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New 2019 Policies that May Impact Skilled Nursing Facilities

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New 2019 Policies that May Impact Skilled Nursing Facilities

Government budgets and policies play an essential role in the medical industry as lawmakers work to improve government-funded patient care and provider efficiency. The latest roll-out of policies by The Centers for Medicare & Medicaid Services (CMS) has a notable effect on skilled nursing facilities (SNFs) in both the allocation of funds toward services provided, as well as how services are reimbursed. These changes address some of the criticisms associated with the previous prospective payment system (PPS) in hopes to improve patient care and eliminate wasteful spending.

The goal of these new SNF policies

CMS is shifting its focus to the overall improvement of a patient’s condition during treatment at an SNF. CMS understands that the number of services provided does not equate to a better patient outcome. In the past, CMS and providers alike have noted that the former reimbursement model incentivized SNFs that delivered a high output of services with no correlation to the overall improvement to a patient’s health status, resulting in unnecessary treatments and extensive administrative paperwork. The new policies aim to improve the quality of care for patients and reduce the administrative burden associated with collecting payment. Furthermore, the policy changes seek to lower the rate of hospital readmission by ensuring patients receive proper care at SNFs.

The new PDPM model

The Patient-Driven Payment Model is designed to incentivize SNFs that focus on a patient’s needs and outcomes as a whole versus providing a large volume of services. To help facilitate these changes, CMS has split case-mix components to identify and separate specific care and their associated costs. These components allow CMS to reimburse SNFs based on a patient’s need for the service provided instead of reimbursing them for simply conducting the service. The split also expands coverage for underfunded services, including nursing and nontherapy ancillary services (NTAS).

In addition to PDPM, the hospital value-based purchasing (VBP) program will provide incentives to post-acute SNFs that can keep their patients from hospital readmission for 30 days from their discharge date.


The impact of new SNF policy changes

The good news is that the new proposed rule includes a net 2.5 percent rate increase in Medicare payments to SNFs with approximately $887 million in Medicare reimbursement over the course of 2020. Additionally, new policies encourage improved care for SNF patients and more holistic service coverage. However, these changes will require SNFs to reevaluate the way they provide care for their patients and how they document services to ensure that they comply with the new standards. For more information on how to implement the PDPM, visit CMS website.