The Day After: Experts Dig into SNF PPS, Find Inflation, MDS Nuggets

SNFs know the numbers by now: the Centers for Medicare and Medicaid Services (CMS) on July 29 finalized the Fiscal Year (FY) 2027 SNF PPS and in doing so maintained the April draft’s 2.4 percent rate hike based on the final SNF market basket of 3.3 percent, reduced by a 0.9 percent productivity adjustment, for an estimated increase of $882.74 million in aggregate payments to SNFs.

Underneath these topline numbers are some interesting points that providers should realize for now, and in the coming years, experts in SNF reimbursement and compliance matters tell Park Place.

For instance, there is the matter of inflation. Martin Allen, former senior vice president of reimbursement policy for the American Health Care Association/National Center for Assisted Living (AHCA/NCAL), pointed out a major difference from the FY 2027 Final Rule and last year’s version.

“The structural difference year over year is that 2026 included a forecast error adjustment [increase] of .6 percent and 2027 did not,” he said. “In fact, this year, CMS notes that they actually overestimated prior inflation by .2 percent [decrease] and the forecast error would have been negative.”

It was not included in the calculation because it did not exceed the threshold (.5 percent plus or minus either way), Allen said.

“This is a big deal because it shows that the inflation measures overall are lower. During my tenure at AHCA we received a benefit from the forecast error. Will the current inflation drive future increases? I don’t know.”

MDS and QRP Breakdown

Then we have analysis of MDS and QRP issues. For that, we defer to Alicia Cantinieri, managing director, clinical reimbursement and regulatory compliance for Zimmet Healthcare Services Group, who said the Final Rule has two major changes including shortening the MDS Data Submission Deadline and the assessments included in the SNF Quality Reporting Program (QRP).

“Currently, the MDS data submission deadlines allow a review and correction period of 4.5 months after each quarterly data collection period to ensure all assessments are submitted and accepted, as well as to make any corrections,” she said.

But beginning with the FY 2029 SNF QRP, the time has been shortened to just 45 days.

“As there is plenty of time to prepare, facilities should plan how to meet this deadline before it is a requirement to avoid a 2 percent penalty on the APU once the shortened deadline is in effect,” Cantinieri said.  

“This involves keeping a close eye on the data reporting thresholds more frequently than once per quarter and auditing to ensure the assessments are accurate prior to the initial submission while meeting the RAI Manual submission deadlines,” she added.  

SNF QRP Change

Additionally, Cantinieri said the SNF QRP currently includes only data for Traditional Medicare Part A beneficiaries. But the FY 2027 SNF PPS finalizes CMS's proposal to require the submission of MDS data on all SNF residents admitted for covered skilled care regardless of payer beginning with the FY 2031 SNF QRP.

“This will include residents covered under Medicare Advantage plans as well, following the definition of skilled services outlined in the Medicare Benefit Policy Manual, Chapter 8, Section 30,” Cantinieri said.

Many facilities already complete a PPS assessment that is not submitted via iQIES, and in most cases are required to complete and submit an OBRA assessment for these residents, she said. “CMS intends to modify one and add three new items to the MDS to indicate if that resident is receiving skilled services and primary payer information,” Cantinieri said.

The SNF QRP language has raised concerns in the sector, with AHCA/NCAL head Clif Porter issuing a statement saying the move puts paperwork before patients. See the news article on this issue and overall sector reaction here.  

What do these changes mean for facilities?

Cantinieri said the following:

• More assessments will be included in the QRP, which means that achieving the QRP data reporting threshold, in which 90 percent of the assessments have 100 percent of the data submitted (no or few dashes) may be more difficult and place the facility at a higher risk of a 2 percent penalty on the APU

• Shortened final data submission deadlines for more assessments, which means ensuring accuracy is crucial before the assessments are submitted to iQIES

30,000 Foot View

Allen said overall, the CMS release is a fairly clean rule. “Providers get an increase, PDPM case mix changes/recalibration are avoided for at least another year, and the QRP/VBP changes appear minor, despite provider concerns.

“Providers don’t like having to complete MDS’s for all skilled care, but this is a sensible change by CMS, I think. What it means is that Medicare Advantage residents will need MDS completed more often. With the increase in Medicare Advantage as a payer CMS needs this information to have to look at acuity and lengths of stages like they do for Medicare FFS,” he said.

There is credence to what AHCA/NCAL said on the additional paperwork, Allen noted. “That’s true, it will result in additional MDS staff time,” he said, agreeing there is more of an administrative burden.

What CMS Released

In addition to the rate increase, here is what CMS said about the Final Rule. Some of these issues have been addressed above.

-              CMS said FY 2027 final updates to the SNF QRP include the removal of two measures from the SNF QRP, beginning with the FY 2028 SNF QRP: (1) the COVID-19 Vaccination Coverage Among Healthcare Personnel measure, and (2) the COVID-19 Vaccine: Percent of Patients/Residents Who Are Up to Date measure.

-              CMS said it is finalizing the revised data submission timeframe from 4.5 months to approximately 45 days, beginning with the FY 2029 SNF QRP. This shortened time frame, it said, will reduce the lag between data submission and public reporting by up to three months, resulting in timelier data for consumers and their families. SNFs will also have earlier access to data to support their quality initiatives.

-              On MDS Data Submission, CMS said to obtain the most accurate SNF quality of care information and to remain relevant to the SNF community and consumers, CMS is finalizing a requirement for all SNFs to submit MDS data for all SNF residents receiving covered skilled care, regardless of payer. “This will align the SNF QRP with other Post-Acute Care settings and CMS programs that already collect data on all patients regardless of payer,” the agency  said.

-              CMS said it received comments on one potential measure topic that might be adopted in future years for the SNF QRP: advanced care planning (ACP). ACP is a continuous process of conversation and documentation to align a patient’s care and interventions with their beliefs, values, and preferences if they become unable to make those decisions. CMS provides a summary of comments received in the FY 2027 SNF PPS final rule.

-              For the SNF Value-Based Purchasing (VBP) Program, CMS finalized performance standards for the FY 2029 and FY 2030 program years to comply with the program’s statutory notice deadline.

-              CMS said it will update the “snapshot date” codified at 42 CFR § 413.338(f)(1)(v) for two measures calculated using MDS assessment data to maintain alignment with the newly finalized SNF QRP submission deadlines for MDS assessment data, beginning with FY 2027 data. The SNF VBP adjustments for certain SNFs subject to the net reduction in payments under the SNF VBP and which are not incorporated into the impact estimates for the payment rate are an estimated $203.60 million reduction in FY 2027.

-              CMS said “this RFI focused on potential updates to the Patient Driven Payment Model [PDPM] payment system as part of a broader effort to ensure that payment policy reflects current care practices and changes in the SNF resident population. The RFI also focused on how CMS could address observed case-mix upcoding. CMS will take the comments received under advisement in any potential proposed adjustments in future rulemaking.”

The SNF Prospective Payment System Final Rule can be viewed on the Federal Register at: https://www.federalregister.gov/public-inspection/current.

Comments or questions? Contact Patrick Connole at pconnole@parkplacelive.com.