifies separate noncompliance that began and continued to occur
during the survey, we are currently unable to impose both a PI CMP and
a PD CMP, that are within the requisite daily limits to address these
two separate occurrences of noncompliance identified during the same
survey. In other words, if a survey identified numerous instances of
medication administration errors as well as systemic noncompliance with
infection control policies, we believe imposing a PI CMP for the
medication errors and a PD CMP for the infection control deficiencies,
in this general example, could be a more effective enforcement response
to both the isolated medication noncompliance incidents from prior to
the survey and the current noncompliance with infection control
policies. Due to the additional instances of noncompliance identified,
a PD CMP that covers the noncompliance with infection control
requirements alone may not encourage the facility to sustain compliance
with medication administration. Without this type of flexibility, CMS
cannot impose remedies that are sufficient to ensure that any systemic
issues that caused the noncompliance are permanently corrected.
Moreover, we have found that the failure of nursing homes to take the
necessary steps to permanently resolve systemic problems increases the
probability that deficiencies will recur, progressing to a higher scope
and severity that ultimately results in harm or increased harm to
residents. For example, if noncompliance occurred on a date prior to
the start of a survey, and noncompliance was also identified during the
survey, under the current structure, CMS could impose a PD CMP that
would start accruing from the first date of noncompliance. Under the
new revision, CMS could impose a PI CMP for the noncompliance that
occurred prior to the survey, and PD CMP for the noncompliance that was
identified during the survey. This will allow CMS to impose a CMP that
is commensurate with the actual noncompliance that occurred, rather
than having the CMP amount be impacted by the timing of the survey.
We also disagree that there is an issue in the application of CMPs
for nursing homes as compared to other providers. CMPs for
noncompliance with program participation requirements are not an
available remedy for hospitals. Though they are available for home
health agencies and hospices, unlike these providers, the NHRA is a
nursing home specific statute in which Congress has expressly
instructed the Secretary to pay especial attention to nursing home
compliance with the standards of participation in order to ensure that
[[Page 64142]]
facilities not simply meet the conditions of participation, but also
comply with the statutory mandate that nursing homes must provide
services and activities to ``attain or maintain the highest practicable
physical, mental, and psychosocial well-being of each resident'' and in
such manner and such environment that will ``promote maintenance or
enhancement of the quality of life of each resident.'' Sections
1819(b)(1), 1819(b)(2), 1919(b)(1), and 1919(b)(2) of the Act (emphasis
added). Other providers have very different conditions for
participation and enforcement of those conditions. The revisions in
this rule are to ensure that nursing homes comply to the unique
requirements for participation for long term care facilities.
Comment: Commenters questioned the necessity of the revisions to
impose PD and PI CMPs in the same survey and multiple PI CMPs for the
same type of noncompliance. They note that CMS has existing enforcement
authority to impose a per day CMP amount up to the regulatory maximum
as adjusted by the 2015 Act. As such, the commenter expressed concerns
that CMS could use the regulatory revisions to impose multiple CMPs
that exceed the daily regulatory maximum.
Response: We thank the commenter for their comment. As noted in the
proposed rule and the preamble of this final rule, CMS recognizes that
the statute limits the daily amount of a CMP imposition up to the
regulatory maximum in accordance with Sec. 488.408, as adjusted by the
2015 Act. Additionally, given that the timing of a revisit survey can
vary and potentially result in a disparate CMP total among facilities
for similar noncompliance, even when the noncompliance may have
resulted in relatively less harm to residents, we believe these
revisions would allow for improved consistency in the imposition of
CMPs. Also, the regulatory revisions will provide CMS additional
flexibility to impose CMPs at an amount that aligns with the severity
of the noncompliance, but that does not exceed the statutory and
regulatory maximum amount on a given day.
Comment: Many commenters objected to the CMP proposals which they
described as an expansion, which the commenters believed may divert a
facility's funds away from recruiting and retaining direct care staff
to meet the new minimum nursing home staffing requirements that would
help improve resident quality of care. Commenters referenced the
statements on Improving Safety and Quality in the Nation's nursing
homes,\107\ which outlined a set of reforms including assuring that
every nursing home provides a sufficient number of staff who are
adequately trained to provide high-quality care. There is concern with
how these CMP enforcement updates will interact with the finalized
minimum staffing requirements for long-term care facilities. One
commenter also expressed an additional concern that increased financial
penalties may lead to additional facility closures and create issues
related to access to care.
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\107\ https://www.whitehouse.gov/briefing-room/statements-releases/2022/02/28/fact-sheet-protecting-seniors-and-people-with-disabilities-by-improving-safety-and-quality-of-care-in-the-nations-nursing-homes/.
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Response: We thank the commenters for their comments. The ``Minimum
Staffing Standards for Long-Term Care (LTC) Facilities and Medicaid
Institutional Payment Transparency'' final rule \108\ was issued on
April 22, 2024. This final rule establishes minimum nurse staffing
requirements, which aim to significantly reduce the risk of residents
receiving unsafe and low-quality care within LTC facilities. The
enforcement of the new staffing requirements will not begin until those
requirements are implemented, which is staggered over time; the
relevant implementation dates are provided in the final rule. The
revisions to the enforcement regulations in this final rule, however,
will adjust our ability to impose PD and PI CMPs for noncompliance with
any requirement and are not exclusive to the new staffing requirements.
CMS has a statutory obligation to assure the enforcement of Federal
requirements are adequate to protect the health, safety, welfare and
rights of residents. Enforcement remedies, such as CMPs, address
noncompliance with any requirement, and these revisions intend to
improve our ability to do so in a more targeted and effective manner.
We further note that the revisions to the CMP authorities are not
intended to cause an increase of facility closures or create any access
to care issues. As per Sec. 488.438(f)(2), when choosing to impose a
CMP remedy, CMS considers a facility's financial condition, among other
factors. CMS remains focused on improving the health and safety of
nursing home residents by ensuring quality care and ensuring access to
care. Reforming the CMP system can further help to improve the quality
and safety of care that residents in SNFs and NFs receive by
incentivizing facility violations to be remedied faster.
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\108\ 89 FR 40876 (May 10, 2024); https://www.federalregister.gov/documents/2024/05/10/2024-08273/medicare-and-medicaid-programs-minimum-staffing-standards-for-long-term-care-facilities-and-medicaid.
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Comment: CMS received a comment stating concerns that CMS will be
assessing more CMPs while suggesting CMS include a limit of $5,000 on
projects submitted to the Civil Money Penalty Reinvestment Program
(CMPRP). The commenter notes that ``although we understand the
importance of CMPs as an enforcement tool, we believe that the
combination of these changes will remove even more funding from the
nursing home sector at the same that CMS has made it extremely
challenging to use those funds for their intended purpose of protecting
or improving resident care.''
Response: This comment regarding the CMPRP project limits is
outside the scope of this final rule; however, we note that the
proposed revisions to Sec. Sec. 488.430(a) and 488.434(a)(2)(iii) do
not impact facilities' ability to apply for or receive grants through
the CMPRP for eligible quality improvement programs that benefit
residents.
Comment: Commenters also articulated concerns regarding consistency
in the survey process, stating, ``survey findings can vary
significantly regardless of the actual instances of noncompliance.''
Response: We appreciate the commenters' concerns. However, all
surveyors are required to use CMS published protocols and interpretive
guidance for the regulatory requirements when assessing a facility's
compliance with Federal requirements. Noncompliance citations are based
on violations of the regulations, which are based on observations of
the nursing home's performance or practices as well as record review
and interviews. We acknowledge that there are occasional variations in
survey findings due to the unique facts and circumstances of each
individual situation. However, while CMPs are imposed based on survey
findings, we believe this rule may actually improve CMS' ability to
impose CMPs in a more consistent manner nationwide and in a manner that
better aligns with the severity of the noncompliance that occurred.
After consideration of public comments, we are finalizing the
revisions as proposed. This final rule is effective 60 days after it is
published in the Federal Register. These requirements will be
operationalized beginning March 3, 2025. This will allow CMS to make
the corresponding changes in our systems (iQIES) while we are
transitioning to a new technology
[[Page 64143]]
platform, and to provide the necessary training to implement these
changes.
3. Timing of Enforcement
Sections 1819(h)(2)(A) and 1919(h)(1) and (3) of the Act state that
when a facility is found to be in compliance with the requirements but
``. . . as of a previous period, did not meet such requirements,'' the
Secretary and the State may impose a CMP for the days that the facility
is found out of compliance with the requirements. The regulation at
Sec. 488.430(b) states that ``CMS or the State may impose a civil
money penalty for the number of days of past noncompliance since the
last standard survey, including the number of days of immediate
jeopardy.''
As discussed in the proposed rule, due to an increase in the number
of complaint surveys being conducted (for example, over 10,000
additional surveys since 2015) and resulting increased enforcement
actions, the current regulation may result in an unanticipated limit on
CMS's authority to impose remedies for the noncompliance deficiencies
identified when the last standard survey was performed. For example, a
complaint survey might need to be conducted shortly after a standard
survey, not leaving enough time to impose a CMP for deficiencies
identified in the first survey before the second survey is concluded
because the regulation limits how far back CMS or the State may go when
calculating a CMP amount: since the last standard survey. We proposed
to revise Sec. 488.430(b) by changing ``since the last standard
survey'' to ``since the last three standard surveys.'' We believe this
proposed revision aligns with the statutory mandate that the Secretary
ensure that enforcement remedies ensure quality care and adequately
protect the health and safety of nursing home residents in facilities
where the Medicare and/or Medicaid programs pay for services. These
proposed revisions are designed to enable CMS or State survey agencies
to impose a variety of CMPs for noncompliance, particularly when
surveyors have identified deficiencies during one survey that cannot be
addressed because, for example, a subsequent survey has taken place. In
these situations, it is important for CMS and the State to be able to
impose a CMP (per day, per instance, or both), as warranted, to help
ensure that the facility's correction is swift and its compliance is
permanent. Additionally, as discussed in the proposed rule, limiting
the imposition of CMPs for noncompliance that occurred and was cited
since the last three standard surveys is more reflective of a
facility's current compliance performance and is consistent with
current CMS practices of posting survey results from the last three
standard surveys and last three years of complaint surveys on Nursing
Home Care Compare as well as the Nursing Home Five Star Quality Rating
System.
We sought public comments on this proposal and an alternative look-
back period that would also ensure CMPs are imposed in a manner that is
not dependent on when the next standard survey is conducted. There were
no comments regarding an alternative look-back period. The following is
a summary of the comments we received and our responses.
Comment: Some commenters supported the revision to Sec. 488.430(b)
that authorizes the imposition of CMPs for noncompliance that was
previously cited since the last three standard surveys.
Response: We appreciate the support for this proposal and thank the
commenters for their comments.
Comment: We also received comments questioning how this revision
would be used to enforce new regulations such as the ``Minimum Staffing
Standards for Long-Term Care (LTC) Facilities and Medicaid
Institutional Payment Transparency'' final rule.\109\
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\109\ 89 FR 40876 (May 10, 2024); https://www.federalregister.gov/documents/2024/05/10/2024-08273/medicare-and-medicaid-programs-minimum-staffing-standards-for-long-term-care-facilities-and-medicaid.
