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CMS issues proposed rules increasing payment to skilled nursing, inpatient rehab and psychiatric facilities

Rule eases regulatory burden estimated to cost providers $39 billion a year and the time of 59 full-time equivalent employees.

Susan Morse, Senior Editor

The Centers for Medicare and Medicaid Services late Friday released a new patient-driven payment model for skilled nursing facilities that ties reimbursement to patient conditions and care and reduces paperwork for an estimated $2 billion in savings over 10 years.

Skilled nursing facilities will see an increase of $850 million in Medicare payments in 2019, a 2.4 percent increase resulting from  the Bipartisan Budget Act of 2018. 

Absent the bill, the increase would have been 1.9 percent, an estimated $670 million hike in Medicare payments to skilled nursing facilities.

Beginning October 1, the value-based program will apply either positive or negative incentive payments to skilled nursing facilities based on their performance on the program's readmissions measure. 

The single claims-based all cause 30-day hospital readmissions measure rewards providers that take steps to limit the readmission of their patients to a hospital. It does not require SNFs to report information in addition to what they already submit as part of their claims because CMS will use existing Medicare claims to calculate the measure.

CMS also proposes to increase the number of years of data used to calculate two measures on Nursing Home Compare from one year to two to improve the validity of the results. 

The agency is updating the SNF value-based purchasing program, including changes in scoring methodology for low-volume skilled nursing facilities and an extraordinary circumstances exemption policy. These updates are estimated by the agency to result in a reduction of $211 million in payments.

Pubic comments are due by June 26.

Under the new case-mix model, patients will have a better opportunity to choose a skilled nursing facility that offers services tailored to their condition and preferences, as payment to nursing homes will be better based on a patient's condition than the specific services provided.

CMS's payment rule for Medicare is aimed at advancing meaningful quality measure reporting and administrative costs. The model is part of the patients over paperwork initiative.

"We are taking action in the following proposed rules to reduce paperwork, while maintaining patient safety and program integrity by focusing on meaningful measures," said CMS Administrator Seema Verma.

Proposed payment rules for 2019 also update Medicare policies and rates for prospective payment systems for inpatient rehabilitation facilities and inpatient psychiatric facilities. It updates the hospice wage index and payment rate update.

These follow the release last week of CMS payment proposals for the hospital inpatient prospective payment system and long-term care hospitals. These proposed rules are projected to save providers close to four million hours and more than $144 million as they take effect in 2019 and 2020, CMS said.

"We're pleased to see CMS follow through on its commitment to reduce regulatory burden. This is crucially needed as we continue, and accelerate, the transition to value-based care," the American Hospital Association said by statement. "Last year, we released an analysis showing that providers spend nearly $39 billion a year solely on administrative activities related to regulatory compliance. In addition, the analysis found that an average-sized hospital dedicates 59 full-time equivalent employees to regulatory compliance; one-quarter of those employees are physicians, nurses and other health professionals who would otherwise be caring for patients." 

For inpatient rehab facilities, net payments in 2019 would increase by 0.9 percent, or  $75 million, compared to 2018, according to information posted by the American Hospital Association. This includes a 2.9 percent market-basket update, offset by statutorily mandated cuts of 0.8 percents for productivity and an additional cut of 0.75 percent, and a 0.4 percent decrease in outlier payments.

In addition, the agency is soliciting comments on removing the face-to-face requirement for rehabilitation physician visits and other coverage changes. 

CMS proposes to remove two measures from the inpatient rehabilitation quality reporting program. If finalized, these facilities would no longer have to report data for the MRSA infection or seasonal flu vaccination measures as of Oct. 1. 

For FY 2019, hospice payments and the statutory annual cap would both increase by 1.8 percent, or $340 million from FY 2018 levels, which is based on a hospital market-basket update of 2.9 percent minus the statutorily mandated cuts of 0.8 percent for productivity and an additional 0.3 percentage point cut. 

In addition, the rule recognizes physician assistants as attending physicians for hospice beneficiaries.

Inpatient psychiatric facilities would see a net payment increase of 0.98 percent or $50 million, compared to this year. This includes a 2.8 percent market-basket update, offset by cuts of 0.8 percent for productivity and a further Affordable Care Act-mandated cut of 0.75 percent, as well as a decrease of 0.27 percent due to updating the high-cost outlier threshold. 

CMS also proposes to remove eight measures, which the agency estimates would result in a reduction in costs of $68.1 million. 

In addition, CMS has issued a request for information to obtain feedback on revising conditions of participation to achieve better interoperability between providers.

Twitter: @SusanJMorse
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