Medicare Program; Prospective Payment System and Consolidated Billing for Skilled Nursing Facilities (SNFs) for FY 2016, SNF Value-Based Purchasing Program, SNF Quality Reporting Program, and Staffing Data Collection, 22043-22086 [2015-08944]
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Vol. 80
Monday,
No. 75
April 20, 2015
Part IV
Department of Health and Human Services
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Centers for Medicare & Medicaid Services
42 CFR Part 483
Medicare Program; Prospective Payment System and Consolidated Billing
for Skilled Nursing Facilities (SNFs) for FY 2016, SNF Value-Based
Purchasing Program, SNF Quality Reporting Program, and Staffing Data
Collection; Proposed Rule
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DEPARTMENT OF HEALTH AND
HUMAN SERVICES
Centers for Medicare & Medicaid
Services
42 CFR Part 483
[CMS–1622–P]
RIN 0938–AS44
Medicare Program; Prospective
Payment System and Consolidated
Billing for Skilled Nursing Facilities
(SNFs) for FY 2016, SNF Value-Based
Purchasing Program, SNF Quality
Reporting Program, and Staffing Data
Collection
Centers for Medicare &
Medicaid Services (CMS), HHS.
ACTION: Proposed rule.
AGENCY:
This proposed rule would
update the payment rates used under
the prospective payment system (PPS)
for skilled nursing facilities (SNFs) for
fiscal year (FY) 2016. In addition, it
includes a proposal to specify a SNF allcause all-condition hospital readmission
measure, as well as a proposal to adopt
that measure for a new SNF ValueBased Purchasing (VBP) Program and a
discussion of SNF VBP Program policies
we are considering for future
rulemaking to promote higher quality
and more efficient health care for
Medicare beneficiaries. Additionally,
this proposed rule proposes to
implement a new quality reporting
program for SNFs as specified in the
Improving Medicare Post-Acute Care
Transformation Act of 2014 (IMPACT
Act). It also would amend the
requirements that a long-term care (LTC)
facility must meet to qualify to
participate as a skilled nursing facility
(SNF) in the Medicare program, or a
nursing facility (NF) in the Medicaid
program. These requirements
implement the provision in the
Affordable Care Act regarding the
submission of staffing information based
on payroll data.
DATES: To be assured consideration,
comments must be received at one of
the addresses provided below, no later
than 5 p.m. on June 19, 2015.
ADDRESSES: In commenting, please refer
to file code CMS–1622–P. Because of
staff and resource limitations, we cannot
accept comments by facsimile (FAX)
transmission.
You may submit comments in one of
four ways (please choose only one of the
ways listed):
1. Electronically. You may submit
electronic comments on this regulation
to https://www.regulations.gov. Within
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SUMMARY:
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the search bar, enter the Regulation
Identifier Number associated with this
regulation, 0938–AS44, and then click
on the ‘‘Comment Now’’ box
2. By regular mail. You may mail
written comments to the following
address ONLY: Centers for Medicare &
Medicaid Services, Department of
Health and Human Services, Attention:
CMS–1622–P, P.O. Box 8016, Baltimore,
MD 21244–8016.
Please allow sufficient time for mailed
comments to be received before the
close of the comment period.
3. By express or overnight mail. You
may send written comments to the
following address ONLY: Centers for
Medicare & Medicaid Services,
Department of Health and Human
Services, Attention: CMS–1622–P, Mail
Stop C4–26–05, 7500 Security
Boulevard, Baltimore, MD 21244–1850.
4. By hand or courier. If you prefer,
you may deliver (by hand or courier)
your written comments before the close
of the comment period to either of the
following addresses:
a. Centers for Medicare & Medicaid
Services, Department of Health and
Human Services, Room 445–G, Hubert
H. Humphrey Building, 200
Independence Avenue SW.,
Washington, DC 20201.
(Because access to the interior of the
Hubert H. Humphrey Building is not
readily available to persons without
Federal Government identification,
commenters are encouraged to leave
their comments in the CMS drop slots
located in the main lobby of the
building. A stamp-in clock is available
for persons wishing to retain a proof of
filing by stamping in and retaining an
extra copy of the comments being filed.)
b. Centers for Medicare & Medicaid
Services, Department of Health and
Human Services, 7500 Security
Boulevard, Baltimore, MD 21244–1850.
If you intend to deliver your
comments to the Baltimore address,
please call telephone number (410) 786–
7195 in advance to schedule your
arrival with one of our staff members.
Comments mailed to the addresses
indicated as appropriate for hand or
courier delivery may be delayed and
received after the comment period.
For information on viewing public
comments, see the beginning of the
SUPPLEMENTARY INFORMATION section.
FOR FURTHER INFORMATION CONTACT:
Penny Gershman, (410) 786–6643, for
information related to SNF PPS clinical
issues (excluding any issues raised in
Section V of this proposed rule).
John Kane, (410) 786–0557, for
information related to the development
of the payment rates and case-mix
indexes.
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Kia Sidbury, (410) 786–7816, for
information related to the wage index.
Bill Ullman, (410) 786–5667, for
information related to level of care
determinations, consolidated billing,
and general information.
Shannon Kerr, (410) 786–0666, for
information related to skilled nursing
facility value-based purchasing.
Camillus Ezeike, (410) 786–8614, for
information related to skilled nursing
facility quality reporting.
Lorelei Chapman, (410) 786–9254, for
information related to staffing data
collection.
SUPPLEMENTARY INFORMATION:
Inspection of Public Comments: All
comments received before the close of
the comment period are available for
viewing by the public, including any
personally identifiable or confidential
business information that is included in
a comment. We post all comments
received before the close of the
comment period on the following Web
site as soon as possible after they have
been received: https://
www.regulations.gov. Follow the search
instructions on that Web site to view
public comments.
Comments received timely will also
be available for public inspection as
they are received, generally beginning
approximately 3 weeks after publication
of a document, at the headquarters of
the Centers for Medicare & Medicaid
Services, 7500 Security Boulevard,
Baltimore, Maryland 21244, Monday
through Friday of each week from 8:30
a.m. to 4 p.m. To schedule an
appointment to view public comments,
phone 1–800–743–3951.
Availability of Certain Tables
Exclusively Through the Internet on the
CMS Web Site
As discussed in the FY 2015 SNF PPS
final rule (79 FR 45628), tables setting
forth the Wage Index for Urban Areas
Based on CBSA Labor Market Areas and
the Wage Index Based on CBSA Labor
Market Areas for Rural Areas are no
longer published in the Federal
Register. Instead, these tables are
available exclusively through the
Internet on the CMS Web site. The wage
index tables for this proposed rule can
be accessed on the SNF PPS Wage Index
home page, at https://www.cms.gov/
Medicare/Medicare-Fee-for-ServicePayment/SNFPPS/WageIndex.html.
Readers who experience any problems
accessing any of these online SNF PPS
wage index tables should contact Kia
Sidbury at (410) 786–7816.
To assist readers in referencing
sections contained in this document, we
are providing the following Table of
Contents.
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Table of Contents
I. Executive Summary
A. Purpose
B. Summary of Major Provisions
C. Summary of Cost and Benefits
II. Background on SNF PPS
A. Statutory Basis and Scope
B. Initial Transition for the SNF PPS
C. Required Annual Rate Updates
III. SNF PPS Rate Setting Methodology and
FY 2016 Update
A. Federal Base Rates
B. SNF Market Basket Update
1. SNF Market Basket Index
2. Use of the SNF Market Basket Percentage
3. Forecast Error Adjustment
4. Multifactor Productivity Adjustment
a. Incorporating the Multifactor
Productivity Adjustment Into the Market
Basket Update
5. Market Basket Update Factor for FY
2016
C. Case-Mix Adjustment
D. Wage Index Adjustment
E. Adjusted Rate Computation Example
IV. Additional Aspects of the SNF PPS
A. SNF Level of Care—Administrative
Presumption
B. Consolidated Billing
C. Payment for SNF-Level Swing-Bed
Services
V. Other Issues
A. Skilled Nursing Facility Value-Based
Purchasing Program (SNF VBP)
1. Background
a. Overview
b. SNF VBP Report to Congress
2. Statutory Basis for the SNF VBP Program
3. Skilled Nursing Facility 30-Day AllCause Readmission Measure (SNFRM)
a. Overview
b. Measure Calculation
c. Exclusions
d. Eligible Readmissions
e. Risk Adjustment
f. Measurement Period
g. Stakeholder/MAP Input
h. Feedback Reports to SNFs
4. Performance Standards
a. Background
i. Hospital Value Based Purchasing
Program
ii. Hospital-Acquired Conditions
Reduction Program
iii. Hospital Readmissions Reduction
Program (HRRP)
iv. End-Stage Renal Disease Quality
Incentive Program (ESRD QIP)
b. Measuring Improvement
i. Improvement Points
ii. Measure Rate Increases
iii. Ranking Increases
iv. Performance Score Increases
5. FY 2019 Performance Period and
Baseline Period Considerations
a. Performance Period
b. Baseline Period
6. SNF Performance Scoring
a. Considerations
i. Hospital Value-Based Purchasing
ii. Hospital-Acquired Conditions
Reduction Program
iii. Other Considerations
b. Notification Procedures
c. Exchange Function
7. SNF Value-Based Incentive Payments
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8. SNF VBP Public Reporting
a. SNF-specific Performance Information
b. Aggregate Performance Information
B. Advancing Health Information Exchange
C. Skilled Nursing Facility (SNF) Quality
Reporting Program (QRP)
1. Background and Statutory Authority
2. General Considerations Used for
Selection of Quality Measures for the
SNF QRP
3. Policy for Retaining SNF QRP Measures
for Future Payment Determinations
4. Proposed Process for Adoption of
Changes to SNF QRP Program Measures
5. Proposed New Quality Measures for FY
2018 and Subsequent Payment
Determinations
a. Quality Measure Addressing the Domain
of Skin Integrity and Changes in Skin
Integrity
b. Quality Measure Addressing the Domain
of the Incidence of Major Falls
c. Quality Measure Addressing the Domain
of Functional Status, Cognitive Function,
and Changes in Function and Cognitive
Function
6. SNF QRP Quality Measures and Under
Consideration for Future Years
7. Form, Manner, and Timing of Quality
Data Submission
a. Participation/Timing for New SNFs
b. Data Collection Timelines and
Requirements for FY 2018 Payment
Determination and Subsequent Years
8. SNF QRP Data Completion Thresholds
for FY 2018 Payment Determination and
Subsequent Years
9. SNF QRP Data Validation Requirements
for the FY 2018 Payment Determination
and Subsequent Years
10. SNF QRP Submission Exception and
Extension Requirements for the FY 2018
Payment Determination and Subsequent
Years
11. SNF QRP Reconsideration and Appeals
Procedures for the FY 2018 Payment
Determination and Subsequent Years
12. Public Display of Quality Measure Data
for the SNF QRP
13. Mechanism for Providing Feedback
Reports to SNFs
D. Staffing Data Collection
1. Background and Statutory Authority
2. Consultation on Specifications
3. Provisions of the Proposed Rule
a. Submission Requirements
b. Distinguishing Employee From Agency
and Contract Staff
c. Data Format
d. Submission Schedule
4. Compliance and Enforcement
5. Conclusion
VI. Collection of Information Requirements
VII. Response to Comments
VIII. Economic Analyses
Regulation Text
Acronyms
In addition, because of the many
terms to which we refer by acronym in
this proposed rule, we are listing these
abbreviations and their corresponding
terms in alphabetical order below:
AIDS Acquired Immune Deficiency
Syndrome
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ARD Assessment reference date
BBA Balanced Budget Act of 1997, Pub. L.
105–33
BBRA Medicare, Medicaid, and SCHIP
Balanced Budget Refinement Act of 1999,
Pub. L. 106–113
BIPA Medicare, Medicaid, and SCHIP
Benefits Improvement and Protection Act
of 2000, Pub. L. 106–554
CAH Critical access hospital
CASPER Certification and Survey Provider
Enhanced Reports
CBSA Core-based statistical area
CCN CMS Certification Number
CFR Code of Federal Regulations
CMI Case-mix index
CMS Centers for Medicare & Medicaid
Services
COT Change of therapy
ECI Employment Cost Index
EHR Electronic health record
EOT End of therapy
EOT–R End of therapy—resumption
ESRD–QIP End-Stage Renal Disease Quality
Incentive Program
FAQ Frequently Asked Questions
FFS Fee-for-service
FR Federal Register
FY Fiscal year
GAO Government Accountability Office
HAC Hospital-Acquired Conditions
HACRP Hospital-Acquired Condition
Reduction Program
HCPCS Healthcare Common Procedure
Coding System
HIQR Hospital Inpatient Quality Reporting
HOQR Hospital Outpatient Quality
Reporting
HRRP Hospital Readmissions Reduction
Program
HVBP Hospital Value-Based Purchasing
ICR Information Collection Requirements
IGI IHS (Information Handling Services)
Global Insight, Inc.
IMPACT Improving Medicare Post-Acute
Care Transformation Act of 2014
IPPS Inpatient prospective payment system
IRF Inpatient Rehabilitation Facility
LTC Long-term care
LTCH Long-term care hospital
MAP Measures Application Partnership
MDS Minimum data set
MFP Multifactor productivity
MMA Medicare Prescription Drug,
Improvement, and Modernization Act of
2003, Pub. L. 108–173
MSA Metropolitan statistical area
NAICS North American Industrial
Classification System
NF Nursing facility
NH Nursing Homes
NQF National Quality Forum
OMB Office of Management and Budget
OMRA Other Medicare Required
Assessment
PAC Post-acute care
PAMA Protecting Access to Medicare Act of
2014, Pub. L 113–93
PPS Prospective Payment System
PQRS Physician Quality Reporting System
QIES Quality Improvement Evaluation
System
QIES ASAP Quality Improvement and
Evaluation System Assessment Submission
and Processing
QRP Quality Reporting Program
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RAI Resident assessment instrument
RAVEN Resident assessment validation
entry
RFA Regulatory Flexibility Act, Pub. L. 96–
354
RIA Regulatory impact analysis
RUG–III Resource Utilization Groups,
Version 3
RUG–IV Resource Utilization Groups,
Version 4
RUG–53 Refined 53-Group RUG–III CaseMix Classification System
SCHIP State Children’s Health Insurance
Program
sDTI Suspected deep tissue injuries
SNF Skilled nursing facility
SNFRM Skilled Nursing Facility 30-Day
All-Cause Readmission Measure
STM Staff time measurement
STRIVE Staff time and resource intensity
verification
TEP Technical expert panel
UMRA Unfunded Mandates Reform Act,
Pub. L. 104–4
VBP Value-based purchasing
I. Executive Summary
A. Purpose
This proposed rule would update the
SNF prospective payment rates for FY
2016 as required under section
1888(e)(4)(E) of the Social Security Act
(the Act). It would also respond to
section 1888(e)(4)(H) of the Act, which
requires the Secretary to provide for
publication in the Federal Register
before the August 1 that precedes the
start of each fiscal year, certain specified
information relating to the payment
update (see section II.C.). In addition, it
proposes to implement a new quality
reporting program for SNFs under
section 1888(e)(6) of the Act.
Furthermore, this proposed rule would
establish new regulatory reporting
requirements for SNFs and NFs to
implement the statutory obligation to
submit staffing information based on
payroll data under section 1128I(g) of
the Act, specify a SNF all-cause allcondition hospital readmission measure
under section 1888(g)(1) of the Act and
adopt that measure for a new SNF
value-based purchasing (VBP) program
under section 1888(h) of the Act. The
proposed rule also seeks comment on
other policies under consideration for a
SNF VBP Program, under which valuebased incentive payments will be made
in a fiscal year to SNFs beginning with
payment for services furnished on or
after October 1, 2018.
B. Summary of Major Provisions
In accordance with sections
1888(e)(4)(E)(ii)(IV) and 1888(e)(5) of
the Act, the federal rates in this
proposed rule would reflect an update
to the rates that we published in the
SNF PPS final rule for FY 2015 (79 FR
45628) which reflects the SNF market
basket index, as adjusted by the
applicable forecast error correction and
by the multifactor productivity
adjustment for FY 2016. We also
propose to specify a SNF all-cause allcondition hospital readmission measure
under section 1888(g) of the Act, as well
as adopt that measure for a new SNF
Value-Based Purchasing (VBP) Program
under section 1888(h) of the Act. We
also seek comment on other policies for
the SNF VBP Program that we are
considering for adoption in future
rulemaking to promote higher quality
and more efficient health care for
Medicare beneficiaries. We are also
proposing to implement a new quality
reporting program for SNFs under
section 1888(e)(6) of the Act, which was
added by section 2(c)(4) of the IMPACT
Act of 2014 (Pub. L. 113–85).
For payment determinations
beginning with FY 2018, we propose to
adopt measures meeting three quality
domains specified in section
1899B(c)(1) of the Act: Functional
status, skin integrity, and incidence of
major falls.
In addition, we propose adding new
language at 42 CFR part 483 to
implement section 1128I(g) of the Act.
Specifically, we propose that, beginning
on July 1, 2016, LTC facilities that
participate in Medicare or Medicaid will
be required to electronically submit
direct care staffing information
(including information for agency and
contract staff) based on payroll and
other verifiable and auditable data in a
uniform format. We invite public
comment on CMS’ proposed changes to
42 CFR part 483 to ensure compliance
with this requirement.
C. Summary of Cost and Benefits
Provision description
Total transfers
Proposed FY 2016 SNF PPS payment rate update.
The overall economic impact of this proposed rule would be an estimated increase of $500
million in aggregate payments to SNFs during FY 2016.
II. Background on SNF PPS
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A. Statutory Basis and Scope
As amended by section 4432 of the
Balanced Budget Act of 1997 (BBA, Pub.
L. 105–33, enacted on August 5, 1997),
section 1888(e) of the Act provides for
the implementation of a PPS for SNFs.
This methodology uses prospective,
case-mix adjusted per diem payment
rates applicable to all covered SNF
services defined in section 1888(e)(2)(A)
of the Act. The SNF PPS is effective for
cost reporting periods beginning on or
after July 1, 1998, and covers all costs
of furnishing covered SNF services
(routine, ancillary, and capital-related
costs) other than costs associated with
approved educational activities and bad
debts. Under section 1888(e)(2)(A)(i) of
the Act, covered SNF services include
post-hospital extended care services for
which benefits are provided under Part
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A, as well as those items and services
(other than a small number of excluded
services, such as physician services) for
which payment may otherwise be made
under Part B and which are furnished to
Medicare beneficiaries who are
residents in a SNF during a covered Part
A stay. A comprehensive discussion of
these provisions appears in the May 12,
1998 interim final rule (63 FR 26252). In
addition, a detailed discussion of the
legislative history of the SNF PPS is
available online at https://www.cms.gov/
Medicare/Medicare-Fee-for-ServicePayment/SNFPPS/Downloads/
Legislative_History_07302013.pdf.
Section 215(a) of PAMA added
section 1888(g) to the Act requiring the
Secretary to specify certain quality
measures for the skilled nursing facility
setting. Additionally, section 215(b) of
PAMA added section 1888(h) to the Act
requiring the Secretary to implement a
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value-based purchasing program for
skilled nursing facilities. Finally,
section 2(a) of the IMPACT Act added
section 1899B to the Act that, among
other things, requires SNFs to report
standardized data for measures in
specified quality and resource use
domains. In addition, the IMPACT Act
added section 1888(e)(6) to the Act,
which requires the Secretary to
implement a quality reporting program
for SNFs, which includes a requirement
that SNFs report certain data to receive
their full payment under the SNF PPS.
B. Initial Transition for the SNF PPS
Under sections 1888(e)(1)(A) and
1888(e)(11) of the Act, the SNF PPS
included an initial, three-phase
transition that blended a facility-specific
rate (reflecting the individual facility’s
historical cost experience) with the
federal case-mix adjusted rate. The
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transition extended through the
facility’s first three cost reporting
periods under the PPS, up to and
including the one that began in FY
2001. Thus, the SNF PPS is no longer
operating under the transition, as all
facilities have been paid at the full
federal rate effective with cost reporting
periods beginning in FY 2002. As we
now base payments for SNFs entirely on
the adjusted federal per diem rates, we
no longer include adjustment factors
under the transition related to facilityspecific rates for the upcoming FY.
C. Required Annual Rate Updates
Section 1888(e)(4)(E) of the Act
requires the SNF PPS payment rates to
be updated annually. The most recent
annual update occurred in a final rule
that set forth updates to the SNF PPS
payment rates for FY 2015 (79 FR
45628, August 5, 2014).
Section 1888(e)(4)(H) of the Act
specifies that we provide for publication
annually in the Federal Register of the
following:
• The unadjusted federal per diem
rates to be applied to days of covered
SNF services furnished during the
upcoming FY.
• The case-mix classification system
to be applied for these services during
the upcoming FY.
• The factors to be applied in making
the area wage adjustment for these
services.
Along with other revisions discussed
later in this preamble, this proposed
rule would provide the required annual
updates to the per diem payment rates
for SNFs for FY 2016.
III. SNF PPS Rate Setting Methodology
and FY 2016 Update
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A. Federal Base Rates
Under section 1888(e)(4) of the Act,
the SNF PPS uses per diem federal
payment rates based on mean SNF costs
in a base year (FY 1995) updated for
inflation to the first effective period of
the PPS. We developed the federal
payment rates using allowable costs
from hospital-based and freestanding
SNF cost reports for reporting periods
beginning in FY 1995. The data used in
developing the federal rates also
incorporated a Part B add-on, which is
an estimate of the amounts that, prior to
the SNF PPS, would have been payable
under Part B for covered SNF services
furnished to individuals during the
course of a covered Part A stay in a SNF.
In developing the rates for the initial
period, we updated costs to the first
effective year of the PPS (the 15-month
period beginning July 1, 1998) using a
SNF market basket index, and then
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standardized for geographic variations
in wages and for the costs of facility
differences in case mix. In compiling
the database used to compute the
federal payment rates, we excluded
those providers that received new
provider exemptions from the routine
cost limits, as well as costs related to
payments for exceptions to the routine
cost limits. Using the formula that the
BBA prescribed, we set the federal rates
at a level equal to the weighted mean of
freestanding costs plus 50 percent of the
difference between the freestanding
mean and weighted mean of all SNF
costs (hospital-based and freestanding)
combined. We computed and applied
separately the payment rates for
facilities located in urban and rural
areas, and adjusted the portion of the
federal rate attributable to wage-related
costs by a wage index to reflect
geographic variations in wages.
B. SNF Market Basket Update
1. SNF Market Basket Index
Section 1888(e)(5)(A) of the Act
requires us to establish a SNF market
basket index that reflects changes over
time in the prices of an appropriate mix
of goods and services included in
covered SNF services. Accordingly, we
have developed a SNF market basket
index that encompasses the most
commonly used cost categories for SNF
routine services, ancillary services, and
capital-related expenses. We use the
SNF market basket index, adjusted in
the manner described below, to update
the federal rates on an annual basis. In
the SNF PPS final rule for FY 2014 (78
FR 47939 through 47946), we revised
and rebased the market basket, which
included updating the base year from
FY 2004 to FY 2010.
For the FY 2016 proposed rule, the FY
2010-based SNF market basket growth
rate is estimated to be 2.6 percent,
which is based on the IHS Global
Insight, Inc. (IGI) first quarter 2015
forecast with historical data through
fourth quarter 2014. In section III.B.5. of
this proposed rule, we discuss the
specific application of this adjustment
to the forthcoming annual update of the
SNF PPS payment rates.
2. Use of the SNF Market Basket
Percentage
Section 1888(e)(5)(B) of the Act
defines the SNF market basket
percentage as the percentage change in
the SNF market basket index from the
midpoint of the previous FY to the
midpoint of the current FY. For the
federal rates set forth in this proposed
rule, we use the percentage change in
the SNF market basket index to compute
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the update factor for FY 2016. This is
based on the IGI first quarter 2015
forecast (with historical data through
the fourth quarter 2014) of the FY 2016
percentage increase in the FY 2010based SNF market basket index for
routine, ancillary, and capital-related
expenses, which is used to compute the
update factor in this proposed rule. As
discussed in sections III.B.3. and III.B.4.
of this proposed rule, this market basket
percentage change would be reduced by
the applicable forecast error correction
(as described in § 413.337(d)(2)) and by
the multifactor productivity adjustment
as required by section 1888(e)(5)(B)(ii)
of the Act. Finally, as discussed in
section II.B. of this proposed rule, we no
longer compute update factors to adjust
a facility-specific portion of the SNF
PPS rates, because the initial threephase transition period from facilityspecific to full federal rates that started
with cost reporting periods beginning in
July 1998 has expired.
3. Forecast Error Adjustment
As discussed in the June 10, 2003
supplemental proposed rule (68 FR
34768) and finalized in the August 4,
2003, final rule (68 FR 46057 through
46059), the regulations at
§ 413.337(d)(2) provide for an
adjustment to account for market basket
forecast error. The initial adjustment for
market basket forecast error applied to
the update of the FY 2003 rate for FY
2004, and took into account the
cumulative forecast error for the period
from FY 2000 through FY 2002,
resulting in an increase of 3.26 percent
to the FY 2004 update. Subsequent
adjustments in succeeding FYs take into
account the forecast error from the most
recently available FY for which there is
final data, and apply the difference
between the forecasted and actual
change in the market basket when the
difference exceeds a specified threshold.
We originally used a 0.25 percentage
point threshold for this purpose;
however, for the reasons specified in the
FY 2008 SNF PPS final rule (72 FR
43425, August 3, 2007), we adopted a
0.5 percentage point threshold effective
for FY 2008 and subsequent fiscal years.
As we stated in the final rule for FY
2004 that first issued the market basket
forecast error adjustment (68 FR 46058,
August 4, 2003), the adjustment will
reflect both upward and downward
adjustments, as appropriate.
For FY 2014 (the most recently
available FY for which there is final
data), the estimated increase in the
market basket index was 2.3 percentage
points, while the actual increase for FY
2014 was 1.7 percentage points,
resulting in the actual increase being 0.6
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percentage point lower than the
estimated increase. Accordingly, as the
difference between the estimated and
actual amount of change in the market
basket index exceeds the 0.5 percentage
point threshold and because the
estimated amount of change exceeded
the actual amount of change, the FY
2016 market basket percentage change
of 2.6 percent would be adjusted
downward by the forecast error
correction of 0.6 percentage point,
resulting in a SNF market basket
increase of 2.0 percent, before
application of the productivity
adjustment discussed in this section.