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Response: As stated previously, the enforcement of the new
requirements for minimum staffing standards will not begin until the
requirements become effective; the relevant effective and
implementation dates are stated in the final rule. The revisions in
this final rule will enable CMS to look-back three standard surveys for
any noncompliance that was previously cited but no CMP was yet imposed
and will allow for imposition of CMPs. The revision's intent is not to
instruct that surveyors look-back to the last three standard surveys
for noncompliance that was not previously cited. The revisions will not
impact the new staffing regulations any differently than they impact
CMS' ability to impose CMPs for any other noncompliance where the
imposition of a CMP is warranted.
Comment: We received comments voicing concerns about how the
proposed revisions would be affected by the current survey backlog. The
commenters are concerned that facilities affected by the survey backlog
should not be penalized with a lengthy lookback period when they have
no ability to change it. Additionally, in the current environment where
some States are using contracted surveyors and there is inconsistency,
the commenter believes it is inequitable to apply a national standard
that could penalize some States.
Response: We thank the commenters for their concerns, but we
disagree. We wish to clarify that the proposal to look-back to the last
three standard surveys pertains only to CMPs issued as part of CMS'
oversight and enforcement of regulatory noncompliance that occurred and
was specifically cited in a previous period, but no CMP was yet
imposed. This regulatory revision is not intended to create a new
ability for surveyors to investigate and cite potential or alleged
noncompliance that occurred during the proposed look-back period that
had not already been cited and included on a Statement of Deficiencies.
The intent of the proposed revision is to ensure the imposition of
CMPs, when warranted as an enforcement response, is equitable and that
all providers, regardless of their location will be subject to the same
amount of enforcement in accordance with the CMP Analytic Tool.\110\
This revision allows CMS to impose a variety of CMPs, as necessary, for
regulatory noncompliance that occurred in a previous period even if a
subsequent survey has taken place. We do note however, that the current
regulatory scheme still requires that CMS investigate any received
complaints, without any temporal limitation on the specific alleged
deficiencies complained of, and thus the possibility of investigations
into allegations during the proposed look-back period is possible. See
42 CFR 488.308(f).
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\110\ https://qcor.cms.gov/report_select.jsp?which=0.
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After consideration of public comments we received and for the
reasons discussed earlier in this section and in the proposed rule, we
are finalizing the proposed revision with two modifications at Sec.
488.430(b). First, we are replacing ``past noncompliance'' with
``previously cited noncompliance'' as we are concerned that
stakeholders are confusing the reference to past noncompliance with
noncompliance that occurred and was already previously cited on a
Statement of Deficiencies that was issued to a provider. Therefore, as
discussed earlier in this section, ``previously cited noncompliance''
means noncompliance that was already previously cited on a Statement of
Deficiencies that was issued to a provider for a survey that occurred
since the last three standard
[[Page 64144]]
surveys but a CMP has not yet been imposed. Also, as previously stated,
this regulatory revision is not intended to create a new ability for
surveyors to investigate and cite potential or alleged noncompliance
that occurred during the proposed look-back period that had not already
been cited and included on a Statement of Deficiencies.
Second, we proposed that CMS or the State may impose a civil money
penalty for the ``number of days'' of previously cited noncompliance,
but are adding, ``or instances,'' as a conforming change to specify
that either a PD or PI CMP, or both, may be imposed for previously
cited noncompliance, consistent with the revisions that are finalized
in this rule. This final rule is effective 60 days after it is
published in the Federal Register. These requirements will be
operationalized beginning March 3, 2025. This will allow CMS to make
the corresponding changes in our system while we are transitioning to a
new technology platform (iQIES), and to provide the necessary training
to implement these changes.
X. Collection of Information Requirements
Under the Paperwork Reduction Act of 1995 (PRA), we are required to
provide 30-day notice in the Federal Register and solicit public
comment before a collection of information requirement is submitted to
the Office of Management and Budget (OMB) for review and approval. In
order to fairly evaluate whether an information collection should be
approved by OMB, section 3506(c)(2)(A) of the Paperwork Reduction Act
of 1995 requires that we solicit comment on the following issues:
The need for the information collection and its usefulness
in carrying out the proper functions of our agency.
The accuracy of our estimate of the information collection
burden.
The quality, utility, and clarity of the information to be
collected.
Recommendations to minimize the information collection
burden on the affected public, including automated collection
techniques.
We solicited public comment on each of these issues for the
following sections of this document that contain information collection
requirements (ICRs):
Using the following format describe the information collection
requirements that are in each section.
A. Information Collection Requirements (ICRs)
1. ICRs Regarding the Skilled Nursing Facility Value-Based Purchasing
Program
We are not removing or adding any new or revised SNF VBP measure-
related requirements or burden in this rule. Consequently, this final
rule does not set out any new SNF VBP-related collections of
information that would be subject to OMB approval under the authority
of the PRA.
2. ICRs Regarding the Skilled Nursing Facility Quality Reporting
Program (SNF QRP)
In accordance with section 1888(e)(6)(A)(i) of the Act, the
Secretary must reduce by 2-percentage points the otherwise applicable
annual payment update to a SNF for a fiscal year if the SNF does not
comply with the requirements of the SNF QRP for that fiscal year.
As stated in section VI.C.3. of the proposed rule and VII.C.3. of
this final rule, we proposed to adopt four new items as standardized
patient assessment data elements under the SDOH category and modify one
item collected as a standardized patient assessment data element under
the SDOH category beginning with the FY 2027 SNF QRP. In section
VI.E.3. of the proposed rule and VII.E.3. of this final rule, we also
proposed that SNFs participating in the SNF QRP, be required to
participate in a validation process. Specifically, we proposed adopting
a similar validation process for the SNF QRP that we adopted for the
SNF VBP beginning with the FY 2027 SNF QRP.
As stated in section VI.C.3. of the proposed rule and section
VII.C. of this final rule, we proposed to adopt four new items as
standardized patient assessment data elements under the SDOH category
and modify one item collected as a standardized patient assessment data
element under the SDOH category beginning with the FY 2027 SNF QRP. The
proposed new and modified items would be collected using the MDS. The
MDS, in its current form, has been approved under OMB control number
0938-1140. Four items would need to be added to the MDS at admission to
allow for collection of these data, and one would be modified.
Additionally, as stated in section VI.E.2. of the proposed rule and
section VII.E.2. of this final rule, we are finalizing our proposal to
require SNFs to collect and submit data on the four new and one
modified SDOH standardized patient assessment data elements at
admission beginning October 1, 2025. However, we are finalizing a
modification to the data specifications of the new and modified SDOH
items so that they exclude any SNF residents who, immediately prior to
their hospitalization that preceded a new SNF stay, resided in a NF for
at least 366 continuous days. SNFs can monitor the MDS 3.0 Technical
Information web page at https://www.cms.gov/medicare/quality/nursing-home-improvement/minimum-data-set-technical-information for updates.
The net result of collecting four new items at admission and
modifying the Transportation item (including the modification that this
item be collected at admission only, rather than at admission and
discharge) is an increase of 0.9 minutes or 0.015 hour of clinical
staff time at admission [(4 items x 0.005 hour) minus (1 item x 0.005
hour)]. We identified the staff type based on past SNF burden
calculations, and our assumptions are based on the categories generally
necessary to perform an assessment. We believe the new and modified
items will be completed equally by a Registered Nurse (RN) and Licensed
Practical and Licensed Vocational Nurse (LPN/LVN). However, individual
SNFs determine the staffing resources necessary.
For the purposes of calculating the costs associated with the
collection of information requirements, we obtained median hourly wages
for these staff from the U.S. Bureau of Labor Statistics' (BLS) May
2022 National Occupational Employment and Wage Estimates.\111\ To
account for other indirect costs and fringe benefits, we doubled the
hourly wage. These amounts are detailed in Table 34. We established a
composite cost estimate using our adjusted wage estimates. The
composite estimate of $65.31/hr was calculated by weighting each hourly
wage equally [($78.10/hr x 0.5) plus ($52.52/hr x 0.5) = $65.31].
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\111\ U.S. Bureau of Labor Statistics' (BLS) May 2022 National
Occupational Employment and Wage Estimates. https://www.bls.gov/oes/current/oes_nat.htm.
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[[Page 64145]]
[GRAPHIC] [TIFF OMITTED] TR06AU24.038
We estimate that the burden and cost for SNFs for complying with
requirements of the FY 2027 SNF QRP will increase under this
requirement to collect and submit these new and modified items on the
MDS for each resident at admission. Therefore, we are providing a
revised estimate of burden and cost from what we estimated in section
IX.A.2. of the proposed rule. Using FY 2023 data, we estimate 199,856
5-day PPS assessments would be impacted by the modification within the
MDS data specifications in order to decrease the burden of capturing
this information on any SNF residents who, immediately prior to their
hospitalization that preceded a new SNF stay, resided in a NF for at
least 366 continuous days. As a result, we estimate a new total of
1,766,806 admissions. Our estimate of planned discharge assessments is
not changing and remains at 754,287 planned discharges. We are changing
the number of SNFs based on more recent information and more recent
provider to CBSA matching from 15,393 SNFs annually to 15,477 SNFs
annually. The result is a revised increase of 30,565.41 hours in burden
for all SNFs [(1,766,806 5-day PPS assessments x 0.02 hour for the four
new SDOH items) minus [(199,856 5-day PPS assessments x 0.005 hour for
the modified Transportation item) plus (754,287 planned discharges x
0.005 hour)]], reflecting a reduction of 4,996.41 hours from the
estimate in the proposed rule (89 FR 23424). Given 0.02 hour at $65.31
per hour to complete an average of 114 5-day PPS assessments per
provider per year minus the sum of 0.005 hour at $65.31 per hour to
complete an average of 12.91 5-day PPS assessments per provider per
year and 0.005 at $65.31 per hour to complete an average of 49 Planned
Discharge assessments, we estimate the total cost would be increased by
$128.98 per SNF annually, or $1,996,226.60 for all SNFs annually, a
reduction of $21.90 per SNF annually or $326,314.88 for all SNFs
annually from the estimate in the proposed rule (89 FR 23424). The
increase in burden will be accounted for in a revised information
collection request under OMB control number (0938-1140). The required
60-day and 30-day notices would publish in the Federal Register and the
comment periods will be separate from those associated with this
rulemaking.
In summary, under OMB control number (0938-1140), as a result of
finalizing the policies in this final rule, we estimate the SNF QRP
will result in an overall increase of 30,565.41 hours annually for
15,477 SNFs. The total revised cost increase related to this
information collection is approximately $1,996,226.60 and is summarized
in Table 35.
[[Page 64146]]
[GRAPHIC] [TIFF OMITTED] TR06AU24.039
We invited public comments on the proposed information collection
requirements. We have summarized the comments we received in section
VII.E.2 of this final rule and provided responses. After careful
consideration of the public comments we received, we are finalizing our
proposal with modification as stated above.
3. ICRs Regarding the Minimum Data Set (MDS) Beginning October 1, 2025
The MDS is used for meeting the SNF Requirements of Participation,
requirements under the SNF QRP, and for payment purposes under the SNF
PPS. As outlined in the FY 2019 SNF PPS final rule (83 FR 39165 through
39265), several MDS items are not needed in case-mix adjusting the per
diem payment for PDPM. However, they were not accounted for in the FY
2019 SNF PPS final rule. Therefore, we are removing these items from
the 5-day Medicare-required assessment beginning October 1, 2025. We
have provided an estimate of the reduction in burden here and in Table
36. The items to be removed are:
O0400.A.1. Speech-Language Pathology and Audiology
Services; Individual minutes.
