CMS locks in 2%+ payment bumps for SNFs, post-acute care providers

Skilled nursing facilities get 2.4% payment bump

The CMS finalized the proposed 2.4% update to SNF PPS rates for FY 2027, although total estimated payments to these facilities will be slightly lower at $882.74 million, down from $888 million in the proposed rule.

The agency said the finalized update is based on the final SNF market basket of 3.3%, reduced by a 0.9% productivity adjustment.

Additionally, the rule will remove two COVID-19 vaccine-related measures from the SNF Quality Reporting Program starting in FY 2028. The measures reflect COVID-19 vaccination coverage among staff and patients or residents who are up to date on their vaccinations.

The data submission timeline in the quality reporting program will also be shorter, going from 4.5 months to about 45 days starting in FY 2029, according to the final rule. SNFs will also need to submit minimum data set information for all residents, regardless of payer.

The CMS said this revised timeline will reduce lag between data submission and public reporting by up to three months, delivering timelier data to consumers.

The federal agency said it will continue to consider an advanced care planning measure in the SNF Quality Reporting Program, as it summarized comments from its request for information in this latest rule.

New non-hospice spending metrics try to sniff out waste

For FY 2027, the CMS updated the hospice payment rate by 2.3%, representing about $755 million in additional payments to the facilities next year. The finalized update is less than the $785 million increase proposed in April.

Hospices that fail to submit required quality data, though, will face a 1.7% reduction to the payment rate, the final rule stated.

With the finalized payment rate update, the new hospice cap amount will be $36,174.75 for FY 2027, up from the previous year's $35,361.44.

The CMS also finalized the service and spending variation index, or SSVI, which scores hospices on utilization and non-hospice spending. A higher score points to potential concerning utilization and Medicare program integrity issues, the agency explained.

The new score comes as the CMS reports higher non-hospice spending among the facilities over the last couple of years. The agency said hospices should be providing nearly all care for terminally ill patients and the benefit is designed to cover this.

Higher non-hospice spending is concerning, the CMS said. The agency intends for the SSVI to provide greater transparency on this issue and give beneficiaries more information to help them decide where to seek end-of-life care.

To further combat potential fraud, waste and abuse, the rule will also require hospices to provide a hospice election statement addendum to all Medicare patients, not just those who request it. The addendum, required since FY 2020, informs patients of the services, items, drugs and conditions that are not related to their terminal illness and related conditions and therefore will not be covered by Medicare's hospice benefit.

Additionally, the rule stated that the CMS will add a new icon to the Medicare.gov Care Compare tool to indicate hospices that fail to submit any quality data or submit less than the minimum of 90%. This will take effect in FY 2028.

Final rule updates inpatient rehab's 36-hour rule

IRFs can expect a 2.3% increase to their Medicare payment rates in FY 2027, according to the IRF PPS final rule released on Thursday.

The finalized rate is a significant drop from the proposed 2.8% rate boost, which would have increased Medicare payments to the facilities by approximately $355 million.

The CMS now anticipates paying out $340 million more to IRFs next fiscal year as a result of updated rates and the final phase-out of the rural adjustment for facilities transitioning from rural to urban. The rule also updated the outlier threshold to maintain payments at 3% of total IRF payments.

IRFs also face a new requirement in the rule that all -- not just some -- therapies be initiated within 36 hours of an IRF admission. The CMS said in a fact sheet that this update "will significantly reduce inquiries and support the IRF industry,"

The rule also updated the interdisciplinary team meeting policy to require an initial meeting by the fourth day of admission. The rule also clarified that the team conduct all other meetings weekly, meaning seven days from the date of the initial meeting.

For the IRF Quality Reporting Program, the CMS will also shorten the data submission timeframe to about 45 days, starting in FY 2029.

Inpatient psych gets higher rates, stricter outlier threshold

IPFs can expect a bump in Medicare payments in FY 2027, as CMS finalized a 2.3% update to their PPS rates. The update will inject $60 million into IPF Medicare payments, up from the proposed $50 million.

The final rule also updates the outlier threshold for IPFs. The outlier adjustment provides additional financial support for extraordinarily high-cost patient stays. Next fiscal year, these payments will remain at 2% of total IPF PPS payments, according to the rule.

IPF leaders have expressed concerns about accessing outlier payments for these costly stays since the threshold has increased over the years. But the CMS said in a fact sheet that IPFs have received outlier payments on many of their claims for "exceptionally high reported costs." However, these costs are largely from labor, overhead and other routine costs, not patient-specific differences in needs and care, the agency explained.

The cap will remain in place, although facilities with fewer than 50 stays per year will not be subject to it, the final rule stated.

The rule also finalized changes to the IPF Quality Reporting Program, including removing two alcohol and tobacco use measures and implementing a standardized IPF patient assessment instrument.

Notably, the IPF-PAI requires facilities to submit data via a CMS-developed web application or an application programming interface created by the CMS using Health Level Seven's Fast Healthcare Interoperability Resources specification. The agency said this is its first time requiring a quality reporting program to use the FHIR standard for patient assessment data submission.

Jacqueline LaPointe is an Executive Editor at Xtelligent Healthcare Media, covering revenue cycle management, healthcare payers, health policy and health IT since 2016.