Table 1 shows the forecasted and actual
market basket amounts for FY 2014.
TABLE 1—DIFFERENCE BETWEEN THE
FORECASTED AND ACTUAL MARKET
BASKET INCREASES FOR FY 2014
Index
Forecasted
FY 2014
increase *
Actual
FY 2014
increase **
FY 2014
difference
SNF ...........
2.3
1.7
¥0.6
mstockstill on DSK4VPTVN1PROD with PROPOSALS3
* Published in Federal Register; based on second
quarter 2013 IGI forecast (2010-based index).
** Based on the first quarter 2015 IGI forecast, with
historical data through the fourth quarter 2014 (2010based index).
4. Multifactor Productivity Adjustment
Section 3401(b) of the Affordable Care
Act requires that, in FY 2012 (and in
subsequent FYs), the market basket
percentage under the SNF payment
system as described in section
1888(e)(5)(B)(i) of the Act is to be
reduced annually by the productivity
adjustment described in section
1886(b)(3)(B)(xi)(II) of the Act. Section
1886(b)(3)(B)(xi)(II) of the Act, added by
section 3401(a) of the Affordable Care
Act, sets forth the definition of this
productivity adjustment. The statute
defines the productivity adjustment to
be equal to the 10-year moving average
of changes in annual economy-wide
private nonfarm business multi-factor
productivity (as projected by the
Secretary for the 10-year period ending
with the applicable fiscal year, year,
cost-reporting period, or other annual
period) (the MFP adjustment). The
Bureau of Labor Statistics (BLS) is the
agency that publishes the official
measure of private nonfarm business
multifactor productivity (MFP). We refer
readers to the BLS Web site at https://
www.bls.gov/mfp for the BLS historical
published MFP data.
MFP is derived by subtracting the
contribution of labor and capital inputs
growth from output growth. The
projections of the components of MFP
are currently produced by IGI, a
nationally recognized economic
forecasting firm with which CMS
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contracts to forecast the components of
the market baskets and MFP. To
generate a forecast of MFP, IGI
replicates the MFP measure calculated
by the BLS, using a series of proxy
variables derived from IGI’s U.S.
macroeconomic models. In section
III.F.3. of the FY 2012 SNF PPS final
rule (76 FR 48527 through 48529), we
identified each of the major MFP
component series employed by the BLS
to measure MFP as well as provided the
corresponding concepts determined to
be the best available proxies for the BLS
series.
Beginning with the FY 2016
rulemaking cycle, the MFP adjustment
is calculated using a revised series
developed by IGI to proxy the aggregate
capital inputs. Specifically, IGI has
replaced the Real Effective Capital Stock
used for Full Employment GDP with a
forecast of BLS aggregate capital inputs
recently developed by IGI using a
regression model. This series provides a
better fit to the BLS capital inputs as
measured by the differences between
the actual BLS capital input growth
rates and the estimated model growth
rates over the historical time period.
Therefore, we are using IGI’s most
recent forecast of the BLS capital inputs
series in the MFP calculations beginning
with the FY 2016 rulemaking cycle. A
complete description of the MFP
projection methodology is available on
our Web site at https://www.cms.gov/
Research-Statistics-Data-and-Systems/
Statistics-Trends-and-Reports/
MedicareProgramRatesStats/
MarketBasketResearch.html. Although
we discuss the IGI changes to the MFP
proxy series in this proposed rule, in the
future, when IGI makes changes to the
MFP methodology, we will announce
them on our Web site rather than in the
annual rulemaking.
a. Incorporating the Multifactor
Productivity Adjustment Into the
Market Basket Update
According to section 1888(e)(5)(A) of
the Act, the Secretary shall establish a
skilled nursing facility market basket
index that reflects changes over time in
the prices of an appropriate mix of
goods and services included in covered
skilled nursing facility services. Section
1888(e)(5)(B)(ii) of the Act, added by
section 3401(b) of the Affordable Care
Act, requires that for FY 2012 and each
subsequent FY, after determining the
market basket percentage described in
section 1888(e)(5)(B)(i) of the Act, the
Secretary shall reduce such percentage
by the productivity adjustment
described in section 1886(b)(3)(B)(xi)(II)
(which we refer to as the MFP
adjustment). Section 1888(e)(5)(B)(ii) of
PO 00000
Frm 00006
Fmt 4701
Sfmt 4702
the Act further states that the reduction
of the market basket percentage by the
MFP adjustment may result in the
market basket percentage being less than
zero for a FY, and may result in
payment rates under section 1888(e) of
the Act for a FY being less than such
payment rates for the preceding FY.
Thus, if the application of the MFP
adjustment to the market basket
percentage calculated under section
1888(e)(5)(B)(i) of the Act results in an
MFP-adjusted market basket percentage
that is less than zero, then the annual
update to the unadjusted federal per
diem rates under section
1888(e)(4)(E)(ii) of the Act would be
negative, and such rates would decrease
relative to the prior FY.
For the FY 2016 update, the MFP
adjustment is calculated as the 10-year
moving average of changes in MFP for
the period ending September 30, 2016,
which is 0.6 percent. Consistent with
section 1888(e)(5)(B)(i) of the Act and
§ 413.337(d)(2) of the regulations, the
market basket percentage for FY 2016
for the SNF PPS is based on IGI’s first
quarter 2015 forecast of the SNF market
basket update (2.6 percent) as adjusted
by the forecast error adjustment (0.6
percentage point), and is estimated to be
2.0 percent. In accordance with section
1888(e)(5)(B)(ii) of the Act (as added by
section 3401(b) of the Affordable Care
Act) and § 413.337(d)(3), this market
basket percentage is then reduced by the
MFP adjustment (the 10-year moving
average of changes in MFP for the
period ending September 30, 2016) of
0.6 percent, which is calculated as
described above and based on IGI’s first
quarter 2015 forecast. The resulting
MFP-adjusted SNF market basket
update is equal to 1.4 percent, or 2.0
percent less 0.6 percentage point.
5. Market Basket Update Factor for FY
2016
Sections 1888(e)(4)(E)(ii)(IV) and
1888(e)(5)(i) of the Act require that the
update factor used to establish the FY
2016 unadjusted federal rates be at a
level equal to the market basket index
percentage change. Accordingly, we
determined the total growth from the
average market basket level for the
period of October 1, 2014 through
September 30, 2015 to the average
market basket level for the period of
October 1, 2015 through September 30,
2016. This process yields a percentage
change in the market basket of 2.6
percent.
As further explained in section III.B.3.
of this proposed rule, as applicable, we
adjust the market basket percentage
change by the forecast error from the
most recently available FY for which
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there is final data and apply this
adjustment whenever the difference
between the forecasted and actual
percentage change in the market basket
exceeds a 0.5 percentage point
threshold. Since the forecasted FY 2014
SNF market basket percentage change
exceeded the actual FY 2014 SNF
market basket percentage change (FY
2014 is the most recently available FY
for which there is historical data) by
more than 0.5 percentage point, the FY
2016 market basket percentage change
of 2.6 percent would be adjusted
downward by the applicable difference,
which for FY 2014 is 0.6 percent.
In addition, for FY 2016, section
1888(e)(5)(B)(ii) of the Act requires us to
reduce the market basket percentage
change by the MFP adjustment (the 10year moving average of changes in MFP
for the period ending September 30,
2016) of 0.6 percent, as described in
section III.B.4. of this proposed rule.
The resulting net SNF market basket
update would equal 1.4 percent, or 2.6
percent less the 0.6 percentage point
forecast error adjustment, less the 0.6
percentage point MFP adjustment. We
propose that if more recent data become
available (for example, a more recent
estimate of the FY 2010-based SNF
market basket and/or MFP adjustment),
we would use such data, if appropriate,
to determine the FY 2016 SNF market
22049
basket percentage change, labor-related
share relative importance, forecast error
adjustment, and MFP adjustment in the
FY 2016 SNF PPS final rule.
We used the SNF market basket,
adjusted as described above, to adjust
each per diem component of the federal
rates forward to reflect the change in the
average prices for FY 2016 from average
prices for FY 2015. We would further
adjust the rates by a wage index budget
neutrality factor, described later in this
section. Tables 2 and 3 reflect the
updated components of the unadjusted
federal rates for FY 2016, prior to
adjustment for case-mix.
TABLE 2—FY 2016 UNADJUSTED FEDERAL RATE PER DIEM URBAN
Rate component
Nursing—case-mix
Therapy—case-mix
Therapy—noncase-mix
Non-case-mix
Per Diem Amount ............................................................
$171.46
$129.15
$17.01
$87.50
TABLE 3—FY 2016 UNADJUSTED FEDERAL RATE PER DIEM RURAL
Rate component
Nursing—case-mix
Therapy—case-mix
Therapy—noncase-mix
Non-case-mix
Per Diem Amount ............................................................
$163.80
$148.91
$18.17
$89.12
mstockstill on DSK4VPTVN1PROD with PROPOSALS3
C. Case-Mix Adjustment
Under section 1888(e)(4)(G)(i) of the
Act, the federal rate also incorporates an
adjustment to account for facility casemix, using a classification system that
accounts for the relative resource
utilization of different patient types.
The statute specifies that the adjustment
is to reflect both a resident classification
system that the Secretary establishes to
account for the relative resource use of
different patient types, as well as
resident assessment data and other data
that the Secretary considers appropriate.
In the interim final rule with comment
period that initially implemented the
SNF PPS (63 FR 26252, May 12, 1998),
we developed the RUG–III case-mix
classification system, which tied the
amount of payment to resident resource
use in combination with resident
characteristic information. Staff time
measurement (STM) studies conducted
in 1990, 1995, and 1997 provided
information on resource use (time spent
by staff members on residents) and
resident characteristics that enabled us
not only to establish RUG–III, but also
to create case-mix indexes (CMIs). The
original RUG–III grouper logic was
based on clinical data collected in 1990,
1995, and 1997. As discussed in the
SNF PPS proposed rule for FY 2010 (74
FR 22208), we subsequently conducted
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20:58 Apr 17, 2015
Jkt 235001
a multi-year data collection and analysis
under the Staff Time and Resource
Intensity Verification (STRIVE) project
to update the case-mix classification
system for FY 2011. The resulting
Resource Utilization Groups, Version 4
(RUG–IV) case-mix classification system
reflected the data collected in 2006–
2007 during the STRIVE project, and
was finalized in the FY 2010 SNF PPS
final rule (74 FR 40288) to take effect in
FY 2011 concurrently with an updated
new resident assessment instrument,
version 3.0 of the Minimum Data Set
(MDS 3.0), which collects the clinical
data used for case-mix classification
under RUG–IV.
We note that case-mix classification is
based, in part, on the beneficiary’s need
for skilled nursing care and therapy
services. The case-mix classification
system uses clinical data from the MDS
to assign a case-mix group to each
patient that is then used to calculate a
per diem payment under the SNF PPS.
As discussed in section IV.A. of this
proposed rule, the clinical orientation of
the case-mix classification system
supports the SNF PPS’s use of an
administrative presumption that
considers a beneficiary’s initial case-mix
classification to assist in making certain
SNF level of care determinations.
Further, because the MDS is used as a
basis for payment, as well as a clinical
PO 00000
Frm 00007
Fmt 4701
Sfmt 4702
assessment, we have provided extensive
training on proper coding and the time
frames for MDS completion in our
Resident Assessment Instrument (RAI)
Manual. For an MDS to be considered
valid for use in determining payment,
the MDS assessment must be completed
in compliance with the instructions in
the RAI Manual in effect at the time the
assessment is completed. For payment
and quality monitoring purposes, the
RAI Manual consists of both the Manual
instructions and the interpretive
guidance and policy clarifications
posted on the appropriate MDS Web site
at https://www.cms.gov/Medicare/
Quality-Initiatives-Patient-AssessmentInstruments/NursingHomeQualityInits/
MDS30RAIManual.html.
In addition, we note that section 511
of the Medicare Prescription Drug,
Improvement, and Modernization Act of
2003 (MMA, Pub. L. 108–173) amended
section 1888(e)(12) of the Act to provide
for a temporary increase of 128 percent
in the PPS per diem payment for any
SNF residents with Acquired Immune
Deficiency Syndrome (AIDS), effective
with services furnished on or after
October 1, 2004. This special add-on for
SNF residents with AIDS was to remain
in effect until the Secretary certifies that
there is an appropriate adjustment in
the case mix to compensate for the
increased costs associated with such
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residents. The add-on for SNF residents
with AIDS is also discussed in Program
Transmittal #160 (Change Request
#3291), issued on April 30, 2004, which
is available online at www.cms.gov/
transmittals/downloads/r160cp.pdf. In
the SNF PPS final rule for FY 2010 (74
FR 40288), we did not address the
certification of the add-on for SNF
residents with AIDS in that final rule’s
implementation of the case-mix
refinements for RUG–IV, thus allowing
the add-on payment required by section
511 of the MMA to remain in effect. For
the limited number of SNF residents
that qualify for this add-on, there is a
significant increase in payments. For
example, using FY 2013 data, we
identified fewer than 4,800 SNF
residents with a diagnosis code of 042
(Human Immunodeficiency Virus (HIV)
Infection). For FY 2016, an urban
facility with a resident with AIDS in
RUG–IV group ‘‘HC2’’ would have a
case-mix adjusted per diem payment of
$428.57 (see Table 4) before the
application of the MMA adjustment.
After an increase of 128 percent, this
urban facility would receive a case-mix
adjusted per diem payment of
approximately $977.14.
Currently, we use the International
Classification of Diseases, 9th revision,
Clinical Modification (ICD–9–CM) code
042 to identify those residents for whom
it is appropriate to apply the AIDS addon established by section 511 of the
MMA. In this context, we note that the
Department published a final rule in the
September 5, 2012 Federal Register (77
FR 54664) which requires us to stop
using ICD–9–CM on September 30,
2014, and begin using the International
Classification of Diseases, 10th revision,
Clinical Modification (ICD–10–CM), on
October 1, 2014. Regarding the abovereferenced ICD–9–CM diagnosis code of
042, in the FY 2014 SNF PPS proposed
rule (78 FR 26444, May 6, 2013), we
proposed to transition to the equivalent
ICD–10–CM diagnosis code of B20 upon
the overall conversion to ICD–10–CM on
October 1, 2014, and we subsequently
finalized that proposal in the FY 2014
SNF PPS final rule (78 FR 47951
through 47952).
However, on April 1, 2014, the
Protecting Access to Medicare Act of
2014 (PAMA) (Pub. L. 113–93) was
enacted. Section 212 of PAMA, titled
‘‘Delay in Transition from ICD–9 to
ICD–10 Code Sets,’’ provides that the
Secretary of Health and Human Services
may not, prior to October 1, 2015, adopt
ICD–10 code sets as the standard for
code sets under section 1173(c) of the
Act (42 U.S.C. 1320d–2(c)) and section
162.1002 of title 45, Code of Federal
Regulations. In the FY 2015 SNF PPS
final rule (79 FR 45633), we stated that
the Department expected to release an
interim final rule in the near future that
would include a new compliance date
that would require the use of ICD–10
beginning October 1, 2015. In light of
this, in the FY 2015 SNF PPS final rule,
we stated that the effective date of the
change from ICD–9–CM code 042 to
ICD–10–CM code B20 for purposes of
applying the AIDS add-on is October 1,
2015, and that until that time we would
continue to use the ICD–9–CM code 042
for this purpose. On August 4, 2014, the
U.S. Department of Health and Human
Services released a final rule in the
Federal Register (79 FR 45128 through
45134) that included a new compliance
date that requires the use of ICD–10
beginning October 1, 2015. The August
4, 2014 final rule is available for
viewing on the Internet at https://
www.gpo.gov/fdsys/pkg/FR-2014-08-04/
pdf/2014-18347.pdf. That final rule also
requires HIPAA covered entities to
continue to use ICD–9–CM through
September 30, 2015. Thus, as we
finalized in the FY 2015 SNF PPS final
rule, the effective date of the change
from ICD–9–CM code 042 to ICD–10–
CM code B20 for the purpose of
applying the AIDS add-on enacted by
section 511 of the MMA is October 1,
2015.
Under section 1888(e)(4)(H), each
update of the payment rates must
include the case-mix classification
methodology applicable for the
upcoming FY. The payment rates set
forth in this proposed rule reflect the
use of the RUG–IV case-mix
classification system from October 1,
2015, through September 30, 2016. We
list the proposed case-mix adjusted
RUG–IV payment rates, provided
separately for urban and rural SNFs, in
Tables 4 and 5 with corresponding casemix values. We use the revised OMB
delineations adopted in the FY 2015
SNF PPS final rule (79 FR 45632, 45634)
to identify a facility’s urban or rural
status for the purpose of determining
which set of rate tables would apply to
the facility. These tables do not reflect
the add-on for SNF residents with AIDS
enacted by section 511 of the MMA,
which we apply only after making all
other adjustments (such as wage index
and case-mix).
TABLE 4—RUG–IV CASE-MIX ADJUSTED FEDERAL RATES AND ASSOCIATED INDEXES
URBAN
Nursing
index
mstockstill on DSK4VPTVN1PROD with PROPOSALS3
RUG–IV Category
RUX ..........................................................
RUL ..........................................................
RVX ..........................................................
RVL ..........................................................
RHX ..........................................................
RHL ..........................................................
RMX .........................................................
RML ..........................................................
RLX ..........................................................
RUC .........................................................
RUB ..........................................................
RUA ..........................................................
RVC ..........................................................
RVB ..........................................................
RVA ..........................................................
RHC .........................................................
RHB ..........................................................
RHA ..........................................................
RMC .........................................................
RMB .........................................................
VerDate Sep<11>2014
20:58 Apr 17, 2015
Jkt 235001
Therapy
index
2.67
2.57
2.61
2.19
2.55
2.15
2.47
2.19
2.26
1.56
1.56
0.99
1.51
1.11
1.10
1.45
1.19
0.91
1.36
1.22
PO 00000
Frm 00008
1.87
1.87
1.28
1.28
0.85
0.85
0.55
0.55
0.28
1.87
1.87
1.87
1.28
1.28
1.28
0.85
0.85
0.85
0.55
0.55
Fmt 4701
Nursing
component
Therapy
component
Non-case
mix therapy
comp
Non-case
mix component
$457.80
440.65
447.51
375.50
437.22
368.64
423.51
375.50
387.50
267.48
267.48
169.75
258.90
190.32
188.61
248.62
204.04
156.03
233.19
209.18
$241.51
241.51
165.31
165.31
109.78
109.78
71.03
71.03
36.16
241.51
241.51
241.51
165.31
165.31
165.31
109.78
109.78
109.78
71.03
71.03
....................
....................
....................
....................
....................
....................
....................
....................
....................
....................
....................
....................
....................
....................
....................
....................
....................
....................
....................
....................
$87.50
87.50
87.50
87.50
87.50
87.50
87.50
87.50
87.50
87.50
87.50
87.50
87.50
87.50
87.50
87.50
87.50
87.50
87.50
87.50
Sfmt 4702
E:\FR\FM\20APP3.SGM
20APP3
Total rate
$786.81
769.66
700.32
628.31
634.50
565.92
582.04
534.03
511.16
596.49
596.49
498.76
511.71
443.13
441.42
445.90
401.32
353.31
391.72
367.71
22051
Federal Register / Vol. 80, No. 75 / Monday, April 20, 2015 / Proposed Rules
TABLE 4—RUG–IV CASE-MIX ADJUSTED FEDERAL RATES AND ASSOCIATED INDEXES—Continued
URBAN
Nursing
index
RUG–IV Category
RMA .........................................................
RLB ..........................................................
RLA ..........................................................
ES3 ..........................................................
ES2 ..........................................................
ES1 ..........................................................
HE2 ..........................................................
HE1 ..........................................................
HD2 ..........................................................
HD1 ..........................................................
HC2 ..........................................................
HC1 ..........................................................
HB2 ..........................................................
HB1 ..........................................................
LE2 ...........................................................
LE1 ...........................................................
LD2 ...........................................................
LD1 ...........................................................
LC2 ...........................................................
LC1 ...........................................................
LB2 ...........................................................
LB1 ...........................................................
CE2 ..........................................................
CE1 ..........................................................
CD2 ..........................................................
CD1 ..........................................................
CC2 ..........................................................
CC1 ..........................................................
CB2 ..........................................................
CB1 ..........................................................
CA2 ..........................................................
CA1 ..........................................................
BB2 ..........................................................
BB1 ..........................................................
BA2 ..........................................................
BA1 ..........................................................
PE2 ..........................................................
PE1 ..........................................................
PD2 ..........................................................
PD1 ..........................................................
PC2 ..........................................................
PC1 ..........................................................
PB2 ..........................................................
PB1 ..........................................................
PA2 ..........................................................
PA1 ..........................................................
0.84
1.50
0.71
3.58
2.67
2.32
2.22
1.74
2.04
1.60
1.89
1.48
1.86
1.46
1.96
1.54
1.86
1.46
1.56
1.22
1.45
1.14
1.68
1.50
1.56
1.38
1.29
1.15
1.15
1.02
0.88
0.78
0.97
0.90
0.70
0.64
1.50
1.40
1.38
1.28
1.10
1.02
0.84
0.78
0.59
0.54
Therapy
index
0.55
0.28
0.28
....................
....................
....................
....................
....................
....................
....................
....................
....................
....................
....................
....................
....................
....................
....................
....................
....................
....................
....................
....................
....................
....................
....................
....................
....................
....................
....................
....................
....................
....................
....................
....................
....................
....................
....................
....................
....................
....................
....................
....................
....................
....................
....................
Nursing
component
Therapy
component
Non-case
mix therapy
comp
Non-case
mix component
144.03
257.19
121.74
613.83
457.80
397.79
380.64
298.34
349.78
274.34
324.06
253.76
318.92
250.33
336.06
264.05
318.92
250.33
267.48
209.18
248.62
195.46
288.05
257.19
267.48
236.61
221.18
197.18
197.18
174.89
150.88
133.74
166.32
154.31
120.02
109.73
257.19
240.04
236.61
219.47
188.61
174.89
144.03
133.74
101.16
92.59
71.03
36.16
36.16
....................
....................
....................
....................
....................
....................
....................
....................
....................
....................
....................
....................
....................
....................
....................
....................
....................
....................
....................
....................
....................
....................
....................
....................
....................
....................
....................
....................
....................
....................
....................
....................
....................
....................
....................
....................
....................
....................
....................
....................
....................
....................
....................
....................
....................
....................
17.01
17.01
17.01
17.01
17.01
17.01
17.01
17.01
17.01
17.01
17.01
17.01
17.01
17.01
17.01
17.01
17.01
17.01
17.01
17.01
17.01
17.01
17.01
17.01
17.01
17.01
17.01
17.01
17.01
17.01
17.01
17.01
17.01
17.01
17.01
17.01
17.01
17.01
17.01
17.01
17.01
17.01
17.01
87.50
87.50
87.50
87.50
87.50
87.50
87.50
87.50
87.50
87.50
87.50
87.50
87.50
87.50
87.50
87.50
87.50
87.50
87.50
87.50
87.50
87.50
87.50
87.50
87.50
87.50
87.50
87.50
87.50
87.50
87.50
87.50
87.50
87.50
87.50
87.50
87.50
87.50
87.50
87.50
87.50
87.50
87.50
87.50
87.50
87.50
Total rate
302.56
380.85
245.40
718.34
562.31
502.30
485.15
402.85
454.29
378.85
428.57
358.27
423.43
354.84
440.57
368.56
423.43
354.84
371.99
313.69
353.13
299.97
392.56
361.70
371.99
341.12
325.69
301.69
301.69
279.40
255.39
238.25
270.83
258.82
224.53
214.24
361.70
344.55
341.12
323.98
293.12
279.40
248.54
238.25
205.67
197.10
TABLE 5—RUG–IV CASE-MIX ADJUSTED FEDERAL RATES AND ASSOCIATED INDEXES
RURAL
Nursing
index
mstockstill on DSK4VPTVN1PROD with PROPOSALS3
RUG–IV Category
RUX ..........................................................
RUL ..........................................................
RVX ..........................................................
RVL ..........................................................
RHX ..........................................................
RHL ..........................................................
RMX .........................................................
RML ..........................................................
RLX ..........................................................
RUC .........................................................
RUB ..........................................................
RUA ..........................................................
RVC ..........................................................
RVB ..........................................................
VerDate Sep<11>2014
20:58 Apr 17, 2015
Jkt 235001
Therapy
index
2.67
2.57
2.61
2.19
2.55
2.15
2.47
2.19
2.26
1.56
1.56
0.99
1.51
1.11
PO 00000
Frm 00009
1.87
1.87
1.28
1.28
0.85
0.85
0.55
0.55
0.28
1.87
1.87
1.87
1.28
1.28
Fmt 4701
Nursing
component
Therapy
component
Non-case
mix therapy
comp
Non-case
mix component
$437.35
420.97
427.52
358.72
417.69
352.17
404.59
358.72
370.19
255.53
255.53
162.16
247.34
181.82
$278.46
278.46
190.60
190.60
126.57
126.57
81.90
81.90
41.69
278.46
278.46
278.46
190.60
190.60
....................
....................
....................
....................
....................
....................
....................
....................
....................
....................
....................
....................
....................
....................
$89.12
89.12
89.12
89.12
89.12
89.12
89.12
89.12
89.12
89.12
89.12
89.12
89.12
89.12
Sfmt 4702
E:\FR\FM\20APP3.SGM
20APP3
Total rate
$804.93
788.55
707.24
638.44
633.38
567.86
575.61
529.74
501.00
623.11
623.11
529.74
527.06
461.54
22052
Federal Register / Vol. 80, No. 75 / Monday, April 20, 2015 / Proposed Rules
TABLE 5—RUG–IV CASE-MIX ADJUSTED FEDERAL RATES AND ASSOCIATED INDEXES—Continued
RURAL
Nursing
index
RUG–IV Category
RVA ..........................................................