O0400.A.2. Speech-Language Pathology and Audiology
Services; Concurrent minutes.
O0400.A.3. Speech-Language Pathology and Audiology
Services; Group minutes.
O0400.A.3A. Speech-Language Pathology and Audiology
Services; Co-treatment minutes.
O0400.A.4. Speech-Language Pathology and Audiology
Services; Days.
O0400.A.5. Speech-Language Pathology and Audiology
Services; Therapy start date.
O0400.A.6. Speech-Language Pathology and Audiology
Services; Therapy end date.
O0400.B.1. Occupational Therapy; Individual minutes.
O0400.B.2. Occupational Therapy; Concurrent minutes.
O0400.B.3. Occupational Therapy; Group minutes.
O0400.B.3A. Occupational Therapy; Co-treatment minutes.
O0400.B.4. Occupational Therapy; Days.
O0400.B.5. Occupational Therapy; Therapy start date.
O0400.B.6. Occupational Therapy; Therapy end date.
O0400.C.1. Physical Therapy; Individual minutes.
O0400.C.2. Physical Therapy; Concurrent minutes.
O0400.C.3. Physical Therapy; Group minutes.
O0400.C.3A. Physical Therapy; Co-treatment minutes.
O0400.C.4. Physical Therapy; Days.
O0400.C.5. Physical Therapy; Therapy start date.
O0400.C.6. Physical Therapy; Therapy end date.
O0400.E.2. Psychological Therapy; Days.
The net result of removing the collection of these items is a
decrease of 6.6 minutes of clinical staff time at admission. We believe
that these items are completed equally by a RN and LPN/LVN. Individual
SNFs determine the staffing resources necessary.
For the purposes of calculating the costs associated with the
collection of information requirements, we obtained median hourly wages
for these staff from the BLS May 2022 National Occupational Employment
and Wage Estimates.\112\ To account for other indirect costs and fringe
benefits, we have doubled the hourly wage. These amounts are detailed
in Table 36. We
[[Page 64147]]
established a composite cost estimate using our adjusted wage
estimates. The composite estimate of $65.31/hr was calculated by
weighting each hourly wage equally [($78.10/hr x 0.5) plus ($52.52/hr x
0.5) = $65.31].
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\112\ U.S. Bureau of Labor Statistics' (BLS) May 2022 National
Occupational Employment and Wage Estimates. https://www.bls.gov/oes/current/oes_nat.htm.
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Using FY 2023 data, we estimate a total of 1,966,662 admissions to
15,477 SNFs annually. This equates to a decrease of 216,332.82 hours in
burden for all SNFs. Given 0.11 hour at $65.31 per hour to complete an
average of 127 5-day PPS assessments per provider per year, we estimate
the total cost will be decreased by $912.88 per SNF annually, or
$14,128,696.47 for all SNFs annually.
[GRAPHIC] [TIFF OMITTED] TR06AU24.040
As noted previously in this section of the final rule, we did not
formally propose the changes to the MDS. Rather we used this
opportunity to provide SNFs the information collection requirements
associated with a change that was not accounted for in the FY 2019 SNF
PPS final rule. We received a limited number of comments about this
notification, and are providing a summary of those here, with our
responses.
Comment: Three commenters supported the removal of several MDS
items that are not needed in case-mix adjusting the per diem payment
for PDPM but were not accounted for in the 2019 SNF PPS. These
commenters acknowledged CMS' efforts to reduce provider burden. One of
these commenters appreciated that CMS was not removing the Therapy
items in Section O on the PPS Discharge Assessment that collect the
number of physical, occupational, and speech-language pathology and
audiology minutes provided since the start date of the resident's most
recent Medicare Part A stay.
Response: We appreciate the support from commenters and agree that
removing the requirement to collect the data at the time of the
Medicare Part A admission, while retaining the requirement to collect
the data at the time of discharge from the Medicare Part A stay,
balances the need to monitor the data, while also minimizing provider
burden.
Comment: Several commenters urged CMS not to remove these items
from the 5-day PPS assessment because it gave the appearance that
rehabilitation therapy was being devalued and CMS would not be able to
track functional outcomes. Two of these commenters suggested that there
are not enough safeguards in place to ensure patients receive the
appropriate skilled therapy they need to achieve desired outcomes, and
one of these commenters suggested the therapy minutes items provided a
trigger for nursing staff to consider whether therapy should be
implemented. One of the commenters stated it is too early to eliminate
the items from the MDS given that PDPM was implemented approximately 5
years ago. Other commenters noted that they were concerned that without
these minutes documented, residents may only receive ``low'' skilled
therapies. Finally, one of the commenters stated collection of these
items allows CMS to ensure that when they make a therapy payment,
therapy services are delivered.
Response: We acknowledge the commenters concerns, and it is not our
intent to devalue therapy. In fact, functional outcomes are a key
component of our SNF QRP measure set, including the Discharge Function
Score measure that was adopted in the FY 2024 SNF PPS final rule (88 FR
53233 through 53243). As we stated at the time, the implementation of
interventions that improve residents' functional outcomes and reduce
the risks of associated undesirable outcomes as a part of a resident-
centered care plan is essential to maximizing functional improvement.
For many people, the overall goals of SNF care may include optimizing
functional improvement, returning to a previous level of independence,
maintaining functional abilities, or avoiding institutionalization (88
FR 53234). We take the quality of care residents receive in SNFs
seriously, and monitor the impact of policy decisions, including adding
or removing quality measures and assessment items. We do not believe it
is necessary to retain these items on the 5-day PPS admission
assessment to trigger a decision as to whether therapy services are
needed. SNFs have a responsibility to develop and implement a baseline
care plan for each resident that includes the instructions needed to
provide effective and person-centered care of the resident that meet
professional standards of quality care (Sec. 483.21(a)). Additionally,
the facility must develop and implement a comprehensive person-centered
care plan for each resident (Sec. 483.21(b)) that has been prepared by
an interdisciplinary team (Sec. 483.21(b)(2)(ii)). The comprehensive
person-centered care plan must include the services to be furnished in
order to
[[Page 64148]]
attain or maintain the resident's highest practicable physical, mental,
and psychosocial well-being as required under Sec. 483.24, Sec.
483.25, or Sec. 483.40.
We believe retaining the therapy items on the PPS discharge
assessment will achieve the same goals, but with less burden on SNFs.
Specifically, we will still collect the total number of individual,
concurrent, group, and cotreatment therapy minutes by discipline, as
well as the number of days of each therapy discipline a resident
received over the course of their Part A stay. Therefore, we will be
able to ensure there is no significant change in the intensity of
therapy a resident receives and understand the relationship between the
delivery of therapy services with functional outcomes.
Regarding the comment that residents may receive ``low'' skilled
therapies, we are unclear how to interpret what the commenter may have
been referring to as ``low'' skilled therapies. Medicare only has one
definition of skilled therapy,\113\ and the MDS RAI manual has
consistently provided guidance to SNFs that the number of days and
minutes recorded on the MDS may only include the skilled therapy
treatment time. And, as noted previously in this final rule, SNFs have
a responsibility to provide the necessary care and services to attain
or maintain the highest practicable physical, mental, and psychosocial
well-being, in accordance with the comprehensive assessment and plan of
care (42 CFR 483.25). Regarding the comment that CMS will be unable to
ensure that when they make a therapy payment, therapy services are
delivered, we remind commenters that the SNF PPS does not use the
number of therapy minutes to determine SNF payment. The SNF PDPM was
implemented on October 1, 2019, replacing the Resource Utilization
Groups (RUG) which was dependent on Section O for therapy minutes. The
PDPM consists of five case-mix adjust components, all based on data-
driven, interested parties-vetted patient characteristics, rather than
therapy utilization minutes.
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\113\ Medicare Benefit Policy Manual 100-02; Chapter 8--Coverage
of Extended Care (SNF) Services Under Hospital Insurance; Section
30.2--Skilled Nursing and Skilled Rehabilitation Services.
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Comment: Two commenters urged CMS to continue tracking the therapy
start date, which is only collected on the 5-day PPS assessment, since
this datapoint may be useful for research on best practices and
functional outcomes, including determining whether or how delays in the
start of rehabilitation care may impact patient outcomes and discharge
disposition.
Response: We thank these commenters for their input. However, CMS
no longer uses start dates because the data are not needed for Federal
governmental purposes. As we noted in the FY 2019 SNF PPS final rule,
we closely monitor service utilization, payment, and quality trends
when evaluating patient care outcomes.
Comment: One commenter stated the therapy start date is necessary
to retain since it is used in calculating the Discharge Function Score
measure, and requested CMS clarify how this measure would be calculated
without the data point.
Response: The Discharge Function Score measure does not use the
O0400A5 Speech-Language Pathology and Audiology Services Start date,
the O0400B5 Occupational Therapy Services Start date, or the O0400C5
Physical Therapy Services Start date in the calculation. Therefore,
these data will have no effect on the calculation of the measure
scores.
Comment: One commenter recognized that removing items from the MDS
reduces administrative burden but noted that CMS overestimated the
amount of time that it takes to track therapy utilization using the MDS
tool and did not agree that the collection and submission of these
items takes more than 6 minutes of staff time per patient at admission.
Response: The commenter did not provide specific information to
support why they believe the burden was overestimated. The 6.6 minutes
per MDS is based on past MDS burden calculations and represents the
time it takes to encode the MDS. Our assumptions for staff type were
based on the categories generally necessary to perform an assessment,
and subsequently encode it, and is consistent with past collection of
information estimates.
After careful consideration of the public comments we received, we
are finalizing our intention to remove the Section O0400 items
identified above from the MDS.
4. ICRs Regarding the Proposal for SNFs To Participate in a Validation
Process
In section VI.E.3. of the proposed rule, we proposed to require
SNFs to participate in a validation process beginning with the FY 2027
SNF QRP. We provided an estimate of burden in Table 37, and noted that
the increase in burden will be accounted for in a new information
collection request.
As stated in section VI.E.3(a) of the proposed rule and section
VII.E.3(a) of this final rule, we proposed to require SNFs to
participate in a validation process for assessment-based measures
beginning with the FY 2027 SNF QRP. We identified the staff type based
on past SNF burden calculations, and our assumptions are based on the
categories generally necessary to perform an assessment. We believe
that the medical records will be collected and submitted by a Medical
Records and Health Information Technologist and Medical Registrar (HIT/
MR). However, individual SNFs determine the staffing resources
necessary. For the purposes of calculating the costs associated with
the collection of information requirements, we obtained median hourly
wages for these staff from the BLS May 2022 National Occupational
Employment and Wage Estimates.\114\ To account for other indirect costs
and fringe benefits, we doubled the hourly wage to establish an
adjusted wage estimate of $56.02/hr. These amounts are detailed in
Table 37.
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\114\ https://www.bls.gov/oes/current/oes_nat.htm.
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[[Page 64149]]
[GRAPHIC] [TIFF OMITTED] TR06AU24.041
We proposed that our validation contractor will select, on an
annual basis, up to 1,500 SNFs and up to 10 medical records from each
of the selected SNFs. We proposed that the selected SNFs will have the
option to submit digital or paper copies of the requested medical
records to the validation contractor.
