Nursing homes may see a $320 million cut to their Medicare Part A payments in fiscal 2023 under a proposed rule the Centers for Medicare and Medicaid Services issued Monday.
The proposed rule also seeks feedback on how to establish minimum staffing requirements for nursing homes, as directed by President Joe Biden, and includes a plan to add three measures to the Skilled Nursing Facility Value-Based Purchasing Program.
The reimbursement decrease is the result of the transition to the Patient Driven Payment Model in 2019. The model has to be budget neutral, but a CMS analysis uncovered an unintended 5% increase in payments for fiscal 2020, which means the agency has to cut payments for next year, the draft regulation says.
A similar issue occurred in 2011, the last time CMS switched up the nursing home payment system. CMS reduced rates by 12.5% in fiscal 2012 after seeing the difference between the historical data used to create the payment system and the actual utilization data under the new scheme.
But CMS decided not to recalibrate the payment system to make it budget neutral in fiscal 2022, and instead asked for comments on how to account for the effects of COVID-19 without compromising the accuracy of the pay adjustment.
CMS's fiscal 2023 proposal takes that feedback into account by excluding patients whose stays were connected to a COVID-19 public health emergency waiver or who were diagnosed with the novel coronavirus. The agency also proposes a one-year control period based on months with low COVID-19 prevalences from 2020 and 2021.
"Any reduction in government resources could deepen the economic crisis currently within the long term and post-acute care sector. Many nursing homes already face imminent closure," Mark Parkinson, president and CEO of the American Health Care Association, said in a news release. "We look forward to submitting constructive comments to CMS on this proposed rule."
To advance Biden's nursing home plan, CMS asks for comments on the effects of minimum staffing requirements. CMS will also conduct a study on optimal nursing home staffing levels. The agency plans to issue proposed rules on a minimum staffing requirement for nursing homes within the year.
"The COVID-19 pandemic has highlighted serious problems at some of the nation's nursing homes that have persisted for too long. And we have seen the tragic impact that inadequate staff resources can have on residents and staff," CMS Administrator Chiquita Brooks-LaSure said in a news release.
The AHCA/National Center for Assisted Living said earlier this year that increasing staffing minimums would not help residents because nursing homes are having such a hard time hiring in the first place.
CMS also aims to change to the skilled nursing facility value-based purchasing program, which rewards nursing homes with incentive payments based on quality. The program currently uses one measure—hospital readmissions—to assess performance, but CMS can add more starting Oct. 1, 2023.
CMS proposes adding a measure on healthcare-associated infections requiring hospitalizations and another on total nursing hours per resident per day, starting in fiscal 2026. CMS suggests adopting a measure on successful discharges to the community starting in fiscal 2027. CMS also is considering several adjustments to value-based purchasing scoring methods to account for new measures.
The agency also seeks comment on adding a nursing home staff turnover measure to the value-based program in the future.
Additionally, CMS wants to discount the readmissions measure for fiscal 2023 because of the COVID-19 public health emergency. CMS proposes a special scoring policy under which the agency will assign all participating facilities a zero. CMS will reduce the otherwise applicable federal daily rate for each nursing home by 2% and award facilities 60% of the withhold, leaving providers with a 1.2% payback.
CMS also proposes updates to the nursing home quality reporting program, which pays nursing homes for reporting quality measurement data. CMS wants nursing homes to submit data on how many of their healthcare workers have gotten influenza vaccines. Flu vaccination rates are typically lower in nursing homes than in other healthcare settings, according to CMS.
CMS wants to revise the compliance date to Oct. 1, 2023, for some quality reporting requirements, including measures that detect whether medication information is given to caregivers when residents are discharged, along with some standardized patient assessment data elements. In 2020, these requirements were delayed until two years after the end of the COVID-19 public health emergency, but CMS argues it should collect the information sooner.
The agency seeks feedback on whether it should include a functional outcome measure for residents and a COVID-19 vaccine coverage measure for residents in the reporting program in the future.
CMS asks for comments on several other matters, including on whether to incorporate health equity adjustments and outcomes into nursing home payments.
Comments on the rule are due by June 10.