RHC .........................................................
RHB ..........................................................
RHA ..........................................................
RMC .........................................................
RMB .........................................................
RMA .........................................................
RLB ..........................................................
RLA ..........................................................
ES3 ..........................................................
ES2 ..........................................................
ES1 ..........................................................
HE2 ..........................................................
HE1 ..........................................................
HD2 ..........................................................
HD1 ..........................................................
HC2 ..........................................................
HC1 ..........................................................
HB2 ..........................................................
HB1 ..........................................................
LE2 ...........................................................
LE1 ...........................................................
LD2 ...........................................................
LD1 ...........................................................
LC2 ...........................................................
LC1 ...........................................................
LB2 ...........................................................
LB1 ...........................................................
CE2 ..........................................................
CE1 ..........................................................
CD2 ..........................................................
CD1 ..........................................................
CC2 ..........................................................
CC1 ..........................................................
CB2 ..........................................................
CB1 ..........................................................
CA2 ..........................................................
CA1 ..........................................................
BB2 ..........................................................
BB1 ..........................................................
BA2 ..........................................................
BA1 ..........................................................
PE2 ..........................................................
PE1 ..........................................................
PD2 ..........................................................
PD1 ..........................................................
PC2 ..........................................................
PC1 ..........................................................
PB2 ..........................................................
PB1 ..........................................................
PA2 ..........................................................
PA1 ..........................................................
1.10
1.45
1.19
0.91
1.36
1.22
0.84
1.50
0.71
3.58
2.67
2.32
2.22
1.74
2.04
1.60
1.89
1.48
1.86
1.46
1.96
1.54
1.86
1.46
1.56
1.22
1.45
1.14
1.68
1.50
1.56
1.38
1.29
1.15
1.15
1.02
0.88
0.78
0.97
0.90
0.70
0.64
1.50
1.40
1.38
1.28
1.10
1.02
0.84
0.78
0.59
0.54
mstockstill on DSK4VPTVN1PROD with PROPOSALS3
D. Wage Index Adjustment
Section 1888(e)(4)(G)(ii) of the Act
requires that we adjust the federal rates
to account for differences in area wage
levels, using a wage index that the
Secretary determines appropriate. Since
the inception of the SNF PPS, we have
used hospital inpatient wage data in
developing a wage index to be applied
to SNFs. We propose to continue this
practice for FY 2016, as we continue to
believe that in the absence of SNF-
VerDate Sep<11>2014
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Therapy
index
1.28
0.85
0.85
0.85
0.55
0.55
0.55
0.28
0.28
....................
....................
....................
....................
....................
....................
....................
....................
....................
....................
....................
....................
....................
....................
....................
....................
....................
....................
....................
....................
....................
....................
....................
....................
....................
....................
....................
....................
....................
....................
....................
....................
....................
....................
....................
....................
....................
....................
....................
....................
....................
....................
....................
Nursing
component
Therapy
component
Non-case
mix therapy
comp
Non-case
mix component
180.18
237.51
194.92
149.06
222.77
199.84
137.59
245.70
116.30
586.40
437.35
380.02
363.64
285.01
334.15
262.08
309.58
242.42
304.67
239.15
321.05
252.25
304.67
239.15
255.53
199.84
237.51
186.73
275.18
245.70
255.53
226.04
211.30
188.37
188.37
167.08
144.14
127.76
158.89
147.42
114.66
104.83
245.70
229.32
226.04
209.66
180.18
167.08
137.59
127.76
96.64
88.45
190.60
126.57
126.57
126.57
81.90
81.90
81.90
41.69
41.69
....................
....................
....................
....................
....................
....................
....................
....................
....................
....................
....................
....................
....................
....................
....................
....................
....................
....................
....................
....................
....................
....................
....................
....................
....................
....................
....................
....................
....................
....................
....................
....................
....................
....................
....................
....................
....................
....................
....................
....................
....................
....................
....................
....................
....................
....................
....................
....................
....................
....................
....................
....................
$18.17
18.17
18.17
18.17
18.17
18.17
18.17
18.17
18.17
18.17
18.17
18.17
18.17
18.17
18.17
18.17
18.17
18.17
18.17
18.17
18.17
18.17
18.17
18.17
18.17
18.17
18.17
18.17
18.17
18.17
18.17
18.17
18.17
18.17
18.17
18.17
18.17
18.17
18.17
18.17
18.17
18.17
18.17
89.12
89.12
89.12
89.12
89.12
89.12
89.12
89.12
89.12
89.12
89.12
89.12
89.12
89.12
89.12
89.12
89.12
89.12
89.12
89.12
89.12
89.12
89.12
89.12
89.12
89.12
89.12
89.12
89.12
89.12
89.12
89.12
89.12
89.12
89.12
89.12
89.12
89.12
89.12
89.12
89.12
89.12
89.12
89.12
89.12
89.12
89.12
89.12
89.12
89.12
89.12
89.12
specific wage data, using the hospital
inpatient wage index data is appropriate
and reasonable for the SNF PPS. As
explained in the update notice for FY
2005 (69 FR 45786), the SNF PPS does
not use the hospital area wage index’s
occupational mix adjustment, as this
adjustment serves specifically to define
the occupational categories more clearly
in a hospital setting; moreover, the
collection of the occupational wage data
also excludes any wage data related to
PO 00000
Frm 00010
Fmt 4701
Sfmt 4702
Total rate
459.90
453.20
410.61
364.75
393.79
370.86
308.61
376.51
247.11
693.69
544.64
487.31
470.93
392.30
441.44
369.37
416.87
349.71
411.96
346.44
428.34
359.54
411.96
346.44
362.82
307.13
344.80
294.02
382.47
352.99
362.82
333.33
318.59
295.66
295.66
274.37
251.43
235.05
266.18
254.71
221.95
212.12
352.99
336.61
333.33
316.95
287.47
274.37
244.88
235.05
203.93
195.74
SNFs. Therefore, we believe that using
the updated wage data exclusive of the
occupational mix adjustment continues
to be appropriate for SNF payments. For
FY 2016, the updated wage data are for
hospital cost reporting periods
beginning on or after October 1, 2011
and before October 1, 2012 (FY 2012
cost report data).
We note that section 315 of the
Medicare, Medicaid, and SCHIP
Benefits Improvement and Protection
E:\FR\FM\20APP3.SGM
20APP3
Federal Register / Vol. 80, No. 75 / Monday, April 20, 2015 / Proposed Rules
Act of 2000 (BIPA, Pub. L. 106–554,
enacted on December 21, 2000)
authorized us to establish a geographic
reclassification procedure that is
specific to SNFs, but only after
collecting the data necessary to establish
a SNF wage index that is based on wage
data from nursing homes. However, to
date, this has proven to be unfeasible
due to the volatility of existing SNF
wage data and the significant amount of
resources that would be required to
improve the quality of that data.
In addition, we propose to continue to
use the same methodology discussed in
the SNF PPS final rule for FY 2008 (72
FR 43423) to address those geographic
areas in which there are no hospitals,
and thus, no hospital wage index data
on which to base the calculation of the
FY 2016 SNF PPS wage index. For rural
geographic areas that do not have
hospitals, and therefore, lack hospital
wage data on which to base an area
wage adjustment, we would use the
average wage index from all contiguous
Core-Based Statistical Areas (CBSAs) as
a reasonable proxy. For FY 2016, there
are no rural geographic areas that do not
have hospitals, and thus, this
methodology would not be applied. For
rural Puerto Rico, we would not apply
this methodology due to the distinct
economic circumstances that exist there
(for example, due to the close proximity
to one another of almost all of Puerto
Rico’s various urban and non-urban
areas, this methodology would produce
a wage index for rural Puerto Rico that
is higher than that in half of its urban
areas); instead, we would continue to
use the most recent wage index
previously available for that area. For
urban areas without specific hospital
wage index data, we would use the
average wage indexes of all of the urban
areas within the state to serve as a
reasonable proxy for the wage index of
that urban CBSA. For FY 2016, the only
urban area without wage index data
available is CBSA 25980, HinesvilleFort Stewart, GA. The proposed wage
index applicable to FY 2016 is set forth
in Table A available on the CMS Web
site at https://cms.gov/Medicare/
Medicare-Fee-for-Service-Payment/
SNFPPS/WageIndex.html.
Once calculated, we would apply the
wage index adjustment to the laborrelated portion of the federal rate. Each
year, we calculate a revised laborrelated share, based on the relative
importance of labor-related cost
categories (that is, those cost categories
that are labor-intensive and vary with
the local labor market) in the input price
index. In the SNF PPS final rule for FY
2014 (78 FR 47944 through 47946), we
finalized a proposal to revise the laborrelated share to reflect the relative
importance of the revised FY 2010based SNF market basket cost weights
for the following cost categories: Wages
and salaries; employee benefits; the
labor-related portion of nonmedical
professional fees; administrative and
facilities support services; all other—
labor-related services; and a proportion
of capital-related expenses.
We calculate the labor-related relative
importance from the SNF market basket,
and it approximates the labor-related
portion of the total costs after taking
into account historical and projected
price changes between the base year and
FY 2016. The price proxies that move
the different cost categories in the
market basket do not necessarily change
at the same rate, and the relative
importance captures these changes.
Accordingly, the relative importance
figure more closely reflects the cost
share weights for FY 2016 than the base
year weights from the SNF market
basket.
We calculate the labor-related relative
importance for FY 2016 in four steps.
22053
First, we compute the FY 2016 price
index level for the total market basket
and each cost category of the market
basket. Second, we calculate a ratio for
each cost category by dividing the FY
2016 price index level for that cost
category by the total market basket price
index level. Third, we determine the FY
2016 relative importance for each cost
category by multiplying this ratio by the
base year (FY 2010) weight. Finally, we
add the FY 2016 relative importance for
each of the labor-related cost categories
(wages and salaries, employee benefits,
the labor-related portion of non-medical
professional fees, administrative and
facilities support services, all other:
labor-related services, and a portion of
capital-related expenses) to produce the
FY 2016 labor-related relative
importance. Table 6 summarizes the
proposed updated labor-related share
for FY 2016, compared to the laborrelated share that was used for the FY
2015 SNF PPS final rule.
We are proposing for FY 2016 and
subsequent fiscal years, to report and
apply the SNF PPS labor-related share at
a tenth of a percentage point (rather
than at a thousandth of a percentage
point) consistent with the manner in
which we report and apply the market
basket update percentage under the SNF
PPS and the IPPS and the manner in
which we report and apply the IPPS
labor-related share. The level of
precision specified for the IPPS laborrelated share is three decimal places or
a tenth of a percentage point (0.696 or
69.6 percent), which we believe
provides a reasonable level of precision.
We believe it is appropriate to maintain
such consistency across all payment
systems so that the level of precision
specified is both reasonable and similar
for all providers. We invite public
comments on this proposal.
TABLE 6—LABOR-RELATED RELATIVE IMPORTANCE, FY 2015 AND FY 2016
mstockstill on DSK4VPTVN1PROD with PROPOSALS3
Relative importance,
labor-related, FY 2015
14:2 forecast 1
Relative importance,
labor-related, FY 2016
15:1 forecast 2
Wages and salaries .................................................................................................................
Employee benefits ...................................................................................................................
Nonmedical Professional fees: labor-related ...........................................................................
Administrative and facilities support services ..........................................................................
All Other: Labor-related services .............................................................................................
Capital-related (.391) ...............................................................................................................
48.816
11.365
3.450
0.502
2.276
2.771
48.9
11.4
3.4
0.5
2.3
2.7
Total ..................................................................................................................................
69.180
69.2
1 Published
2 Based
in the Federal Register; based on second quarter 2014 IGI forecast.
on first quarter 2015 IGI forecast, with historical data through fourth quarter 2014.
Tables 7 and 8 show the RUG–IV
case-mix adjusted federal rates by labor-
VerDate Sep<11>2014
20:58 Apr 17, 2015
Jkt 235001
related and non-labor-related
components.
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E:\FR\FM\20APP3.SGM
20APP3
22054
Federal Register / Vol. 80, No. 75 / Monday, April 20, 2015 / Proposed Rules
TABLE 7—RUG–IV CASE-MIX ADJUSTED FEDERAL RATES FOR URBAN SNFS BY LABOR AND NON-LABOR COMPONENT
mstockstill on DSK4VPTVN1PROD with PROPOSALS3
RUG–IV category
Total rate
RUX ...........................................................................................................................
RUL ............................................................................................................................
RVX ............................................................................................................................
RVL ............................................................................................................................
RHX ...........................................................................................................................
RHL ............................................................................................................................
RMX ...........................................................................................................................
RML ...........................................................................................................................
RLX ............................................................................................................................
RUC ...........................................................................................................................
RUB ...........................................................................................................................
RUA ...........................................................................................................................
RVC ...........................................................................................................................
RVB ............................................................................................................................
RVA ............................................................................................................................
RHC ...........................................................................................................................
RHB ...........................................................................................................................
RHA ...........................................................................................................................
RMC ...........................................................................................................................
RMB ...........................................................................................................................
RMA ...........................................................................................................................
RLB ............................................................................................................................
RLA ............................................................................................................................
ES3 ............................................................................................................................
ES2 ............................................................................................................................
ES1 ............................................................................................................................
HE2 ............................................................................................................................
HE1 ............................................................................................................................
HD2 ............................................................................................................................
HD1 ............................................................................................................................
HC2 ............................................................................................................................
HC1 ............................................................................................................................
HB2 ............................................................................................................................
HB1 ............................................................................................................................
LE2 .............................................................................................................................
LE1 .............................................................................................................................
LD2 ............................................................................................................................
LD1 ............................................................................................................................
LC2 ............................................................................................................................
LC1 ............................................................................................................................
LB2 .............................................................................................................................
LB1 .............................................................................................................................
CE2 ............................................................................................................................
CE1 ............................................................................................................................
CD2 ............................................................................................................................
CD1 ............................................................................................................................
CC2 ............................................................................................................................
CC1 ............................................................................................................................
CB2 ............................................................................................................................
CB1 ............................................................................................................................
CA2 ............................................................................................................................
CA1 ............................................................................................................................
BB2 ............................................................................................................................
BB1 ............................................................................................................................
BA2 ............................................................................................................................
BA1 ............................................................................................................................
PE2 ............................................................................................................................
PE1 ............................................................................................................................
PD2 ............................................................................................................................
PD1 ............................................................................................................................
PC2 ............................................................................................................................
PC1 ............................................................................................................................
PB2 ............................................................................................................................
PB1 ............................................................................................................................
PA2 ............................................................................................................................
PA1 ............................................................................................................................
Labor portion
786.81
769.66
700.32
628.31
634.50
565.92
582.04
534.03
511.16
596.49
596.49
498.76
511.71
443.13
441.42
445.90
401.32
353.31
391.72
367.71
302.56
380.85
245.40
718.34
562.31
502.30
485.15
402.85
454.29
378.85
428.57
358.27
423.43
354.84
440.57
368.56
423.43
354.84
371.99
313.69
353.13
299.97
392.56
361.70
371.99
341.12
325.69
301.69
301.69
279.40
255.39
238.25
270.83
258.82
224.53
214.24
361.70
344.55
341.12
323.98
293.12
279.40
248.54
238.25
205.67
197.10
$544.47
532.60
484.62
434.79
439.07
391.62
402.77
369.55
353.72
412.77
412.77
345.14
354.10
306.65
305.46
308.56
277.71
244.49
271.07
254.46
209.37
263.55
169.82
497.09
389.12
347.59
335.72
278.77
314.37
262.16
296.57
247.92
293.01
245.55
304.87
255.04
293.01
245.55
257.42
217.07
244.37
207.58
271.65
250.30
257.42
236.06
225.38
208.77
208.77
193.34
176.73
164.87
187.41
179.10
155.37
148.25
250.30
238.43
236.06
224.19
202.84
193.34
171.99
164.87
142.32
136.39
Non-labor portion
$242.34
237.06
215.70
193.52
195.43
174.30
179.27
164.48
157.44
183.72
183.72
153.62
157.61
136.48
135.96
137.34
123.61
108.82
120.65
113.25
93.19
117.30
75.58
221.25
173.19
154.71
149.43
124.08
139.92
116.69
132.00
110.35
130.42
109.29
135.70
113.52
130.42
109.29
114.57
96.62
108.76
92.39
120.91
111.40
114.57
105.06
100.31
92.92
92.92
86.06
78.66
73.38
83.42
79.72
69.16
65.99
111.40
106.12
105.06
99.79
90.28
86.06
76.55
73.38
63.35
60.71
TABLE 8—RUG–IV CASE-MIX ADJUSTED FEDERAL RATES FOR RURAL SNFS BY LABOR AND NON-LABOR COMPONENT
RUG–IV category
Total rate
RUX ...........................................................................................................................
VerDate Sep<11>2014
20:58 Apr 17, 2015
Jkt 235001
PO 00000
Frm 00012
Fmt 4701
Sfmt 4702
Labor portion
804.93
E:\FR\FM\20APP3.SGM
$557.01
20APP3
Non-labor portion
$247.92
Federal Register / Vol. 80, No. 75 / Monday, April 20, 2015 / Proposed Rules
22055
TABLE 8—RUG–IV CASE-MIX ADJUSTED FEDERAL RATES FOR RURAL SNFS BY LABOR AND NON-LABOR COMPONENT—
Continued
mstockstill on DSK4VPTVN1PROD with PROPOSALS3
RUG–IV category
Total rate
RUL ............................................................................................................................
RVX ............................................................................................................................
RVL ............................................................................................................................
RHX ...........................................................................................................................
RHL ............................................................................................................................
RMX ...........................................................................................................................
RML ...........................................................................................................................
RLX ............................................................................................................................
RUC ...........................................................................................................................
RUB ...........................................................................................................................
RUA ...........................................................................................................................
RVC ...........................................................................................................................
RVB ............................................................................................................................
RVA ............................................................................................................................
RHC ...........................................................................................................................
RHB ...........................................................................................................................
RHA ...........................................................................................................................
RMC ...........................................................................................................................
RMB ...........................................................................................................................
RMA ...........................................................................................................................
RLB ............................................................................................................................
RLA ............................................................................................................................
ES3 ............................................................................................................................
ES2 ............................................................................................................................
ES1 ............................................................................................................................
HE2 ............................................................................................................................
HE1 ............................................................................................................................
HD2 ............................................................................................................................
HD1 ............................................................................................................................
HC2 ............................................................................................................................
HC1 ............................................................................................................................
HB2 ............................................................................................................................
HB1 ............................................................................................................................
LE2 .............................................................................................................................
LE1 .............................................................................................................................
LD2 ............................................................................................................................
LD1 ............................................................................................................................
LC2 ............................................................................................................................
LC1 ............................................................................................................................
LB2 .............................................................................................................................
LB1 .............................................................................................................................
CE2 ............................................................................................................................
CE1 ............................................................................................................................
CD2 ............................................................................................................................
CD1 ............................................................................................................................
CC2 ............................................................................................................................
CC1 ............................................................................................................................
CB2 ............................................................................................................................
CB1 ............................................................................................................................
CA2 ............................................................................................................................
CA1 ............................................................................................................................
BB2 ............................................................................................................................
BB1 ............................................................................................................................
BA2 ............................................................................................................................
BA1 ............................................................................................................................
PE2 ............................................................................................................................
PE1 ............................................................................................................................
PD2 ............................................................................................................................
PD1 ............................................................................................................................
PC2 ............................................................................................................................
PC1 ............................................................................................................................
PB2 ............................................................................................................................
PB1 ............................................................................................................................
PA2 ............................................................................................................................
PA1 ............................................................................................................................
Section 1888(e)(4)(G)(ii) of the Act
also requires that we apply this wage
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788.55
707.24
638.44
633.38
567.86
575.61
529.74
501.00
623.11
623.11
529.74
527.06
461.54
459.90
453.20
410.61
364.75
393.79
370.86
308.61
376.51
247.11
693.69
544.64
487.31
470.93
392.30
441.44
369.37
416.87
349.71
411.96
346.44
428.34
359.54
411.96
346.44
362.82
307.13
344.80
294.02
382.47
352.99
362.82
333.33
318.59
295.66
295.66
274.37
251.43
235.05
266.18
254.71
221.95
212.12
352.99
336.61
333.33
316.95
287.47
274.37
244.88
235.05
203.93
195.74
index in a manner that does not result
in aggregate payments under the SNF
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Sfmt 4702
Labor portion
545.68
489.41
441.80
438.30
392.96
398.32
366.58
346.69
431.19
431.19
366.58
364.73
319.39
318.25
313.61
284.14
252.41
272.50
256.64
213.56
260.54
171.00
480.03
376.89
337.22
325.88
271.47
305.48
255.60
288.47
242.00
285.08
239.74
296.41
248.80
285.08
239.74
251.07
212.53
238.60
203.46
264.67
244.27
251.07
230.66
220.46
204.60
204.60
189.86
173.99
162.65
184.20
176.26
153.59
146.79
244.27
232.93
230.66
219.33
198.93
189.86
169.46
162.65
141.12
135.45
Non-labor portion
242.87
217.83
196.64
195.08
174.90
177.29
163.16
154.31
191.92
191.92
163.16
162.33
142.15
141.65
139.59
126.47
112.34
121.29
114.22
95.05
115.97
76.11
213.66
167.75
150.09
145.05
120.83
135.96
113.77
128.40
107.71
126.88
106.70
131.93
110.74
126.88
106.70
111.75
94.60
106.20
90.56
117.80
108.72
111.75
102.67
98.13
91.06
91.06
84.51
77.44
72.40
81.98
78.45
68.36
65.33
108.72
103.68
102.67
97.62
88.54
84.51
75.42
72.40
62.81
60.29
PPS that are greater or less than would
otherwise be made if the wage
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adjustment had not been made. For FY
2016 (federal rates effective October 1,
2014), we would apply an adjustment to
fulfill the budget neutrality requirement.
We would meet this requirement by
multiplying each of the components of
the unadjusted federal rates by a budget
neutrality factor equal to the ratio of the
weighted average wage adjustment
factor for FY 2015 to the weighted
average wage adjustment factor for FY
2016. For this calculation, we use the
same FY 2014 claims utilization data for
both the numerator and denominator of
this ratio. We define the wage
adjustment factor used in this
calculation as the labor share of the rate
component multiplied by the wage
index plus the non-labor share of the
rate component. The budget neutrality
factor for FY 2016 would be 0.9989.
In the SNF PPS final rule for FY 2006
(70 FR 45026, August 4, 2005), we
adopted the changes discussed in the
OMB Bulletin No. 03–04 (June 6, 2003),
available online at
www.whitehouse.gov/omb/bulletins/
b03-04.html, which announced revised
definitions for MSAs and the creation of
micropolitan statistical areas and
combined statistical areas.
In adopting the CBSA geographic
designations, we provided for a one-year
transition in FY 2006 with a blended
wage index for all providers. For FY
2006, the wage index for each provider
consisted of a blend of 50 percent of the
FY 2006 MSA-based wage index and 50
percent of the FY 2006 CBSA-based
wage index (both using FY 2002
hospital data). We referred to the
blended wage index as the FY 2006 SNF
PPS transition wage index. As discussed
in the SNF PPS final rule for FY 2006
(70 FR 45041), since the expiration of
this one-year transition on September
30, 2006, we have used the full CBSAbased wage index values.
On February 28, 2013, OMB issued
OMB Bulletin No. 13–01, announcing
revisions to the delineation of MSAs,
Micropolitan Statistical Areas, and
Combined Statistical Areas, and
guidance on uses of the delineation of
these areas. A copy of this bulletin is
available online at https://
www.whitehouse.gov/sites/default/files/
omb/bulletins/2013/b-13-01.pdf. This
bulletin states that it provides the
delineations of all Metropolitan
Statistical Areas, Metropolitan
Divisions, Micropolitan Statistical
Areas, Combined Statistical Areas, and
New England City and Town Areas in
the United States and Puerto Rico based
on the standards published on June 28,
2010, in the Federal Register (75 FR
37246–37252) and Census Bureau data.
While the revisions OMB published
on February 28, 2013 are not as
sweeping as the changes made when we
adopted the CBSA geographic
designations for FY 2006, the February
28, 2013 bulletin does contain a number
of significant changes. For example,
there are new CBSAs, urban counties
that became rural, rural counties that
became urban, and existing CBSAs that
were split apart.
In the FY 2015 SNF PPS final rule (79
FR 45644 through 45646), we finalized
changes to the SNF PPS wage index
based on the newest OMB delineations,
as described in OMB Bulletin No. 13–
01, beginning in FY 2015, including a 1year transition with a blended wage
index for FY 2015. Because the 1-year
transition period expires at the end of
FY 2015, the proposed SNF PPS wage
index for FY 2016 is fully based on the
revised OMB delineations adopted in
FY 2015. As noted above, the proposed
wage index applicable to FY 2016 is set
forth in Table A available on the CMS
Web site at https://cms.gov/Medicare/
Medicare-Fee-for-Service-Payment/
SNFPPS/WageIndex.html.
E. Adjusted Rate Computation Example
Using the hypothetical SNF XYZ
described below, Table 9 shows the
adjustments made to the federal per
diem rates to compute the provider’s
actual per diem PPS payment. We
derive the Labor and Non-labor columns
from Table 7. The wage index used in
this example is based on the proposed
wage index, which may be found in
Table A as referenced above. As
illustrated in Table 9, SNF XYZ’s total
PPS payment would equal $45,462.10.
TABLE 9—ADJUSTED RATE COMPUTATION EXAMPLE
SNF XYZ: LOCATED IN FREDERICK, MD (URBAN CBSA 43524)
WAGE INDEX: 0.9681
[See Proposed Wage Index in Table A] 1
RUG–IV Group
RVX ..................................
ES2 ..................................
RHA ..................................
CC2* .................................
BA2 ..................................
Labor
Wage index
$484.62
389.12
244.49
225.38
155.37
Adjusted
labor
0.9681
0.9681
0.9681
0.9681
0.9681
$469.16
376.71
236.69
218.19
150.41
Non-labor
$215.70
173.19
108.82
100.31
69.16
Adjusted
rate
$684.86
549.90
345.51
318.50
219.57
Percent
adjustment
$684.86
549.90
345.51
726.18
219.57
Medicare
days
Payment
14
30
16
10
30
$9,588.04
16,497.00
5,528.16
7,261.80
6,587.10
100
45,462.10
* Reflects a 128 percent adjustment from section 511 of the MMA.