For the purposes of burden estimation, we assume all the activities
associated with the SNF QRP validation process will be completed by a
HIT/MR. For selected SNFs utilizing electronic health records (EHR), we
anticipate an increase of 3 hours up to 7.5 hours of HIT/MR time per
SNF to submit a sample of up to 10 records. For selected SNFs that do
not utilize EHRs, we anticipate an increase of 5 hours up to 12.5 hours
of HIT/MR time per SNF to submit a sample of up to 10 records.
Additionally, SNFs that do not utilize EHRs may incur printing and
shipping costs if they are unable to submit the records via an
electronic portal, and for these SNFs, we estimate the cost to print
and ship a sample of up to 10 records would range from $842.67 up to
$4,114.35.
We also anticipate that a sample of up to 10 medical records will
consist of SNF stays that vary in length of stay. We estimate the
length of stay for each of the selected medical records could range
from 20 days (or less) up to or exceeding 366 days. For purposes of our
burden estimate, we anticipate the average sample of up to 10 medical
records will be distributed among the possible lengths of stay (that
is, approximately 40 percent of stays or 4 stays would be 1 to 30 days,
40 percent of stays or 4 stays would be 31 to 100 days, and 20 percent
of stays or 2 stays would last 101 to 366 or more consecutive days). We
also estimate that approximately 85 percent of nursing homes utilize
some form of EHRs.\115\ Therefore, we estimate the total cost to submit
up to 10 medical records will range between $335,699.85 and $477,368.10
for all 1,500 SNFs selected, depending on the length of stay of the
sample medical records and whether the SNFs use an EHR. We also
estimate that total cost to submit up to 10 medical records will range
between $263.29 [$335,699.85/(1,500 x 0.85 SNFs)] and $2,121.64
[$477,368.10/(1,500 x 0.15 SNFs)] per SNF selected depending on the
length of stay of the sample of medical records and whether the SNF
uses an EHR. On average we estimate the total cost will be increased by
$813,067.95 for all 1,500 selected SNFs [[($263.29 x (1,500 x 0.85)]
plus [$2,121.64 x (1,500 x 0.15)]] and $542.05 per selected SNF
($813,067.95/1,500 SNFs) annually.
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\115\ https://www.ncbi.nlm.nih.gov/pmc/articles/PMC6591108/
#:~:text=In%20a%20nationwide%20sample%2C%20we,EHR%20adoption%20by%20n
ursing%20facilities.
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In section VI.E.3(b). of the proposed rule and section VII.E.3.(b)
of this final rule, we proposed to require SNFs to participate in a
validation process for Medicare fee-for-service claims-based measures
beginning with the FY 2027 SNF QRP. All Medicare fee-for-service
claims-based measures are already reported to the Medicare program for
payment purposes, and therefore there is no additional burden for SNFs.
[GRAPHIC] [TIFF OMITTED] TR06AU24.042
We invited public comments on the proposed information collection
requirements. We have summarized the comments we received in section
VII.E.3 of this final rule and provided responses. After careful
consideration of the public comments received, and for the reasons
outlined in this section of the final rule and our comment responses,
we are finalizing the requirements as proposed.
5. ICRs Regarding Nursing Home Enforcement
This rule finalizes our proposals to expand and strengthen
enforcement processes to increase CMS' flexibility when imposing CMPs.
While Omnibus Budget Reconciliation Act of 1987 (OBRA '87) exempts
nursing home enforcement requirements from the PRA, the anticipated
increase in penalties due to facility noncompliance being cited are
quantified in the regulatory impact analysis (RIA) section of this
preamble.
[[Page 64150]]
XI. Economic Analyses
A. Regulatory Impact Analysis
1. Statement of Need
a. Statutory Provisions
This rule updates the FY 2025 SNF prospective payment rates as
required under section 1888(e)(4)(E) of the Act. It also responds to
section 1888(e)(4)(H) of the Act, which requires the Secretary to
provide for publication in the Federal Register before the August 1
that precedes the start of each FY, the unadjusted Federal per diem
rates, the case-mix classification system, and the factors to be
applied in making the area wage adjustment. These are statutory
provisions that prescribe a detailed methodology for calculating and
disseminating payment rates under the SNF PPS, and we do not have the
discretion to adopt an alternative approach on these issues.
With respect to the SNF QRP, we proposed and are finalizing several
updates beginning with the FY 2027 SNF QRP as described in section VII.
of this final rule. Specifically, we are finalizing our proposal to
collect four new items as standardized patient assessment data elements
under the SDOH category and modify one item collected as a standardized
patient assessment data element under the SDOH category in the MDS
beginning with the FY 2027 SNF QRP with one modification. Specifically,
we are finalizing the data specifications of the new and modified SDOH
items so that they exclude any SNF residents who, immediately prior to
their hospitalization that preceded a new SNF stay, resided in a NF for
at least 366 continuous days. We believe these new and modified items
advance the CMS National Quality Strategy Goals of equity and
engagement by encouraging meaningful collaboration between healthcare
providers, caregivers, and community-based organizations to address
SDOH prior to discharge from the SNF. We also are finalizing our
proposal to adopt a validation process for the SNF QRP beginning with
the FY 2027 SNF QRP with modification. Specifically, we are finalizing
that our validation contractor will select, on an annual basis, up to
1,500 SNFs that submit at least one MDS record in the FY 2 years prior,
rather than the CY 3 years prior, to the applicable FY SNF QRP. We
believe this validation process satisfies section 111(a)(4) of Division
CC of the Consolidated Appropriations Act, 2021 (Pub. L. 116-260) which
requires that the data submitted under the SNF QRP (section 1888(e)(6)
of the Act) be subject to a validation process. We are also finalizing
revisions to our regulation at Sec. 413.360.
With respect to the SNF VBP Program, this final rule updates SNF
VBP Program requirements for FY 2025 and subsequent years. Section
1888(h)(3) of the Act requires the Secretary to establish and announce
performance standards for SNF VBP Program measures no later than 60
days before the performance period, and this final rule includes
numerical values of the performance standards for the FY 2027 program
year for the SNFRM, SNF HAI, Total Nurse Staffing, Nursing Staff
Turnover, Falls with Major Injury (Long-Stay), DC Function, and Long
Stay Hospitalization measures; and numerical values of the performance
standards for the FY 2028 program year for the DTC PAC SNF and SNF WS
PPR measures. We are also required under section 1888(h)(1)(C) of the
Act to establish a minimum number of measures that apply to a facility
for the applicable performance period. Therefore, we are finalizing the
measure minimum for the FY 2028 program year and subsequent program
years, which will be the same as the measure minimum we previously
finalized for the FY 2027 program year (88 FR 53303).
b. Discretionary Provisions
In addition, this final rule includes the following discretionary
provisions:
(1) SNF Market Basket Adjustment
We are rebasing and revising the SNF market basket to reflect a
2022 base year. Since the inception of the SNF PPS, the market basket
used to update SNF PPS payments has been periodically rebased and
revised to reflect more recent data. We last rebased and revised the
market basket applicable to the SNF PPS in the FY 2022 SNF PPS final
rule (86 FR 42444 through 42463) where we adopted a 2018-based SNF
market basket.
Given changes to the industry in recent years and public comments
about the timeliness of the weights, we have been monitoring the
Medicare cost report data to determine if a more frequent rebasing
schedule than our standard schedule (which has generally been about
every 4 years) is necessary. In light of this analysis, we are
incorporating data that is more reflective of recent SNF expenses.
(2) SNF Forecast Error Adjustment
Each year, we evaluate the SNF market basket forecast error for the
most recent year for which historical data is available. The forecast
error is determined by comparing the projected SNF market basket
increase each year with the actual SNF market basket increase in that
year. In evaluating the data for FY 2023, we found that the forecast
error for that year was 1.7 percentage points, exceeding the 0.5
percentage point threshold we established in regulation to trigger a
forecast error adjustment. Given that the forecast error exceeds the
0.5 percentage point threshold for FY 2023, current regulations require
that the SNF market basket percentage increase for FY 2025 be adjusted
upward by 1.7 percentage points to account for forecasting error in the
FY 2023 SNF market basket update.
(3) Technical Updates to ICD-10 Mappings
In the FY 2019 SNF PPS final rule (83 FR 39162), we finalized the
implementation of the PDPM, effective October 1, 2019. The PDPM
utilizes ICD-10 codes in several ways, including using the patient's
primary diagnosis to assign patients to clinical categories under
several PDPM components, specifically the PT, OT, SLP, and NTA
components. In this rule, we are finalizing several substantive changes
to the PDPM ICD-10 code mapping.
2. Introduction
We have examined the impacts of this final rule as required by
Executive Order 12866 on Regulatory Planning and Review (September 30,
1993), Executive Order 13563 on Improving Regulation and Regulatory
Review (January 18, 2011), Executive Order 14094, entitled
``Modernizing Regulatory Review'' (April 6, 2023), the Regulatory
Flexibility Act (RFA, September 19, 1980, Pub. L. 96-354), section
1102(b) of the Act, section 202 of the Unfunded Mandates Reform Act of
1995 (UMRA, March 22, 1995; Pub. L. 104-4), Executive Order 13132 on
Federalism (August 4, 1999), and the Congressional Review Act (5 U.S.C.
804(2)).
Executive Orders 12866 and 13563 direct agencies to assess all
costs and benefits of available regulatory alternatives and, if
regulation is necessary, to select regulatory approaches that maximize
net benefits (including potential economic, environmental, public
health and safety effects, distributive impacts, and equity). Executive
Order 14094, entitled ``Modernizing Regulatory Review'', amends section
3(f)(1) of Executive Order 12866 (Regulatory Planning and Review). The
amended section 3(f) of Executive Order 12866 defines a ``significant
regulatory action'' as an action that is likely to result in a rule:
(1) having an annual effect on the
[[Page 64151]]
economy of $200 million or more in any 1 year (adjusted every 3 years
by the Administrator of Office of Information and Regulatory Affairs
(OIRA) for changes in gross domestic product), or adversely affect in a
material way the economy, a sector of the economy, productivity,
competition, jobs, the environment, public health or safety, or State,
local, territorial, or tribal governments or communities; (2) creating
a serious inconsistency or otherwise interfering with an action taken
or planned by another agency; (3) materially altering the budgetary
impacts of entitlement grants, user fees, or loan programs or the
rights and obligations of recipients thereof; or (4) raise legal or
policy issues for which centralized review would meaningfully further
the President's priorities or the principles set forth in this
Executive order, as specifically authorized in a timely manner by the
Administrator of OIRA in each case.
A RIA must be prepared for major rules with significant regulatory
action/s and/or with significant effects as per section 3(f)(1) ($200
million or more in any 1 year). Based on our estimates, OMB's Office of
Information and Regulatory Affairs has determined this rulemaking is
significant per section 3(f)(1) as measured by the $200 million or more
in any 1 year, and hence also a major rule under subtitle E of the
Small Business Regulatory Enforcement Fairness Act of 1996 (also known
as the Congressional Review Act). Accordingly, we have prepared a RIA
that to the best of our ability presents the costs and benefits of the
rulemaking. Therefore, OMB has reviewed the proposed regulations, and
the Departments have provided the following assessment of their impact.
