CMS Proposes Medicare Rate Increase for SNFs

The Centers for Medicare & Medicaid Services (“CMS”) released a proposed rule on Monday, May 1, 2013 to rebase and revise the skilled nursing facility market basket index for fiscal year 2014. CMS estimates this enhancement would increase payment to skilled nursing facilities by about $500 million in comparison to 2013 levels.

CMS has proposed a 2.3% market basket increase for fiscal year 2014, but with “forecast error correction” and other adjustments, the payment to SNFs would increase by 1.4%. The current market basket reflects data from fiscal year 2004 and the proposed rule suggests using data from fiscal year 2010.

The proposed revisions also include adding five new cost categories to the market basket index, which would bring the total to 29 cost categories. These new categories include medical instruments and supplies, apparel, machinery and equipment, administrative and facilities support services, and financial services.

CMS released a fact sheet on May 1 summarizing the proposed rule and noted that “[c]urrently, the number of days for each therapy discipline reported on the [Minimum Data Set (“MDS”)] is summed without regard to the number of separate and unique days per week on which the patient receives therapy services across all rehabilitation disciplines,” which results in some patients receiving higher SNF payments when they do not actually meet qualifying conditions for that Resource Utilization Group. The proposed MDS modification is intended to ensure that SNFs are paid accurately by adding an item to the MDS “to record the number of distinct calendar days of therapy provided by all the rehabilitation disciplines to a beneficiary over the seven-day look-back period.”

The rule was published in the Federal Register on May 6, and CMS will accept public comments until July 1.

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