1 Available on the CMS Web site at https://www.cms.gov/Medicare/Medicare-Fee-for-Service-Payment/SNFPPS/WageIndex.html.
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IV. Additional Aspects of the SNF PPS
A. SNF Level of Care—Administrative
Presumption
The establishment of the SNF PPS did
not change Medicare’s fundamental
requirements for SNF coverage.
However, because the case-mix
classification is based, in part, on the
beneficiary’s need for skilled nursing
care and therapy, we have attempted,
where possible, to coordinate claims
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review procedures with the existing
resident assessment process and casemix classification system discussed in
section III.C. of this proposed rule. This
approach includes an administrative
presumption that utilizes a beneficiary’s
initial classification in one of the upper
52 RUGs of the 66-group RUG–IV casemix classification system to assist in
making certain SNF level of care
determinations.
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In accordance with section
1888(e)(4)(H)(ii) of the Act and the
regulations at § 413.345, we include in
each update of the federal payment rates
in the Federal Register the designation
of those specific RUGs under the
classification system that represent the
required SNF level of care, as provided
in § 409.30. As set forth in the FY 2011
SNF PPS update notice (75 FR 42910),
this designation reflects an
administrative presumption under the
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66-group RUG–IV system that
beneficiaries who are correctly assigned
to one of the upper 52 RUG–IV groups
on the initial five-day, Medicarerequired assessment are automatically
classified as meeting the SNF level of
care definition up to and including the
assessment reference date on the fiveday Medicare-required assessment.
A beneficiary assigned to any of the
lower 14 RUG–IV groups is not
automatically classified as either
meeting or not meeting the definition,
but instead receives an individual level
of care determination using the existing
administrative criteria. This
presumption recognizes the strong
likelihood that beneficiaries assigned to
one of the upper 52 RUG–IV groups
during the immediate post-hospital
period require a covered level of care,
which would be less likely for those
beneficiaries assigned to one of the
lower 14 RUG–IV groups.
In the July 30, 1999 final rule (64 FR
41670), we indicated that we would
announce any changes to the guidelines
for Medicare level of care
determinations related to modifications
in the case-mix classification structure.
In this proposed rule, we would
continue to designate the upper 52
RUG–IV groups for purposes of this
administrative presumption, consisting
of all groups encompassed by the
following RUG–IV categories:
• Rehabilitation plus Extensive
Services.
• Ultra High Rehabilitation.
• Very High Rehabilitation.
• High Rehabilitation.
• Medium Rehabilitation.
• Low Rehabilitation.
• Extensive Services.
• Special Care High.
• Special Care Low.
• Clinically Complex.
However, we note that this
administrative presumption policy does
not supersede the SNF’s responsibility
to ensure that its decisions relating to
level of care are appropriate and timely,
including a review to confirm that the
services prompting the beneficiary’s
assignment to one of the upper 52 RUG–
IV groups (which, in turn, serves to
trigger the administrative presumption)
are themselves medically necessary. As
we explained in the FY 2000 SNF PPS
final rule (64 FR 41667), the
administrative presumption:
. . . is itself rebuttable in those individual
cases in which the services actually received
by the resident do not meet the basic
statutory criterion of being reasonable and
necessary to diagnose or treat a beneficiary’s
condition (according to section 1862(a)(1) of
the Act). Accordingly, the presumption
would not apply, for example, in those
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situations in which a resident’s assignment to
one of the upper . . . groups is itself based
on the receipt of services that are
subsequently determined to be not
reasonable and necessary.
Moreover, we want to stress the
importance of careful monitoring for
changes in each patient’s condition to
determine the continuing need for Part
A SNF benefits after the assessment
reference date of the 5-day assessment.
B. Consolidated Billing
Sections 1842(b)(6)(E) and 1862(a)(18)
of the Act (as added by section 4432(b)
of the BBA) require a SNF to submit
consolidated Medicare bills to its
Medicare Administrative Contractor for
almost all of the services that its
residents receive during the course of a
covered Part A stay. In addition, section
1862(a)(18) places the responsibility
with the SNF for billing Medicare for
physical therapy, occupational therapy,
and speech-language pathology services
that the resident receives during a
noncovered stay. Section 1888(e)(2)(A)
of the Act excludes a small list of
services from the consolidated billing
provision (primarily those services
furnished by physicians and certain
other types of practitioners), which
remain separately billable under Part B
when furnished to a SNF’s Part A
resident. These excluded service
categories are discussed in greater detail
in section V.B.2. of the May 12, 1998
interim final rule (63 FR 26295 through
26297).
A detailed discussion of the
legislative history of the consolidated
billing provision is available on the SNF
PPS Web site at https://www.cms.gov/
Medicare/Medicare-Fee-for-ServicePayment/SNFPPS/Downloads/
Legislative_History_07302013.pdf. In
particular, section 103 of the Medicare,
Medicaid, and SCHIP Balanced Budget
Refinement Act of 1999 (BBRA) (Pub. L.
106–113, enacted on November 29,
1999) amended section 1888(e)(2)(A) of
the Act by further excluding a number
of individual high-cost, low probability
services, identified by Healthcare
Common Procedure Coding System
(HCPCS) codes, within several broader
categories (chemotherapy items,
chemotherapy administration services,
radioisotope services, and customized
prosthetic devices) that otherwise
remained subject to the provision. We
discuss this BBRA amendment in
greater detail in the SNF PPS proposed
and final rules for FY 2001 (65 FR 19231
through 19232, April 10, 2000, and 65
FR 46790 through 46795, July 31, 2000),
as well as in Program Memorandum
AB–00–18 (Change Request #1070),
issued March 2000, which is available
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22057
online at www.cms.gov/transmittals/
downloads/ab001860.pdf.
As explained in the FY 2001 proposed
rule (65 FR 19232), the amendments
enacted in section 103 of the BBRA not
only identified for exclusion from this
provision a number of particular service
codes within four specified categories
(that is, chemotherapy items,
chemotherapy administration services,
radioisotope services, and customized
prosthetic devices), but also gave the
Secretary the authority to designate
additional, individual services for
exclusion within each of the specified
service categories. In the proposed rule
for FY 2001, we also noted that the
BBRA Conference report (H.R. Rep. No.
106–479 at 854 (1999) (Conf. Rep.))
characterizes the individual services
that this legislation targets for exclusion
as high-cost, low probability events that
could have devastating financial
impacts because their costs far exceed
the payment SNFs receive under the
prospective payment system. According
to the conferees, section 103(a) of the
BBRA is an attempt to exclude from the
PPS certain services and costly items
that are provided infrequently in SNFs.
By contrast, we noted that the Congress
declined to designate for exclusion any
of the remaining services within those
four categories (thus, leaving all of those
services subject to SNF consolidated
billing), because they are relatively
inexpensive and are furnished routinely
in SNFs.
As we further explained in the final
rule for FY 2001 (65 FR 46790), and as
our longstanding policy, any additional
service codes that we might designate
for exclusion under our discretionary
authority must meet the same statutory
criteria used in identifying the original
codes excluded from consolidated
billing under section 103(a) of the
BBRA: They must fall within one of the
four service categories specified in the
BBRA; and they also must meet the
same standards of high cost and low
probability in the SNF setting, as
discussed in the BBRA Conference
report. Accordingly, we characterized
this statutory authority to identify
additional service codes for exclusion as
essentially affording the flexibility to
revise the list of excluded codes in
response to changes of major
significance that may occur over time
(for example, the development of new
medical technologies or other advances
in the state of medical practice) (65 FR
46791). In this proposed rule, we
specifically invite public comments
identifying HCPCS codes in any of these
four service categories (chemotherapy
items, chemotherapy administration
services, radioisotope services, and
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customized prosthetic devices)
representing recent medical advances
that might meet our criteria for
exclusion from SNF consolidated
billing. We may consider excluding a
particular service if it meets our criteria
for exclusion as specified above.
Commenters should identify in their
comments the specific HCPCS code that
is associated with the service in
question, as well as their rationale for
requesting that the identified HCPCS
code(s) be excluded.
We note that the original BBRA
amendment (as well as the
implementing regulations) identified a
set of excluded services by means of
specifying HCPCS codes that were in
effect as of a particular date (in that
case, as of July 1, 1999). Identifying the
excluded services in this manner made
it possible for us to utilize program
issuances as the vehicle for
accomplishing routine updates of the
excluded codes, to reflect any minor
revisions that might subsequently occur
in the coding system itself (for example,
the assignment of a different code
number to the same service).
Accordingly, in the event that we
identify through the current rulemaking
cycle any new services that would
actually represent a substantive change
in the scope of the exclusions from SNF
consolidated billing, we would identify
these additional excluded services by
means of the HCPCS codes that are in
effect as of a specific date (in this case,
as of October 1, 2015). By making any
new exclusions in this manner, we
could similarly accomplish routine
future updates of these additional codes
through the issuance of program
instructions.
mstockstill on DSK4VPTVN1PROD with PROPOSALS3
C. Payment for SNF-Level Swing-Bed
Services
Section 1883 of the Act permits
certain small, rural hospitals to enter
into a Medicare swing-bed agreement,
under which the hospital can use its
beds to provide either acute- or SNFlevel care, as needed. For critical access
hospitals (CAHs), Part A pays on a
reasonable cost basis for SNF-level
services furnished under a swing-bed
agreement. However, in accordance
with section 1888(e)(7) of the Act, these
services furnished by non-CAH rural
hospitals are paid under the SNF PPS,
effective with cost reporting periods
beginning on or after July 1, 2002. As
explained in the FY 2002 final rule (66
FR 39562), this effective date is
consistent with the statutory provision
to integrate swing-bed rural hospitals
into the SNF PPS by the end of the
transition period, June 30, 2002.
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Accordingly, all non-CAH swing-bed
rural hospitals have now come under
the SNF PPS. Therefore, all rates and
wage indexes outlined in earlier
sections of this proposed rule for the
SNF PPS also apply to all non-CAH
swing-bed rural hospitals. A complete
discussion of assessment schedules, the
MDS, and the transmission software
(RAVEN–SB for Swing Beds) appears in
the FY 2002 final rule (66 FR 39562)
and in the FY 2010 final rule (74 FR
40288). As finalized in the FY 2010 SNF
PPS final rule (74 FR 40356–57),
effective October 1, 2010, non-CAH
swing-bed rural hospitals are required to
complete an MDS 3.0 swing-bed
assessment which is limited to the
required demographic, payment, and
quality items. The latest changes in the
MDS for swing-bed rural hospitals
appear on the SNF PPS Web site at
https://www.cms.gov/Medicare/
Medicare-Fee-for-Service-Payment/
SNFPPS/.
V. Other Issues
A. Skilled Nursing Facility Value-Based
Purchasing Program (SNF VBP Program)
1. Background
a. Overview
In recent years, we have undertaken a
number of initiatives to promote higher
quality and more efficient health care
for Medicare beneficiaries. These
initiatives, which include
demonstration projects, quality
reporting programs, and value-based
purchasing programs, have been
implemented in various health care
settings, including physician offices,
ambulatory surgical centers (ASCs),
hospitals, nursing homes, home health
agencies (HHAs), and dialysis facilities.
Many of these programs link a portion
of Medicare payments to provider
reporting or performance on quality
measures. The overarching goal of these
initiatives is to transform Medicare from
a passive payer of claims to an active
purchaser of quality health care for its
beneficiaries.
We view value-based purchasing as
an important step toward revamping
how care is paid for, moving
increasingly toward rewarding better
value, outcomes, and innovations
instead of merely volume.
b. SNF VBP Report to Congress
Section 3006(a) of the Affordable Care
Act required the Secretary to develop a
plan to implement a value-based
purchasing program under the Medicare
program for SNFs (as defined in section
1819(a) of the Act) and to submit that
plan to Congress. In developing the
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plan, this section required the Secretary
to consider several issues, including the
ongoing development, selection, and
modification process for measures, the
reporting, collection, and validation of
quality data, the structure of valuebased payment adjustments, methods
for public disclosure of SNF
performance, and any other issues
determined appropriate by the
Secretary. The Secretary was also
required to consult with relevant
affected parties and consider experience
with demonstrations relevant to the SNF
VBP Program.
HHS submitted the Report to Congress
required under section 3006 of the
Affordable Care Act in March 2012. The
report explains that a significant
number of elderly Americans receive
care in SNFs/NFs, either as short-term
post-acute care or as long-term custodial
care, and that quality of care is a
significant concern for a subset of SNFs/
NFs. The report also states that the SNF
PPS does not strongly incentivize SNFs
to furnish high quality care to this very
fragile patient population. The report
concludes that if HHS harnesses the
significant and growing purchasing
power of Medicare in this sector, it can
incentivize SNFs to improve the quality
of care for their patients.
In the report, we explained our belief
that the implementation of a SNF VBP
Program is a central step in revamping
Medicare’s payments for health care
services to reward better value,
outcome, and innovations, rather than
the volume of care. We also explained
our belief that a SNF VBP Program
should promote the development and
use of robust quality measures,
including measures that assess
functional status, to promote timely,
safe, and high-quality care for Medicare
beneficiaries. We noted that the creation
of a SNF VBP Program would align with
numerous HHS and CMS efforts to
improve care coordination, and would
be consistent with the National Quality
Strategy and its aims of Better Care,
Healthy People and Communities, and
Affordable Care.
The full report is available on our
Web site at https://www.cms.gov/
Medicare/Medicare-Fee-for-ServicePayment/SNFPPS/Downloads/SNFVBP-RTC.pdf.
2. Statutory Basis for the SNF VBP
Program
Section 215 of PAMA added sections
1888(g) and (h) to the Act. Section
1888(g)(1) of the Act requires the
Secretary to specify a skilled nursing
facility all-cause all-condition hospital
readmission measure (or any successor
to such a measure) not later than
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October 1, 2015. Section 1888(g)(2) of
the Act requires the Secretary to specify
an all-condition risk-adjusted
potentially preventable hospital
readmission rate for SNFs not later than
October 1, 2016. Section 1888(g)(3) of
the Act directs the Secretary to develop
a methodology to achieve high
reliability and validity for these
measures, especially for SNFs with a
low volume of readmissions. Section
1888(g)(4) of the Act makes the prerulemaking Measure Applications
Partnership process of Section 1890A of
the Act optional for these measures.
Under section 1888(g)(5) of the Act, the
Secretary is directed to provide
quarterly confidential feedback reports
to SNFs on their performance on the
readmission or resource use measure
beginning on October 1, 2016. Under
section 1888(g)(6) of the Act, not later
than October 1, 2017, the Secretary must
establish procedures for making
performance data on readmission and
resource use measures public on
Nursing Home Compare or a successor
Web site. That paragraph also requires
that the procedures ensure that a SNF
has the opportunity to review and
submit corrections to the information
that is to be made public for it before
that information is made public.
Section 1888(h)(1)(A) of the Act
requires the Secretary to establish a SNF
value-based purchasing program under
which value-based incentive payments
are made in a fiscal year to SNFs, and
section 1888(h)(1)(B) of the Act requires
that the Program apply to payments for
services furnished on or after October 1,
2018. Under section 1888(h)(2)(A) of the
Act, the Secretary must apply the
readmission measure specified under
section 1888(g)(1) of the Act for
purposes of the Program, and section
1888(h)(1)(B) of the Act requires the
Secretary to apply the resource use
measure specified under section
1888(g)(2) of the Act instead of the
readmission measure specified under
section 1888(g)(1) as soon as practicable.
Sections 1888(h)(3)(A) and (B) of the
Act require the Secretary to establish
performance standards for the measure
applied under section 1888(h)(2) of the
Act for a performance period for a fiscal
year and that those performance
standards include levels of achievement
and improvement. In addition, in
calculating the SNF performance score
for the measure under the Program,
section 1888(h)(3)(B) of the Act requires
the Secretary to use the higher of
achievement or improvement scores.
Further, the performance standards
established under section 1888(h)(3) of
the Act must, under section
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1888(h)(3)(C), be established and
announced by the Secretary not later
than 60 days prior to the beginning of
the performance period for the fiscal
year involved.
Section 1888(h)(4) of the Act directs
the Secretary to develop a methodology
to assess each SNF’s total performance
based on the performance standards for
the applicable measure for each
performance period. Under section
1888(h)(4)(B) of the Act, SNF
performance scores for the performance
period for each fiscal year must be
ranked from low to high.
Section 1888(h)(5) of the Act outlines
several requirements for value-based
incentive payments under the SNF VBP
Program. Under section 1888(h)(5)(A) of
the Act, the Secretary is directed to
increase the adjusted federal per diem
rate determined under section
1888(e)(4)(G) for services furnished by a
skilled nursing facility by the valuebased incentive payment amount
determined under section 1888(h)(5)(B).
This section also directs that the valuebased incentive payment amount be
equal to the product of the adjusted
federal per diem rate and the valuebased incentive payment percentage
specified under section 1888(h)(5)(C) of
the Act for the SNF for the fiscal year.
Section 1888(h)(5)(C) requires the
Secretary to specify a value-based
incentive payment percentage for a SNF
for a fiscal year, which may include a
zero percentage. The Secretary is further
directed under section 1888(h)(5)(C) to
ensure that such percentage is based on
the SNF performance score for the
performance period for the fiscal year,
that the application of all such
percentages in a fiscal year results in an
appropriate distribution of value-based
incentive payments, and that the total
amount of value-based incentive
payments for all SNFs for a fiscal year
be greater than or equal to 50 percent,
but not greater than 70 percent, of the
total amount of the reductions to
payments for the fiscal year under
section 1888(h)(6), as estimated by the
Secretary.
Section 1888(h)(6) of the Act requires
the Secretary to reduce the adjusted
federal per diem rate for SNFs otherwise
applicable to each SNF for services
furnished by that SNF during the
applicable fiscal year by the applicable
percent, which is defined in paragraph
(b) as two percent for FY 2019 and
subsequent years. Section 1888(h)(7) of
the Act requires the Secretary to inform
each SNF of its payment adjustments
under the Program not later than 60
days prior to the fiscal year involved,
and under section 1888(h)(8) of the Act,
the value-based incentive payments
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calculated for a fiscal year apply only
for that fiscal year.
Section 1888(h)(9)(A) of the Act
requires the Secretary to publish SNFspecific performance information on the
Nursing Home Compare Web site or a
successor Web site, including SNF
performance scores and rankings.
Section 1888(h)(9)(B) of the Act requires
the Secretary to post aggregate
information on the SNF VBP Program,
including the range of SNF performance
scores and the number of SNFs
receiving value-based incentive
payments and the range and total
amount of those payments.
3. Skilled Nursing Facility 30-Day AllCause Readmission Measure (SNFRM)
(NQF #2510; Measure Steward: CMS)
a. Overview
Reducing hospital readmissions is
important for quality of care and patient
safety. Readmission to a hospital may be
an adverse event for patients and in
many cases imposes a financial burden
on the health care system. Successful
efforts to reduce preventable
readmission rates will improve the
quality of care furnished to beneficiaries
while simultaneously decreasing the
cost of that care. Hospitals and other
health care providers can work with
their communities to lower readmission
rates and improve patient care in a
number of ways, such as by ensuring
that patients are clinically ready to be
discharged, reducing infection risk,
reconciling medications, improving
communication with community
providers responsible for post-discharge
patient care, improving care transitions,
and ensuring that patients understand
their care plans upon discharge.
Many studies have demonstrated the
effectiveness of these types of inhospital and post-discharge
interventions in reducing the risk of
readmission, confirming that hospitals
and their partners have the ability to
lower readmission rates.1 2 3 These types
of efforts during and after a
hospitalization have been shown to be
effective in reducing readmission rates
1 Gwadry-Sridhar FH, Flintoft V, Lee DS, Lee H,
Guyatt GH: A systematic review and meta-analysis
of studies comparing readmission rates and
mortality rates in patients with heart failure. Arch
Intern Med. 2004;164(21):2315–2320.
2 McAlister FA, Lawson FM, Teo KK, Armstrong
PW.: A systematic review of randomized trials of
disease management programs in heart failure.
AmJMed. 2001;110(5):378–384.
3 Krumholz HM, Amatruda J, Smith GL, et al.:
Randomized trial of an education and support
intervention to prevent readmission of patients with
heart failure. J Am Coll Cardiol. 2002;39(1):83–89.
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in geriatric populations generally,4 5 as
well as for multiple specific conditions.
Moreover, such interventions can result
in cost saving. Financial incentives to
reduce readmissions will in turn
promote improvement in care
transitions and care coordination, as
these are important means of reducing
preventable readmissions.6 In its 2007
Report to Congress on Promoting Better
Efficiency in Medicare,7 MedPAC noted
the potential benefit to patients of
lowering readmissions and suggested
payment strategies that would
incentivize hospitals to reduce these
rates. Readmission rates are important
markers of quality of care, particularly
of the care of a patient in transition from
an acute care setting to a non-acute care
setting, and improving readmissions can
positively influence patient outcomes
and the cost of care.
We are proposing to specify the
Skilled Nursing Facility 30-Day AllCause Readmission Measure (SNFRM)
(NQF #2510) as the skilled nursing
facility all-cause, all-condition hospital
readmission measure under section
1888(g)(1) of the Act. This measure
assesses the risk-standardized rate of allcause, all-condition, unplanned
inpatient hospital readmissions of
Medicare fee-for-service (FFS) SNF
patients within 30 days of discharge
from an admission to an inpatient
prospective payment system (IPPS)
hospital, critical access hospital (CAH),
or psychiatric hospital. This measure is
claims-based, requiring no additional
data collection or submission burden for
SNFs.
We are also proposing to apply this
measure for purposes of the SNF VBP
Program under section 1888(h)(2)(A) of
the Act. We believe that this measure
will (1) incentivize SNFs to make
quality improvements that result in
successful transitions of care for
patients discharged from the hospital
(IPPS, CAH or psychiatric hospital)
setting to a SNF, and subsequently to
the community or to another post-acute
4 Coleman EA, Parry C, Chalmers S, Min SJ.: The
care transitions intervention: Results of a
randomized controlled trial. Arch Intern Med.
2006;166:1822–8.
5 Naylor MD, Brooten D, Campbell R, Jacobsen
BS, Mezey MD, Pauly MV, Schwartz JS.:
Comprehensive discharge planning and home
follow-up of hospitalized elders: A randomized
clinical trial. JAMA. 1999;281:613–20. 186
6 Coleman EA.: 2005. Background Paper on
Transitional Care Performance Measurement.
Appendix I. In: Institute of Medicine, Performance
Measurement: Accelerating Improvement.
Washington, DC: National Academy Press.
7 Medicare Payment Advisory Commission
(MedPAC). Report to Congress: Promoting Greater
Efficiency in Medicare; 2007. Available at https://
www.medpac.gov/documents/Jun07_
EntireReport.pdf. Accessed January 10, 2011.
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care setting, (2) reduce unplanned
readmission rates of these patients to
hospitals; and (3) align the SNF VBP
Program with the National Quality
Strategy priorities of safer, better
coordinated care and lower costs.8
We developed this measure based
upon the NQF-endorsed Hospital-Wide
All-Cause Unplanned Readmission
Measure (HWR) (NQF #1789) (https://
www.qualityforum.org/QPS/1789) 9
implemented in the Hospital Inpatient
Quality Reporting Program. To the
extent methodologically and clinically
appropriate, we harmonized the SNFRM
with the HWR measure specifications.
b. Measure Calculation
The SNFRM estimates the riskstandardized rate of all-cause,
unplanned, hospital readmissions for
SNF Medicare FFS beneficiaries within
30 days of discharge from their prior
proximal acute hospitalization. The SNF
admission must have occurred within
one day after discharge from the prior
proximal hospitalization. The prior
proximal hospitalization is defined as
an inpatient admission to an IPPS, CAH,
or a psychiatric hospital. Because the
measure denominator is based on SNF
admissions, each Medicare beneficiary
may be included in the measure
multiple times within a given year if
they have more than one SNF stay
meeting all measure inclusion criteria
including a prior proximal
hospitalization.
Patient readmissions included in the
measure are identified by examining
Medicare claims data for readmissions
of SNF Medicare FFS beneficiaries to an
IPPS hospital or CAH occurring within
30 days of discharge from the prior
proximal hospitalization. If the patient
was admitted to the SNF within 1 day
of discharge from the prior proximal
hospitalization and the hospital
readmission occurred within the 30-day
risk window, it is counted in the
numerator regardless of whether the
patient is readmitted directly from the
SNF or has been discharged from the
SNF. Because patients differ in
complexity and morbidity, the measure
is risk-adjusted for patient case-mix.
The measure also excludes planned
readmissions, because these are not
considered to be indicative of poor
quality of care by the SNF. Details
regarding how readmissions are
8 Wilson, N. U.S. Department of Health and
Human Services, Agency for Healthcare Research
and Quality. (2014). National quality strategy:
Overview.
9 Adopted for the Hospital IQR Program in the FY
2013 IPPS/LTCH PPS Final Rule (77 FR 53521
through 53528).
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identified are available in our SNFRM
Technical Report.10
The SNFRM (NQF # 2510) assesses
readmission rates while accounting for
patient demographics, principal
diagnosis in the prior hospitalization,
comorbidities, and other patient factors.
While estimating the predictive power
of patient characteristics, the model also
estimates a facility-specific effect
common to patients treated at that SNF.
The SNFRM is calculated based on
the ratio, for each SNF, of the number
of risk-adjusted all-cause, unplanned
readmissions to an IPPS hospital or
CAH that occurred within 30 days of
discharge from the prior proximal
hospitalization, including the estimated
facility effect, to the estimated number
of risk-adjusted predicted unplanned
inpatient hospital readmissions for the
same patients treated at the average
SNF. A ratio above 1.0 indicates a
higher than expected readmission rate,
or lower level of quality, while a ratio
below 1.0 indicates a lower than
expected readmission rate, or higher
level of quality. This ratio is referred to
as the standardized risk ratio or SRR.
The SRR is then multiplied by the
overall national raw readmission rate for
all SNF stays. The resulting rate is the
risk-standardized readmission rate
(RSRR). The full methodology is
detailed in the SNFRM Technical
Report.
