CMS Issues Minor Correction to SNF PPS Rates

Posted on October 16, 2018 by Jeff Bostic

As we have previously reported, the updated Skilled Nursing Facility (SNF) PPS rates took effect for the year that began on Oct. 1. Since our last article, the Centers for Medicare & Medicaid Services (CMS) issued a correction to the rates that impacted the wage index for some regions. The only Minnesota regions affected by this correction are Duluth and Rochester, and both by only pennies a day. 

We have calculated the base SNF rates for all regions of Minnesota with the corrections, and members can review those rates via our Medicare Rates & Reimbursement page. 

First Year of Value-Based Purchasing

Oct. 1 also starts the first year of implementation of Value-Based Purchasing (VBP). Under VBP, rates are adjusted based on SNF-specific hospital readmission rates. The hospital readmission data used for the first year of VBP was from calendar year 2017, and individual facility results are available on the FY 2019 SNF VBP Program Performance report that facilities can download from the CASPER system. 

CMS developed the formula based on how a SNF’s readmission rates compared to the national average. Each SNF’s rates are adjusted by an incentive payment multiplier, which is designed to capture the two financial aspects of VBP in one number - the 2 percent withheld from all SNF payments and the amount paid back to the specific SNF based on their readmission performance.  

The incentive payment multiplier, which is multiplied by each of the base RUG rates to determine each individual SNF’s rates, varies from 0.98 to 1.023. The lowest performing SNFs receive a 2 percent cut compared to the base rates while the best performers receive an increase of 2.3 percent.