New SNF Medicare Rates Take Effect on Thursday

Posted on September 30, 2020 by Jeff Bostic

Based on the annual SNF Payment Rule which CMS released earlier this summer, new SNF Medicare rates for the second year of the Patient-Driven Payment Model (PDPM) take effect on October 1. 

The October 1 rates include an inflation update of 2.2% based on a formula in existing law. Due to the Covid-19 pandemic, CMS proposed minimal changes to the payment system, essentially just updating rates as required by law.

In addition to the annual inflation update, the rates are adjusted by updated wage indices, so the actual rate changes vary by region of the state. This document shows the rate change by county in Minnesota. Most counties are positive, other than Houston County (which is in the LaCrosse metro area) and Sibley County (which lost metro status in the most recent update).  Lake County has the largest increase as it was added to the Duluth metro area.

The Value-Based Purchasing Program (VBP) continues in its third year on October 1, and the adjustments for that program, which are determined based on performance on a hospital readmission measure, continue to impact each facility’s rates based on their individual score.  Those scores and the associated rate adjustments were sent to each SNF in August, and because of the way the program was structured by Congress more SNFs receive rate reductions than rate increases.