The patient population includes SNF
patients who:
• Had a prior hospital discharge
(IPPS, CAH or psychiatric hospital)
within one day of their admission to a
SNF.
• Had at least 12 months of Medicare
Part A, FFS coverage prior to their
discharge date from the prior proximal
hospitalization.
• Had Medicare Part A, FFS coverage
during the 30 days (the 30-day risk
window) following their discharge date
from the prior proximal hospitalization.
c. Exclusions
Patients whose prior proximal
hospitalization was for the medical
treatment for cancer are excluded.
Analyses of this population during
measure development showed them to
have a different trajectory of illness and
mortality than other patient
populations, which is consistent with
10 Available on the Nursing Home Quality
Initiative Web site at https://www.cms.gov/
Medicare/Quality-nitiatives-Patient-AssessmentInstruments/NursingHomeQualityInits/
index.html?redirect=/nursinghomequalityinits/.
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findings in studies in other patient
populations.11
SNF stays excluded from the measure
are:
• SNF stays where the patient had
one or more intervening post-acute care
(PAC) admissions (inpatient
rehabilitation facility (IRF), long-term
care hospital (LTCH), or another SNF)
which occurred either between the prior
proximal hospital discharge and SNF
admission (from which the patient was
readmitted) or after the SNF discharge
but before the readmission, within the
30-day risk window.
• SNF stays with a gap of greater than
1 day between discharge from the prior
proximal hospitalization and the SNF
admission.
• SNF stays in which the patient was
discharged from the SNF against
medical advice (AMA).
• SNF stays in which the principal
diagnosis for the prior proximal
hospitalization was for rehabilitation
care; fitting of prostheses and for the
adjustment of devices.
• SNF stays in which the prior
proximal hospitalization was for
pregnancy.
• SNF stays in which data were
missing on any variable used in the
SNFRM construction.
Readmissions within the 30-day risk
window that are usually considered
planned due to the nature of the
procedures and principal diagnoses of
the readmission are also excluded from
the measure. In addition to the list of
planned procedures is a list of diagnoses
(provided in the SNFRM Technical
Report), which, if found as the principal
diagnosis on the readmission claim,
would indicate that the usually planned
procedure occurred during an
unplanned acute readmission. In
addition to the HWR Planned
Readmission Algorithm, the SNFRM
incorporates procedures that are
considered planned in post-acute care
settings as identified in consultation
with technical expert panels. Full
details on the planned readmissions
criteria used, including the additional
procedures considered planned for postacute care may be found in the SNFRM
Technical Report. Details regarding the
TEP proceedings can be found in the
SNFRM TEP Report.
d. Eligible Readmissions
An eligible SNF admission is
considered to be in the 30-day risk
window from the date of discharge from
the proximal acute hospitalization until:
11 National Quality Forum. ‘‘Patient Outcomes:
All-Cause Readmissions Expedited Review 2011’’.
July 2012. pp12.
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(1) The 30-day period ends; or (2) the
patient is readmitted to an IPPS hospital
or CAH. If the readmission is
unplanned, it is counted as a
readmission in the numerator of the
measure. If the readmission is planned,
the readmission is not counted in the
numerator of the measure. The
occurrence of a planned readmission
ends further tracking for readmissions
in the 30-day risk window.
e. Risk Adjustment
Readmission rates are risk-adjusted
for patient case-mix characteristics,
independent of quality. The risk
adjustment modeling estimates the
effects of patient characteristics,
comorbidities, and select health status
variables on the probability of
readmission. More specifically, the riskadjustment model for SNFs accounts for
demographic characteristics (age and
sex), principal diagnosis during the
prior proximal hospitalization,
comorbidities based on the secondary
medical diagnoses listed on the patient’s
prior proximal hospital claim and
diagnoses from prior hospitalizations
that occurred in the previous 365 days,
length of stay during the patient’s prior
proximal hospitalization, length of stay
in the intensive care unit (ICU), body
system specific surgical indicators, endstage renal disease status, whether the
patient was disabled, and the number of
prior hospitalizations in the previous
365 days.
f. Measurement Period
The SNFRM utilizes 1 year of data to
calculate the measure rate. Given that
there are more than 2 million Medicare
FFS SNF admissions per year in more
than 15,000 SNFs, 1 year of data is
sufficient to calculate this measure with
a model in which the risk adjusters have
sufficient sample size to have good
precision. The relevant reliability
testing may be found in the SNFRM
Technical Report.
g. Stakeholder/MAP Input
Our measure development contractor
convened a technical expert panel (TEP)
which provided input on the technical
specifications of this quality measure.
The TEP was supportive of the design
of this measure. We also solicited
stakeholder feedback on the
development of this measure through a
public comment process from July 15th
to 29th, 2013. In December 2014, the
NQF endorsed the Skilled Nursing
Facility 30-Day All-Cause Readmission
Measure (NQF #2510).
We also considered input from the
Measures Application Partnership
(MAP) when selecting measures under
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the CMS SNF VBP Program. The MAP
is composed of multi-stakeholder
groups convened by the NQF, our
current contractor under section 1890(a)
of the Act. The MAP has noted the need
for care transition measures in PAC/
Long term care (LTC) performance
measurement programs and stated that
setting-specific admission and
readmission measures under
consideration would address this
need.12 We included the SNFRM on the
December 1, 2014 List of Measures
under Consideration (MUC List), and
the MAP supported the measure. A
spreadsheet of MAP’s 2015 Final
Recommendations is available at NQF’s
Web site at https://
www.qualityforum.org/WorkArea/
linkit.aspx?LinkIdentifier=id&
ItemID=78711.
We invite public comment on our
proposal to adopt the Skilled Nursing
Facility 30-Day All-Cause Readmission
Measure (SNFRM) (NQF #2510) for use
in the SNF VBP Program.
h. Feedback Reports to SNFs
Section 1888(g)(5) of the Act requires
that beginning October 1, 2016, SNFs be
provided quarterly confidential
feedback reports on their performance
on measures specified under sections
1888(g)(1) or (2) of the Act.
We intend to address this topic in
future rulemaking. However, we request
public comment on the best means by
which to communicate these reports to
SNFs. For example, we could consider
providing confidential, downloadable
feedback reports to SNFs through a
secure portal, such as QualityNet. We
also seek comment on the level of detail
that would be most helpful to SNFs in
understanding their performance on the
new quality measures.
4. Performance Standards
a. Background
Section 1888(h)(3) of the Act requires
the Secretary to establish performance
standards for the SNF VBP Program.
The performance standards must
include levels of achievement and
improvement, and must be established
and announced not later than 60 days
prior to the beginning of the
performance period for the fiscal year
involved. To assist us in developing our
proposals to establish performance
standards for the SNF VBP program, we
reviewed a number of innovative health
care programs and demonstration
12 National Quality Forum. Measure Applications
Partnership Pre-Rulemaking Report: 2013
Recommendations of Measures Under
Consideration by HHS: February 2013. Available at
https://www.qualityforum.org/WorkArea/linkit.aspx?
LinkIdentifier=id&ItemID=72738.
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projects, both public and private, to
discover if any could serve as a
prototype for the SNF VBP program.
One methodology of important note that
provides us an analogous framework for
implementation of performance
standards is the Performance
Assessment Model, implemented for our
Hospital VBP program. We also
reviewed the Hospital Acquired
Conditions Reduction Program, as well
as the Hospital Readmissions Reduction
Program and the End-Stage Renal
Disease Quality Incentive Program
(ESRD QIP). We seek comment on
several potential approaches for
calculating performance standards
under the SNF VBP Program.
i. Hospital Value-Based Purchasing
Program
Under the Hospital VBP Program, a
hospital’s Total Performance Score is
determined by aggregating and
weighting domain scores, which are
calculated based on hospital
performance on measures within each
domain. The domain scores are then
weighted to calculate a TPS that ranges
between 0 and 100 points. At this time,
we do not anticipate proposing to adopt
quality measurement domains akin to
other CMS quality programs under the
SNF VBP Program due to fact that this
program is based on only one measure.
To calculate HVBP measure scores,
hospital performance on specified
quality measures is compared to
performance standards established by
the Secretary. These performance
standards include levels of achievement
and improvement and enable us to
award between 0 and 10 points to each
hospital based on its performance on
each measure during the performance
period. An achievement threshold,
generally defined as the median of all
hospital performance on most measures
during a specified baseline period, is the
minimum level of performance required
to receive achievement points. The
benchmark, generally defined as the
mean of the top decile of all hospital
performance on a measure during the
baseline period, is the performance level
required for receiving the maximum
number of points on a given measure.
The Program also establishes an
improvement threshold for each
measure, set at each individual
hospital’s performance on the measure
during the baseline period, to award
points for improvement over time.
We believe that the Hospital VBP
Program’s performance standards
methodology is a well-understood
methodology under which health care
providers and suppliers can be
rewarded both for providing high-
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quality care and for improving their
performance over time. The statutory
authority for the Hospital VBP Program
is structured similarly to the statutory
authority for the SNF VBP Program, and
we are considering adoption of a similar
methodology for establishing
performance standards under the SNF
VBP Program. We also seek to align our
pay-for-performance and quality
reporting programs as much as possible.
Specifically, we could consider
adopting performance standards based
on all SNF performance during the
baseline period on the measure
specified under section 1888(g)(1) or (2)
of the Act in the form of the
achievement threshold—median of all
SNF performance during a baseline
period—and the benchmark—mean of
the top decile of all SNF performance
during a baseline period. We could then
consider awarding points along a
continuum relative to those
performance levels.
ii. Hospital-Acquired Conditions
Reduction Program
We also considered whether we
should adopt any components of the
scoring methodology that we have
finalized for the HAC Reduction
Program under the SNF VBP Program.
The HAC Reduction Program requires
the Secretary to reduce eligible
hospitals’ Medicare payments to 99
percent of what would otherwise have
been paid for discharges when hospitals
rank in the worst performing quartile for
risk-adjusted HAC quality measures.
These quality measures comprise efforts
to promote quality of care by reducing
the number of HACs in the acute
inpatient hospital setting.
We determine a hospital’s Total HAC
Score by first assigning each hospital a
score of between 1 and 10 for each
measure based on the hospital’s relative
performance ranking in 10 groups (or
deciles) for that measure. Second, the
measure score is used to calculate the
domain score. We discuss other details
of the HAC Reduction Program’s scoring
methodology in further detail below.
Although the HACRP statutory
authority is not structured the same as
the SNF VBP statutory authority, we
view the HACRP’s use of decile-based
performance standards as one
conceptual possibility for constructing
performance standards under the SNF
VBP Program. Specifically, we could
consider setting performance standards
based on SNFs’ ranked performance on
the measures specified under sections
1888(g)(1) or (2) of the Act during the
performance period. We could divide
SNFs’ performance on the measures into
deciles and award between 1 and 10
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points to all SNFs within each decile.
While this type of performance
standards calculation would measure
and reward achievement, we are
concerned that it would not incorporate
improvement, and we seek comment on
the best means by which we could
include improvement in this type of
calculation.
iii. Hospital Readmissions Reduction
Program (HRRP)
We also considered aspects of the
Hospital Readmissions Reduction
Program (HRRP) for adaptation under
the SNF VBP Program. HRRP reduces
Medicare payments to hospitals with a
higher number of readmissions for
applicable conditions over a specified
time period.
Hospital readmissions are defined as
Medicare patients that are readmitted to
the same or another hospital within 30
days of a discharge from the same or
another hospital, which includes shortterm inpatient acute care hospitals. The
initial hospital inpatient admission (the
discharge from which starts the 30-day
potential penalty clock) is termed the
index admission. The hospital inpatient
readmission (which can be used to
determine application of a penalty if the
readmission occurs within 30 days of
the index inpatient admission stay) can
be for any cause, that is, it does not have
to be for the same cause as the index
admission.
Using historical data, we determine
whether eligible IPPS hospitals have
readmission rates that are higher than
expected, given the hospital’s case mix,
while accounting for the patient risk
factors, including age, and chronic
medical conditions identified from
inpatient and outpatient claims for the
12 months prior to the hospitalization.
A hospital’s excess readmission ratio for
each condition is a measure of a
hospital’s readmission performance
compared to the national average for the
hospital’s set of patients with that
applicable condition. If the hospital’s
actual readmission rate, based on the
hospital’s actual performance, for the
year is greater than its CMS-expected
readmission rate, the hospital incurs a
penalty up to the maximum cap. If a
hospital performs better than an average
hospital that admitted similar patients,
the hospital will not be subjected to a
payment reduction. If a hospital
performs worse than average (below a
1.000 score), the poorer performance
triggers a payment reduction. For FY
2013, the reduction was capped at 1
percent, for FY 2014 at 2 percent, and
at 3 percent for FY 2015 and for
subsequent years.
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We view the Hospital Readmissions
Reduction Program as a potential model
for the SNF VBP Program because that
program does not weight scores based
on domains. That is, under the HRRP,
hospitals’ risk-adjusted readmissions
ratios form the basis for Medicare
payment adjustments. Under SNF VBP
(and as discussed further in this
section), the Program’s statute requires
us to select only one measure to form
the basis for the SNF Performance
Score. We believe that this conceptual
similarity stands distinct from certain
other CMS quality programs that
incorporate quality measurement
domains and domain weighting into the
scoring calculations. However, the
HRRP sets an effective performance
standard based on the average
readmissions adjustment factor of 1.000.
We seek comment on whether or not we
should adopt a similar form of
performance standard under the SNF
VBP Program. This performance
standard could take the form of the
median or mean performance on the
specified quality measure during the
performance period. However, we
believe we would also need to consider
more granular delineations in SNF
scoring to ensure an appropriate
distribution of value-based incentive
payments under the Program, and we
seek comment on what additional
policies we should consider adopting in
this topic area.
iv. End-Stage Renal Disease Quality
Incentive Program (ESRD QIP)
The End-Stage Renal Disease Quality
Incentive Program (ESRD QIP) is
authorized by section 1881(h) of the
Act. The program promotes patient
health by providing a financial
incentive for renal dialysis facilities to
deliver high-quality care to their
patients.
Section 1881(h)(3)(A)(i) of the Act
requires the Secretary to develop a
methodology for assessing the total
performance of each provider and
facility based on performance standards.
For each clinical measure adopted
under the ESRD QIP, we assess
performance on both achievement and
improvement. For the achievement
score, facility performance on a measure
during a performance period is
compared against national facility
performance on that measure during a
specified baseline period. To calculate
the improvement score, we compare a
facility’s performance during the
performance period to its performance
during a specified baseline period. In
determining a clinical measure score for
each measure, we take the higher of the
improvement or achievement score.
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For each reporting measure, we assess
performance based on whether the
facility completed the reporting for that
measure as specified. If a facility reports
data according to the specifications we
have adopted, then the facility earns the
maximum number of points on the
measure. If the facility partially reports
data according to the specifications we
have adopted, the hospital earns some
points on the measure, but less than the
maximum.
We believe that the ESRD QIP
performance standards methodology is a
well-understood methodology under
which health care providers and
suppliers can be rewarded both for
providing high-quality care and for
improving their performance over time.
The scoring methodology rewards
achievement and improvement, and is
generally aligned with other pay-forperformance and quality reporting
programs. Like the Hospital VBP
Program statutory language, the ESRD
QIP statutory language is structured
similar to the SNF VBP Program
statutory language, and we are
considering adoption of a similar
methodology for calculating
performance standards under the SNF
VBP Program. Specifically, we could
consider adopting performance
standards based on all SNF performance
during the baseline period on the
measure specified under sections
1888(g)(1) or (2) of the Act in the forms
of the achievement threshold—median
of all SNF performance—and the
benchmark—mean of the top decile of
all SNF performance. We could then
consider awarding points for those
performance levels.
b. Measuring Improvement
We are considering several
methodologies for improvement scoring
under the SNF VBP Program, and we
welcome public comments on these
options or others that we should
consider as we develop our SNF VBP
Program policies for future rulemaking.
Section 1888(h)(4)(B) of the Act
specifically requires us to construct a
ranking of SNF performance scores.
While we view such a ranking system as
fairly straightforward when based on
achievement scoring—for example,
ranking SNFs based on their
performance on a measure during the
performance period could be achieved
by ordering SNF performance rates on
the measure specified for the Program
year—we are considering several
approaches for including improvement
in the SNF scoring methodology
because we are limited to one measure
for each SNF Program year. These
approaches include:
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• Improvement points, awarded using
a similar methodology as the one we use
to award improvement points in the
Hospital VBP Program.
• Measure rate increases, in which a
SNF’s performance rate on a measure
would be increased as a result of its
improvement over time.
• Ranking increases, in which a
SNF’s ranking relative to other SNFs
would be increased as a result of
improvement.
• Performance score increases, in
which a SNF’s performance score would
be increased as a result of improvement.
We discuss each of these options in
further detail below.
i. Improvement Points
The Hospital VBP Program calculates
both achievement and improvement
points for participating hospitals with
sufficient data on each measure adopted
under the Program, and the score a
hospital receives on a measure is the
higher of the achievement and
improvement score. We could consider
adopting a similar methodology under
the SNF VBP Program, in which points
would be calculated for SNFs for both
achievement (in comparison to all SNFs
during the performance period) and for
improvement (in comparison to that
individual SNF’s performance during
the baseline period). Points awarded
could be, similar to the HVBP Program,
between 0 and 10 points, or we could
consider awarding points on a broader
range, such as from 0 to 50, or 0 to 100.
We believe that adapting the Hospital
VBP Program’s performance standards
methodology presents certain
advantages, in that it is well understood
by the public and reflects a fair means
to fulfill the statutory requirement at
section 1888(h)(3)(B) of the Act to
include both achievement and
improvement. However, since there is
only one measure in the SNF VBP
Program, such a policy could result in
significant differences in SNF valuebased incentive payments between
SNFs with relatively small differences
in measured performance. We seek
comment on whether or not we should
adopt improvement points in a similar
form to that which we have adopted for
the Hospital VBP Program.
ii. Measure Rate Increases
Given the limited number of measures
that we may select for the SNF VBP
Program, we are considering whether
we should include improvement in the
program by way of increasing a SNF’s
performance rate on the Program’s
measure by a certain amount. Such a
measure rate increase could take several
forms, and could rely on any number of
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qualifying criteria. For example, an
increase of 10 percent of measured
performance could be awarded to any
SNF’s measure rate that rises between
the baseline and performance periods.
We could also consider limiting this
increase to SNFs whose improvement
on the Program’s measure placed them
in the top 50 percent of improving SNFs
between the baseline and performance
period. Additionally, we could consider
incorporating a penalty into the scoring
methodology if a SNF’s performance on
the measure selected under the Program
should decline significantly, and we
seek comment on whether or not we
should consider such a policy.
However, we are concerned about the
methodological implications to quality
measurement of awarding increases in
measured performance rates to
recognize improvement. We understand
that quality measures are developed
with robust considerations for the
clinical topic covered, the
recommended care provided, and in
many cases, for the health of the
underlying patient population, and we
seek comment on whether such an
adjustment would be methodologically
sound.
iii. Ranking Increases
Another possibility for rewarding
improvement is to adopt certain
elements of the Hospital VBP Program’s
scoring methodology—that is, 0 to 10
points for measured performance—and
increase a SNF’s relative placement as a
result of improvement. Under this type
of scenario, SNF performance would be
rank-ordered, and each SNF would be
placed in a cohort numbered from 0 to
10, which would correspond to the
points that would be awarded to that
SNF for achievement along a 0 to 10
point scale of SNF performance scores
based on their measured performance.
Once SNF performance has been ranked
from 0 to 10, we could consider
increasing SNFs’ ranking, and basing
value-based incentive payments under
the program on the resulting adjusted
ranking. For example, a SNF whose
performance on a measure resulted in a
score of 3 on the 0 to 10 point scale, but
whose performance improved, could
have its score increased to 4. We could
also consider limiting this increase to
only those SNFs whose improvement
places them in the top 50 percent of
improving SNFs between the baseline
and performance period.
However, we are concerned that this
type of ranking may not provide us with
enough granularity to meaningfully
differentiate performance between
groups of SNFs, and may result in
substantial differences in value-based
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incentive payments between SNFs with
relatively small differences in measured
performance. We are also concerned
about comparability once this type of
ranking increase has been performed,
because comparing two SNFs that both
ended at a given point on the 0 to 10
scale may not be meaningful if one of
them reached that point via
improvement. Because we are limited in
the number of measures that we may
adopt, we believe that we may need to
consider adopting a scoring
methodology that allows additional
granularity to capture improvement
appropriately. We seek comment on this
issue.
iv. Performance Score Increases
This option is a variation on the
HVBP improvement points scenario
described further above. Under this
option, we would construct SNF
performance scores based on measured
performance during the performance
period, and would award an increased
performance score to SNFs whose
measured performance rose between the
baseline and performance periods. This
option could take the form of a
percentage-based increase—such as a 25
percent increase to a SNF performance
score if the SNF improved over time—
and could also be limited to top
improvers, as described above in
reference to other options.
This option would not result in direct
adjustments to quality measure rates.
We would instead be adjusting the SNF
performance score, and given the broad
authority that the SNF VBP statute
provides us in calculating the SNF
performance score, we believe this
option be to operationally feasible.
However, we remain concerned about
the challenges associated with
comparability between SNFs with
different performance rates on the
measure but the same SNF performance
score. We specifically seek comment on
how, if at all, we should differentiate
SNFs’ performance scores when based
on achievement or improvement to
address this issue.
5. FY 2019 Performance Period and
Baseline Period Considerations
a. Performance Period
We intend to specify a performance
period for a payment year with an end
date as close as feasibly possible to the
payment year’s start date. We strive to
link performance furnished by SNFs as
closely as possible to the payment year
to ensure clear connections between
quality measurement and value-based
payment. We also strive to measure
performance using a sufficiently reliable
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population of patients that broadly
represent the total care provided by
SNFs. As such, we anticipate that our
annual performance period end date
must provide sufficient time for SNFs to
submit claims for the patients included
in our measure population. In other
programs, such as HRRP and the
Hospital Inpatient Quality Reporting
Program (HIQR), this time lag between
care delivered to patients who are
included in the readmission measures
and application of a payment
consequence linked to reporting or
performance on those measures has
historically been close to one year. We
also recognize that other factors
contribute to this time lag, including the
processing time we need to calculate
measure rates using multiple sources of
claims needed for statistical modeling,
time for providers to review their
measure rates and included patients,
and processing time we need to
determine whether a payment
adjustment needs to be made to a
provider’s reimbursement rate under the
applicable PPS based on its reporting or
performance on measures.
For the FY 2019 SNF VBP Program’s
performance period, we are also
considering the necessary timeline we
need to complete measure scoring to
announce the net result of the Program’s
adjustments to Medicare payments not
later than 60 days prior to the fiscal
year, in accordance with section
1888(h)(7) of the Act. We are also
considering the number of SNF stays
typically covered by Medicare each
year. As discussed previously, Medicare
typically covers more than two million
Medicare Part A stays per year in more
than 15,000 SNFs, and we therefore
believe that one year of SNFRM data is
sufficient to ensure that the measure
rates are statistically reliable.
We intend to propose a performance
period for the FY 2019 SNF VBP
Program in future rulemaking. However,
we seek public comment on the most
appropriate performance period length.
b. Baseline Period
As described previously, in other
Medicare quality programs such as the
Hospital Value-Based Purchasing
Program and the End-Stage Renal
Disease Quality Incentive Program, we
generally adopt a baseline period that
occurs prior to the performance period
for a fiscal year to measure
improvement and establish performance
standards.
We view the SNF VBP Program as
necessitating a similarly-adopted
baseline period for each fiscal year to
measure improvement (as required by
section 1888(h)(3)(B) of the Act) and to
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enable us to calculate performance
standards that we must establish and
announce prior to the performance
period (as required by section
1888(h)(3)(A) of the Act). As with the
Hospital VBP Program, we intend to
adopt baseline periods that are as close
as possible in duration as the
performance period specified for a fiscal
year. However, we may occasionally
need to adopt a baseline period that is
shorter than the performance period to
meet operational timelines. We also
intend to adopt baseline periods that are
seasonally aligned with the performance
periods to avoid any effects on quality
measurement that may result from
tracking SNF performance during
different times of the calendar year.
We intend to propose a baseline
period for purposes of calculating
performance standards and measuring
improvement in future rulemaking. We
seek public comment on the most
appropriate baseline period for the FY
2019 Program, including what
considerations we should take into
account when developing this policy for
future rulemaking.
6. SNF Performance Scoring
a. Considerations
As with our performance standards
policy considerations described above,
we considered how other Medicare
quality programs score eligible facilities.
Specifically, we considered how the
Hospital Value-Based Purchasing
Program and the Hospital-Acquired
Conditions Reduction Program score
eligible hospitals. We discussed the
Hospital Readmissions Reduction
Program’s scoring above in relation to
performance standards.
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i. Hospital Value-Based Purchasing
A Hospital VBP domain score is
calculated by combining the measure
scores within that domain, weighting
each measure equally. The domain score
reflects the number of points the
hospital has earned based on its
performance on the measures within
that domain for which it is eligible to
receive a score. After summing the
weighted domain scores, the TPS is
translated using a linear exchange
function into the percentage multiplier
to be applied to each Medicare
discharge claim submitted by the
hospital during the applicable fiscal
year. (We discuss the Exchange
Function in further detail below).
Unlike the Hospital VBP Program, the
SNF VBP program focuses on a single
readmission measure, one that will be
replaced by a single resource use
measure as soon as is practicable. As
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described above, we do not anticipate
adopting quality measure domains akin
to other CMS quality programs under
the SNF VBP Program. We therefore
seek comment on how, if at all, we
should adapt the HVBP Program’s
scoring methodology to accommodate
both the smaller number of measures
and the ranking required under the SNF
VBP Program.
ii. Hospital-Acquired Conditions
Reduction Program
The Hospital-Acquired Conditions
(HAC) Reduction Program scores
measures that have been categorized
into domains, in a manner that is
similar to the HVBP Program’s domain
structure. For Domain 1, the points
awarded to the single assigned measure
yield the Domain 1 score, since Domain
1 only contains one measure. For
Domain 2, the points awarded for the
domain measures are averaged to yield
a Domain 2 score. A hospital’s Total
HAC Score is determined by the sum of
weighted Domain 1 and Domain 2
scores. Higher scores indicate worse
performance relative to the performance
of all other eligible hospitals. Hospitals
with a Total HAC Score above the 75th
percentile of the Total HAC Score
distribution are subject to a payment
reduction.
