The final rules include details of quality reporting programs for post-acute care providers, which will continue to roll out over the next two years.

Aug. 1—Newly finalized FY17 Medicare rates include small increases for inpatient rehabilitation facilities (IRFs), skilled nursing facilities (SNFs), and hospice providers.

Under Medicare, IRFs garnered a 1.9 percent net payment increase, or $145 million more than in FY16, according to the final rule. That was higher than the estimated 1.45 percent increase factor proposed in April.

The IRF increase is based on a 2.7 percent market-basket update that was reduced by 0.3 percent for productivity and by 0.75 percent as required by the Affordable Care Act (ACA). The rate also was increased by 0.3 percent for high-cost outlier cases.

The Medicare rate for SNFs increased by a net 2.4 percent, or $920 million more than those facilities received in FY16, according to the final rule. That rate stemmed from a 2.7 percent market-basket update and a 0.3 percent productivity cut required by the ACA. The rate increase was larger than the 2.1 percent, or $800 million, bump that Medicare proposed for SNFs in April.

In FY17, hospice payments will increase by 2.1 percent, which is $350 million more than in FY16, according to a final rule. That rate stemmed from a 2.7 percent market-basket update reduced by 0.3 percent for productivity and 0.3 percent as required by the ACA. The hospice rate also is slightly larger than the 2.0 percent, or $330 million, increase proposed in April.

The hospice cap for FY17 likewise will be updated by 2.1 percent.

Credit-rating firm Moody’s Investor Service described even the lower increases proposed in the spring as credit-positive for most subsectors, although it noted that the increases would have a slightly different impact on the reimbursement rates paid to each.

Data Release

The final rules also advanced the Centers for Medicare & Medicaid Services’ (CMS’s) plans to require standardized quality-data reporting from post-acute care providers.

“This data will be used by CMS to compare quality across these segments in order to better coordinate and reduce the cost of care, possibly by changing to a reimbursement model that is based more on the level of care provided and less on the specific care setting,” the Moody’s report stated.

CMS maintained plans to begin publicly reporting IRF quality data in the fall, according to a fact sheet. The agency finalized four measures for public display in CY17, pending final data analysis, and adopted procedures associated with public reporting, including the review and correction of data and confidential feedback reports for providers.

The Improving Medicare Post-Acute Care Transformation Act of 2014 (IMPACT Act) required IRFs to report data on certain measures and that those measures be aligned with others for long-term care hospitals, SNFs, and home health agencies. The final rule adopted several measures, and IRFs that fail to submit the required quality data to CMS face an ongoing reduction to their annual increase factor.

The SNF rule also adopted three measures to meet the requirements of the IMPACT Act. SNFs that fail to submit the required quality data to CMS also face a two-percentage-point reduction to the annual market-basket percentage update factor beginning in FY18, according to a fact sheet.

CMS said it is still finalizing policies and procedures associated with the eventual public reporting of SNF data.

Although some provider advocates have worried about whether post-acute care providers have the digital infrastructure to meet the new quality reporting requirements, Moody’s analysts saw no problem for some.

“We believe that the rated SNF operators have invested in the systems that will allow them to meet the reporting requirements and maintain receipt of the full payment update,” the Moody’s report stated.

Similarly, the final rule for hospice payment finalizes new quality measures for the hospice quality reporting program (QRP). Since FY14, hospices that do not meet quality reporting requirements have had a two-percentage-point reduction in their payment rates. The hospice QRP finalized two new quality measures for FY17: One that assesses hospice staff visits to patients and caregivers in the last three and seven days of life, and a second that assesses the percentage of hospice patients who received care processes consistent with guidelines.

Public reporting on hospice quality measures through a website is expected to begin in 2017, according to a CMS fact sheet. The agency began posting hospice demographic data in June.


The Protecting Access to Medicare Act of 2014 (PAMA) authorized creation of a SNF value-based purchasing (VBP) program that will link SNF payments to performance measures starting in FY19. The final rule took several steps to implement the VBP program, including establishing performance standards; establishing baseline and performance periods; adopting a performance scoring methodology; and providing for confidential feedback reports to SNFs.

The final rule also designated the SNF 30-day potentially preventable readmission measure to serve as the all-cause, all-condition risk-adjusted potentially preventable hospital readmission measure, as required by law. That measure assesses SNFs’ rates of unplanned, potentially preventable hospital readmissions for SNF patients within 30 days of discharge from a prior admission to a hospital. 

Additional Steps

CMS also is considering enhancing an existing data collection tool, known as the hospice item set, to better align it with tools for other post-acute care settings. The changes aim to replace the current chart abstraction with a comprehensive patient assessment instrument.

“By integrating a core standard data set into a comprehensive assessment system, hospices can use such a data set as the foundation for valid and reliable information for patient assessment, care planning, and service delivery,” CMS stated in the fact sheet on the final rule for hospice payment. “This will enable greater accuracy in quality reporting; decrease provider burden; help surveyors ensure hospices are meeting Conditions of Participation and providing high quality patient care; and, in the future, enable payment determinations.”

The final rules take effect Oct. 1.

Rich Daly is a senior writer/editor in HFMA’s Washington, D.C. office. Follow Rich on Twitter: @rdalyhealthcare

Publication Date: Monday, August 01, 2016