OverviewCMS released three final payment rules this evening for Skilled Nursing Facilities, Inpatient Rehabiliation Facilities and Inpatient Psychiatric Facilities. The only rule containing major policy shifts was that for SNFs which had been nursed along for years and was entirely expected, welcome even. The other two for IRFs and IPFs suggest no major policy initiatives in the next year or so. |
Skilled Nursing Facilities. The payment update for Skilled Nursing Facilities is not eventful. The group was subject to a Congressional override of 2.4 percent as a budgetary offset for other priorities. Were it not for Congress’s action the update would have been 2 percent. That, apparently, is how Congress saves money.
Total payments to SNFs are expected to increase $830 million in FY 2019 ($680 million absent Congressional action)
The real change for SNFs is the departure of the RUG-IV case-mix system that has dictated Medicare nursing home payments for years. In its place is the Patient-driven Payment Model, effective in FY 2020. The PDPM de-emphasizes therapy visits as a payment factor – something long sought by policy makers – in favor of nursing care. The upshot of the change is the SNF’s that have “pushed the therapy,” as they say in the industry, to improve margins will now be compensated for caring for sicker patients.
The change is budget neutral. For-profit operators who traditionally have relied more on therapy as a payment factor will see a decline in payments of just under 1 percent while non-profit and government operators will see increases.
CMS was able to finalize the PDPM in more or less the form in which it was proposed. That smooth path was a function of the long ramp they used to build consensus in the industry and the undeniable reality that SNFs as a preferred treatment venue are in secular decline.
Inpatient Rehabilitation Facilities. The annual payment update is largely as expected with a final discharge rate of $16,021.00, an increase of about 1.16 percent. Total Medicare payments to IRFs are expected to increase $105 million.
CMS has not made IRFs a policy priority as it has SNFs and Home Health so there were few new initiatives other than certain paperwork burden reductions.
Inpatient Psychiatric Facilities. Like IRFs, the FY 2019 Medicare payment update offers little in the way of policy signals. The per diem base rate is expected to increase from $771.35 to $782.78 or about $50 million overall.
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Emily Evans
Managing Director
Health Policy
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