Unlike the Hospital VBP program,
referenced above, there is no
requirement in the HAC Reduction
Program that measures or performance
standards must incorporate
improvement and achievement scores.
As with the HVBP Program above, we
seek public comments on the extent to
which, if at all, we should adopt
components of the HAC Reduction
Program’s scoring methodology for
purposes of the SNF VBP Program. We
specifically seek comment on whether
or not we should set an absolute level
of performance that must be reached to
receive a positive SNF value-based
incentive payment.
iii. Other Considerations
We intend to consider several
additional factors when developing the
performance scoring methodology. We
believe that it is important to ensure
that the performance scoring
methodology is straightforward and
transparent to SNFs, patients, and other
stakeholders. SNFs must be able to
clearly understand performance scoring
methods and performance expectations
to maximize their quality improvement
efforts. The public must understand the
scoring methodology to make the best
use of the publicly reported information
when choosing a SNF. We also believe
that scoring methodologies for all
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Medicare value-based purchasing
programs should be aligned as
appropriate given their specific
statutory requirements. This alignment
will facilitate the public’s
understanding of quality information
disseminated in these programs and
foster more informed consumer decision
making about health care. We believe
that differences in performance scores
must reflect true differences in
performance. To ensure that these
beliefs are appropriately reflected in the
SNF VBP Program, we intend to assess
the quantitative characteristics of the
measures specified under sections
1888(g)(1) and (2) of the Act, including
the current state of measure
development, to ensure an appropriate
distribution of value-based incentive
payments as required by the SNF VBP
statute.
We seek public comment on what
other considerations we should take
into account when developing our
proposed scoring methodology for the
SNF VBP Program in future rulemaking.
b. Notification Procedures
As described above, we intend to
address the topic of quarterly feedback
reports to SNFs related to measures
specified under sections 1888(g)(1) and
(2) of the Act in future rulemaking. We
also intend to address how to notify
SNFs of the adjustments to their PPS
payments based on their performance
scores and ranking under the SNF VBP
Program, in accordance with the
requirement in section 1888(h)(7) of the
Act, in future rulemaking.
However, we seek public comment on
the best means by which to so notify
SNFs.
c. Exchange Function
As described above in reference to the
Hospital VBP Program’s scoring
methodology, we use a linear exchange
function to translate a hospital’s Total
Performance Score under that Program
into the percentage multiplier to be
applied to each Medicare discharge
claim submitted by the hospital during
the applicable fiscal year. We refer
readers to the Hospital Inpatient VBP
Program Final Rule (76 FR 26531
through 26534) for detailed discussion
of the Hospital VBP Program’s Exchange
Function, as well as responses to public
comments on this issue.
We believe we could consider
adopting a similar exchange function
methodology to translate SNF
performance scores into value-based
incentive payments under the SNF VBP
Program, and we seek comment on
whether or not we should do so.
However, as we did for the Hospital
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Medicare beneficiaries. As illustrated in
figure 1, we could consider the
following four mathematical exchange
function options: Straight line (linear);
concave curve (cube root function);
convex curve (cube function); and S-
shape (logistic function), and we seek
comment on what form of the exchange
function we should consider
implementing if we adopt such a
function under the SNF VBP Program.
We also seek comment on what
considerations we should take into
account when determining the
appropriate form of the exchange
function under the SNF VBP Program.
We intend to consider how such options
would distribute the value-based
incentive payments among SNFs, the
potential differences between the valuebased incentive payment amounts for
SNFs that perform poorly and SNFs that
perform very well, the different
marginal incentives created by the
different exchange function slopes, and
the relative importance of having the
exchange function be as simple and
straightforward as possible. We request
public comments on what additional
considerations, if any, we should take
into account.
SNF VBP Program, including the valuebased incentive payment percentage
that must be determined for each SNF
and the funding available for valuebased incentive payments.
We intend to address this topic in
future rulemaking.
public comment on how we should
display this SNF-specific performance
information, whether or not we should
allow SNFs an opportunity to review
and correct the SNF-specific
performance information that we will
post on Nursing Home Compare, and
how such a review and correction
process should operate.
7. SNF Value-Based Incentive Payments
Sections 1888(h)(5) and (6) of the Act
outline several requirements for valuebased incentive payments under the
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8. SNF VBP Public Reporting
a. SNF-Specific Performance
Information
Section 1888(h)(9)(A) of the Act
requires the Secretary to post
information on the performance of
individual SNFs under the SNF VBP
Program on the Nursing Home Compare
Web site or its successor. This
information is to include the SNF
performance score for the facility for the
applicable fiscal year and the SNF’s
ranking for the performance period for
such fiscal year.
We intend to address this topic in
future rulemaking. However, we seek
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b. Aggregate Performance Information
Section 1888(h)(9)(B) of the Act
requires the Secretary to post aggregate
information on the SNF VBP Program
on the Nursing Home Compare Web
site, or a successor Web site, to include
the range of SNF performance scores
and the number of SNFs that received
value-based incentive payments and the
range and total amount of such valuebased incentive payments.
We intend to address this topic in
future rulemaking. However, we seek
public comment on the most
appropriate form for posting this
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VBP Program, we believe we would
need to consider the appropriate form
and slope of the exchange function to
determine how best to reward high
performance and encourage SNFs to
improve the quality of care provided to
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aggregate information to make such
information easily understandable for
the public.
B. Advancing Health Information
Exchange
HHS has a number of initiatives
designed to encourage and support the
adoption of health information
technology and to promote nationwide
health information exchange to improve
health care. As discussed in the August
2013 Statement ‘‘Principles and
Strategies for Accelerating Health
Information Exchange’’ (available at
https://www.healthit.gov/sites/default/
files/acceleratinghieprinciples_
strategy.pdf), HHS believes that all
individuals, their families, their
healthcare and social service providers,
and payers should have consistent and
timely access to health information in a
standardized format that can be securely
exchanged between the patient,
providers, and others involved in the
individual’s care. Health IT that
facilitates the secure, efficient and
effective sharing and use of healthrelated information when and where it
is needed is an important tool for
settings across the continuum of care,
including SNFs and NFs. While these
facilities are not eligible for the
Medicare and Medicaid EHR Incentive
Programs, effective adoption and use of
health information exchange and health
IT tools will be essential as these
settings seek to improve quality and
lower costs through initiatives such as
value-based purchasing.
The Office of the National
Coordinator for Health Information
Technology (ONC) has released a
document entitled ‘‘Connecting Health
and Care for the Nation: A Shared
Nationwide Interoperability Roadmap
Draft Version 1.0 (draft Roadmap)
(available at https://www.healthit.gov/
sites/default/files/nationwideinteroperability-roadmap-draft-version1.0.pdf) which describes barriers to
interoperability across the current
health IT landscape, the desired future
state that the industry believes will be
necessary to enable a learning health
system, and a suggested path for moving
from the current state to the desired
future state. In the near term, the draft
Roadmap focuses on actions that will
enable a majority of individuals and
providers across the care continuum to
send, receive, find and use a common
set of electronic clinical information at
the nationwide level by the end of 2017.
The Roadmap’s goals also align with the
IMPACT Act of 2014 which requires
assessment data to be standardized and
interoperable to allow for exchange of
the data. Moreover, the vision described
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in the draft Roadmap significantly
expands the types of electronic health
information, information sources and
information users well beyond clinical
information derived from electronic
health records (EHRs). This shared
strategy is intended to reflect important
actions that both public and private
sector stakeholders can take to enable
nationwide interoperability of electronic
health information such as: (1)
Establishing a coordinated governance
framework and process for nationwide
health IT interoperability; (2) improving
technical standards and implementation
guidance for sharing and using a
common clinical data set; (3) enhancing
incentives for sharing electronic health
information according to common
technical standards, starting with a
common clinical data set; and (4)
clarifying privacy and security
requirements that enable
interoperability.
In addition, ONC has released the
draft version of the 2015 Interoperability
Standards Advisory (available at https://
www.healthit.gov/standards-advisory),
which provides a list of the best
available standards and implementation
specifications to enable priority health
information exchange functions.
Providers, payers, and vendors are
encouraged to take these ‘‘best available
standards’’ into account as they
implement interoperable health
information exchange across the
continuum of care, including care
settings such as behavioral health, longterm and post-acute care, and home and
community-based service providers.
We encourage stakeholders to utilize
health information exchange and
certified health IT to effectively and
efficiently help providers improve
internal care delivery practices, support
management of care across the
continuum, enable the reporting of
electronically specified clinical quality
measures (eCQMs), and improve
efficiencies and reduce unnecessary
costs. As adoption of certified health IT
increases and interoperability standards
continue to mature, HHS will seek to
reinforce standards through relevant
policies and programs.
C. Skilled Nursing Facility (SNF)
Quality Reporting Program (QRP)
1. Background and Statutory Authority
We seek to promote higher quality
and more efficient health care for
Medicare beneficiaries, and our efforts
are furthered by quality reporting
programs coupled with public reporting
of that information. Such quality
reporting programs already exist for
various settings such as the Hospital
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Inpatient Quality Reporting (HIQR)
Program, the Hospital Outpatient
Quality Reporting (HOQR) Program, the
Physician Quality Reporting System, the
Long-Term Care Hospital (LTCH)
Quality Reporting Program (QRP), the
Inpatient Rehabilitation Facility (IRF)
Quality Reporting Program (QRP), the
Home Health Quality Reporting Program
(HHQRP), and the Hospice Quality
Reporting Program (HQRP). We have
also implemented quality reporting
programs for home health agencies
(HHAs) that are based on conditions of
participation, and an End-Stage Renal
Disease (ESRD) Quality Incentive
Program (QIP) and a Hospital ValueBased Purchasing (HVBP) Program that
link payment to performance.
SNFs are providers that meet
conditions of participation for Medicare.
Some SNFs are also certified under
Medicaid as nursing facilities, and these
types of long-term care facilities furnish
services to both Medicare beneficiaries
and Medicaid enrollees. SNFs provide
short-term skilled nursing services,
including but not limited to
rehabilitative therapy, physical therapy,
occupational therapy, and speechlanguage pathology services. Such
services are provided to beneficiaries
who are recovering from surgical
procedures, such as hip and knee
replacements, or from medical
conditions, such as stroke and
pneumonia. SNF services are provided
when needed to maintain or improve a
beneficiary’s current condition, or to
prevent a condition from worsening.
The care provided in a SNF (as a freestanding facility or part of a hospital), is
aimed at enabling the beneficiary to
maintain or improve his/her health and
to function independently. SNF care is
a benefit under Medicare Part A and
such care is covered for up to 100 days
in a benefit period if all coverage
requirements are met.13 In 2014, 2.6
million covered stays occurred within
15,421 SNFs.
Section 1888(e)(6)(B)(i)(II) of the Act
requires that each SNF submit, for fiscal
years (FYs) beginning on or after the
specified application date (as defined in
section 1899B(a)(2)(E) of the Act), data
on quality measures specified under
section 1899B(c)(1) of the Act and data
on resource use and other measures
specified under section 1899B(d)(1) of
the Act in a manner and within the
timeframes specified by the Secretary.
In addition, section 1888(e)(6)(B)(i)(III)
of the Act requires, for FYs beginning on
or after October 1, 2018, that each SNF
13 Section 1812(a)(2) and (b)(2) of the Social
Security Act; 42 CFR 409.61; https://
www.medicare.gov/Pubs/pdf/10153.pdf.
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submit standardized patient assessment
data required under section 1899B(b)(1)
of the Act in a manner and within the
timeframes specified by the Secretary.
Section 1888(e)(6)(A)(i) of the Act
requires that, for FYs beginning with FY
2018, if a SNF does not submit data, as
applicable, on quality and resource use
and other measures in accordance with
section 1888(e)(6)(B)(i)(II) of the Act and
standardized patient assessment in
accordance with section
1888(e)(6)(B)(i)(III) of the Act for such
FY, the Secretary reduce the market
basket percentage described in section
1888(e)(5)(B)(ii) of the Act by 2
percentage points.
The IMPACT Act adds section 1899B
to the Act that imposes new data
reporting requirements for certain PAC
providers, including SNFs. Sections
1899B(c)(1) and 1899B(d)(1) of the Act
collectively require that the Secretary
specify quality measures and resource
use and other measures with respect to
certain domains not later than the
specified application date that applies
to each measure domain and PAC
provider setting. Section 1899B(a)(2)(E)
of the Act delineates the specified
application dates for each measure
domain and PAC provider. The IMPACT
Act also added section 1886(e)(6) to the
Act, to require the Secretary to reduce
the otherwise applicable PPS payment
to a SNF that does not report the new
data in a form and manner, and at a
time, specified by the Secretary. For
SNFs, new section 1886(e)(6)(A)(i) of
the Act would require the Secretary to
reduce the payment update for any SNF
that does not satisfactorily submit the
new required data.
Under the SNF QRP, we are proposing
that the general timeline and sequencing
of measure implementation would occur
as follows: Specification of measures;
proposal and finalization of measures
through notice-and-comment
rulemaking; SNF submission of data on
the adopted measures; analysis and
processing of the submitted data;
notification to SNFs regarding their
quality reporting compliance with
respect to a particular fiscal year;
consideration of any reconsideration
requests; and imposition of a payment
reduction in a particular fiscal year for
failure to satisfactorily submit data with
respect to that fiscal year. We are also
proposing that any payment reductions
that are taken with respect to a fiscal
would year begin approximately one
year after the end of the data submission
period for that fiscal year and
approximately two years after we first
adopt the measure.
This timeline, which is followed in
the other quality reporting programs,
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reflects operational and other practical
constraints, including the time needed
to specify and adopt valid and reliable
measures, collect the data, and
determine whether a SNF has complied
with our quality reporting requirements.
It also takes into consideration our
desire to give SNFs enough notice of
new data reporting obligations so that
they are prepared to timely start
reporting the data. Therefore, we intend
to follow the same timing and sequence
of events for measures specified under
section 1899B(c)(1) and (d)(1) of the Act
that we currently follow for the other
quality reporting programs. We intend
to specify each of these measures no
later than the specified application
dates set forth in section 1899B(a)(2)(E)
of the Act and propose to adopt them
consistent with the requirements in the
Act and Administrative Procedure Act.
To the extent that we finalize a proposal
to adopt a measure for the SNF QRP that
satisfies an IMPACT Act measure
domain, we intend to require SNFs to
report data on the measure for the fiscal
year that begins 2 years after the
specified application date for that
measure. Likewise, we intend to require
SNFs to begin reporting any other data
specifically required under the IMPACT
Act for the fiscal year that begins 2 years
after we adopt requirements that would
govern the submission of that data.
As provided at section
1888(e)(6)(A)(ii) of the Act, depending
on the market basket percentage for a
particular year, the 2 percentage point
reduction under section 1888(e)(6)(A)(i)
of the Act may result in this percentage,
after application of the productivity
adjustment under section
1888(e)(5)(B)(ii) of the Act, being less
than 0.0 percent for a FY and may result
in payment rates under the SNF PPS
being less than payment rates for the
preceding FY. In addition, as set forth
at section 1888(e)(6)(A)(iii) of the Act,
any reduction based on failure to
comply with the SNF QRP reporting
requirements applies only to the
particular FY involved, and any such
reduction must not be taken into
account in computing the SNF PPS
payment rates for subsequent FYs.
For purposes of meeting the reporting
requirements under the SNF QRP,
section 1888(e)(6)(B)(ii) of the Act states
that SNFs (or other facilities described
in section 1888(e)(7)(B) of the Act, other
than a CAH) may submit the resident
assessment data required under section
1819(b)(3) of the Act using the standard
instrument designated by the state
under section 1819(e)(5) of the Act.
Currently, the resident assessment
instrument is titled the MDS 3.0. To the
extent data required for submission
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under subclause (II) or (III) of section
1888(e)(6)(B)(i) of the Act duplicates
other data required to be submitted
under clause (i)(I), section
1888(e)(6)(B)(iii) provides that the
submission of data under subclause (II)
or (III) is to be in lieu of the submission
of such data under clause (I), unless the
Secretary makes a determination that
such duplication is necessary to avoid
delay in the implementation of section
1899B of the Act taking into account the
different specified application dates
under section 1899B(a)(2)(E) of the Act.
In addition to requiring a quality
reporting program for SNFs under new
section 1888(e)(6), the IMPACT Act
requires feedback to SNFs and public
reporting of their performance. More
specifically, section 1899B(f)(1) of the
Act requires the Secretary to provide
confidential feedback reports to SNFs
on their performance on the quality
measures and resource use and other
measures specified under that section.
The Secretary must make such
confidential feedback reports available
to SNFs beginning one year after the
specified application date that applies
to the measures in that section and, to
the extent feasible, no less frequently
than on a quarterly basis, except in the
case of measures reported on an annual
basis, as to which the confidential
feedback reports may be made available
annually.
Section 1899B(g)(1) of the Act
requires the Secretary to provide for the
public reporting of SNF performance on
the quality measures specified under
section 1899B(c)(1) of the Act and the
resource use and other measures
specified under section 1899B(d)(1) of
the Act by establishing procedures for
making the performance data available
to the public. Such procedures must
ensure, including through a process
consistent with the process applied
under section 1886(b)(3)(B)(viii)(VII) of
the Act, that SNFs have the opportunity
to review and submit corrections to the
data and other information before it is
made public as required by section
1899B(g)(2) of the Act. Section
1899B(g)(3) of the Act requires that the
data and information is made publicly
available beginning no later than two
years after the specified application date
applicable to such a measure and SNFs.
Finally, section 1899B(g)(4)(B) of the
Act requires that such procedures must
provide that the data and information
described in section 1899B(g)(1) of the
Act with respect to quality and resource
use measures be made publicly
available consistent with sections
1819(i) and 1919(i) of the Act.
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2. General Considerations Used for
Selection of Quality Measures for the
SNF QRP
We strive to promote high quality and
efficiency in the delivery of health care
to the beneficiaries we serve.
Performance improvement leading to
the highest quality health care requires
continuous evaluation to identify and
address performance gaps and reduce
the unintended consequences that may
arise in treating a large, vulnerable, and
aging population. Quality reporting
programs, coupled with public reporting
of quality information, are critical to the
advancement of health care quality
improvement efforts.
Valid, reliable, relevant quality
measures are fundamental to the
effectiveness of our quality reporting
programs. Therefore, selection of quality
measures is a priority for CMS in all of
its quality reporting programs.
We are proposing to adopt for the SNF
QRP three measures that we are
specifying under section 1899(B)(c)(1) of
the Act for purposes of meeting the
following three domains: Functional
status, cognitive function, and changes
in function and cognitive function; skin
integrity and changes in skin integrity;
and incidence of major falls. These
measures align with the CMS Quality
Strategy,14 which incorporates the three
broad aims of the National Quality
Strategy: 15
• Better Care: Improve the overall
quality of care by making healthcare
more patient-centered, reliable,
accessible, and safe.
• Healthy People, Healthy
Communities: Improve the health of the
U.S. population by supporting proven
interventions to address behavioral,
social, and environmental determinants
of health in addition to delivering
higher-quality care.
• Affordable Care: Reduce the cost of
quality healthcare for individuals,
families, employers, and government.
In deciding to propose these
measures, we also took into account
national priorities, including those
established by the National Priorities
Partnership (https://
www.qualityforum.org/Setting_
Priorities/NPP/National_Priorities_
Partnership.aspx), and the HHS
Strategic Plan (https://www.hhs.gov/
secretary/about/priorities/
priorities.html).
These measures also incorporate
common standards and definitions that
14 https://www.cms.gov/Medicare/QualityInitiatives-Patient-Assessment-Instruments/
QualityInitiativesGenInfo/CMS-QualityStrategy.html
15 https://www.ahrq.gov/workingforquality/nqs/
nqs2011annlrpt.htm
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can be used across post-acute care
settings to allow for the exchange of
data among post-acute care providers, to
provide access to longitudinal
information for such providers to
facilitate coordinated and improved
outcomes, and to enable comparison of
such assessment data across all such
providers as required by section
1899B(a) of the Act.
We initiated an Ad Hoc MAP process
to obtain input on the measures that we
are proposing to adopt in this proposed
rule. On February 5th, 2015, we made
publicly available a list of Measures
Under Consideration (called the ‘‘List of
Ad Hoc Measures Under Consideration
for the Improving Medicare Post-Acute
Care Transformation (IMPACT) Act of
2014’’) (MUC list) as part of an Ad Hoc
Measures Application Partnership
(MAP) convened by the National
Quality Forum (NQF). The MAP PostAcute Care/Long-Term Care Workgroup
convened on February 9, 2015 to
‘‘review the measures technical
properties as they are adapted for use in
new settings and whether the new
settings impact the measures’ adherence
to the NQF Scientific Acceptability
criterion.’’ 16 The NQF published the
MUC list on our behalf for public
comment from February 11, 2015
through February 19, 2015 on its Web
site. The MAP Coordinating Committee
convened on February 27, 2015 to
discuss the public comments received,
and those public comments are listed
here https://public.qualityforum.org/
MAP/
MAP%20Coordinating%20Committee/
MAP_CC%20Feb%2027_Discussion_
Guide.html#agenda.
The MAP issued a pre-rulemaking
report on March 6, 2015 Pre-Rulemaking
Report, which is available for download
at https://www.qualityforum.org/Project_
Pages/MAP_Post-Acute_CareLongTerm_Care_Workgroup.aspx. The
MAP’s input for each of the proposed
measures is discussed in this section.
Section 1899B(j) of the Act requires
that we allow for stakeholder input as
part of the pre-rulemaking process.
Therefore, we sought stakeholder input
on the measures we are proposing to
adopt in this proposed rule as follows:
We convened a technical expert panel
that included stakeholder experts and
patient representatives on February 3,
2015; we sought public input during the
February 2015 ad hoc MAP process; and
we implemented a public mail box for
the submission of comments in January
16 . Ad-hoc Review: Expansion of Settings. (n.d.).
Retrieved March 5, 2015, from https://
www.qualityforum.org/Projects/a-b/Ad_Hoc_
Reviews/CMS/Ad_Hoc_Reviews-CMS.aspx
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22069
2015, PACQualityInitiative@
cms.hhs.gov which is located on our
post-acute care quality initiatives Web
site at https://www.cms.gov/Medicare/
Quality-Initiatives-Patient-AssessmentInstruments/Post-Acute-Care-QualityInitiatives/IMPACT-Act-of-2014-andCross-Setting-Measures.html. In
addition, we held a National
Stakeholder Special Open Door Forum
on February 25, 2015 for the purpose of
seeking input on these measures. Lastly,
we held two separate listening sessions
on February 10 and March 24, 2015,
respectively.
3. Policy for Retaining SNF QRP
Measures for Future Payment
Determinations
For the SNF QRP, for the purpose of
streamlining the rulemaking process, we
are proposing that when we adopt a
measure for the SNF QRP for a payment
determination, this measure would be
automatically retained for all
subsequent payment determinations
unless we propose to remove, suspend,
or replace the measure.
Section 1899B(h)(1) of the Act
provides that the Secretary may remove,
suspend or add a quality measure or
resource use or other measure specified
under section 1899B(c)(1) or (d)(1) of
the Act so long as the Secretary
publishes a justification for the action in
the Federal Register with a notice and
comment period. Consistent with the
policies of other quality reporting
programs including the HIQR Program,
the HOQR Program, LTCH QRP, and the
IRF QRP, we are proposing that quality
measures would be considered for
removal if: (1) Measure performance
among SNFs is so high and unvarying
that meaningful distinctions in
improvements in performance can no
longer be made in which case the
measure may be removed or suspended;
(2) performance or improvement on a
measure does not result in better
resident outcomes; (3) a measure does
not align with current clinical
guidelines or practice; (4) a more
broadly applicable measure (across
settings, populations, or conditions) for
the particular topic is available; (5) a
measure that is more proximal in time
to desired resident outcomes for the
particular topic is available; (6) a
measure that is more strongly associated
with desired resident outcomes for the
particular topic is available; or (7)
collection or public reporting of a
measure leads to negative unintended
consequences other than resident harm.
We also note that under section
1899B(h)(2) of the Act, in the case of a
quality measure or resource use or other
measure for which there is a reason to
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believe that the continued collection
raises possible safety concerns or would
cause other unintended consequences,
the Secretary may promptly suspend or
remove the measure and publish the
justification for the suspension or
removal in the Federal Register during
the next rulemaking cycle.
For any measure that meets this
criteria (that is, a measure that raises
safety concerns), we will take
immediate action to remove the measure
from SNF QRP, and, in addition to
publishing a justification in the next
rulemaking cycle, will immediately
notify SNFs and the public through the
usual communication channels,
including listening session, memos,
email notification, and web postings.
We are inviting public comment on
these proposals and policies.
4. Proposed Process for Adoption of
Changes to SNF QRP Program Measures
Quality measures selected for the SNF
QRP must be endorsed by the NQF
unless they meet the statutory criteria
for exception. The NQF is a voluntary
consensus standard-setting organization
with a diverse representation of
consumer, purchaser, provider,
academic, clinical, and other healthcare
stakeholder organizations. The NQF was
established to standardize healthcare
quality measurement and reporting
through its consensus development
process (https://www.qualityforum.org/
About_NQF/Mission_and_Vision.aspx).
The NQF undertakes review of: (a) New
quality measures and national
consensus standards for measuring and
publicly reporting on performance, (b)
regular maintenance processes for
endorsed quality measures, (c) measures
with time-limited endorsement for
consideration of full endorsement, and
(d) ad hoc review of endorsed quality
measures, practices, consensus
standards, or events with adequate
justification to substantiate the review
(https://www.qualityforum.org/
Measuring_Performance/Ad_Hoc_
Reviews/Ad_Hoc_Review.aspx).
