News | Medicare Payment and Reimbursement

Small Medicare payment increases in store for post-acute care

News | Medicare Payment and Reimbursement

Small Medicare payment increases in store for post-acute care

  • CMS will increase SNF payments in FY20 by a net 2.4%.
  • IRF payments will increase by 2.5% and hospices by 2.6%.

The Centers for Medicare & Medicaid Services (CMS) recently issued final rules with FY20 rates for skilled nursing facilities (SNFs), inpatient rehabilitation facilities (IRFs) and hospices.

For SNFs, CMS finalized a net payment increase of 2.4%, or $851 million more than in FY19.

The SNF rule also:

  • Includes more details on the new SNF payment model finalized in last year's rulemaking
  • Projects payment improvements for hospital-based SNFs in FY20 (increases of 12.4% in urban areas and 23.1% in rural areas) 
  • Implements a process for updating ICD-10 codes under the new payment model
  • Adopts two new quality measures to assess whether certain health information is provided by an SNF at the time of transfer or discharge.

CMS dropped its proposal to collect SNF Quality Reporting Program data on all patients, regardless of payer, according to a fact sheet.

IRF payment details include case-mix changes

A final rule for the FY20 IRF Prospective Payment System provided a net payment increase of 2.5%, or $210 million.

The IRF rule also:

  • Includes more details on the new IRF case-mix system that takes effect Oct. 1
  • Finalizes revisions to the case-mix groups based on two years of data (FY17 and FY18) from the quality-indicator data items
  • Updates the relative weights and average-length-of-stay values associated with the revised case-mix groups beginning Oct. 1, 2019
  • Modifies the IRF Quality Reporting Program
  • Adopts new patient assessment elements, including several regarding social determinants of health

CMS amended its regulations to clarify that the IRF determines whether a physician qualifies as a rehabilitation physician (that is, a licensed physician with specialized training and experience in inpatient rehabilitation), according to a fact sheet.

CMS also finalized two new quality measures to implement the final requirements of the Improving Medicare Post-Acute Transformation (IMPACT) Act: Transfer of Health Information (TOH) from IRF to Another Provider, and TOH from IRF to the Patient.

Hospice rule includes changes to base rates

A separate final rule increased by 2.6% Medicare payment rates for hospices for FY20. The increase amounts to a net $520 million.

The hospice payment system’s statutory aggregate cap, which limits the overall payments per patient made to a hospice annually, will be set for FY20 at $29,964.78. That amount is 2.6% higher than the FY19 cap of $29,205.44.

Other details of the hospice rule include:

  • Rebasing the rates hospices are paid for certain types of care
  • Modifying the beneficiary hospice election statement to reduce the time spent on obtaining information needed for treatment decisions and accurate claims submissions
  • Finalizing the use of FY20 pre-floor, pre-reclassified hospital wage index data for the FY20 hospice wage index, rather than using FY19 data

CMS said it plans to issue “soon” a proposed hospice assessment tool to provide real-time patient assessments that can help hospice staff better understand patients’ end-of-life care needs, provide hospices with important information to address patient and family needs, ensure delivery of high-quality care and minimize the burden on providers, according to a fact sheet.

About the Authors

Rich Daly, HFMA senior writer/editor

is based in the Washington, D.C., office. Follow Rich on Twitter: @rdalyhealthcare

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