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The Centers for Medicare & Medicaid Services (CMS) has recently released a proposed rule for the fiscal year (FY) 2024 that includes a 3.7% pay increase for skilled nursing facilities (SNFs). The update will result in a $1.2 billion increase in Medicare Part A payments for SNFs. 

The proposed rule also includes modifications of the SNF Value-Based Purchasing (VBP) Program and the SNF Quality Reporting Program (QRP), which will result in significant changes like: 

  • Adding three new measures: The Discharge Function Score measure, the CoreQ: Short Stay Discharge Measure, and the COVID-19 Vaccine: Percent of Patients/Residents Who Are Up to Date measure.
  • Removing three measures: the Application of the Percent of Long-Term Care Hospital Patients with an Admission and Discharge Functional Assessment and a Care Plan That Addresses Function measure; the Application of the IRF Functional Outcome Measures: Change in Self-Care Score for Medical Rehabilitation Patients measure; and the Change in Mobility Score for Medical Rehabilitation Patients measure starting in FY 2025.
  • Modifying one measure: This measure targets COVID-19 Vaccination Coverage among Healthcare Personnel, requiring facilities to report the cumulative number of healthcare personnel who are up to date with recommended COVID-19 vaccinations.

Meanwhile, modifications to the SNF VBP program will include four new quality measures and policy changes, including: 

A physician is looking at the new CMS new quality measures to understand the 3.7% pay increase better.
In 2024, there will be three CMS new quality measures.
  • Nursing Staff Turnover Measure: The metrics for this measure are collected and publicly reported on the Care Compare website. Nursing facilities are expected to start reporting these metrics in 2024. After this, users can assess the staffing stability in skilled nursing facilities by looking at the nursing staff turnover numbers.  
  • Adopting a Healthy Equity Adjustment: The CMS also proposes rewarding skilled nursing facilities that serve people dually eligible for Medicare and Medicaid. This means that facilities with a resident population consisting of 20% or more dual residents during the reporting period will be eligible for high-performance bonus points.
  • Increasing the payback percentage policy: The CMS proposes increasing the payback percentage policy under the SNF VBP program, which is currently set at 60%. In the coming future, bonuses will be given to high-performing, high-dual skilled nursing facilities. And more importantly, this will not come at the expense of the other skilled nursing facilities that do not meet the quota.  
  • Adopting a Discharge Function Score: The CMS proposes adopting a discharge function score, a new measure that will assess the hospitalization rate of long-stay residents. This measure is proposed to start in 2027 and will also include evaluating patient falls with significant injury rates for long-stay residents.

While the news is welcomed in skilled nursing facilities, hospice providers and inpatient rehabilitation facilities cannot help but feel underwhelmed by significantly lower funding allocations. Additionally, the important topic of the staffing minimum still needs to be addressed. Of course, the CMS is committed to reviewing the staffing minimum later this spring. In the meantime, the industry waits with abated breath for more updates in the coming months.