CMS Issues FY 2016 RUG-IV Medicare SNF PPS Rates Effective October 1, 2015



The Centers for Medicare &; Medicaid Services (CMS) published the final rule updating Medicare SNF PPS rates for federal Fiscal Year (FY) 2016 in the August 4, 2015 Federal Register. The rates will be effective from October 1, 2015 through September 30, 2016.

The notice provides for a 1.2% net market basket increase over FY 2015. The full increase was calculated at 2.3%, but was reduced by a 0.5% productivity adjustment in accordance with the Affordable Care Act and a 0.6% “forecast error adjustment” to account for differences between estimated and actual data used for the FY 2015 PPS rates. CMS estimates the net increase in payments to SNFs to be approximately $430 million nationwide in FY 2016.

The actual rate change from FY 2015 to FY 2016 experienced by your facility is dependent on the change in wage index in your county’s Core Based Statistical Area (CBSA).  Belmont County will see an increase of 3.30%, the largest increase in the Ohio. Cleveland-Elyria can expect a rate increase of 2.18%, while the Columbus will see an increase of 2.12%. Cincinnati will see an increase of only 0.88%.  Four of the fifteen CBSAs in Ohio will see an overall cut to their Medicare rates, including Lima (-0.57%), Mansfield (-1.70%), Springfield (-0.21%) and Weirton-Steubenville(-0.82%).  The PDF file for each CBSA below includes the percentage change from FY 2015 to FY 2016.


The FY 2015 final rule included changes to the CBSA delineations of some counties based on data from the 2010 Census.  The changes to the CBSA delineations included creation of new CBSAs, deletion of certain CBSAs and movement of counties from Urban to Rural or Rural to Urban.  Nationwide, 105 counties moved from Rural to Urban, while 38 counties moved from Urban to Rural.

In certain cases, the changes to the CBSA delineations resulted in very significant changes to a county’s wage index.  In order to lessen the impact of these changes on impacted providers, CMS provided for a one-year wage index transition period in FY 2015.  The wage indices for each CBSA were calculated under both the old and new delineations and were averaged together for the FY 2015 PPS rate calculations.  The FY 2016 rates, effective October 1, 2015, have been calculated using only the wage indices for the new CBSA delineations.

In Ohio, six counties were impacted by the changes:

• Hocking County and Perry County moved from the Rural CBSA to the Columbus CBSA
• Ottawa County moved from the Toledo CBSA to the Rural CBSA
• Preble County moved from the Dayton CBSA to the Rural CBSA
• Washington County moved from the Parkersburg-Marietta CBSA to the Rural CBSA
• The Sandusky CBSA was eliminated, resulting in Erie County moving to the Rural CBSA

Providers in the affected counties should use the rates for their new CBSAs in FY 2016.

Due to the transition period in FY 2015, the affected counties will experience difference percentage changes to their rates than the remaining counties in their new CBSAs.  Hocking and Perry Counties will both see increases of 6.74%, while Erie County will see an increase of 3.08% and Washington County will see an increase of 1.45%.  Preble County (-1.46%) and Ottawa County (-2.18%) will both see decreases as a result of their move from an urban CBSA to the Rural CBSA.


In addition to the rate update, the final rule includes a few additional regulatory changes.

SNF Quality Reporting Program

The rule identifies three quality measures for skilled nursing facilities under the SNF Quality Reporting Program to be effective in FY 2018:

• Skin integrity and changes in skin integrity
• Incidence of major falls
• Functional status, cognitive function and changes in function and cognitive function

Beginning with FY 2018, SNFs that fail to submit required quality data to CMS under the SNF Quality Reporting Program will have their annual payment updates reduced by two percentage points.  CMS intends to propose additional quality measures in future rules.

SNF Value Based Purchasing Program

The final rule also includes, as part of the SNF Value Based Purchasing Program created by legislation in 2014, the adoption of a 30-day all cause readmission measure for skilled nursing facilities.   The measure will be used in the SNF Value Based Purchasing program that will be effective beginning in FY 2019.  The Value Based Purchasing program has the potential to have a significant impact on providers, as money will be withheld from all providers and redistributed to providers based on their results.  Providers that score poorly could potentially lose money under the program, while those that score well could earn additional money.  CMS has indicated that they will continue to refine and expand the Value Based Purchasing program in future rulemaking, including the FY 2017 SNF PPS rule.

