CMS Issues FY 2021 Medicare SNF PDPM Rates Effective October 1, 2020
The Centers for Medicare & Medicaid Services (CMS) published the final rule updating Medicare rates for skilled nursing facilities for federal Fiscal Year (FY) 2021 in the August 5, 2020 Federal Register. The rates will be effective from October 1, 2020, through September 30, 2021. Fiscal year 2021 represents the second year of the Patient Driven Payment Model (PDPM) payment system for skilled nursing facilities. The final rule for FY 2021 makes no major changes to the structure of PDPM, though it does make some changes to the technical mapping of ICD-10 codes to PDPM. The rule provides for a 2.2% net market basket increase over FY 2020, which CMS estimates will increase nationwide SNF payments by approximately $750 million.
In the rule, CMS finalized its decision to update its CBSA delineations based on the Office of Management & Budget (OMB) Bulletin 18-04. As a result, the following changes will occur nationwide:
- 34 counties currently considered part of an urban CBSA will move to the rural CBSA
- 47 counties currently considered to be in a rural area will move to an urban CBSA
- 19 counties will move from one urban CBSA to a different urban CBSA
- 31 CBSAs have been assigned a new CBSA name or number based on the cities located within the CBSA
In order to protect providers in the affected counties, CMS has instituted a one-year wage index transition period. The providers in these counties will be assigned the wage index of the new CBSA, but in no case can the wage index in these counties be reduced by more than 5% of the county’s FY 2020 wage index.
In Ohio, only one county is impacted by the changes noted above. Ottawa County, currently considered a rural county, will move to the Toledo, OH CBSA effective October 1, 2020. Ottawa County was previously part of the Toledo, OH CBSA prior to October 1, 2014, when it was moved to the rural CBSA. Ottawa County is not impacted by the wage index transition and will be assigned the Toledo, OH wage index of .9013.
In addition, one Ohio CBSA will see a name and number change with the Dayton, OH CBSA (19380) changing to the Dayton-Kettering, OH CBSA (19430). There will be no change to the counties making up this CBSA (Greene, Miami, Montgomery).
PDPM Rates Effective 10/1/2020
The links in the list below provide the 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 from the list 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.
Detailed Calculations by Ohio CBSA Name
- Huntington-Ashland (Lawrence Cty, OH)
- Rural Ohio
- Weirton-Steubenville (Jefferson Cty, OH)
- Wheeling, WV (Belmont Cty, OH)
With the move from 66 groups in the RUG-IV system to over 28,000 possible groups in PDPM, as well as tapering of the non-therapy ancillary and therapy components, these rates are not as meaningful as the RUG-IV rates we provided in previous years, as all six components must be combined to determine the daily rate.
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 click here for a sample of our calculator and 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
The results of the SNF Value-Based Purchasing Program will be updated for all facilities on October 1, 2020. The Value-Based Purchasing program withholds 2% from SNF Part A payments and returns 60% of the dollars to providers based on a 30-day, all-cause hospital readmission measure. The withhold and return are completed simultaneously, so no settlement or lump sums will be necessary. To do so, each provider has been assigned a “Value-Based Purchasing Incentive Payment Multiplier” which adjusts the providers rates to the account for the withhold and return. Facility specific VBP reports are available in CASPER.
For FY 2021, providers were scored on the better of their performance on the measure in fiscal year 2019 and their improvement over fiscal year 2017. CMS has not publically released the minimum and maximum multipliers for FY 2021 as of publication, though we expect them to do so at a later date. For reference, FY 2020 incentive payment multipliers ranged from 98.03% (almost none of the withheld funds will be returned) to 103.12% (more than the 2% withheld will be returned). The multipliers will be reset on October 1, 2021, based on data from FY 2018 (baseline year) and FY 2020 (performance year).
SNF Quality Reporting Program (QRP)
Effective October 1, 2018, SNFs that failed to submit required quality data to CMS under the SNF Quality Reporting Program 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 met the requirements and avoided payment reductions. However, facilities that did not respond to CMS “Review and Correct” reports may not have qualified for the QRP, and as a result, will have their rates reduced by 2% through September 30, 2021.
COVID-19 Provider Relief Funding
Throughout the ongoing COVID-19 pandemic, the Department of Health & Human Services (HHS) and various states have assisted healthcare providers with funding to support the additional expenses and lost revenue incurred due to the virus. Various terms and conditions governing how the funds can be used have been attached to these payments and guidance from HHS has been changing on a weekly basis. We invite you to visit our website to view the articles we have published regarding the provider relief funding, as well as the Payroll Protection Program and many other COVID-19 topics of interest.
IMPORTANT – Updated CMS Medicare Bad Debt Requirements
As a reminder, last year, CMS clarified its Medicare coinsurance bad debt policy. Effective for cost reporting periods beginning on or after October 1, 2019 (i.e., 2020 cost reports for calendar year providers), providers must write off unpaid coinsurance amounts for Medicare-Medicaid (dual eligible) crossover claims to a bad debt expense account in their general ledgers. The dual-eligible coinsurance amounts can no longer be written off to a contractual allowance account. CMS indicated this was a long-standing requirement in the Provider Reimbursement Manual.
While the overall reimbursement for dual-eligible coinsurance bad debts remains at 65%, providers may need to adjust how amounts are written off in their general ledgers to ensure continued reimbursement of coinsurance bad debts.
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.