The NQF solicits information from
measure stewards for annual reviews
and in order to review measures for
continued endorsement in a specific 3year cycle. In this measure maintenance
process, the measure steward is
responsible for updating and
maintaining the currency and relevance
of the measure and for confirming
existing specifications to the NQF on an
annual basis. As part of the ad hoc
review process, the ad hoc review
requester and the measure steward are
responsible for submitting evidence for
review by a NQF Technical Expert panel
which, in turn, provides input to the
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Consensus Standards Approval
Committee which then makes a decision
on endorsement status and/or
specification changes for the measure,
practice, or event.
The NQF regularly maintains its
endorsed measures through annual and
triennial reviews, which may result in
the NQF making updates to the
measures. We believe that it is
important to have in place a
subregulatory process to incorporate
nonsubstantive updates made by the
NQF into the measure specifications as
we have adopted for the Hospital IQR
Program so that these measures remain
up-to-date. We also recognize that some
changes the NQF might make to its
endorsed measures are substantive in
nature and might not be appropriate for
adoption using a subregulatory process.
Therefore, in the FY 2013 IPPS/LTCH
PPS final rule (77 FR 53504 through
53505), we finalized a policy under
which we use a subregulatory process to
make nonsubstantive updates to
measures used for the Hospital IQR
Program. For what constitutes
substantive versus nonsubstantive
changes, we expect to make this
determination on a case-by-case basis.
Examples of nonsubstantive changes to
measures might include updated
diagnosis or procedure codes,
medication updates for categories of
medications, broadening of age ranges,
and exclusions for a measure (such as
the addition of a hospice exclusion to
the 30-day mortality measures). We
believe that nonsubstantive changes
may include updates to NQF-endorsed
measures based upon changes to
guidelines upon which the measures are
based.
Therefore, we propose to use
rulemaking to adopt substantive updates
made to measures as we have for the
Hospital IQR Program. Examples of
changes that we might consider to be
substantive would be those in which the
changes are so significant that the
measure is no longer the same measure,
or when a standard of performance
assessed by a measure becomes more
stringent (for example, changes in
acceptable timing of medication,
procedure/process, or test
administration). Another example of a
substantive change would be where the
NQF has extended its endorsement of a
previously endorsed measure to a new
setting, such as extending a measure
from the inpatient setting to hospice.
These policies regarding what is
considered substantive versus
nonsubstantive would apply to all
measures in the SNF QRP. We also note
that the NQF process incorporates an
opportunity for public comment and
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engagement in the measure maintenance
process.
We believe this policy adequately
balances our need to incorporate
updates to the SNF QRP measures in the
most expeditious manner possible while
preserving the public’s ability to
comment on updates that so
fundamentally change an endorsed
measure that it is no longer the same
measure that we originally adopted.
We are inviting public comment on
this proposal.
5. Proposed New Quality Measures for
FY 2018 and Subsequent Payment
Determinations
For the FY 2018 SNF QRP and
subsequent years, we are proposing to
adopt three post-acute care (PAC) crosssetting quality measures. These
measures address the following
domains: (1) Skin integrity and changes
in skin integrity; (2) incidence of major
falls; and (3) functional status, cognitive
function, and changes in function and
cognitive function, which are all
required under section 1899B(c)(1) of
the Act. The proposed quality measure
addressing skin integrity and changes in
skin integrity is the NQF-endorsed
measure, Percent of Residents or
Patients with Pressure Ulcers That Are
New or Worsened (Short Stay) (NQF
#0678) (https://www.qualityforum.org/
QPS/0678). The proposed quality
measure addressing the incidence of
major falls is an application of the NQFendorsed Percent of Residents
Experiencing One or More Falls with
Major Injury (Long Stay) (NQF #0674)
(https://www.qualityforum.org/QPS/
0674). Finally, the proposed quality
measure addressing functional status,
cognitive function, and changes in
function and cognitive function is an
application of the Percent of Long-Term
Care Hospital Patients With an
Admission and Discharge Functional
Assessment and a Care Plan that
Addresses Function (NQF #2631; under
NQF review) (https://
www.qualityforum.org/QPS/2631).
The proposed quality measures
addressing the domains of incidence of
major falls and functional status, as well
as cognitive function, and changes in
function and cognitive function, are not
currently NQF-endorsed for the SNF
population. We reviewed the NQF’s
endorsed measures and were unable to
identify any NQF-endorsed cross-setting
quality measures that focused on these
domains. We are also unaware of any
other cross-setting quality measures that
have been endorsed or adopted by
another consensus organization.
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a. Quality Measure Addressing the
Domain of Skin Integrity and Changes in
Skin Integrity: Percent of Residents or
Patients With Pressure Ulcers That Are
New or Worsened (Short Stay) (NQF
#0678)
We are proposing to adopt for the SNF
QRP, beginning with the FY 2018
payment determination, NQF #0678,
Percent of Residents or Patients with
Pressure Ulcers that are New or
Worsened (Short Stay) as a cross-setting
quality measure that satisfies the skin
integrity and changes in skin integrity
domain. This measure assesses the
percentage of short-stay residents or
patients in SNFs, IRFs, and LTCHs with
Stage 2 through 4 pressure ulcers that
are new or worsened since a prior
assessment.
Pressure ulcers are a serious medical
condition that result in pain, decreased
quality of life, and increased mortality
in aging populations.17 18 19 20 Pressure
ulcers typically are the result of
prolonged periods of uninterrupted
pressure on the skin, soft tissue, muscle,
and bone.21 22 23 Elderly individuals in
SNFs are prone to a wide range of
medical conditions that increase their
risk of developing pressure ulcers.
These include impaired mobility or
sensation, malnutrition or
undernutrition, obesity, stroke, diabetes,
dementia, cognitive impairments,
circulatory diseases, dehydration, the
use of wheelchairs, medical devices,
and a history of pressure ulcers or a
pressure ulcer at
admission.24 25 26 27 28 29 30 31 32 33 34
17 Casey, G. (2013). ‘‘Pressure ulcers reflect
quality of nursing care.’’ Nurs N Z 19(10): 20–24.
18 Gorzoni, M. L. and S. L. Pires (2011). ‘‘Deaths
in nursing homes.’’ Rev Assoc Med Bras 57(3): 327–
331.
19 Thomas, J. M., et al. (2013). ‘‘Systematic
review: Health-related characteristics of elderly
hospitalized adults and nursing home residents
associated with short-term mortality.’’ J Am Geriatr
Soc 61(6): 902–911.
20 White-Chu, E. F., et al. (2011). ‘‘Pressure ulcers
in long-term care.’’ Clin Geriatr Med 27(2): 241–258.
21 Bates-Jensen BM. Quality indicators for
prevention and management of pressure ulcers in
vulnerable elders. Ann Int Med. 2001;135 (8 Part 2),
744–51.
22 Institute for Healthcare Improvement (IHI).
Relieve the pressure and reduce harm. May 21,
2007. Available from https://www.ihi.org/IHI/
Topics/PatientSafety/SafetyGeneral/
ImprovementStories/FSRelievethePressureand
ReduceHarm.htm
23 Russo CA, Steiner C, Spector W.
Hospitalizations related to pressure ulcers among
adults 18 years and older, 2006 (Healthcare Cost
and Utilization Project Statistical Brief No. 64).
December 2008. Available from https://
www.hcupus.ahrq.gov/reports/statbriefs/sb64.pdf.
24 Agency for Healthcare Research and Quality
(AHRQ). Agency news and notes: pressure ulcers
are increasing among hospital patients. January
2009. Available from https://www.ahrq.gov/
research/jan09/0109RA22.htm.=
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Section 1899B(a)(1)(B) of the Act
requires that the data submitted on
quality measures under section
1899B(c)(1) of the Act be standardized
and interoperable across PAC settings,
and section 1899B(c)(2)(A) of the Act
requires that the measures be reported
through the use of a PAC assessment
instrument. These requirements are in
line with the NQF Steering Committee
report, which stated that to understand
the impact of pressure ulcers across
settings, quality measures addressing
prevention, incidence, and prevalence
of pressure ulcers must be harmonized
and aligned. This measure has been
implemented in nursing homes for
resident population with stays of less
than 100 days under CMS’s Nursing
Home Quality Initiative. We also
adopted the measure for use in the
LTCH QRP (76 FR 51753 through 51756)
beginning with the FY 2014 payment
determination, and for use in the IRF
QRP (76 FR 24254) beginning with the
FY 2014 payment determination. We
have not, to date, adopted the measure
for the home health setting. More
information on the NQF endorsed
measure, the Percent of Residents or
Patients with Pressure Ulcers That Are
New or Worsened (Short Stay), is
available at https://
www.qualityforum.org/QPS/0678.
25 Bates-Jensen BM. Quality indicators for
prevention and management of pressure ulcers in
vulnerable elders. Ann Int Med. 2001;135 (8 Part 2),
744–51.
26 Cai, S., et al. (2013). ‘‘Obesity and pressure
ulcers among nursing home residents.’’ Med Care
51(6): 478–486.
27 Casey, G. (2013). ‘‘Pressure ulcers reflect
quality of nursing care.’’ Nurs N Z 19(10): 20–24.
28 Hurd D, Moore T, Radley D, Williams C.
Pressure ulcer prevalence and incidence across
post-acute care settings. Home Health Quality
Measures & Data Analysis Project, Report of
Findings, prepared for CMS/OCSQ, Baltimore, MD,
under Contract No. 500–2005–000181 TO 0002.
2010.
29 MacLean DS. Preventing & managing pressure
sores. Caring for the Ages. March 2003;4(3):34–7.
Available from https://www.amda.com/publications/
caring/march2003/policies.cfm.
30 Michel, J. M., et al. (2012). ‘‘As of 2012, what
are the key predictive risk factors for pressure
ulcers? Developing French guidelines for clinical
practice.’’ Ann Phys Rehabil Med 55(7): 454–465
31 National Pressure Ulcer Advisory Panel
(NPUAP) Board of Directors; Cuddigan J, Berlowitz
DR, Ayello EA (Eds). Pressure ulcers in America:
Prevalence, incidence, and implications for the
future. An executive summary of the National
Pressure Ulcer Advisory Panel Monograph. Adv
Skin Wound Care. 2001;14(4):208–15
32 Park-Lee E, Caffrey C. Pressure ulcers among
nursing home residents: United States, 2004 (NCHS
Data Brief No. 14). Hyattsville, MD: National Center
for Health Statistics, 2009. Available from https://
www.cdc.gov/nchs/data/databriefs/db14.htm
33 Reddy, M. (2011). ‘‘Pressure ulcers.’’ Clin Evid
(Online) 2011.
34 Teno, J. M., et al. (2012). ‘‘Feeding tubes and
the prevention or healing of pressure ulcers.’’ Arch
Intern Med 172(9): 697–701.
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A TEP convened by our measure
development contractor provided input
on the technical specifications of this
quality measure, including the
feasibility of implementing the measure
across PAC settings. The TEP supported
the measure’s implementation across
PAC settings and was also supportive of
our efforts to standardize the measure
for cross-setting development. The MAP
also supported the use of NQF #0678,
Percent of Residents or Patients with
Pressure Ulcers that are New or
Worsened (Short Stay) in the SNF QRP
as a cross-setting quality measure.
We are proposing that the data for this
quality measure would be collected
using the MDS 3.0, currently submitted
by SNFs through the Quality
Improvement and Evaluation System
(QIES) Assessment Submission and
Processing (ASAP) system. We believe
that this data collection method will
minimize the reporting burden on SNFs
because SNFs are already required to
submit MDS data for payment purposes.
For more information on SNF
submission using the QIES ASAP
system, readers are referred to https://
www.cms.gov/Medicare/QualityInitiatives-Patient-AssessmentInstruments/NursingHomeQualityInits/
NHQIMDS30TechnicalInformation.
html.
The data items that we would use to
calculate the proposed quality measure
include: M0800A (Worsening in
Pressure Ulcer Status Since Prior
Assessment (OBRA or scheduled PPS
assessment) or Last Admission/Entry or
Reentry, Stage 2), M0800B (Worsening
in Pressure Ulcer Status Since Prior
Assessment (OBRA or scheduled PPS
assessment) or Last Admission/Entry or
Reentry, Stage 3), and M0800C
(Worsening in Pressure Ulcer Status
Since Prior Assessment (OBRA or
scheduled PPS assessment) or Last
Admission/Entry or Reentry, Stage 4).
This measure would be calculated at
two points in time, at admission and
discharge (see Proposed Form, Manner,
and Timing of Quality Data
Submission). The specifications and
data items for the Percent of Residents
or Patients with Pressure Ulcers that are
New or Worsened (Short Stay), are
available in the MDS 3.0 Quality
Measures User’s Manual available on
our Web site at https://www.cms.gov/
Medicare/Quality-Initiatives-PatientAssessment-Instruments/
NursingHomeQualityInits/NHQIQuality
Measures.html.
We invite public comment on our
proposal to adopt NQF #0678 Percent of
Residents or Patients with Pressure
Ulcers that are New or Worsened (Short
Stay) for the SNF QRP for the FY 2018
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payment determination and subsequent
years.
As part of our ongoing measure
development efforts, we are considering
a future update to the numerator of the
quality measure NQF #0678, Percent of
Residents or Patients with Pressure
Ulcers that are New or Worsened (Short
Stay). This update would require PAC
providers to report the development of
unstageable pressure ulcers and
suspected deep tissue injuries (sDTIs).
Under this potential change we are
considering, the numerator of the
quality measure would be updated to
include unstageable pressure ulcers,
including sDTIs that are new/developed
in the facility, as well as Stage 1 or 2
pressure ulcers that become unstageable
due to slough or eschar (indicating
progression to a stage 3 or 4 pressure
ulcer) after admission. SNFs are already
required to complete the unstageable
pressure ulcer items on the MDS 3.0. As
such, this update would require a
change in the way the measure is
calculated but would not increase the
data collection burden for SNFs.
A TEP convened by our measure
development contractor strongly
recommended that CMS update the
specifications for the measure to include
these pressure ulcers in the numerator,
although it acknowledged that
unstageable pressure ulcers and sDTIs
cannot and should not be assigned a
numeric stage. The TEP also
recommended that a Stage 1 or 2
pressure ulcer that becomes unstageable
due to slough or eschar should be
considered worsened because the
presence of slough or eschar indicates a
full thickness (equivalent to Stage 3 or
4) wound.35 36 These recommendations
were supported by technical and
clinical advisors and the National
Pressure Ulcer Advisory Panel.37
35 Schwartz, M., Nguyen, K.H., Swinson Evans,
T.M., Ignaczak, M.K., Thaker, S., and Bernard, S.L.:
Development of a Cross-Setting Quality Measure for
Pressure Ulcers: OY2 Information Gathering, Final
Report. Centers for Medicare & Medicaid Services,
November 2013. Available: https://www.cms.gov/
Medicare/Quality-Initiatives-Patient-AssessmentInstruments/Post-Acute-Care-Quality-Initiatives/
Downloads/Development-of-a-Cross-SettingQuality-Measure-for-Pressure-Ulcers-InformationGathering-Final-Report.pdf
36 Schwartz, M., Ignaczak, M.K., Swinson Evans,
T.M., Thaker, S., and Smith, L.: The Development
of a Cross-Setting Pressure Ulcer Quality Measure:
Summary Report on November 15, 2013, Technical
Expert Panel Follow-Up Webinar. Centers for
Medicare & Medicaid Services, January 2014.
Available: https://www.cms.gov/Medicare/QualityInitiatives-Patient-Assessment-Instruments/PostAcute-Care-Quality-Initiatives/Downloads/
Development-of-a-Cross-Setting-Pressure-UlcerQuality-Measure-Summary-Report-on-November15–2013-Technical-Expert-Pa.pdf.
37 Schwartz, M., Nguyen, K.H., Swinson Evans,
T.M., Ignaczak, M.K., Thaker, S., and Bernard, S.L.:
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Additionally, exploratory data analysis
conducted by our measure development
contractor suggests that the addition of
unstageable pressure ulcers, including
sDTIs, will increase the observed
incidence of new or worsened pressure
ulcers at the facility level and may
improve the ability of the quality
measure to discriminate between poorand high-performing facilities.
We invite public comment to inform
our consideration of the inclusion of
unstageable pressure ulcers and sDTIs
in the numerator of the quality measure
NQF #0678 Percent of Residents or
Patients with Pressure Ulcers that are
New or Worsened (Short Stay) as part of
our future measure development efforts.
b. Quality Measure Addressing the
Domain of the Incidence of Major Falls:
An Application of the Measure Percent
of Residents Experiencing One or More
Falls With Major Injury (Long Stay)
(NQF #0674)
We are proposing to adopt beginning
with the FY 2018 SNF QRP an
application to the SNF setting of the
Percent of Residents Experiencing One
or More Falls with Major Injury (Long
Stay) (NQF #0674) measure that satisfies
the incidence of major falls domain.
This outcome measure reports the
percentage of residents who have
experienced falls with major injury over
a 3-month period. This measure was
developed by CMS and is NQFendorsed for long-stay residents of
nursing facilities.
Research indicates that fall-related
injuries are the most common cause of
accidental death in people aged 65 and
older, responsible for approximately 41
percent of accidental deaths annually.38
Rates increase to 70 percent of
accidental deaths among individuals
aged 75 and older.39 In addition to
death, falls can lead to fracture, soft
tissue or head injury, fear of falling,
anxiety, and depression.40 Research also
indicates that approximately 75 percent
of nursing facility residents fall at least
once a year. This is twice the rate of
Development of a Cross-Setting Quality Measure for
Pressure Ulcers: OY2 Information Gathering, Final
Report. Centers for Medicare & Medicaid Services,
November 2013. Available: https://www.cms.gov/
Medicare/Quality-Initiatives-Patient-AssessmentInstruments/Post-Acute-Care-Quality-Initiatives/
Downloads/Development-of-a-Cross-Setting-Quality
-Measure-for-Pressure-Ulcers-InformationGathering-Final-Report.pdf.
38 Currie LM. Fall and injury prevention. Annu
Rev Nurs Res. 2006;24:39–74.
39 Fuller GF. Falls in the elderly. Am Fam
Physician. Apr 1 2000;61(7):2159–2168, 2173–2154.
40 Premier Inc. Causes of Falls. 2013. Available:
https://www.premierinc.com/quality-safety/
toolsservices/safety/topics/falls/causes_of_falls.jsp.
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their counterparts in the community.41
Further, it is estimated that 10 percent
to 25 percent of nursing facility resident
falls result in fractures and/or
hospitalization.42
Falls also represent a significant cost
burden to the entire health care system,
with injurious falls accounting for 6
percent of medical expenses among
those age 65 and older.43 In their 2006
work, Sorensen et al. estimate the costs
associated with falls of varying severity
among nursing home residents. Their
work suggests that acute care costs
incurred for falls among nursing home
residents range from $979 for a typical
case with a simple fracture to $14,716
for a typical case with multiple
injuries.44 A similar study of
hospitalizations of nursing home
residents due to serious fall-related
injuries (intracranial bleed, hip fracture,
other fracture) found an average cost of
$23,723.45 Among the SNF population,
the average 6-month cost of a resident
with a hip fracture was estimated at
$11,719 in 1996 U.S. dollars.46
According to Morse, 78 percent of
falls are anticipated physiologic falls,
which are falls among individuals who
scored high on a risk assessment scale,
meaning their risk could have been
identified in advance of the fall.47 To
date, studies have identified a number
of risk factors for falls.48 49 50 51 52 53 54 55 56
41 Rubenstein LZ, Josephson KR, Robbins AS.
Falls in the nursing home. Ann Intern Med. 1994
Sep 15; 121(6):442–51.
42 Vu MQ, Weintraub N, Rubenstein LZ. Falls in
the nursing home: are they preventable? J Am Med
Dir Assoc. 2004 Nov-Dec; 5(6):401–6. Review.
43 Tinetti ME, Williams CS. The effect of falls and
fall injuries on functioning in community-dwelling
older persons. J Gerontol A Biol Sci Med Sci. 1998
Mar;53(2):M112–9.
44 Sorensen SV, de Lissovoy G, Kunaprayoon D,
Resnick B, Rupnow MF, Studenski S. A taxonomy
and economic consequence of nursing home falls.
Drugs Aging. 2006;23(3):251–62.
45 Quigley PA, Campbell RR, Bulat T, Olney RL,
Buerhaus P, Needleman J. Incidence and cost of
serious fall-related injuries in nursing homes. Clin
Nurs Res. Feb 2012;21(1):10–23.
46 Kramer AM, Steiner JF, Schlenker RE, et al.
Outcomes and costs after hip fracture and stroke:
a comparison of rehabilitation settings. JAMA.
1997;277(5):396–404.
47 Ibid. Ibid.Morse, J. M. (1996). Preventing
patient falls. Sage.
48 Rothschild JM, Bates DW, Leape LL.
Preventable medical injuries in older patients. Arch
Intern Med. 2000 Oct 9; 160(18):2717–28.
49 Morris JN, Moore T, Jones R, et al. Validation
of long-term and post-acute care quality indicators.
CMS Contract No: 500–95–0062/T.O. #4.
Cambridge, MA: Abt Associates, Inc., June 2003.
50 Avidan AY, Fries BE, James ML, Szafara KL,
Wright GT, Chervin RD. Insomnia and hypnotic
use, recorded in the minimum data set, as
predictors of falls and hip fractures in Michigan
nursing homes. J Am Geriatr Soc. 2005 Jun;
53(6):955–62.
51 Fonad E, Wahlin TB, Winblad B, Emami A,
Sandmark H. Falls and fall risk among nursing
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The identification of such risk factors
suggests the potential for health care
facilities to reduce and prevent the
incidence of falls.
The Percent of Residents
Experiencing One or More Falls with
Major Injury (Long Stay) (NQF #0674)
quality measure is NQF-endorsed and
has been successfully implemented in
nursing facilities for long-stay residents
since 2011. In addition, the quality
measure is currently publicly reported
on CMS’ Nursing Home Compare Web
site at https://www.medicare.gov/
nursinghomecompare/search.html.
Further, an application of the quality
measure was adopted for use in the
LTCH QRP in the FY 2015 IPPS/LTCH
PPS final rule (79 FR 50290).
Although NQF #0674 is not currently
endorsed for the SNF setting, we
reviewed the NQF’s consensus endorsed
measures and were unable to identify
any NQF-endorsed cross-setting quality
measures for that setting that are
focused on falls with major injury. We
are aware of one NQF-endorsed
measure, Falls with Injury (NQF #0202),
which is a measure designed for adult
acute inpatient and rehabilitation
patients capturing ‘‘all documented
patient falls with an injury level of
minor or greater on eligible unit types
in a calendar quarter, reported as injury
falls per 100 days.’’ 57 NQF #0202 is not
appropriate to meet the IMPACT Act
domain as it includes minor injury in
the numerator definition. Additionally,
including all falls could result in
providers limiting the freedom of
activity for individuals at higher risk for
falls. We are unaware of any other crosssetting quality measures for falls with
major injury that have been endorsed or
adopted by another consensus
organization for the SNF setting.
Therefore, we are proposing to adopt
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home residents. J Clin Nurs. 2008 Jan; 17(1):126–
34.
52 Currie LM. Fall and injury prevention. Annu
Rev Nurs Res. 2006;24:39–74.
53 Ellis AA, Trent RB. Do the risks and
consequences of hospitalized fall injuries among
older adults in California vary by type of fall? J
Gerontol A Biol Sci Med Sci. Nov
2001;56(11):M686–692.
54 Chen XL, Liu YH, Chan DK, Shen Q, Van
Nguyen H. Chin Med J (Engl). Characteristics
associated with falls among the elderly within aged
care wards in a tertiary hospital: a retrospective.
2010 Jul;123(13):1668–72.
55 Frisina PG, Guellnitz R, Alverzo J. A time series
analysis of falls and injury in the inpatient
rehabilitation setting. Rehabil Nurs. 2010
JulAug;35(4):141–6, 166.
56 Lee JE, Stokic DS. Risk factors for falls during
inpatient rehabilitant Am J Phys Med Rehabil. 2008
May;87(5):341–50; quiz 351, 422.
57 American Nurses Association (2014, April 9).
Falls with injury. Retrieved from https://
www.qualityforum.org/QPS/0202.
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this measure under the Secretary’s
authority to specify non-NQF-endorsed
measures under section 1899B.
A TEP convened by our measure
development contractor provided input
on the technical specifications of this
quality measure, including the
feasibility of implementing the measure
across PAC settings. The TEP was
supportive of the implementation of this
measure across PAC settings and was
also supportive of our efforts to
standardize this measure for crosssetting development. The MAP
conditionally supported the use of an
application of NQF #0674 Percent of
Residents Experiencing One or More
Falls with Major Injury (Long Stay) in
the SNF QRP as a cross-setting quality
measure. More information about the
MAP’s recommendations for this
measure is available in the report
entitled MAP Off-Cycle Deliberations
2015: Measures under Considerations to
Implement Provisions of the IMPACT
Act, which can be found at https://
www.qualityforum.org/Project_Pages/
MAP_Post-Acute_CareLong-Term_Care_
Workgroup.aspx.
More information on the NQF
endorsed measure, the Percent of
Residents Experiencing One or More
Falls with Major Injury (Long Stay) is
available at https://
www.qualityforum.org/QPS/0674.
We are proposing that data for this
quality measure will be collected using
the MDS 3.0, currently submitted by
SNFs through the QIES ASAP system
for the reason noted previously.
The data items that we would use to
calculate this proposed quality measure
include: J1800 (Any Falls Since
Admission/Entry (OBRA or Scheduled
PPS) or Reentry or Prior Assessment,
whichever is more recent), and J1900
(Number of Falls Since Admission/
Entry (OBRA or Scheduled PPS) or
Reentry or Prior Assessment, whichever
is more recent). This measure would be
calculated at the time of discharge (see
Proposed Form, Manner, and Timing of
Quality Data Submission). The
specifications for the application of the
measure, the Percent of Residents
Experiencing One or More Falls with
Major Injury (Long Stay), for the SNF
population are available on our SNF
QRP measures and technical Web site at
https://www.cms.gov/Medicare/QualityInitiatives-Patient-AssessmentInstruments/NursingHomeQualityInits/
SNF-Quality-Reporting-ProgramMeasures-and-TechnicalInformation.html.
