The Centers for Medicare & Medicaid Services (CMS) published the final rule updating Medicare rates for skilled nursing facilities for federal fiscal year (FY) 2023 in the August 3, 2022 Federal Register. The rates will be effective from October 1, 2022 through September 30, 2023.  Fiscal year 2023 represents the fourth year of the Patient-Driven Payment Model (PDPM) payment system for skilled nursing facilities.

Last year, CMS proposed, but ultimately relented on, a 5% “parity adjustment” to bring PDPM payment down to a budget-neutral level.   Following a proposed rule in April 2022, in which CMS indicated its intent to go forward with a revised 4.6% parity adjustment for FY 2023, the final rule split the parity adjustment over two years, applying a 2.3% cut to this year’s update and another 2.3% cut to next year’s update.

The final rule also provides for a 5.1% net market basket increase over FY 2022, and as a result, net Medicare reimbursement is expected to increase by approximately 2.7%, which is estimated to increase nationwide SNF payments by approximately $900 million.  Due to annual updates in CBSA wage indices, your county’s change in Medicare rates may be higher or lower than the published 2.7% increase.

Due to a significant decrease in its wage index of (-4.9%), the rates for the Dayton-Kettering, OH CBSA (including Greene, Montgomery and Miami Counties) will decrease by approximately (-1.1%).  The remaining 14 Ohio CBSAs will see increases in their PDPM rates between 1% and 3.6%.

The final rule also made adjustments to the technical mapping of certain conditions between ICD-10 diagnoses and PDPM groupings. CMS has posted an updated PDPM ICD-10 mapping file on its website to assist providers with coding crosswalks and classification logic.

PDPM continues to be complex and it is critical to ensure facility staff stay abreast of the clinical and billing requirements.  We are available to assist you with any questions or issues you may have.  Please contact us if you are in need of assistance.

PDPM RATES EFFECTIVE 10/1/2022

The links in the list below provide detailed calculations of the PDPM rates for each of the 15 CBSAs in Ohio.  The rates provided for the individual CBSAs are shown prior to the Quality Reporting Program and Value-Based Purchasing adjustments.

Please select the CBSA in which your county resides from the list below 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.

DETAILED CALCULATIONS BY OHIO CBSA NAME

We have developed a calculator to assist in calculating rates for all PDPM groups.  The calculator can assist you in seeing changes in reimbursement over the course of a Part A stay due to the potential impacts of tapering and AIDS diagnoses.  Please contact us for more information if you are interested.

These rates are subject to change. If a Correction Notice is issued that affects any Ohio counties, we will update our website links with the new rates.

SNF VALUE-BASED PURCHASING PROGRAM

Prior to the COVID-19 Public Health Emergency, providers who scored well on the SNF Value-Based Purchasing (VBP) hospital readmission measures had the opportunity to earn an increase to their PDPM rates, while those who ranked lower could lose up to 2% of their PDPM rates.  However, as a result of COVID-19, CMS made the decision to suppress the hospital readmission calculations used for SNF VBP for FY 2022 and has once again done so for FY 2023.

As a result, CMS will apply an identical adjustment to most providers, who will see a .8% reduction to their PDPM rates.  Low utilization providers (i.e., those with fewer than 25 stays) will not be affected by VBP and will not receive a reduction in their rates.  While this adjustment will remain in effect throughout FY 2023, we expect the SNF VBP calculations to return to normal after the Public Health Emergency is lifted.

The final rule added three new measures to the Value-Based Purchasing Program to be used in future years.  It is unknown at this time how the payment calculations will be changed with the addition of the new measures.

  1. FY 2026
    • Healthcare-Acquired Infections Requiring Hospitalization (via claims data)
    • Total Nursing Hours Per Resident Day (via PBJ and MDS data)
  2. FY 2027
    • Discharge to Community (already in use in SNF QRP)

SNF QUALITY REPORTING PROGRAM (QRP)

Effective October 1, 2018, SNFs who fail to submit required quality data to CMS under the SNF QRP will have their Medicare payment rates reduced by two percentage points.  The majority of the reporting is done via the MDS assessment.  As a result, most facilities meet the requirements and avoid payment reductions.  However, facilities that do not respond to CMS “Review and Correct” reports may not qualify for the QRP, and as a result, will have their rates reduced by 2% through September 30, 2023.

The FY 2023 final rule included one new measure for the SNF QRP.  Beginning in FY 2024, QRP will include Influenza Vaccination Coverage Among Health Care Professionals (HCP) (NQF #0431), which will be collected via the NHSN.  Providers will report the percentage of HCP who receive the influenza vaccination.  The first reporting period will cover October 1, 2022, through March 31, 2023, and will be due by May 15, 2023.

HW HEALTHCARE ADVISORS

Our team consists not only of CPAs, but also highly trained and experienced billing/revenue cycle consultants, certified medical office managers, and LNHAs.  We are dedicated to working with the regulatory, operational and reimbursement challenges that providers face in an ever-changing healthcare environment.

We can assist you in streamlining your processes, optimizing your operations and identifying potential opportunities and risks.  Please contact any of our HW Healthcare Advisors to discuss how we can help you and your facility stay on the path to success.

Steve Anderson CPA
Principal steven.anderson@hwco.cpa