3. Overall Impacts
This rule updates the SNF PPS rates contained in the SNF PPS final
rule for FY 2024 (88 FR 53200). We estimate that the aggregate impact
will be an increase of approximately $1.4 billion (4.2 percent) in Part
A payments to SNFs in FY 2025. This reflects a $1.4 billion (4.2
percent) increase from the update to the payment rates. We noted in the
proposed rule that these impact numbers do not incorporate the SNF VBP
Program reductions that we estimate would total $187.69 million in FY
2025. We note that events may occur to limit the scope or accuracy of
our impact analysis, as this analysis is future-oriented, and thus,
very susceptible to forecasting errors due to events that may occur
within the assessed impact time period.
In accordance with sections 1888(e)(4)(E) and (e)(5) of the Act and
implementing regulations at Sec. 413.337(d), we are updating the FY
2024 payment rates by a factor equal to the market basket percentage
increase adjusted for the forecast error adjustment and reduced by the
productivity adjustment to determine the payment rates for FY 2025. The
impact to Medicare is included in the total column of Table 39. The
annual update in this rule applies to SNF PPS payments in FY 2025.
Accordingly, the analysis of the impact of the annual update that
follows only describes the impact of this single year. Furthermore, in
accordance with the requirements of the Act, we will publish a rule or
notice for each subsequent FY that will provide for an update to the
payment rates and include an associated impact analysis.
4. Detailed Economic Analysis
The FY 2025 SNF PPS payment impacts appear in Table 39. Using the
most recently available claims data, in this case FY 2023 we apply the
current FY 2024 case-mix indices (CMIs), wage index and labor-related
share value to the number of payment days to simulate FY 2024 payments.
Then, using the same FY 2023 claims data, we apply the FY 2025 CMIs,
wage index and labor-related share value to simulate FY 2025 payments.
We tabulate the resulting payments according to the classifications in
Table 39 (for example, facility type, geographic region, facility
ownership), and compare the simulated FY 2024 payments to the simulated
FY 2025 payments to determine the overall impact. The breakdown of the
various categories of data in Table 39 is as follows:
The first column shows the breakdown of all SNFs by urban
or rural status, hospital-based or freestanding status, census region,
and ownership.
The first row of figures describes the estimated effects
of the various changes contained in this final rule on all facilities.
The next six rows show the effects on facilities split by hospital-
based, freestanding, urban, and rural categories. The next nineteen
rows show the effects on facilities by urban versus rural status by
census region. The last three rows show the effects on facilities by
ownership (that is, government, profit, and non-profit status).
The second column shows the number of facilities in the
impact database.
The third column shows the effect of the update to the SNF
PPS wage index due to adopting the updated census data and revised
CBSAs in OMB Bulletin 23-01. This represents the effect of only the
adoption of the revised CBSAs, independent of the effect of the annual
update to the wage index.
The fourth column shows the effect of the annual update to
the wage index, including the updates to the labor related-share
discussed in section VI.A of this final rule. This represents the
effect of using the most recent wage data available as well as accounts
for the 5 percent cap on wage index transitions. The total impact of
this change is 0.0 percent; however, there are distributional effects
of the change.
The fifth column shows the effect of all of the changes on
the FY 2025 payments. The update of 4.2 percent is constant for all
providers and, though not shown individually, is included in the total
column. It is projected that aggregate payments will increase by 4.2
percent, assuming facilities do not change their care delivery and
billing practices in response.
As illustrated in Table 39, the combined effects of all of the
changes vary by specific types of providers and by location. For
example, due to changes in this rule, rural providers will experience a
5.1 percent increase in FY 2025 total payments.
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BILLING CODE 4120-01-C
5. Impacts for the Skilled Nursing Facility Quality Reporting Program
(SNF QRP) for FY 2027
Estimated impacts for the SNF QRP are based on analysis discussed
in section XI. of the proposed rule. In accordance with section
1888(e)(6)(A)(i) of the Act, the Secretary must reduce by 2 percentage
points the annual payment update applicable to a SNF for a fiscal year
if the SNF does not comply with the requirements of the SNF QRP for
that fiscal year.
As stated in section VII.C.3. of this final rule, we are finalizing
our proposal to adopt four new items as standardized patient assessment
data elements under the SDOH category and modify the Transportation
item collected as a standardized patient assessment data element under
the SDOH category beginning with residents admitted on October 1, 2025,
for the FY 2027 SNF QRP. However, we are finalizing a modification to
the data specifications of the new and modified SDOH items so that they
exclude any SNF residents who, immediately prior to their
hospitalization that preceded a new SNF stay, resided in a NF for at
least 366 continuous days.
Although the increase in burden for collecting four new SDOH items
and the modified Transportation item via the MDS for each resident at
admission only will be accounted for in a revised information
collection request under OMB control number (0938-1140), we are
providing revised impact information as reflected in Table 40. As
discussed in section X.A.2. of this final rule, while the net result of
these finalized new and modified SDOH items will increase the burden,
the burden of the modified Transportation item will decrease slightly
as we are finalizing that SNFs will be required to collect this item at
admission only, rather than at admission and discharge as is currently
required. With 1,766,806 admissions to and 754,287 planned discharges
from 15,477 SNFs annually, we estimate an annual burden increase of
[[Page 64153]]
30,565.41hours [(1,766,806 5-day PPS assessments x 0.02 hour for the
four new SDOH items) minus [(199,856 5-day PPS assessments x 0.005 hour
for the modified Transportation item) plus (754,287 planned discharges
x 0.005 hour)]], reflecting a reduction of 4,996.41 hours from the
estimate in the proposed rule (89 FR 23424). For each SNF, we estimate
an annual burden increase of 1.97 hours (30,565.41hours/15,477 SNFs) at
an additional cost of $128.98 ($1,996,226.60 total burden/15,477 SNFs).
As stated in section VII.E.3. of this final rule, we also are
finalizing our proposal with modification to require SNFs participating
in the SNF QRP to participate in a validation process that will apply
to data submitted using the MDS and SNF Medicare fee-for-service
claims. Specifically, we are finalizing our proposal with modification
to adopt a validation process for the SNF QRP, similar to the process
that we adopted for the SNF VBP, beginning with the FY 2027 SNF QRP.
This validation process is in accordance with section 111(a)(4) of
Division CC of the Consolidated Appropriations Act, 2021 (Pub. L. 116-
260) which requires that the measures and data submitted under the SNF
QRP Program (section 1888(e)(6) of the Act) be subject to a validation
process.
In section VII.E.3(a). of this final rule, we are finalizing our
proposal to require SNFs to participate in a validation process for
assessment-based measures beginning with the FY 2027 SNF QRP with two
modifications. First, as discussed in section VII.E.3.(a) of this final
rule, we are finalizing that our validation contractor will select, on
an annual basis, up to 1,500 SNFs that submit at least one MDS record
in the FY 2 years prior, rather than the CY 3 years prior, to the
applicable FY SNF QRP. We are also finalizing regulation text at Sec.
413.360(g)(1)(i) that reflects this new policy. Second, we are
modifying the regulation text at Sec. 413.360(g)(1)(iii) to correct a
minor technical error, so it properly cross-references paragraph (g)(1)
instead of paragraph (g)(2). Our validation contractor will select, on
an annual basis, up to 1,500 SNFs and request that each SNF selected
for the validation process submit up to 10 medical records. Although
the increase in burden will be accounted for in a new information
collection request, we are providing impact information. We estimated
the burden per selected SNF will range from 3 hours up to 7.5 hours for
SNFs utilizing electronic health records and 5 hours up to 12.5 hours
for SNFs who do not utilize electronic health records.
We also anticipated that a sample of 10 medical records will
consist of SNF stays that vary in length of stay. We estimated the
length of stay for each of the selected medical records could range
from 1 day up to or exceeding 366 days. We also estimated that
approximately 85 percent of nursing homes utilize some form of
electronic health records (EHR),\116\ and will not incur the costs of
printing and shipping records. However, selected SNFs who do not
utilize EHRs may incur printing and shipping costs if they are unable
to submit the records via an electronic portal, and we estimate the
cost to print and ship a sample of up to 10 records will range between
$842.67 up to $4,114.35. Therefore, depending on the length of stay of
the sample and whether the selected SNF uses an EHR, we estimated the
total cost to submit medical records will range between $335,699.85 and
$477,368.10 for all 1,500 selected SNFs and $263.29 [$335,699.85/(1,500
x 0.85 SNFs)] and $2,121.64 [$477,368.10/(1,500 x 0.15 SNFs)] per
selected SNF. On average, we estimated the total cost will increase by
$813,067.95 for all 1,500 selected SNFs [[($263.29 x (1,500 x 0.85)]
plus [$2,121.64 x (1,500 x 0.15)]] and $542.05 per selected SNF
($813,067.95/1,500 SNFs) annually.
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\116\ https://www.ncbi.nlm.nih.gov/pmc/articles/PMC6591108/
#:~:text=In%20a%20nationwide%20sample%2C%20we,EHR%20adoption%20by%20n
ursing%20facilities.
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In section VII.E.3(b). of this final rule, we are finalizing our
proposal to require SNFs to participate in a validation process for
Medicare fee-for-service claims-based measures beginning with the FY
2027 SNF QRP.
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BILLING CODE 4120-01-C
We invited public comments on the overall impact of the SNF QRP
proposals for FY 2027 displayed in Table 40.
We have summarized the comments we received in section VII of this
final rule and provided responses. After careful consideration of the
public comments we received, we are finalizing our proposal with
modification as stated above.
6. Impacts for the Minimum Data Set Beginning October 1, 2025
As stated in section X.A.3. of the proposed rule and this final
rule, we are removing MDS items that are not needed for case-mix
adjusting the SNF per diem payment for PDPM but were not accounted for
in the FY 2019 SNF PPS final rule (83 FR 39165 through 39265). We are
providing impact information here and in Table 41. With 1,966,662
admissions to 15,477 SNFs annually, we estimate an annual burden
decrease of 216,332.82 hours (1,966,662 admissions x 0.11 hour) and a
decrease of $14,128,696.47 (216,332.82 hours x $65.31/hr). For each
SNF, we estimated an annual burden decrease of 13.98 hours (216,332.82
hours/15,477 SNFs) for a reduction in cost of $912.88 ($14,128,696.47
total burden/15,477 SNFs).
[[Page 64155]]
[GRAPHIC] [TIFF OMITTED] TR06AU24.045
As noted previously in this section of the final rule, we did not
formally propose the changes to the MDS. Rather we used this
opportunity to provide SNFs the information collection requirements
associated with a change that was not accounted for in the FY 2019 SNF
PPS final rule. We received a limited number of comments about this
notification, and have summarized the comments we received in section
X.A.3 of this final rule with our responses.
After careful consideration of the public comments we received, we
are finalizing our intention to remove these items.
7. Impacts for the SNF VBP Program
The estimated impacts of the FY 2025 SNF VBP Program are based on
historical data and appear in Table 42. We modeled SNF performance in
the Program using SNFRM data from FY 2019 as the baseline period and FY
2023 as the performance period. Additionally, we modeled a logistic
exchange function with a payback percentage of 60 percent, as we
finalized in the FY 2018 SNF PPS final rule (82 FR 36619 through
36621).
For the FY 2025 program year, we will reduce each SNFs adjusted
Federal per diem rate by 2 percent. We will then redistribute 60
percent of that 2 percent withhold to SNFs based on their measure
performance. Additionally, in the FY 2023 SNF PPS final rule (87 FR
47585 through 47587), we finalized a case minimum requirement for the
SNFRM, as required by section 1888(h)(1)(C)(ii) of the Act. As a result
of these provisions, SNFs that do not meet the case minimum specified
for the SNFRM for the FY 2025 program year will be excluded from the
Program and will receive their full Federal per diem rate for that
fiscal year. As previously finalized, this policy will maintain the
overall payback percentage at 60 percent for the FY 2025 program year.
