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FY 2021 Proposed Changes for SNFs

May 07, 2020
Documentation, Billing, & Coding By Terry Raser, Senior Consultant

On April 15, 2020, the Centers for Medicare & Medicaid Services (CMS) published the Prospective Payment System (PPS) and Consolidated Billing (CB) Proposed Rule for FY 2021 for Skilled Nursing Facilities (SNFs). The comment period ends on June 9, 2020.

 

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Some of the proposed rule changes include:

  • Change to the Case-Mix Classification code Mapping for SNF PPS
  • Recent Revisions in Office of Management and Budget (OMB) statistical area delineations
  • Proposal changes for SNF Value-Based Purchasing (VBP) Program (technical updates only)

There are no changes or updates to the SNF Quality Reporting Program (SNF QRP)

 CMS is no longer publishing the Wage Index for urban and rural areas in the Federal Register. This information can now be found on the SNF PPS Wage Index home page.

The proposed rule estimates an increase of $784 million in aggregate payments to SNFs during FY2021 and an estimated reduction of $199.54 million in aggregate payments to SNFs for the SNF VBP.

CMS continues to work with many organizations to explore opportunities in interoperable health information technology and nationwide health information exchange across the Post-Acute Care continuum. This includes working with the Office of the National Coordinator for Health Information Technology (ONC) and the establishment of the Post-Acute Care Interoperability Workgroup (PACIO) to develop standards that support the exchange and reuse of patient data using the patient assessment instruments: SNF (MDS), Inpatient Rehabilitation Facilities (IRF-PAI), Long-Term Care Hospitals (LCDS), and Home Care (OASIS).

SNF Market Basket Update

The estimated market basket index, based on the 2014 growth rate for FY 2021, is 2.7 percent before applying the multifactor productivity (MFP) forecast error adjustment. CMS is proposing the 2.7 percent market basket increase, less the 0.4 percentage point MFP adjustment, resulting in the FY 2021 SNF PPS unadjusted federal per diem rates to be 2.3 percent.

The April 15, 2020 proposed rule and all of the details can be found in the Federal Register.

FY 2021 SNF PPS Wage Index Core-Based Statistical Areas (CBSAS)

On September 14, 2018, CMS published the Office of Management and Budget (OMB) Bulletin No. 18-04 which discussed the revised delineations of metropolitan statistical areas, micropolitan statistical areas, combined statistical areas, and guidance on uses of the delineations of these areas.

The bulletin was not based on new census data but did include changes to the OMB statistical area delineations, including changes to some new core-based statistical areas (CBSAs), urban counties that became rural and rural counties that became urban and existing CBSAs that would be split apart. Beginning FY 2021, CMS is proposing to adopt the updates announced in the OMB bulletin No. 18-04. Included in the proposal is a 1-year transition policy that will apply a 5 percent cap in FY 2021 on any decrease in a hospital’s wage index compared to the prior FY 2020.

Unadjusted Federal Per Diem Rates for FY 2021

In the FY 2019 SNF PPS final rule, CMS classified SNF residents under the SNF PPS by implementing a new case-mix classification system—the Patient-Driven Payment Model (PDPM)—that went into effect on October 1, 2019. The PDPM’s unadjusted federal per diem rates were divided into six components. Five are case-mix adjusted and one is non-case-mix adjusted. CMS uses the SNF market basket to adjust the federal rate of each PDPM component to reflect changes in average prices from FY 2020 to FY 2021. Tables 1 and 2 show the updated unadjusted federal rates for FY 2021. These are prior to adjustments made for case-mix. Tables 3 and 4 show the current FY 2020 unadjusted federal rates for comparison.

 

Table 1-FY 2021 Unadjusted Federal Rate Per Diem-Urban

Rate Component PT OT SLP Nursing NTA Non-Case-Mix
Per Diem Amount $62.04 $57.75 $23.16 $108.16 $81.60 $96.85

Table 2-FY 2021 Unadjusted Federal Rate Per Diem-Rural

Rate Component PT OT SLP Nursing NTA Non-Case-Mix
Per Diem Amount $70.72 $64.95 $29.17 $103.34 $77.96 $98.63

Table 3-FY 2020 Unadjusted Federal Rate Per Diem-Urban

Rate Component PT OT SLP Nursing NTA Non-Case-Mix
Per Diem Amount $60.75 $56.55 $22.68 $105.92 $79.91 $94.84

Table 4-FY 2020 Unadjusted Federal Rate Per Diem-Rural

Rate Component PT OT SLP Nursing NTA Non-Case-Mix
Per Diem Amount $69.25 $63.60 $28.57 $101.20 $76.34 $96.59

Case-Mix Adjustment

The previous Resource Utilization Group, version IV (RUG-IV) Medicare Payment System relied heavily on therapy days and minutes provided to a Medicare beneficiary. The PDPM system is based on resident characteristics and comorbidities, decreasing administrative burden and making reimbursement more accurate by eliminating incentives.

