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April 17, 2020
Health Law Weekly

CMS Proposes $784 Million Increase in SNF Medicare Payments for FY 2021

  • April 17, 2020

Skilled nursing facilities (SNFs) would see a $784 million (2.3%) increase in Medicare reimbursement in fiscal year (FY) 2021 under a proposed rule (85 Fed. Reg. 20914) the Centers for Medicare & Medicaid Services (CMS) issued April 10.

The estimate reflects a 2.7% market basket update less a 0.4 percentage point reduction for a multifactor productivity adjustment, according to a CMS fact sheet.

“While CMS is focused on helping the healthcare system respond to the COVID-19 pandemic, we are releasing the annual Medicare payment rules as required by law to ensure providers are informed on the 2021 payment updates,” the agency said.

In addition to the annual payment update, the rule also includes proposals “that reduce burden and may help providers in the COVID-19 response,” according to CMS.

Among other things, CMS is proposing to adopt the most recent Office of Management and Budget statistical area delineations and apply a 5% cap on wage index decreases from FY 2020 to FY 2021.

In the FY 2019 final rule, CMS adopted a new case-mix model, which went into effect October 1, 2019, for the SNF Prospective Payment System. The Patient Driven Payment Model (PDPM) focuses on clinically relevant factors, rather than volume-based services for determining Medicare payment. PDPM uses ICD-10 codes to classify SNF patients into certain payment groups.

Responding to stakeholder feedback, the proposed rule includes changes to the ICD-10 Code mappings that would be effective in FY 2021, CMS said.  

Comments are due June 9.

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