Based on the 60 percent payback percentage, we estimated that we would
redistribute approximately $281.53 million (of the estimated $469.22
million in withheld funds) in value-based incentive payments to SNFs in
FY 2025, which means that the SNF VBP Program is estimated to result in
approximately $187.69 million in savings to the Medicare Program in FY
2025.
Our detailed analysis of the impacts of the FY 2025 SNF VBP Program
is shown in Table 42.
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BILLING CODE 4120-01-C
In the FY 2024 SNF PPS final rule (88 FR 53324 through 53325), we
adopted a validation process that applies to SNF VBP measures
calculated using MDS data beginning with the FY 2027 program year.
Specifically, we finalized that, on an annual basis, the validation
contractor will randomly select up to 1,500 SNFs for validation and
that for each SNF selected, the validation contractor will request up
to 10 medical records. This new medical record submission requirement
for the purposes of SNF VBP MDS validation would result in new burden
on SNFs for the FY 2027 program year. We refer readers to the SNF QRP
section at XI.A.5. of this final rule for details on the estimated
annual burden increase that would result from this new chart submission
requirement. We did not include additional details on burden in this
SNF VBP section, to avoid double counting burden with the SNF QRP
because the same charts will be utilized for both the SNF QRP and SNF
VBP Program. We also note that this burden will be accounted for in the
information collection request that has been submitted to OMB for
approval.
[[Page 64157]]
8. Impacts for Nursing Home Enforcement Revisions
A nursing home certified to participate in either the Medicare
program as a SNF and Medicaid program as a NF or in both programs as a
dually-certified SNF/NF is expected to be in compliance with all
applicable Federal requirements of participation as a condition of
receiving payment for services provided to beneficiaries. If a facility
is determined to be out of compliance and an enforcement decision is
reached to impose a civil monetary penalty (CMP) remedy, the finalized
provisions set out in these regulatory revisions will be applied as
applicable.
We view the anticipated results of this rule as beneficial to
nursing home residents as it incentivizes care quality and resident
safety. Specifically, we believe that additional flexibility to impose
CMPs will allow us to better tailor the response to facility
noncompliance in a way that assures that appropriate resident care
occurs as well as lasting facility compliance with participation
requirements is achieved. We also recognize that not all of the
potential effects of this rule can be anticipated. It is difficult to
quantify the full future effect of this rule on facilities' compliance
activities or costs. If a facility is in substantial compliance with
the participation requirements, there is no basis to use any
enforcement remedy. However, should a remedy be indicated as an
appropriate enforcement response for noncompliance, several alternative
remedies may be considered in addition to or in lieu of a CMP. Since
CMP amounts, once that remedy is selected as an appropriate enforcement
response, are based on when noncompliance occurred and the level of
noncompliance, we are unable to predict the number or amount of CMPs
that will be imposed. However, we do expect that the total amount of
CMPs imposed will increase as a result of these updates.
In 2022, the number of facilities that had a CMP remedy imposed was
6,149 (40 percent). The average total amount of the CMPs imposed for
each facility in 2022 was $17,818. The total dollar amount of per day
(PD) CMPs imposed on facilities in 2022 was $187.0 million and the
total dollar amount of per instance (PI) CMPs imposed was $41.2
million. Additionally, 45 percent of surveys of facilities in 2022 that
had multiple findings of harm to residents and that were imposed a PI
CMP as the remedy of choice only received one PI CMP. Under the
proposed revisions, we anticipate an increased workload to CMS and
States, and increased total CMP amounts to providers when multiple
instances of noncompliance resulting in harm or immediate jeopardy (IJ)
are cited.
We calculated the additional costs for SNFs and NFs, CMS, and
States for the multiple PI policy revision by analyzing the number of
surveys in CY2022 that would have had additional PI CMPs imposed by
identifying surveys with multiple citations of noncompliance resulting
in harm or immediate jeopardy (IJ), but only one PI CMP was imposed, or
a PD CMP was imposed (109 surveys). We then multiplied the number of
these surveys by the average number of citations resulting in harm or
IJ (2.3 citations per survey), and by the average PI CMP amount
($9,959). For the PD and PI on the same survey revision, we calculated
the additional CMP amounts for surveys that may qualify for PD and PI
CMPs by multiplying the number of surveys with at least 2 citations
resulting in harm or IJ and were only imposed a PD CMP (787) by the
average number of harm or IJ citations per survey (2.8) and also
multiplying by the average PI CMP amount ($9,959). Adding the estimated
additional cost to nursing homes for enabling multiple PI CMPs for a
survey with the estimated additional cost for enabling PI CMPs to
surveys with PD CMPs resulted in a total of approximately $25 million
for all nursing homes for CY2022.
We calculated the additional costs for CMS and States by
multiplying the average hourly rate of CMS staff ($84.00 per hour) by
the average number of hours spent by CMS staff per CMP (0.8 hours per
CMP) by the total number of anticipated increased CMPs for surveys that
qualify for either multiple PI CMPs (109 surveys x 2.3 average
citations resulting in harm or IJ) or surveys that qualify for PD and
PI CMPs (787 surveys x 2.8 average citations resulting in harm or IJ).
We estimate this will result in a total increased cost to CMS and the
States of $164,929 per year. Note: The estimated impact of the third
proposed change related to the timing of imposing a CMP is embedded in
these amounts, as these estimates are inclusive of any cases where CMS
needs to impose a CMP for noncompliance that was previously cited, but
no CMP has yet been imposed.
9. Alternatives Considered
As described in this section, we estimate that the aggregate impact
of the provisions in this final rule will result in an increase of
approximately $1.4 billion (4.2 percent) in Part A payments to SNFs in
FY 2025. This reflects a $1.4 billion (4.2 percent) increase from the
update to the payment rates.
Section 1888(e) of the Act establishes the SNF PPS for the payment
of Medicare SNF services for cost reporting periods beginning on or
after July 1, 1998. This section of the statute prescribes a detailed
formula for calculating base payment rates under the SNF PPS, and does
not provide for the use of any alternative methodology. It specifies
that the base year cost data to be used for computing the SNF PPS
payment rates must be from FY 1995 (October 1, 1994, through September
30, 1995). In accordance with the statute, we also incorporated a
number of elements into the SNF PPS (for example, case-mix
classification methodology, a market basket update, a wage index, and
the urban and rural distinction used in the development or adjustment
of the Federal rates). Further, section 1888(e)(4)(H) of the Act
specifically requires us to disseminate the payment rates for each new
FY through the Federal Register, and to do so before the August 1 that
precedes the start of the new FY; accordingly, we are not pursuing
alternatives for this process.
With regard to adopting four new assessment items as standardized
patient assessment data elements under the SDOH category and modifying
the Transportation standardized patient assessment data element in the
SDOH category beginning with the FY 2027 SNF QRP, we believe these new
and modified items advance the CMS National Quality Strategy Goals of
equity and engagement. We considered the alternative of delaying the
collection of these four new assessment items. However, given the fact
they will encourage meaningful collaboration between healthcare
providers, residents, caregivers, and community-based organizations to
address SDOH prior to discharge from the SNF, we believe further delay
is unwarranted.
With regard to removing 22 items from the MDS beginning October 1,
2025, we routinely review the MDS for opportunities to simplify data
submission requirements. We have identified that these items are no
longer used in the calculation of the SNF per diem payment for PDPM but
were not accounted for in the FY 2019 SNF PPS final rule (83 FR 39165
through 39265), and therefore no alternatives were considered.
With regard to requiring SNFs participating in the SNF QRP to
participate in a validation process beginning with the FY 2027 SNF QRP,
we are required to implement a process to satisfy section 1888(h)(12)
of the Act (as added by Division CC, section
[[Page 64158]]
111(a)(4) of the Consolidated Appropriations Act, 2021 (Pub. L. 116-
120)). Because the validation process is statutorily required, no
alternatives were considered.
With regard to the updates for the SNF VBP Program, we discussed
alternatives considered within those sections. In section VII.E.3. of
the proposed rule, we discussed other approaches to incorporating
health equity into the Program.
With regard to the updates for the nursing home enforcement
program, we discussed alternatives within those sections. In section
IX.A. of the proposed rule, we discussed how current regulatory
limitations create inequity in the imposition of PD CMPs and the need
for additional flexibility to ensure that CMP amounts are more closely
aligned with the noncompliance that occurred and are thus effective to
encourage facilities to return and sustain compliance.
10. Accounting Statement
As required by OMB Circular A-4 (available online at https://www.whitehouse.gov/wp-content/uploads/2023/11/CircularA-4.pdf), in
Tables 43 through 47, we have prepared an accounting statement showing
the classification of the expenditures associated with the provisions
of the proposed rule for FY 2025. Tables 39 and 43 provide our best
estimate of the possible changes in Medicare payments under the SNF PPS
as a result of the policies outlined in this final rule, based on the
data for 15,477 SNFs in our database. Tables 40, 44, and 45 provide our
best estimate of the additional cost to SNFs to submit the data for the
SNF QRP as a result of the policies outlined in this final rule. Table
46 provides our best estimate of the possible changes in Medicare
payments under the SNF VBP as a result of the policies for this
program. Table 47 provides our best estimate of the Nursing Home
Enforcement provisions.
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11. Conclusion
This rule updates the SNF PPS rates contained in the SNF PPS final
rule for FY 2024 (88 FR 53200). Based on the above, we estimate that
the overall payments for SNFs under the SNF PPS in FY 2025 are
projected to increase by approximately $1.4 billion, or 4.2 percent,
compared with those in FY 2024. We estimate that in FY 2025, SNFs in
urban and rural areas will experience, on average, a 4.1 percent
increase and 5.1 percent increase, respectively, in estimated payments
compared with FY 2024. Providers in the rural Middle Atlantic region
will experience the largest estimated increase in payments of
approximately 7.4 percent. Providers in the urban Outlying region will
experience the smallest estimated increase in payments of 1.5 percent.
B. Regulatory Flexibility Act Analysis
The RFA requires agencies to analyze options for regulatory relief
of small entities, if a rule has a significant impact on a substantial
number of small entities. For purposes of the RFA, small entities
include small businesses, non-profit organizations, and small
governmental jurisdictions. Most SNFs and most other providers and
suppliers are small entities, either by reason of their non-profit
status or by having revenues of $30 million or less in any 1 year. We
utilized the revenues of individual SNF providers (from recent Medicare
Cost Reports) to classify a small business, and not the revenue of a
larger firm with which they may be affiliated. As a result, for the
purposes of the RFA, we estimate that almost all SNFs are small
entities as that term is used in the RFA, according to the Small
Business Administration's latest size standards (NAICS 623110), with
total revenues of $34 million or less in any 1 year. (For details, see
the Small Business Administration's website at https://www.sba.gov/category/navigation-structure/contracting/contracting-officials/eligibility-size-standards.) In addition, approximately 20 percent of
SNFs classified as small entities are non-profit organizations.
Finally, individuals and States are not included in the definition of a
small entity.
