CMS on Thursday published final rules to update payment rates and policies for skilled nursing facilities (SNFs), inpatient rehabilitation facilities (IRFs), and hospices. 

Below, we round up the biggest changes coming to post-acute care facilities in fiscal year (FY) 2022 and beyond—and what this means for care practices moving forward.

Skilled nursing facility final rule

Payment rate update

CMS' final rule for the SNF prospective payment system will increase payments to SNFs by 1.2%, netting an increase of $410 million in Medicare Part A payments in FY 2022. The update is based on a 2.7% SNF market basket update, a -0.8 percentage point forecast error adjustment, and a -0.7 percentage point productivity adjustment. CMS this year further reduced payments by $1.2 million to account for new exclusions regarding blood clotting factors for certain patients.

Overall, this is a fairly good payment adjustment for SNFs, particularly when coupled with the agency's decision to delay parity adjustment actions until FY 2023 as providers continue to care for patients amid the Covid-19 pandemic.

Quality reporting program updates

CMS also finalized several updates to the SNF quality reporting program, including adopting two new measures: the Healthcare-Associated Infections (HAIs) Requiring Hospitalization Measure and the COVID-19 Vaccination Coverage among Healthcare Personnel Measure.

HAIs may occur due to inadequate patient management following a medical procedure and can be impacted by staffing levels, facility structure characteristics, and adoption—or lack thereof—of infection surveillance or prevention policies. Beginning in FY 2023, SNFs will be required to report HAIs that result in hospitalization, including sepsis, urinary tract infection, and pneumonia. The new measure will be based on Medicare fee-for-service claims data and will aim to identify SNFs that have notably higher rates of infection, when compared with their peers and with the national average HAI rate.

CMS also finalized the requirement for SNFs to report the percentage of staff who are vaccinated against Covid-19. Those scores also will be publicly reported on Care Compare, though SNFs will have at least 30 days to review the data before it is published. SNFs will need to submit their data to the CDC's National Healthcare Safety Network, which means SNFs will need to submit the data at least once week per month—and the first reporting period begins October 1.

CMS said the goals of the new measure are to assess whether SNFs are taking steps to limit the spread of Covid-19 among their workforce, reduce the risk of transmission within their facilities, and help sustain ability of SNFs to continue service communities. While there is not currently an explicit penalty for SNFs that have lower vaccination rates, the hope is that publicly reporting rates will spur action. Many SNFs have struggled to achieve the recommended 75% vaccination threshold among staff—but pressure is building among consumers and industry groups to achieve full staff vaccination.

CMS also is continuing to review comments and feedback to identify ways to close the health equity gap, and the agency plans to provide stratified quality measure data related to race and ethnicity that will enable providers to determine quality performance among different patient populations.

Value-based purchasing program updates

In response to the Covid-19 pandemic, CMS will suppress the 30-day all-cause readmission measure for the FY 2022 SNF VBP Program. CMS noted that the pandemic has affected the measure and ability to make fair, national comparisons of SNF performance scores. As such, CMS also finalized a special scoring policy for FY 2022; CMS will assign a performance score of zero to all participating SNFs regardless of previous performance.

CMS also noted that it received stakeholder comments on ways to expand the VBP measure set and will continue to evaluate those changes in future rulemaking.

Inpatient rehabilitation facility final rule

Payment rate update

CMS' final rule for the IRF prospective payment system will increase payments to IRFs by 1.5% in FY 2022, increasing payments by $130 million compared with FY 2021. The update is based on a 2.6% IRF market basket update, a -0.7 percentage point productivity adjustment, as well as a -0.4 percentage point adjustment in outlier payments.

The payment update is fairly good news for IRFs, particularly considering MedPAC in March recommended IRF payments be reduced by 5%.

Quality reporting program updates

CMS finalized several updates to the IRF quality reporting program, including adding the COVID-19 Vaccination Coverage among Healthcare Personnel Measure. These rates will be publicly available on Care Compare beginning September 2022, with data collection set to begin on October 1.

CMS also updated the number of quarters used for public reporting to account for Covid-related exceptions in reporting of Q1 and Q2 2020. As such, CMS will calculate IRF quality reporting measures using data from Q3 2020 through Q1 2021 for assessment-based measures. CMS will use data from six quarters for claims-based measures: The first Care Compare data refresh, which occurs on December 2021 will rely on data from Q4 2018 through Q4 2019 and Q3 2020, while the September 2022 refresh will include Q4 2019 and Q3 2020 through Q3 2021.

As we saw in the SNF final rule, CMS is continuing to review comments and feedback to identify ways to close the health equity gap. In the future, CMS said it hopes to provide stratified quality measure data related to race and ethnicity that will enable providers to determine quality performance among different patient populations.

Hospice final rule

Payment rate update

CMS' final rule for the hospice payment rate will increase hospice payments by 2.0%, netting a $480 million bump in payments compared with FY 2021. The update is based on the 2.7% market basket percentage increase and a -0.7 percentage point productivity adjustment. Additionally, the hospice aggregate cap, which limits the overall payments per patient that are made to a hospice annually, has been raised by 2% to $31,297.61.

This payment rate update is good news for hospices as it keeps pace with inflation and does not include MedPAC's recommended payment rate cuts and aggregate cap.

Labor share rate update

The labor shares for routine home care and general inpatient care have been slightly lowered, while the rates for continuous home care and inpatient respite care have been slightly raised. The final FY 2022 labor shares are 66% for routine home care, 75.2% for continuous home care, 61% for inpatient respite care, and 63.5% for general inpatient care.

Historically, CMS has based the labor share component on costs related to home health and skilled nursing facilities. This year, CMS determined labor share using 2018 Medicare cost report data for freestanding hospices in an effort to better reflect hospice labor utilization and costs.

Hospice aide training waivers made permanent

CMS made permanent a Covid-19 waiver allowing hospices to use “pseudo patients,” an individual who stands in the role of a patient or a computerized mannequin device, during competency tests for hospice aides, rather than requiring contact with actual patients as previously required.

In addition, hospices are now required to conduct a competency evaluation related to the deficient and related skill(s) noted during a hospice aide supervisory visit. The goal of this change is for hospices to focus on each aide's specific training needs, allowing existing aides to be re-trained more quickly and provide higher quality patient care.

The post-acute leader's HR guide

These changes are a win for hospices, which have been struggling with recruitment and retention of staff. Making these waivers permanent allows for more flexible and faster training of staff to the same or better quality. While this is a good start, the staffing environment is still going to present a major issue to getting organizations back to full capacity.

Quality reporting program updates

The Hospice Quality Reporting Program is adding a new measure to be publicly reported no earlier than May 2022 called the Hospice Care Index (HCI). This measure includes 10 indicators of quality, calculated from claims data. These data points are meant to represent different aspects of hospice care in order to provide a comprehensive overview of quality.

In addition, CMS will scrap 7 individual Hospice Item Set (HIS) measures because they are already reported in the Hospice Comprehensive Assessment Measure.

CMS also finalized a proposal to add the Consumer Assessment of Healthcare Providers and Systems (CAHPS®) Hospice Survey Star ratings to Care Compare, as well as a proposal to publicly report the Hospice Visits in the Last Days of Life (HVLDL) measure, which will be based on eight quarters of claims data in order to have a larger population for small providers.

These quality reporting initiatives are aimed at increasing comprehensiveness and transparency. CMS is expected to crack down even more on hospice quality through the FY 2022 Home Health Rule. More quality reporting metrics will mean more scrutiny on performance, and more opportunity for high-performing hospices to differentiate themselves.