In the future, after reviewing FY 2020 data, CMS may consider adjustments to the case-mix weights in an effort to keep the system budget neutral and recalibrate adjustments as needed. Per this and prior rules, the MDS should be completed in compliance with the instructions in the Resident Assessment Instrument (RAI) manual to be considered valid for use in determining payment. Tables 5 and 6, in the proposed rule, reflect the proposed PDPM case-mix adjusted rates and case-mix indexes for FY 2021. As a reminder, CMS is proposing to adopt the revised OMB delineations identified in OMB Bulletin No. 18-04 which may change a facility’s identification of being urban or rural. If a facility’s urban core-based statistical area (CBSA) changes from urban to rural or vice versa, the rates will change per each PDPM case-mix classification. Per this proposal, 34 counties that are currently noted as part of the urban CBSA are being considered for re-identification as rural counties beginning FY 2021. The 34 counties can be found in Table 11 in the proposed rule.

Per this proposal, 47 counties currently noted as part of the rural CBSA are being considered for re-identification as urban counties beginning FY 2021.  The 47 counties can be found in Table 12 in the proposed rule.

Due to the likelihood of facilities having a decrease in their wage index, CMS is proposing a 5 percent cap for FY 2021 and no cap for FY 2022 with this 2-year phase in transition.

 

Table 5

Table 6

Wage Index Adjustment

Since the implementation of the SNF PPS, CMS has used hospital inpatient data to develop the wage index for SNFs. To prevent provider burden, CMS proposes to continue this practice for FY 2021 since relying strictly on SNF data means cost report forms would need to be more specific than they are now, and the burden for record keeping for SNFs would increase. While CMS does believe it would be beneficial to use only SNF data, it is not feasible at this time. In light of the current COVID-19 pandemic, it is likely that the majority of SNFs would agree.

For FY 2021, CMS is proposing to apply an adjustment to fulfill the budget neutral requirement. The budget neutral factor for FY 2021 is 0.9986 percent. CMS would meet the budget neutral requirement by multiplying the unadjusted federal rate of each PDPM component by the budget neutral factor. The wage adjustment factor used in the calculation will be the labor share rate, multiplied by the wage index, plus the non-labor share rate.

SNF Value-Based Purchasing Program (VBP)

Section 1888(e) of the Social Security Act required the Secretary to reduce the adjusted federal per diem rate by 2 percentage points and to adjust the resulting rate for SNFs by the value-based incentive payment program. The payment is based on the SNF’s performance score for the fiscal year under the VBP program. CMS is not proposing updates to the SNF VBP scoring methodology in this proposed rule. However, in FY 2020, they changed the SNF Potentially Preventable Readmission Measure (SNFPPR) name to Skilled Nursing Facility Potentially Preventable Readmissions after Hospital Discharge. Due to this name change, CMS is also proposing a measure definition change for the “SNF Readmission Measure.” The performance period and baseline period for the SNF VBP program will not change. The following example was given in the proposed rule: the FY 2023 performance period will be FY 2021, and the baseline period will be FY 2019.

Update to the Phase One Review and Correction Deadline

As stated above for SNF VBP, there are two report periods—the performance period and the baseline period. Currently, the performance period's quality measure quarterly report is released in June and facilities have 30 days to look over the Review and Correction report for any inaccuracies. The baseline period's quality measure report is released in December and facilities have until March 31st to make changes. This proposed rule aligns the Review and Correction period for both the performance period and the baseline period reports by giving facilities a 30-day deadline to review and correct both.

Updates to the PDPM ICD-10 Mappings

CMS implemented PDPM on October 1, 2019.  At that time, CMS put into effect the International Classification of Diseases, Tenth Revision, Clinical Modification (ICD-10-CM) mapping on the PDPM website. All five components of PDPM rely on diagnoses to classify a resident into a category for reimbursement. The components are physical therapy (PT), occupational therapy (OT), speech language pathology (SLP), Nursing and Non-therapy Ancillary (NTA). ICD-10 codes are reviewed every June. Addition and removal of codes are implemented every October. In this proposed rule, CMS suggests several changes to the PDPM ICD-10 code mapping and lists. The proposed changes can be viewed on the SNF PDPM website.