Payroll Based Journal (PBJ) Electronic Payroll Submissions

Finally, the rule includes a discussion of the upcoming electronic reporting of staffing data that will be required of SNFs effective July 1, 2016.  Pursuant to the Affordable Care Act, CMS is in the process of developing the Payroll Based Journal (PBJ) system.  SNFs will be required to submit staffing data on a quarterly basis for each employee for each day worked in the quarter.  This process will be a significant undertaking for providers, as each employee will have to be assigned to a job code (e.g., RN, LPN, STNA, etc.) for each hour worked during a quarter.  If an employee works in more than one job code in a given day (e.g., four hours as an STNA and four hours in housekeeping), the hours will have to be split between each code.

The information is to be uploaded electronically and will have to meet very specific technical specifications.  Information on the PBJ, including a draft user manual and information on the technical specifications, can be found on CMS’s website.  We are available to assist you with any questions you might have about the electronic payroll submissions.


The RUG-IV rates for all Ohio CBSAs effective 10/1/2015 are available in the links below:
Ohio CBSA PPS Rates FY16

The links in the lists below provide the detailed calculations of the PPS rates, including the breakdown by therapy, nursing, and non-case mix components, for the 15 CBSAs in Ohio. Please select the county or CBSA from the lists below in which your county resides to open a printable PDF file. If you are not sure which CBSA to choose, please click the first link to open a crosswalk between the county names and the CBSA names.

Crosswalk between Ohio Counties with CBSA names


Huntington-Ashland(includes Lawrence County, OH)
Rural Ohio
Wheeling, WV (includes Belmont County, OH)

These rates are subject to change based on any Correction Notices that are issued by CMS. If a Correction Notice is issued which affects any Ohio counties, we will update these links with the new rates.

We can help you estimate the impact of the FY 2016 rule on your facility. If you would like an estimate, please contact your HW Healthcare Advisor and provide us with your year-to-date RUG-IV days.


CGS has started issuing tentative settlements for the December 31, 2014 Medicare cost reports.  We highly recommend that you review your settlement letter closely to ensure that CGS is properly applying payments related to coinsurance bad debts.

CGS is also beginning to adjust pass-through payments based on bad debts reported on the 2014 cost reports.  They are taking into account the reduced coinsurance reimbursement for 2015 (65%) and the sequestration cuts (2%) when calculating the new payment amounts.  They are also calculating lump sum payments due to Medicare or your facility based on the change in the passthrough payment.  We recommend that you ensure that any lump sums paid or received agree to the letters that you receive.  We have seen many inconsistencies between what CGS believes was paid or received and what a provider actually pays or receives.

If you would like HW&Co;. to review your settlement or passthrough payment calculation, please contact your HW Healthcare Advisor.


The Ohio Department of Medicaid (ODM) recently issued updated Medicaid rates for nursing facilities.  The new rates are effective from July 1, 2015 through December 31, 2015.  We can provide you with a Medicaid rate snapshot with detail on your facility’s July 1, 2015 rate and estimated January 1, 2016 rate, along with case mix scores and detail of your quality incentive program results.  Please contact an HW Healthcare Advisor if you would like us to provide you with a rate snapshot.

For facilities in MyCare Ohio counties, the program requires that you receive no less than your traditional Medicaid rate for a given rate period.  With the July 1, 2015 update to the Medicaid rates, the MyCare Ohio plans should be paying your July claims at the new rates.  Please be sure to review your upcoming payments closely to ensure that you are receiving proper payment for the services you have provided.


We are less than 60 days from the implementation of ICD-10!  ICD-10 was developed in 1993, but its implementation has been repeatedly delayed in the United States.  However, the Department of Health and Human Services (HHS) has said that it has no plan to delay the implementation any further than the currently planned October 1, 2015 implementation.

CMS had previously stated that there would be no grace period for claims submitted using ICD-10.  However, in early July, CMS announced a one-year limited grace period, during which Medicare claims billed under Medicare Part B (including Part B therapies) will not be denied based on which diagnosis code was selected as long as an ICD-10 code from the appropriate family of codes is included on the claim.  All claims must have an appropriate ICD-10 code as CMS’s systems will not be able to accept ICD-9 codes after September 30, 2015.

Your staff responsible for coding and billing must be prepared as soon as possible for the change to ICD-10.  In addition, you must make sure that your software systems are prepared for the transition to ICD-10.  Any failure to properly train and prepare for ICD-10 could have major impacts on your billing and cash flows.


HW&Co;. recently hosted it annual Optimization Workshop for PointClickCare Users in Columbus, Ohio.  Over 100 attendees participated in a variety of educational sessions covering new features of PointClickCare, as well as ICD-10, MDS targeted surveys and the CMS Five Star rating system.  We thank all of those that attended for making the workshop a success!

Be on the lookout as we plan new and exciting programs in the future.  We’d love to have you there!