This rule updates the SNF PPS rates contained in the SNF PPS final
rule for FY 2024 (88 FR 53200). Based on the above, we estimate that
the aggregate impact for FY 2025 will be an increase of $1.4 billion in
payments to SNFs, resulting from the SNF market basket update to the
payment rates. While it is projected in Table 39 that all providers
will experience a net increase in payments, we note that some
individual providers within the same region or group may experience
different impacts on payments than others due to the distributional
impact of the FY 2025 wage indexes and the degree of Medicare
utilization.
Guidance issued by the Department of Health and Human Services on
the proper assessment of the impact on small entities in rulemakings,
utilizes a cost or revenue impact of 3 to 5 percent as a significance
threshold under the RFA. In their March 2024 Report to Congress
(available at https://www.medpac.gov/wp-content/uploads/2024/03/Mar24_Ch6_MedPAC_Report_To_Congress_SEC.pdf), MedPAC states that
Medicare covers approximately 10 percent of total patient days in
freestanding facilities and 17 percent of facility revenue (March 2024
MedPAC Report to Congress, 168). As indicated in Table 39, the effect
on facilities is projected to be an aggregate positive impact of 4.2
percent for FY 2025. As the overall impact on the industry as a whole,
and thus on small entities specifically, meets the 3 to 5 percent
threshold discussed previously, the Secretary has determined that this
final rule will have a significant impact on a substantial number of
small entities for FY 2025.
In addition, section 1102(b) of the Act requires us to prepare a
regulatory impact analysis if a rule may have a significant impact on
the operations of a substantial number of small rural hospitals. This
analysis must conform to the provisions of section 604 of the RFA. For
purposes of section 1102(b) of the Act, we define a small rural
hospital as a hospital that is located outside of an MSA and has fewer
than 100 beds. This final rule will affect small rural hospitals that:
(1) furnish SNF services under a swing-bed agreement or (2) have a
hospital-based SNF. We anticipate that the impact on small rural
hospitals will be similar to the impact on SNF providers overall.
Moreover, as noted in previous SNF PPS final rules (most recently, the
one for FY 2024 (88 FR 53200)), the category of small rural hospitals
is included within the analysis of the impact of the proposed rule on
small entities in general. As indicated in Table 39, the effect on
facilities for FY 2025 is projected to be an aggregate positive impact
of 4.2 percent. As the overall impact on the industry as a whole meets
the 3 to 5 percent threshold discussed previously, the Secretary has
determined that this final rule will have a significant impact on a
substantial number of small rural hospitals for FY 2025.
C. Unfunded Mandates Reform Act Analysis
Section 202 of the Unfunded Mandates Reform Act of 1995 also
requires that agencies assess anticipated costs and benefits before
issuing any rule whose mandates require spending in any 1 year of $100
million in 1995 dollars, updated annually for inflation. In 2024, that
threshold is approximately $183 million. This final rule will impose no
mandates on State, local, or Tribal governments or on the private
sector.
D. Federalism Analysis
Executive Order 13132 establishes certain requirements that an
agency must meet when it issues a proposed rule (and subsequent final
rule) that imposes substantial direct requirement costs on State and
local governments, preempts State law, or otherwise has federalism
implications. This final rule will have no substantial direct effect on
State and local governments, preempt State law, or otherwise have
federalism implications.
[[Page 64160]]
E. Regulatory Review Costs
If regulations impose administrative costs on private entities,
such as the time needed to read and interpret this final rule, we
should estimate the cost associated with regulatory review. Due to the
uncertainty involved with accurately quantifying the number of entities
that will review the rule, we assume that the total number of unique
commenters on this year's proposed rule will be the number of reviewers
of this year's final rule. We acknowledge that this assumption may
understate or overstate the costs of reviewing this rule. It is
possible that not all commenters reviewed this year's proposed rule in
detail, and it is also possible that some reviewers chose not to
comment on the proposed rule. For these reasons, we believe that the
number of commenters on this year's proposed rule is a fair estimate of
the number of reviewers of this final rule.
We also recognize that different types of entities are in many
cases affected by mutually exclusive sections of this final rule, and
therefore, for the purposes of our estimate we assume that each
reviewer reads approximately 50 percent of the rule.
The mean wage rate for medical and health service manages (SOC 11-
9111) in BLS Occupational Employment and Wage Statistics (OEWS) is
$64.64, assuming benefits plus other overhead costs equal 100 percent
of wage rate, we estimate that the cost of reviewing this rule is
$129.28 per hour, including overhead and fringe benefits https://www.bls.gov/oes/current/oes_nat.htm. Assuming an average reading speed,
we estimate that it will take approximately 4 hours for the staff to
review half of this final rule. For each SNF that reviews the rule, the
estimated cost is $517.12 (4 hours x $129.28). Therefore, we estimate
that the total cost of reviewing this regulation is $227,015.68
($517.12 x 439 reviewers).
In accordance with the provisions of Executive Order 12866, this
final rule is reviewed by the Office of Management and Budget.
Chiquita Brooks-LaSure, Administrator of the Centers for Medicare &
Medicaid Services, approved this document on July 24, 2024.
List of Subjects
42 CFR Part 413
Diseases, Health facilities, Medicare, Puerto Rico, Reporting and
recordkeeping requirements.
42 CFR Part 488
Administrative practice and procedure, Health facilities, Health
professions, Medicare, Reporting and recordkeeping requirements.
For the reasons set forth in the preamble, the Centers for Medicare
& Medicaid Services amends 42 CFR chapter IV as set forth below:
PART 413--PRINCIPLES OF REASONABLE COST REIMBURSEMENT; PAYMENT FOR
END-STAGE RENAL DISEASE SERVICES; PROSPECTIVELY DETERMINED PAYMENT
RATES FOR SKILLED NURSING FACILITIES; PAYMENT FOR ACUTE KIDNEY
INJURY DIALYSIS
0
1. The authority citation for part 413 continues to read as follows:
Authority: 42 U.S.C. 1302, 1395d(d), 1395f(b), 1395g, 1395l(a),
(i), and (n), 1395m, 1395x(v), 1395x(kkk), 1395hh, 1395rr, 1395tt,
and 1395ww.
0
2. Section 413.337 is amended by revising paragraph (f) to read as
follows:
Sec. 413.337 Methodology for calculating the prospective payment
rates.
* * * * *
(f) Adjustments to payment rates under the SNF Value-Based
Purchasing Program. Beginning with payment for services furnished on
October 1, 2018, the adjusted Federal per diem rate (as defined in
Sec. 413.338(a)) otherwise applicable to a SNF for the fiscal year is
reduced by the applicable percent (as defined in Sec. 413.338(a)). The
resulting amount is then adjusted by the value-based incentive payment
amount (as defined in Sec. 413.338(a)) based on the SNF performance
score calculated for the SNF for that fiscal year under Sec. 413.338.
0
3. Section 413.338 is amended--
0
a. In paragraph (a) by--
0
i. Revising the definitions of ``Health equity adjustment (HEA) bonus
points'' and ``Measure performance scaler'';
0
ii. Removing the definition of ``Performance score'';
0
iii. Adding the definition of ``SNF performance score'' in alphabetical
order; and
0
iv. Revising the definitions of ``SNF readmission measure'', ``Top tier
performing SNF'', and ``Underserved multiplier'';
0
b. Removing paragraphs (d)(4) through (6);
0
c. Redesignating paragraphs (f)(1) through (4) as paragraphs (f)(2)
through (5);
0
d. Adding a new paragraph (f)(1) and revising newly redesignated
paragraphs (f)(2) and (3);
0
e. In newly redesignated paragraph (f)(4) introductory text by removing
the reference ``paragraphs (f)(1) and (2)'' and adding in its place the
reference ``paragraphs (f)(2) and (3)'';
0
f. Revising paragraph (j)(3); and
0
g. Adding paragraphs (l), (m), and (n).
The revisions and additions read as follows:
Sec. 413.338 Skilled nursing facility value-based purchasing
program.
(a) * * *
Health equity adjustment (HEA) bonus points means the points that a
SNF can earn for a fiscal year based on its performance and proportion
of SNF residents who are members of the underserved population.
* * * * *
Measure performance scaler means, for a fiscal year, the sum of the
points assigned to a SNF for each measure on which the SNF is a top
tier performing SNF.
* * * * *
SNF performance score means the numeric score ranging from 0 to 100
awarded to each SNF based on its performance under the SNF VBP Program
for a fiscal year.
SNF readmission measure means, prior to October 1, 2027, the SNF
30-Day All-Cause Readmission Measure (SNFRM) specified under section
1888(g)(1) of the Social Security Act. Beginning October 1, 2027, the
term SNF readmission measure means the SNF Within-Stay Potentially
Preventable Readmission (SNF WS PPR) Measure specified under section
1888(g)(2) of the Social Security Act.
* * * * *
Top tier performing SNF means a SNF whose performance on a measure
during the applicable fiscal year meets or exceeds the 66.67th
percentile of SNF performance on the measure during the same fiscal
year.
Underserved multiplier means the mathematical result of applying a
logistic function to the number of SNF residents who are members of the
underserved population out of the SNF's total Medicare population, as
identified from the SNF's Part A claims, during the performance period
that applies to the 1-year measures for the applicable fiscal year.
* * * * *
(f) * * *
(1) CMS will provide quarterly confidential feedback reports to
SNFs on their performance on each measure specified for the fiscal
year. Beginning with the baseline period and performance period quality
measure quarterly reports issued on or after
[[Page 64161]]
October 1, 2021, CMS calculates the measure rates included in those
reports using data that are current as of a specified date as follows:
(i) For the SNFRM, the specified date is 3 months after the last
index SNF admission in the applicable baseline period or performance
period.
(ii) For the Skilled Nursing Facility Healthcare Associated
Infections Requiring Hospitalization (``SNF HAI''), Discharge to
Community--Post-Acute Care Measure for Skilled Nursing Facilities
(``DTC PAC SNF''), and Skilled Nursing Facility Within-Stay Potentially
Preventable Readmissions (``SNF WS PPR'') measure, the specified date
is 3 months after the last SNF discharge in the applicable baseline
period or performance period.
(iii) For the Number of Hospitalizations per 1,000 Long Stay
Residents (``Long Stay Hospitalization'') measure, the specified date
is 3 months after the last day of the final quarter of the applicable
baseline period or performance period.
(iv) For the Total Nursing Hours per Resident Day Staffing (``Total
Nurse Staffing'') measure and the Total Nursing Staff Turnover
(``Nursing Staff Turnover'') measure, the specified date is 45 days
after the last day of each quarter of the applicable baseline period or
performance period.
(v) For the Discharge Function Score for SNFs (``DC Function
measure'') and Percent of Residents Experiencing One of More Falls with
Major Injury (Long Stay) (``Falls with Major Injury (Long Stay)'')
measure, the specified date is the February 15th that is approximately
4.5 months after the last day of the applicable baseline period or
performance period.
(2) Beginning with the baseline period and performance period
quality measure quarterly reports issued on or after October 1, 2021,
which contain the baseline period and performance period measure rates,
respectively, SNFs will have 30 days following the date CMS provides in
each of these reports to review and submit corrections to the measure
rate calculations contained in that report. The underlying data used to
calculate the measure rates are not subject to review and correction
under this paragraph (f)(2). Any such correction requests must include:
(i) The SNF's CMS Certification Number (CCN);
(ii) The SNF's name;
(iii) The correction requested; and
(iv) The reason for requesting the correction, including any
available evidence to support the request.
