April 5, 2024
On March 28, 2024, the Centers for Medicare & Medicaid Services (CMS) issued a proposed rule that would update Medicare payment policies and rates for skilled nursing facilities under the Skilled Nursing Facility Prospective Payment System (SNF PPS) for fiscal year (FY) 2025 (CMS 1802-P).
FY 2025 Proposed Updates to the SNF Payment Rates
For FY 2025, CMS proposes updating SNF PPS rates by 4.1% based on the proposed SNF market basket of 2.8%, plus a 1.7% market basket forecast error adjustment and a negative 0.4% productivity adjustment. Note that these impact figures do not incorporate the SNF VBP reductions for certain SNFs subject to the net reduction in payments under the SNF VBP; those adjustments are estimated to total $196.5 million in FY 2025.
Nursing Home Enforcement
The proposed rule includes revisions to CMS’ existing nursing home enforcement authority to enhance the safety and quality of care provided in the nation’s nursing homes. In February 2022, the Biden-Harris Administration signaled a commitment to ensure that all residents living in nursing homes receive safe, quality care. CMS proposes expanding its ability to impose financial penalties to drive sustained correction of health and safety deficiencies. These revisions will allow CMS to expand 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.
CMS’ current enforcement authority allows imposing civil money penalties (CMPs) for noncompliance. Penalties can currently be imposed per day (PD) or per instance (PI) depending on the health and safety deficiencies identified, with PD CMPs applied until the noncompliance is corrected and PI CMPs applied for isolated instances. However, PD and PI penalties may not be imposed during the same survey, and PI penalties may not be imposed concurrently for the same deficiency. The severity of enforcement sanctions is based on the harm or potential harm to residents caused by non-compliance. This regulatory limitation prevents CMS and the state from imposing CMPs commensurate with the identified noncompliance by restricting the use of multiple penalties for one deficiency, which prevents full use of CMPs to encourage faster correction and sustain compliance with health and safety requirements.
In this proposed rule, CMS proposes to expand the penalties that can be imposed through regulatory revision to allow for more per instance and per day CMPs to be imposed. The proposals in this rule will permit both types of penalties to be imposed, not to exceed the statutory daily limits, providing CMS with greater flexibility to impose penalties in a manner that more directly reflects the health and safety impact to residents and incentivizes permanent correction.
