CMS on Wednesday (July 31) finalized a 4.2 %, or $1.4 billion, pay hike for skilled nursing facilities (SNFs) that received mixed reviews, but stakeholders quickly blasted the agency’s decision to allow additional civil monetary penalties (CMPs) for health and safety violations — with some suggesting the move to be agency overreach.
CMS says the 4.2% pay hike in the Skilled Nursing Facility Prospective Payment System (SNF PPS) Final Rule reflects a 3% market basket update, a 1.7 percentage point increase to balance the agency’s fiscal 2023 market basket error, and a 0.5% cut for productivity. The final pay rate is slightly higher than the 4.1% increase the agency proposed in April. Still, the update received mixed reviews from industry.
Mark Parkinson, the president and CEO of the American Health Care Association (ACHA), said in an emailed statement to Inside Health Policy on Wednesday that his organization appreciates the 4.2% increase in Medicare rates “so that nursing homes can meet escalating needs to invest in their workforce, care services, and more.”
But LeadingAge, which represents nonprofit providers of aging services, says the pay bump is still “insufficient.”
“Given the operational challenges that our mission-driven and nonprofit provider members navigate–including a very competitive labor market–today’s announced increase of 4.2% from CMS is insufficient,” Katie Smith Sloan, president and CEO of LeadingAge, said in a statement.
The final rule also revises CMS’ policy on CMPs, by allowing the agency to impose penalties for health and safety violations, both per-day, until the non-compliance is corrected, and per-instance. The agency says its previous policy that allowed only one CMP for the same deficiency had limited CMS and state authorities’ ability to use multiple penalties, and CMS believes the new policy will encourage quicker and sustained compliance.
“These revisions will provide CMS flexibility in determining the mix and number of penalties in response to situations that put residents’ health and safety at risk and, therefore, encourage facilities to promptly correct and maintain lasting compliance with CMS’ health and safety requirements,” the agency says in the rule’s fact sheet.
Though they feel differently about the pay hike, both the ACHA and LeadingAge passionately rebuked the revisions to CMS’ enforcement authority. ACHA suggested the expansion could be a case of agency overreach and argued that excessive fines risk pushing already-struggling nursing homes to close.
“In particular, we are deeply troubled by CMS’ statement that it is ‘expanding its ability to impose financial penalties,’ as this is a clear indication of agency overreach when it comes to enforcement,” Parkinson said. “We have long emphasized that CMPs divert critical resources away from necessary improvements by imposing fines without providing constructive support for residents or addressing root causes.”
“By expanding this punitive enforcement authority, CMS and the Administration propagate a mistaken belief that financial penalties are an effective means of quality improvement,” Sloan said. “We urge them to refocus and to take steps to actively engage in quality improvement in a productive way, choosing the carrot instead of a larger, stronger stick.”
CMS also announced that it’s adding four new social determinants of health (SDOH) items to the Skilled Nursing Facility Quality Reporting Program (SNF QRP) in FY 2027: Living Situation, Food (two items), and Utilities. CMS now requires SNFs to participate in a data validation process, with those failing to meet reporting requirements facing a 2% reduction in their Annual Payment Update.
CMS has also finalized operational and administrative updates for the Skilled Nursing Facility (SNF) Value-Based Purchasing (VBP) Program, which withholds 2% of Medicare Part A payments from SNFs and redistributes 50-70% as incentive payments based on performance.
The agency says it’s adopting policies for measure retention, removal, and selection to ensure that metrics remain focused on assessing care quality. Plus, CMS is adjusting the review and corrections policy to allow SNFs to review and correct data used in calculating their measure rates.
CMS Issues 4.2% Pay Hike For SNFs But Draws Ire For Expanded Enforcement Authority
bgov.com
August 1, 2024 3:59 pm
CMS on Wednesday (July 31) finalized a 4.2 %, or $1.4 billion, pay hike for skilled nursing facilities (SNFs) that received mixed reviews, but stakeholders quickly blasted the agency’s decision to allow additional civil monetary penalties (CMPs) for health and safety violations — with some suggesting the move to be agency overreach.
CMS says the 4.2% pay hike in the Skilled Nursing Facility Prospective Payment System (SNF PPS) Final Rule reflects a 3% market basket update, a 1.7 percentage point increase to balance the agency’s fiscal 2023 market basket error, and a 0.5% cut for productivity. The final pay rate is slightly higher than the 4.1% increase the agency proposed in April. Still, the update received mixed reviews from industry.
Mark Parkinson, the president and CEO of the American Health Care Association (ACHA), said in an emailed statement to Inside Health Policy on Wednesday that his organization appreciates the 4.2% increase in Medicare rates “so that nursing homes can meet escalating needs to invest in their workforce, care services, and more.”
But LeadingAge, which represents nonprofit providers of aging services, says the pay bump is still “insufficient.”
“Given the operational challenges that our mission-driven and nonprofit provider members navigate–including a very competitive labor market–today’s announced increase of 4.2% from CMS is insufficient,” Katie Smith Sloan, president and CEO of LeadingAge, said in a statement.
The final rule also revises CMS’ policy on CMPs, by allowing the agency to impose penalties for health and safety violations, both per-day, until the non-compliance is corrected, and per-instance. The agency says its previous policy that allowed only one CMP for the same deficiency had limited CMS and state authorities’ ability to use multiple penalties, and CMS believes the new policy will encourage quicker and sustained compliance.
“These revisions will provide CMS flexibility in determining the mix and number of penalties in response to situations that put residents’ health and safety at risk and, therefore, encourage facilities to promptly correct and maintain lasting compliance with CMS’ health and safety requirements,” the agency says in the rule’s fact sheet.
Though they feel differently about the pay hike, both the ACHA and LeadingAge passionately rebuked the revisions to CMS’ enforcement authority. ACHA suggested the expansion could be a case of agency overreach and argued that excessive fines risk pushing already-struggling nursing homes to close.
“In particular, we are deeply troubled by CMS’ statement that it is ‘expanding its ability to impose financial penalties,’ as this is a clear indication of agency overreach when it comes to enforcement,” Parkinson said. “We have long emphasized that CMPs divert critical resources away from necessary improvements by imposing fines without providing constructive support for residents or addressing root causes.”
“By expanding this punitive enforcement authority, CMS and the Administration propagate a mistaken belief that financial penalties are an effective means of quality improvement,” Sloan said. “We urge them to refocus and to take steps to actively engage in quality improvement in a productive way, choosing the carrot instead of a larger, stronger stick.”
CMS also announced that it’s adding four new social determinants of health (SDOH) items to the Skilled Nursing Facility Quality Reporting Program (SNF QRP) in FY 2027: Living Situation, Food (two items), and Utilities. CMS now requires SNFs to participate in a data validation process, with those failing to meet reporting requirements facing a 2% reduction in their Annual Payment Update.
CMS has also finalized operational and administrative updates for the Skilled Nursing Facility (SNF) Value-Based Purchasing (VBP) Program, which withholds 2% of Medicare Part A payments from SNFs and redistributes 50-70% as incentive payments based on performance.
The agency says it’s adopting policies for measure retention, removal, and selection to ensure that metrics remain focused on assessing care quality. Plus, CMS is adjusting the review and corrections policy to allow SNFs to review and correct data used in calculating their measure rates.