(3) Beginning not later than 60 days prior to each fiscal year, CMS
will provide reports to SNFs on their performance under the SNF VBP
Program for a fiscal year. SNFs will have the opportunity to review and
submit corrections to their SNF performance scores and ranking
contained in these reports for 30 days following the date that CMS
provides the reports. Any such correction requests must include:
(i) The SNF's CMS Certification Number (CCN);
(ii) The SNF's name;
(iii) The correction requested; and
(iv) The reason for requesting the correction, including any
available evidence to support the request.
* * * * *
(j) * * *
(3) Beginning October 1, 2026, for all measures that are calculated
using Minimum Data Set (MDS) information, CMS will validate the
accuracy of this information. CMS will request medical records as
follows:
(i) On an annual basis, a CMS contractor will randomly select up to
1,500 SNFs for validation. A SNF is eligible for selection for a year
if the SNF submitted at least one MDS record in the calendar year that
is 3 years prior to the applicable fiscal year or was included in the
SNF VBP Program in the year prior to the applicable fiscal year.
(ii) For each SNF selected under paragraph (j)(3)(i) of this
section, the CMS contractor will request in writing up to 10 medical
records.
(iii) A SNF that receives a request for medical records under
paragraph (j)(3)(ii) of this section must submit a digital or paper
copy of each of the requested medical records within 45 days of the
date of the request as documented on the request.
* * * * *
(l) Measure selection, retention, and removal policy. (1) The SNF
VBP measure set for each fiscal year includes the SNF readmission
measure CMS has specified under section 1888(g) of the Social Security
Act for application in the SNF VBP Program.
(2) Beginning with FY 2026, the SNF VBP measure set for each fiscal
year may include up to nine additional measures specified by CMS. Each
of these measures remains in the measure set unless CMS removes or
replaces it based on one or more of the following factors:
(i) SNF performance on the measure is so high and unvarying that
meaningful distinctions and improvements in performance can no longer
be made.
(ii) Performance or improvement on a measure do not result in
better resident outcomes.
(iii) A measure no longer aligns with current clinical guidelines
or practices.
(iv) A more broadly applicable measure for the particular topic is
available.
(v) A measure that is more proximal in time to the desired resident
outcomes for the particular topic is available.
(vi) A measure that is more strongly associated with the desired
resident outcomes for the particular topic is available.
(vii) The collection or public reporting of a measure leads to
negative unintended consequences other than resident harm.
(viii) The costs associated with a measure outweigh the benefit of
its continued use in the Program.
(3) Upon a determination by CMS that the continued requirement for
SNFs to submit data on a measure specified under paragraph (l)(2) of
this section raises specific resident safety concerns, CMS may elect to
immediately remove the measure from the SNF VBP Program. Upon removal
of the measure, CMS will provide notice to SNFs and the public, along
with a statement of the specific patient safety concern that would be
raised if SNFs continued to submit data on the measure. CMS will also
provide notice of the removal in the Federal Register.
(4) CMS uses rulemaking to make substantive updates to the
specifications of measures used in the SNF VBP Program. CMS makes
technical measure specification updates in a sub-regulatory manner and
informs SNFs of measure specification updates through postings on the
CMS website, listservs, and other educational outreach efforts to SNFs.
(m) Extraordinary circumstances exception policy. (1) A SNF may
request and CMS may grant exceptions to the SNF Value-Based Purchasing
Program's requirements under this section for one or more calendar
months when there are certain extraordinary circumstances beyond the
control of the SNF.
(2) A SNF may request an exception within 90 days of the date that
the extraordinary circumstances occurred. Prior to FY 2025, the request
must be submitted in the form and manner specified by CMS on the SNF
VBP website at https://www.cms.gov/Medicare/Quality/Nursing-Home-
Improvement/Value-Based-Purchasing/Extraordinary-Circumstance-Exception
and include a completed Extraordinary Circumstances Request form
(available on https://qualitynet.cms.gov/) and any available evidence
of the impact of the extraordinary circumstances on the care that the
SNF furnished to patients including, but not limited to, photographs
and media articles.
[[Page 64162]]
Beginning with FY 2025, a SNF may request an extraordinary
circumstances exception by sending an email with the subject line ``SNF
VBP Extraordinary Circumstances Exception Request'' to the SNF VBP
Program Help Desk with the following information:
(i) The SNF's CMS Certification Number (CCN);
(ii) The SNF's business name and business address;
(iii) Contact information for the SNF's chief executive officer
(CEO) or CEO-designated personnel, including all applicable names,
email addresses, telephone numbers, and the SNF's physical mailing
address (which cannot be a P.O. Box);
(iv) A description of the event, including the dates and duration
of the extraordinary circumstance;
(v) Available evidence of the impact of the extraordinary
circumstance on the care the SNF provided to its residents or the SNF's
ability to report SNF VBP data, including, but not limited to,
photographs, media articles, and any other materials that would aid CMS
in determining whether to grant the exception; and
(vi) A date proposed by the SNF for when it will again be able to
fully comply with the SNF VBP Program's requirements and a
justification for the proposed date.
(3) Except as provided in paragraph (m)(4) of this section, CMS
will not consider an exception request unless the SNF requesting such
exception has complied fully with the requirements in paragraph (m)(2)
of this section.
(4) CMS may grant exceptions to SNFs without a request if it
determines that an extraordinary circumstance affected an entire region
or locale.
(5) CMS will calculate a SNF performance score for a fiscal year
for a SNF for which it has granted an exception request that does not
include its performance on a quality measure during the calendar months
affected by the extraordinary circumstance.
(n) SNF VBP performance standards. (1) CMS announces the
performance standards for each measure no later than 60 days prior to
the start of the performance period that applies to the measure for the
fiscal year.
(2) Beginning with FY 2021, if CMS discovers an error in the
performance standard calculations subsequent to publishing their
numerical values for a fiscal year, CMS will update the numerical
values to correct the error. If CMS subsequently discovers one or more
other errors with respect to the fiscal year, CMS will not further
update the numerical values for that fiscal year.
(3) Beginning with FY 2025, CMS may update the numerical values of
the performance standards for a measure if, between the time that CMS
announced the performance standards for the measure for that fiscal
year and the time that CMS calculates SNF performance on the measure at
the conclusion of the performance period for that measure for that
fiscal year, CMS has made technical updates to the specifications for
the measure that affect the measure rate calculations.
0
4. Section 413.360 is amended by--
0
a. Revising paragraph (f)(1) introductory text;
0
b. Adding paragraph (f)(1)(iv);
0
c. Revising paragraph (f)(3); and
0
d. Adding paragraph (g).
The additions and revision read as follows:
Sec. 413.360 Requirements under the Skilled Nursing Facility (SNF)
Quality Reporting Program (QRP).
* * * * *
(f) * * *
(1) SNFs must meet or exceed the following data completeness
thresholds with respect to a program year:
* * * * *
(iv) If selected for the data validation process under paragraph
(g) of this section, the threshold set at 100 percent submission of
medical charts.
* * * * *
(3) A SNF must meet or exceed each applicable threshold described
in paragraph (f)(1) of this section to avoid receiving the applicable
penalty for failure to report quality data set forth in Sec.
413.337(d)(4).
(g) Data validation process. (1) Beginning with the FY 2027 payment
year: for all measures that are calculated using Minimum Data Set (MDS)
information, CMS will validate the accuracy of this information. The
process by which CMS will request medical records and by which SNFs
must submit the requested medical records is as follows:
(i) On an annual basis, a CMS contractor will select up to 1,500
SNFs for validation. A SNF is eligible for selection for a year if it
submitted at least one MDS record to CMS in the fiscal year that is 2
years prior to the applicable program year, and if the SNF has been
randomly selected for a periodic audit for the same year under Sec.
413.338.
(ii) For each SNF selected under this paragraph (g)(1), the CMS
contractor will request up to 10 medical records. Each SNF selected
will only be required to submit records once in a fiscal year, for a
maximum of 10 records for each SNF selected. Each requested medical
record must be the same medical record that has been requested for
submission by the SNF for the same year under Sec. 413.338. CMS will
submit its request in writing to the selected SNF.
(iii) A SNF that receives a request for medical records under this
paragraph (g)(1) must submit a digital or paper copy of each of the
requested medical records within 45 days of the date of the request.
(2) Beginning with the FY 2027 payment year: the information
reported through claims for all claims-based measures are validated for
accuracy by Medicare Administrative Contractors (MACs).
PART 488--SURVEY, CERTIFICATION, AND ENFORCEMENT PROCEDURES
0
5. The authority citation for part 488 continues to read as follows:
Authority: 42 U.S.C. 1302 and 1395hh.
0
6. Section 488.401 is amended by adding the definition of ``Instance or
instances of noncompliance'' in alphabetical order to read as follows:
Sec. 488.401 Definitions.
* * * * *
Instance or instances of noncompliance means a factual and temporal
occurrence(s) when a facility is not in substantial compliance with the
requirements for participation. Each instance of noncompliance is
sufficient to constitute a deficiency and a deficiency may comprise of
multiple instances of noncompliance.
* * * * *
0
7. Section 488.408 is amended by revising paragraph (e)(2)(ii) to read
as follows:
Sec. 488.408 Selection of remedies.
* * * * *
(e) * * *
(2) * * *
(ii) For each instance of noncompliance, CMS and the State may
impose a civil money penalty of $3,050-$10,000 (as adjusted annually
under 45 CFR part 102) per day, $1,000-$10,000 (as adjusted annually
under 45 CFR part 102) per instance of noncompliance, or both, in
addition to imposing the remedies specified in paragraph (e)(2)(i) of
this section. For multiple instances of noncompliance, CMS may impose
any combination of per instance or per day civil money penalties for
each instance within the same survey. The aggregate civil money penalty
amount may not exceed $10,000 (as adjusted annually under 45 CFR part
102) for each day of noncompliance.
* * * * *
[[Page 64163]]
0
8. Section 488.430 is revised to read as follows:
Sec. 488.430 Civil money penalties: Basis for imposing penalty.
(a) CMS or the State may impose a civil money penalty for the
number of days a facility is not in substantial compliance with one or
more participation requirements or for each instance that a facility is
not in substantial compliance, or both, regardless of whether or not
the deficiencies constitute immediate jeopardy. When a survey contains
multiple instances of noncompliance, CMS or the State may impose any
combination of per instance or per day civil money penalties for each
instance of noncompliance within the same survey.
(b) CMS or the State may impose a civil money penalty for the
number of days or instances of previously cited noncompliance,
including the number of days of immediate jeopardy, since the last
three standard surveys.
0
9. Section 488.434 is amended by revising paragraphs (a)(2)(iii) and
(v) to read as follows:
Sec. 488.434 Civil money penalties: Notice of penalty.
(a) * * *
(2) * * *
(iii) Either the amount of penalty per day of noncompliance or the
amount of the penalty per instance of noncompliance or both;
* * * * *
(v) The date(s) of the instance(s) of noncompliance or the date on
which the penalty begins to accrue;
* * * * *
0
10. Section 488.440 is amended by revising paragraph (a)(2) to read as
follows:
Sec. 488.440 Civil money penalties: Effective date and duration of
penalty.
(a) * * *
(2) A civil money penalty for each instance of noncompliance is
imposed in a specific amount per instance.
* * * * *
Xavier Becerra,
Secretary, Department of Health and Human Services.
[FR Doc. 2024-16907 Filed 7-31-24; 4:15 pm]
BILLING CODE 4120-01-P