Nursing Homes to Get 2.4 Percent Medicare Pay Bump in FY 2017

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By Michael D. Williamson

July 29 — Nursing homes will get $920 million, or 2.4 percent, more in Medicare payments in fiscal 2017 compared to 2016, a July 29 final rule said.

The rule also added quality measures that nursing homes will have to report on in the future to avoid Medicare payment reductions.

The payment increase outlined in the final rule (Docket No. CMS-1645-F, RIN:0938-AS75) is $120 million more than the Centers for Medicare & Medicaid Services originally proposed in April (78 HCDR, 4/22/16).

Reimbursements rates and other policies specified in the rule take effect Oct. 1. The final rule is scheduled for the Aug. 5 Federal Register, a CMS fact sheet said.

AHCA's Take

A nursing home trade group offered qualified praise for the quality measures. “In many areas, we believe these are important changes aimed at advancing quality via the IMPACT Act and other new law,” the American Health Care Association's president and chief executive officer, Mark Parkinson, told Bloomberg BNA in a July 29 statement. However, in others, “we wish a different outcome had occurred,” he said.

Nevertheless, the AHCA looks forward to working with the CMS on efforts aimed at bolstering SNF quality and improving beneficiaries' lives, Parksinson said.

Quality Measures

The CMS adopted several changes to the skilled nursing facilities (SNFs) quality reporting program. These were mandated by the Improving Medicare Post-Acute Care Transformation (IMPACT) Act of 2014, the fact sheet said.

Under the rule, SNFs that don't submit the required quality data to the CMS will be subject to a pay cut of 2 percentage points, beginning in fiscal 2018.

Beginning in fiscal 2018, SNFs will be required to report the following information to avoid a payment reduction:

  •  Medicare spending per beneficiary;
  •  discharges to the community; and
  •  potentially preventable 30-day post-discharge readmissions rates.

SNFs also will need to report information on the number of drug regimen reviews they conduct and how they follow up on drug regiment issues beginning in fiscal 2020, according to the fact sheet.

Value-Based Purchasing

In addition, the final rule specifies one quality measure that will be used in the SNF value-based purchasing program, which is slated to begin in fiscal 2019. With that program, the CMS plans to reward nursing homes with incentive payments for the quality of care they provide to beneficiaries.

Under the program, nursing homes will need to report on the SNF 30-Day Potentially Preventable Readmission Measure. The measure, which is required by law, assesses the facility-level risk-standardized rate of unplanned, potentially preventable hospital readmissions for SNF patients within 30 days of discharge from a prior admission to a hospital paid under the Inpatient Prospective Payment System, a critical access hospital or a psychiatric hospital, the fact sheet said.

The Protecting Access to Medicare Act required the CMS to develop the SNF value-based purchasing program.

The rule also established performance standards, outlined performance periods and specified a scoring methodology for the SNF value based purchasing program. In addition, the rule detailed how the CMS will provide confidential feedback reports to SNFs.

To contact the reporter on this story: Michael D. Williamson in Washington at

To contact the editor responsible for this story: Brian Broderick at

For More Information

The final rule is at

The CMS fact sheet is at

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