On July 30th, 2015, CMS released the FY 2016 SNF PPS final rule, which also included language on value-based purchasing (VBP) as well as the recently-enacted IMPACT law. AHCA will provide additional details in the coming days. For now, please see below for an outline of the specifics behind the market basket update.
SNF payments to increase $430 million
CMS projects within the final rule that aggregate SNF payments in FY 2016 will increase by $430 million - or 1.2 percent - from payments in FY 2015.
This final increase is 0.2 percent less than what was outlined in the proposed FY 2016 rule released earlier in April, which included a 1.4 percent net market basket increase ($500 million) for SNFs beginning on October 1 of this year.
CMS justifies the reduction via a caveat in the FY 2016 proposed rule that if more recent data became available and was appropriate to consider, the agency would use such data to determine the final FY 2016 SNF rate. That explains the change from the original $500 million estimate to $430 million. CMS used more recent data from the second quarter 2015 IHS Global Insight forecast of the FY 2010-based SNF market basket to calculate the reduced market basket increase of 1.2 percent.
Tables 1 and 2 below reflect the updated components of the unadjusted federal rates for FY 2016 prior to adjustment for case-mix. CMS further adjusts the rates by a wage index budget neutrality factor.
Table 1 - FY 2016 Unadjusted Federal Rate Per Diem
Urban
Table 2 - FY 2016 Unadjusted Federal Rate Per Diem
Rural
Quality Measures Finalized
CMS also finalized the rehospitalization measure to be used in the SNF VBP program that applies a 2 percent withhold to all SNF Part A payments. SNFs can "earn" some of the withhold back based on its rehospitalization rate. The measure, which was unchanged from the proposed rule, will use the SNF RM, a National Quality Forum-endorsed risk adjusted measure based on SNF and Hospital Part A claims.
In addition, CMS finalized the specifications for three quality measures to comply with the IMPACT Act. In the coming days, AHCA will release a more detailed summary of the final rule, including the VBP language as well as details on the quality reporting and staff reporting measures found in IMPACT. You are encouraged to review the final rule, as well as the CMS fact sheet.
AHCA will continue to advocate on your behalf as we meet with CMS in the coming weeks about the provisions in the final rule.
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