Proposed ICD-10-CM Code Mapping and Lists

CMS is also proposing several changes to the PDPM ICD-10 code mapping and lists. The proposed changes can be found on the Federal Register.  

Under PDPM, the primary SNF diagnosis classifies a resident into a clinical category for PT, OT and SLP. Some of the classifications rely on whether the resident had a major procedure during their prior hospital stay that is captured at J2100 through J5000 on the MDS. The current FY 2020 ICD-10 mapping does not include the potential that if a resident had surgery that would affect the clinical category and the resident would qualify. Below are those ICD-10 codes and the proposed addition to the potential category that may be added to qualify the resident.

 

Disease ICD-10 Codes Associated Section J of the MDS Proposed Changes
Cancer that could require surgery C15 through C26.9, C33 through C39.9, C40.01 through C40.02, C40.11 through C40.12, C40.21 through C40.22, C40.31 through C40.32, C40.81 through C40.82, C40.91 through C41.9, C45.0 through C45.9, C46.3 through C46.9, C47.0, C47.11 through C47.12, C47.21 through C47.22, C47.3 through C48.8, C49.0, C49.11 through C49.12, C49.21 through C49.A9, C50.011 through C50.012, C50.021 through C50.022, C50.111 through C50.112, C50.121 through C50.122, C50.211 through C50.212, C50.221 through C50.222, C50.311 through C50.312, C50.321 through C50.322, C50.411 through C50.412, C50.421 through C50.422, C50.511 through C50.512, C50.521 through C50.522, C50.611 through C50.612, C50.621 through C50.622, C50.811 through C50.812, C50.821 through C50.822, C50.911 through C50.912, C50.921 through C50.922, C51.0 through C61, C62.01 through C62.02, C62.11 through C62.12, C62.91 through C68.9, C70.0 through C76.3, C76.41 through C76.42, C76.51 through C80.1, D37.09 through D39.9, D3A.00 through D3A.8, D40.0, D40.11 through D44.9, D48.3 through D48.4, D48.61 through D48.7, D49.0 through D49.7 NA Add: "May be Eligible for the Non-Orthopedic Surgery Category" or "May be Eligible for One of the Two Orthopedic Surgery Categories"
Cancer C15.3 through C26.9 J2910 Gastrointestinal Tract “May be Eligible for the Non-Orthopedic Surgery Category”
Cancer C33 through C39.9 J2710 Respiratory System “May be Eligible for the Non-Orthopedic Surgery Category”
Cancer C40.01 through C41.9 (with the exception of C410 Malignant neoplasm of bones of skull and face) Surgical Option Added  “May be Eligible for the Non-Orthopedic Surgery Category”
Cancer

C46.3 through C46.9 Kaposi's sarcoma

Surgical Option Added “May be Eligible for the Non-Orthopedic Surgery Category”
Neoplasm D37.09 through D39.9, D3A.00 through D3A.8, D40.0, D40.11 through D44.9, D48.3 through D48.4, D48.61 through D48.7, and D49.0 through D49.7 Surgical Option Added “May be Eligible for the Non-Orthopedic Surgery Category”

“Glucose-6-phosphate dehydrogenase (G6PD) deficiency without anemia

D75.A NA "Medical Management"
Fractures S32.031D, S32.19XD, S82.001D, and S82.002D through S82.002J Surgical Option Added “Non-Surgical Orthopedic”, with the surgical option of “May be Eligible for One of the Two Orthopedic Surgery Categories”
Fractures

S82.009A, S82.013A, S82.016A, S82.023A, S82.026A, S82.033A, S82.036A, and S82.099A

NA Return to Provider
Skeletal M48.00 through M48.08 spinal stenosis codes Surgical Option Added “May be Eligible for One of the Two Orthopedic Surgery Categories”
Surgery Aftercare Codes Z48.21, Z48.22, Z48.23, Z48.24, Z48.280, Z48,.288, Z48.290, Z48.298, Z48.3, Z48.811, Z48.812, Z48.813, Z48.815, Z48.816, and Z48.29, Surgical Option Added “May be Eligible for the Non-Orthopedic Surgery Category”
NTA Implant Device or Graft

 T82.310A through T85.89XA 

NA

Codes Changed to (D) 7th character codes for SNFs.

 

 

For more information on these proposed changes, contact Terry Raser at 484-365-2680 or email TRaser@LW-Consult.com.

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