The Centers for Medicare & Medicaid Services’ decision to hold off adjusting Patient Driven Payment Model payment rates could be the agency’s way of “playing their cards close to their chest” as it waits to see COVID-19’s full impact on skilled nursing facilities, according to one expert.
The agency last week revealed that its decision on the potential recalibration to PDPM’s parity adjustment will be included no sooner than next year’s (FY 2023) SNF PPS proposed rule. This comes after receiving hundreds of comments from industry stakeholders and providers on the matter.
Providers decidedly told the agency more time is needed before it would implement any adjustments — presumably cuts — to the model. Providers also disputed CMS’s calculations about potential overpayments.
CMS originally announced with the FY 2022 SNF PPS proposed rule in April that it wants to recalibrate PDPM’s parity adjustment; it had found that aggregate spending under the new model increased unintentionally by 5.3%, or $1.7 billion, when compared to what it would have paid SNFs under the old Resource Utilization Group model. PDPM is supposed to be budget neutral.
“We believe it is imperative that we act in a well-considered but expedient manner once excess payments are identified,” the agency wrote in the updated FY 2022 SNF PPS proposed rule released Thursday. “We will continue to monitor all available data and take that into consideration, in combination with the feedback and recommendations received, for developing the FY 2023 SNF PPS proposed rule.”
CMS’ decision to hold off was an intelligent move, said Cynthia Morton, executive vice president of the National Association for the Support of Long Term Care.
“This is smart because it’s possible that the Delta variant could have a significant impact in the coming months and so CMS may want to take that impact into account as it decides how it will handle a parity adjustment in the near future,” she told McKnight’s Long-Term Care News on Friday.
The agency also announced that the disappointing 1.3% PPS pay hike it proposed in April is being finalized at 1.2%, good for an infusion of an additional $410 million in Medicare Part A payments in fiscal 2022.
The 1.2% pay increase is derived from an initial 2.7% proposed pay raise, trimmed by a forecast error correction of 0.8% and a productivity adjustment of 0.7%.
CMS added that market basket impact figures do not incorporate the SNF VBP reductions that are estimated to be $184.25 million in FY 2022.
Morton explained that “while it’s not good news, from a clarity and transparency standpoint,” she was pleased CMS stated the 1.2% payment update does not take into account the SNF VBP program impact.
“The SNF sector has been so detrimentally impacted from COVID, we need each payment increase that is possible to [ensure] providers [are] able to provide quality services to their residents,” she stressed.
