April 6, 2023

Without Addressing Staffing Mandate, CMS Updates SNF Rates in Proposed PPS Rule

On April 6, 2023 by Jeff Bostic

Earlier this week, the Centers for Medicare and Medicaid Services (CMS) published the annual proposed rule that updates the Prospective Payment System (PPS) rates for care centers. The rule calls for an update in the rates starting Oct. 1, which averages 3.7%.

  That includes an inflation update of 6.1%, reflecting the large increases in inflation in the last year, reduced by the second year of the “parity” adjustment of 2.3%, which corrects for unexpected increases since the implementation of the Patient-Driven Payment Model (PDPM) in 2019.

This is the final year of the two years of reductions related to correcting for PDPM impacts. The impact on individual care center rates depends on changes to the wage index for their region, plus any changes to this proposal that CMS makes in the final rule this summer. Given the financial stress experienced by care centers, the inflation adjustment this year is much needed.

Updates to value-based purchasing

The proposed rule also makes updates to the Value-Based Purchasing (VBP) program, which will take effect in future years if they remain as part of the final rule. Those changes include revising the one measure that’s been in use for years on readmissions, to focus on preventable readmissions.

The rule also proposes adding four new measures over time, including staff turnover, discharge function score, hospitalization rate, and rate of falls with injury. How those measures will be factored into the VBP formula will be determined in future rules.

Staffing requirement not addressed

Despite expectations that new staffing requirements would be addressed in the proposed PPS rule, the rule does not address that issue and CMS indicates that it will be addressed later this spring in separate rulemaking. National and state provider associations remain very concerned about the impact of a staffing mandate on the ability of providers to be able to continue operating given significant workforce shortages, and we will be reviewing the details of that rule very closely when it is available.