We refer readers to the Form, Manner,
and Timing of Quality Data Submission
section of this proposed rule for more
information on the proposed data
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collection and submission timeline for
this proposed quality measure.
We invite public comment on our
proposal to adopt an application of
Percent of Residents Experiencing One
or More Falls with Major Injury (Long
Stay) (NQF #0674) measure for the SNF
QRP beginning with the FY 2018
payment determination.
c. Quality Measure Addressing the
Domain of Functional Status, Cognitive
Function, and Changes in Function and
Cognitive Function: Application of
Percent of Long-Term Care Hospital
Patients With an Admission and
Discharge Functional Assessment and a
Care Plan That Addresses Function
(NQF #2631; Under NQF Review)
We are proposing to adopt beginning
with the FY 2018 SNF QRP an
application of the quality measure
Percent of Long-Term Care Hospital
Patients with an Admission and
Discharge Functional Assessment and a
Care Plan that Addresses Function (NQF
#2631; under NQF review) as a crosssetting quality measure that satisfies the
functional status, cognitive function,
and changes in functional status and
cognitive function domain. This quality
measure reports the percent of patients
or residents with both an admission and
a discharge functional assessment and
an activity (self-care or mobility) a goal
that addresses function.
The National Committee on Vital and
Health Statistics’ Subcommittee on
Health,58 noted that ‘‘information on
functional status is becoming
increasingly essential for fostering
healthy people and a healthy
population. Achieving optimal health
and well-being for Americans requires
an understanding across the life span of
the effects of people’s health conditions
on their ability to do basic activities and
participate in life situations in other
words, their functional status.’’ This is
supported by research showing that
patient and resident functioning is
associated with important outcomes
such as discharge destination and length
of stay in inpatient settings,59 as well as
the risk of nursing home placement and
hospitalization of older adults living in
the community.60
58 Subcommittee on Health National Committee
on Vital and Health Statistics, ‘‘Classifying and
Reporting Functional Status’’ (2001).
59 Reistetter TA, Graham JE, Granger CV, Deutsch
A, Ottenbacher KJ. Utility of Functional Status for
Classifying Community Versus Institutional
Discharges after Inpatient Rehabilitation for Stroke.
Archives of Physical Medicine and Rehabilitation,
2010; 91:345–350.
60 Miller EA, Weissert WG. Predicting Elderly
People’s Risk for Nursing Home Placement,
Hospitalization, Functional Impairment, and
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The majority of individuals who
receive PAC services, including care
provided by SNFs, HHAs, IRFs, and
LTCHs, have functional limitations and
many of these individuals are at risk for
further decline in function due to
limited mobility and ambulation.61 The
patient and resident populations treated
by SNFs, HHAs, IRFs, and LTCHs vary
in terms of their functional abilities at
the time of the PAC admission and their
goals of care. For IRF patients and many
SNF residents, treatment goals may
include fostering the person’s ability to
manage his or her daily activities so that
he or she can complete self-care and/or
mobility activities as independently as
possible, and if feasible, return to a safe,
active, and productive life in a
community-based setting. For home
health patients, achieving independence
within the home environment and
promoting community mobility may be
the goal of care. For other home care
patients, the goal of care may be to slow
the rate of functional decline in order to
allow the person to remain at home and
avoid institutionalization.62 Lastly, in
addition to having complex medical
care needs for an extended period of
time, LTCH patients often have
limitations in functioning because of the
nature of their conditions, as well as
deconditioning due to prolonged bed
rest and treatment requirements (for
example, ventilator use). The clinical
practice guideline Assessment of
Physical Function 63 recommends that
clinicians document functional status at
baseline and over time to validate
capacity, decline, or progress. Therefore,
assessment of functional status at
admission and discharge and
establishing a functional goal for
discharge as part of the care plan is an
important aspect of patient or resident
care in all of these PAC settings.
Given the variation in patient or
resident populations across the PAC
settings, the functional activities that are
typically assessed by clinicians for each
type of PAC provider may vary. For
example, rolling left and right in bed is
an example of a functional activity that
may be most relevant for lowfunctioning patients or residents who
Mortality: A Synthesis. Medical Care Research and
Review, 57; 3: 259–297.
61 Kortebein P, Ferrando A, Lombebeida J, Wolfe
R, Evans WJ. Effect of 10 days of bed rest on skeletal
muscle in health adults. JAMA; 297(16):1772–4.
62 Ellenbecker CH, Samia L, Cushman MJ, Alster
K. Patient safety and quality in home health care.
Patient Safety and Quality: An Evidence-Based
Handbook for Nurses. Vol 1.
63 Kresevic DM. Assessment of physical function.
In: Boltz M, Capezuti E, Fulmer T, Zwicker D,
editor(s). Evidence-based geriatric nursing protocols
for best practice. 4th ed. New York (NY): Springer
Publishing Company; 2012. p. 89–103.
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are chronically critically ill. However,
certain functional activities such as
eating, oral hygiene, lying to sitting on
the side of the bed, toilet transfers, and
walking or wheelchair mobility are
important activities for patients or
residents in each PAC setting.
Although, functional assessment data
are currently collected by all four PAC
providers and in NFs, this data
collection has employed different
assessment instruments, scales, and
item definitions. The data cover similar
topics, but are not standardized across
PAC settings. The different sets of
functional assessment items coupled
with different rating scales makes
communication about patient and
resident functioning challenging when
patients and residents transition from
one type of setting to another. Collection
of standardized functional assessment
data across SNFs, HHAs, IRFs, and
LTCHs using common data items would
establish a common language for patient
and resident functioning, which may
facilitate communication and care
coordination as patients and residents
transition from one type of provider to
another. The collection of standardized
functional status data may also help
improve patient and resident
functioning during an episode of care by
ensuring that basic daily activities are
assessed for all PAC residents at the
start and end of care and that at least
one functional goal is established.
The functional assessment items
included in the proposed functional
status quality measure were originally
developed and tested as part of the PostAcute Care Payment Reform
Demonstration version of the Continuity
Assessment Record and Evaluation
(CARE) Item Set, which was designed to
standardize the assessment of a person’s
status, including functional status,
across acute and post-acute settings
(SNFs, HHAs, IRFs, and LTCHs). The
functional status items on the CARE
Item Set are daily activities that
clinicians typically assess at the time of
admission and/or discharge in order to
determine patient’s or resident’s needs,
evaluate patient or resident progress,
and prepare patients, residents, and
their families for a transition to home or
to another setting.
The development of the CARE Item
Set and a description and rationale for
each item is described in a report
entitled ‘‘The Development and Testing
of the Continuity Assessment Record
and Evaluation (CARE) Item Set: Final
Report on the Development of the CARE
Item Set: Volume 1 of 3.’’ 64 Reliability
64 Barbara Gage et al., ‘‘The Development and
Testing of the Continuity Assessment Record and
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and validity testing were conducted as
part of CMS’s Post-Acute Care Payment
Reform Demonstration, and we
concluded that the functional status
items have acceptable reliability and
validity. A description of the testing
methodology and results are available in
several reports, including the report
entitled ‘‘The Development and Testing
of the Continuity Assessment Record
And Evaluation (CARE) Item Set: Final
Report On Reliability Testing: Volume 2
of 3’’ 65 and the report entitled ‘‘The
Development and Testing of The
Continuity Assessment Record And
Evaluation (CARE) Item Set: Final
Report on Care Item Set and Current
Assessment Comparisons: Volume 3 of
3.’’ 66 These reports are available on our
Post-Acute Care Quality Initiatives Web
page at https://www.cms.gov/Medicare/
Quality-Initiatives-Patient-AssessmentInstruments/Post-Acute-Care-QualityInitiatives/CARE-Item-Set-and-BCARE.html.
The functional status quality measure
we are proposing to adopt beginning
with the FY 2018 SNF QRP is a process
quality measure that is an application of
the quality measure, Percent of LongTerm Care Hospital Patients with an
Admission and Discharge Functional
Assessment and a Care Plan that
Addresses Function’’ (NQF #2631;
under NQF review). This quality
measure reports the percent of patients
or residents with both an admission and
a discharge functional assessment and a
treatment goal that addresses function.
This process measure requires the
collection of admission and discharge
functional status data by clinicians
using standardized clinical assessment
items, or data elements, which assess
specific functional activities, that is,
self-care and mobility activities. The
self-care and mobility function activities
are coded using a 6-level rating scale
that indicates the resident’s level of
independence with the activity at both
admission and discharge. A higher score
indicates more independence.
For this quality measure, there must
be documentation at the time of
admission that at least one activity
performance (function) goal is recorded
for at least one of the standardized selfcare or mobility function items using
the 6-level rating scale. This indicates
that an activity goal(s) has been
established. Following this initial
assessment, the clinical best practice
would be to ensure that the resident’s
Evaluation (CARE) Item Set: Final Report on the
Development of the CARE Item Set’’ (RTI
International, 2012).
65 Ibid.
66 Ibid.
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care plan reflected and included a plan
to achieve such an activity goal(s). At
the time of discharge, goal setting and
establishment of a care plan to achieve
the goal, is reassessed using the same 6level rating scale, enabling the ability to
evaluate success in achieving the
resident’s activity performance goals.
To the extent that a resident has an
unplanned discharge, for example, for
the purpose of being admitted to an
acute care facility, the collection of
discharge functional status data might
not be feasible. Therefore, for patients or
residents with unplanned discharges,
admission functional status data and at
least one treatment goal must be
reported, but discharge functional status
data are not required to be reported.
A TEP convened by the measure
development contractor for CMS
provided input on the technical
specifications of this quality measure,
including the feasibility of
implementing the measure across PAC
settings. The TEP was supportive of the
implementation of this measure across
PAC settings and was also supportive of
our efforts to standardize this measure
for cross-setting use. Additionally, the
MAP conditionally supported the use of
an application of the Percent of LongTerm Care Hospital Patients With an
Admission and Discharge Functional
Assessment and a Care Plan that
Addresses Function (NQF #2631; under
NQF review) for use in the SNF QRP as
a cross-setting measure. The MAP noted
that this functional status measure
addresses an IMPACT Act domain and
a MAP PAC/LTC core concept. The
MAP conditionally supported this
measure pending NQF-endorsement and
resolution of concerns about the use of
two different functional status scales for
quality reporting and payment
purposes. Finally, the MAP reiterated its
support for adding measures addressing
function, noting the group’s special
interest in this PAC/LTC core concept.
More information about the MAP’s
recommendations for this measure is
available in the report entitled MAP OffCycle Deliberations 2015: Measures
under Considerations to Implement
Provisions of the IMPACT Act, which
can be found at https://
www.qualityforum.org/Project_Pages/
MAP_Post-Acute_CareLong-Term_Care_
Workgroup.aspx.
The proposed measure is derived
from the Percent of Long-Term Care
Hospital Patients With an Admission
and Discharge Functional Assessment
and a Care Plan that Addresses Function
quality measure, and we intend to
submit the proposed measure to NQF
for endorsement. The specifications are
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available for review at the SNF QRP
measures and technical Web site at
https://www.cms.gov/Medicare/QualityInitiatives-Patient-AssessmentInstruments/NursingHomeQualityInits/
SNF-Quality-Reporting-ProgramMeasures-and-TechnicalInformation.html.
We reviewed the NQF’s endorsed
measures and were unable to identify
any NQF-endorsed cross-setting quality
measures focused on assessment of
function for PAC patients and residents.
We are also unaware of any other crosssetting quality measures for functional
assessment that have been endorsed or
adopted by another consensus
organization. Therefore, we are
proposing to adopt this function
measure for use in the SNF QRP for the
FY 2018 payment determination and
subsequent years under the Secretary’s
authority to select non-NQF-endorsed
measures.
We are proposing that data for the
proposed quality measure would be
collected through the MDS 3.0, which
SNFs currently submit through the QIES
ASAP system. We refer readers to
section V.C.7. of this proposed rule for
more information on the proposed data
collection and submission timeline for
this proposed quality measure.
The calculation algorithm of the
proposed measure is: (1) For each SNF
stay, records of residents discharged
during the 12-month target time period
are identified and counted. This count
is the denominator; (2) The records of
residents with complete stays are
identified and the number of these
resident stays with complete admission
functional assessment data and at least
one self-care or mobility activity goal
and complete discharge functional
assessment data is counted; (3) The
records of residents with incomplete
stays are identified, and the number of
these resident records with complete
admission functional status data and at
least one self-care or mobility goal is
counted; (4) The counts from step 2
(complete SNF stays) and step 3
(incomplete SNF stays) are summed.
The sum is the numerator count; and (5)
the numerator count is divided by the
denominator count to calculate this
quality measure. This measure would be
calculated at two points in time, at
admission and discharge.
For purposes of assessment data
collection, we propose to add new
functional status items to the MDS 3.0.
The items would assess specific selfcare and mobility activities, and would
be based on functional items included
in the Post-Acute Care Payment Reform
Demonstration version of the CARE Item
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Set. The items have been developed and
tested for reliability and validity in
SNFs, HHAs, IRFs, and LTCHs. More
information pertaining to item testing is
available on our Post-Acute Care
Quality Initiatives Web page at https://
www.cms.gov/Medicare/QualityInitiatives-Patient-AssessmentInstruments/Post-Acute-Care-QualityInitiatives/CARE-Item-Set-and-BCARE.html.
The proposed function items that we
would add to the MDS for purposes of
the calculation of this proposed quality
measure do not duplicate existing items
currently collected in that assessment
instrument for other purposes. The
currently used MDS function items
evaluate a resident’s greatest
dependence on three or more occasions,
whereas the proposed functional items
would evaluate an individual’s usual
performance at the time of admission
and at the time of discharge for goal
setting purposes. Additionally, there are
several key differences between the
existing and new proposed function
items that may result in variation in the
resident assessment results including:
(1) The data collection and associated
data collection instructions; (2) the
rating scales used to score a resident’s
level of independence; and (3) the item
definitions. A description of these
differences is provided with the
measure specifications on our SNF QRP
measures and technical Web site at
https://www.cms.gov/Medicare/QualityInitiatives-Patient-AssessmentInstruments/NursingHomeQualityInits/
SNF-Quality-Reporting-ProgramMeasures-and-TechnicalInformation.html.
Because of the differences between
the current function assessment items
(section G of the MDS 3.0) and the
proposed function assessment items that
we would collect for purposes of
calculating the proposed measure, we
would require that SNFs submit data on
both sets of items. Data collection for
the new proposed function items do not
substitute for the data collection under
the current Section G.
We invite public comments on our
proposal to adopt beginning with the FY
2018 SNF QRP an application of the
quality measure Percent of Long-Term
Care Hospital Patients with an
Admission and Discharge Functional
Assessment and a care Plan that
Addresses Function (NQF #2631; under
review).
6. SNF QRP Quality Measures Under
Consideration for Future Years
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TABLE 10—SNF QRP QUALITY MEASURES AND CONCEPTS UNDER CONSIDERATION FOR FUTURE YEARS
Impact Act Domain .........................
Measures ........................................
Impact Act Domain .........................
Measure ..........................................
Impact Act Domain .........................
Measure ..........................................
Measures to reflect all-condition risk-adjusted potentially preventable hospital readmission rates.
(NQF #2510): Skilled Nursing Facility 30-Day All-Cause Readmission Measure (SNFRM).
(NQF #2512; NQF #2502): Application of the LTCH/IRF All-Cause Unplanned Readmission Measure for 30
Days Post Discharge from LTCHs/IRFs.
Resource Use, including total estimated Medicare spending per beneficiary.
Application of the Payment Standardized Medicare Spending Per Beneficiary (MSPB).
Discharge to community.
Percentage residents/patients at discharge assessment, who are discharged to a higher level of care or to
the community. Measure assesses if the patient/resident went to the community and whether they
stayed there. Ideally, this measure would be paired with the 30-day all-cause readmission measure.
We invite comment on the measure
domains and associated measures and
measure concepts listed in Table 10. In
addition, in alignment with the
requirements of the IMPACT Act to
develop quality measures and
standardize data for comparative
purposes, we believe that evaluating
outcomes across the post-acute settings
using standardized data is an important
priority. Therefore, in addition to
proposing a process-based measure for
the domain in the IMPACT Act of
‘‘Functional status, cognitive function,
and changes in function and cognitive
function’’, which is included in this
year’s proposed rule, we also intend to
develop outcomes-based quality
measures, including functional status
and other quality outcome measures to
further satisfy this domain. These
measures will be proposed in future
rulemaking in order to assess functional
change for each care setting as well as
across care settings.
7. Form, Manner, and Timing of Quality
Data Submission
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a. Participation/Timing for New SNFs
Beginning with the submission of data
required for the FY 2018 payment
determination, we propose that a new
SNF would be required to begin
reporting data on any quality measures
finalized for that program year by no
later than the first day of the calendar
quarter subsequent to 30 days after the
date on its CMS Certification Number
(CCN) notification letter. For example,
for FY 2018 payment determinations, if
a SNF received its CCN on August 28,
2016, and 30 days are added (for
example, August 28 + 30 days =
September 27), the SNF would be
required to submit data for residents
who are admitted beginning on October
1, 2016.
We invite public comment on this
proposed timing for new SNFs to begin
reporting quality data under the SNF
QRP.
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b. Data Collection Timelines and
Requirements for the FY 2018 Payment
Determination and Subsequent Years
As discussed previously, we are
proposing that SNFs would submit data
on the proposed functional status, skin
integrity, and incidence of major falls
measures by completing items on the
MDS and then submitting the MDS to
CMS through the Quality Improvement
and Evaluation System (QIES),
Assessment Submission and Processing
System (ASAP) system. We seek
comment on this proposed method of
data collection.
Currently, there is no discharge
assessment required when a resident is
discharged from the SNF Medicare Part
A coverage stay but does not leave the
facility, and we are aware that this
affects nearly 30 percent of all SNF
residents. To collect the data at the time
these beneficiaries are discharged from
the SNF Part A coverage stay, we
propose to add an item set in addition
to the 5-Day PPS Assessment. Further,
to collect the data elements required to
calculate the function quality measure
(an application of Percent of Long-Term
Care Hospital Patients With an
Admission and Discharge Functional
Assessment and a Care Plan that
Addresses Function [NQF #2631; under
NQF review]) at the time of a residents
admission, we also propose to add the
necessary items to the 5-day PPS
Assessment.
A list of the data items that we are
proposing to add to the SNF PPS Part A
Discharge and the 5-Day PPS
Assessments is available on our Web
site at https://www.cms.gov/Medicare/
Quality-Initiatives-Patient-AssessmentInstruments/NursingHomeQualityInits/
SNF-Quality-Reporting-ProgramMeasures-and-TechnicalInformation.html. We recognize that
there may be instances where SNFs
want to combine the SNF PPS Part A
Discharge Assessment with other
required assessments, as happens with
other PPS and OBRA assessments, or
scenarios in which the end of the Part
A coverage stay occurs at the same time
as a scheduled PPS assessment.
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Therefore, we invite comment on any
situations where assessments may be
combined or interact, which should be
considered in implementing the SNF
PPS Part A Discharge Assessment with
a view toward addressing any issues
that we may identify through the public
comment process as requiring
additional clarification.
For the FY 2018 payment
determination, we are proposing that
SNFs submit data on the three proposed
quality measures for residents who are
admitted to the SNF on and after
October 1, 2016 and discharged from the
SNF up to and including December 31,
2016, using the data submission
schedule that we are proposing in this
section.
We are proposing to collect a single
quarter of data for FY 2018 to remain
consistent with the usual October
release schedule for the MDS, to give
SNFs a sufficient amount of time to
update their systems so that they can
comply with the new data reporting
requirements, and to give CMS a
sufficient amount of time to determine
compliance for the FY 2018 program.
The proposed use of one quarter of data
for the initial year of quality reporting
is consistent with the approach we used
to implement a number of other quality
reporting programs, including the
LTCH, IRF, and Hospice QRPs.
We also propose that following the
close of the reporting quarter, October 1,
2016 through December 31, 2016 for the
FY 2018 payment determination, SNFs
would have an additional 51⁄2 months to
correct and/or submit their quality data.
Consistent with the IRF QRP, we
propose that the final deadline for
submitting data for the FY 2018
payment determination would be May
15, 2017. We further propose that for the
FY 2019 payment determination, we
would collect data from the 2nd through
4th quarters of FY 2017 (that is, data for
residents who are admitted from
January 1st and discharged up to and
including September 30th) to determine
whether a SNF has met its quality
reporting requirements with respect to
that fiscal year. Beginning with the FY
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2020 payment determination, we
propose to move to a full year of fiscal
year data collection. We intend to
propose the FY 2019 payment
determination quality reporting data
submission deadlines in future
rulemaking.
TABLE 11—PROPOSED MEASURES, DATA COLLECTION SOURCE, DATA COLLECTION PERIOD AND DATA SUBMISSION
DEADLINES AFFECTING THE FY 2018 PAYMENT DETERMINATION
Proposed data
collection period
Proposed data
submission
deadline for FY
2018 payment
determination
Quality measure
Data collection
source
NQF #0678: Percent of Patients or Residents with Pressure Ulcers that are New
or Worsened.
NQF #0674: Application of Percent of Residents Experiencing One or More Falls
with Major Injury (Long Stay).
NQF #2631*: Application of Percent of Long-Term Care Hospital Patients with an
Admission and Discharge Functional Assessment and a Care Plan that Addresses Function.
MDS .................
10/01/16–12/31/16
May 15, 2017.
MDS .................
10/01/16–12/31/16
May 15, 2017.
MDS .................
10/01/16–12/31/16
May 15, 2017.
* Status: under review at NQF, please see: https://www.qualityforum.org/ProjectMeasures.aspx?projectID=73867, see NQF #2631.
We invite comment on the proposed
SNF QRP data completion requirements.
8. SNF QRP Data Completion
Thresholds for the FY 2018 Payment
Determination and Subsequent Years
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We seek public comment on these
proposals.
9. SNF QRP Data Validation
Requirements for the FY 2018 Payment
Determination and Subsequent Years
We are proposing that, beginning with
the FY 2018 payment determination,
SNFs must report all of the data
necessary to calculate the proposed
quality measures on at least eighty
percent of the MDS assessments that
they submit. We are proposing that a
SNF has reported all of the data
necessary to calculate the measures if
the data actually can be used for
purposes of calculating the quality
measures, as opposed to, for example,
the use of a dash [-], to indicate that the
SNF was unable to perform a pressure
ulcer assessment.
We believe that because SNFs have
long been required to submit MDS
assessments for other purposes, SNFs
should easily be able to meet this
proposed requirement for the SNF QRP.
Our proposal to set reporting thresholds
is consistent with policies we have
adopted for the Long-Term Care
Hospital (79 FR 50314), InpatientRehabilitation Hospital (79 FR 45923)
and Home Health (79 FR 66079) Quality
Reporting Programs.
Although we are proposing to adopt
an 80 percent threshold initially, we
intend to propose to raise the threshold
level for subsequent program years
through future rulemaking.
We are also proposing that for the FY
2018 SNF QRP, any SNF that does not
meet the proposed requirement that 80
percent of all MDS assessments
submitted contain 100 percent of all
data items necessary to calculate the
SNF QRP measures would be subject to
a reduction of 2 percentage points to its
FY 2018 market basket percentage.
To ensure the reliability and accuracy
of the data submitted under the SNF
QRP, we intend to propose to adopt
policies and processes for validating the
data submitted under the SNF QRP in
future rulemaking. At this time, we are
seeking comment on what elements we
should consider including in such a
process.
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10. SNF QRP Submission Exception and
Extension Requirements for the FY 2018
Payment Determination and Subsequent
Years
Our experience with other quality
reporting programs has shown that there
are times when providers are unable to
submit quality data due to extraordinary
circumstances beyond their control (for
example, natural, or man-made
disasters). Other extenuating
circumstances are reviewed on a caseby-case basis. We have defined a
‘‘disaster’’ as any natural or man-made
catastrophe which causes damages of
sufficient severity and magnitude to
partially or completely destroy or delay
access to medical records and associated
documentation. Natural disasters could
include events such as hurricanes,
tornadoes, earthquakes, volcanic
eruptions, fires, mudslides, snowstorms,
and tsunamis. Man-made disasters
could include such events as terrorist
attacks, bombings, floods caused by
man-made actions, civil disorders, and
explosions. A disaster may be
widespread and impact multiple
structures or be isolated and impact a
single site only.
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In certain instances of either natural
or man-made disasters, a SNF may have
the ability to conduct a full resident
assessment, and record and save the
associated data either during or before
the occurrence of the extraordinary
event. In this case, the extraordinary
event has not caused the facility’s data
files to be destroyed, but it could hinder
the SNF’s ability to meet the quality
reporting program’s data submission
deadlines. In this scenario, the SNF
would potentially have the ability to
report the data at a later date, after the
emergency has passed. In such cases, a
temporary extension of the deadlines for
reporting might be appropriate.
In other circumstances of natural or
man-made disaster, a SNF may not have
had the ability to conduct a full resident
assessment, or to record and save the
associated data before the occurrence of
the extraordinary event. In such a
scenario, the facility may not have
complete data to submit to CMS. We
believe that it may be appropriate, in
these situations, to grant a full exception
to the reporting requirements for a
specific period of time.
We do not wish to penalize SNFs in
these circumstances or to unduly
increase their burden during these
times. Therefore, we are proposing a
process for SNFs to request and for us
to grant exceptions and extensions with
respect to the quality data reporting
requirements of the SNF QRP for one or
more quarters, beginning with the FY
2018 payment determination, when
there are certain extraordinary
circumstances beyond the control of the
SNF. When an exception or extension is
granted, we would not reduce the SNF’s
PPS payment for failure to comply with
the requirements of the SNF QRP.
We are proposing that if a SNF seeks
to request an exception or extension
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with respect to the SNF QRP, the SNF
should request an exception or
extension within 90 days of the date
that the extraordinary circumstances
occurred. The SNF may request an
exception or extension for one or more
quarters by submitting a written request
to CMS that contains the information
noted below, via email to the SNF
Exception and Extension mailbox at
SNFQRPReconsiderations@cms.hhs.gov.
Requests sent to CMS through any other
channel will not be considered as valid
requests for an exception or extension
from the SNF QRP’s reporting
requirements for any payment
determination.
We note that the subject of the email
must read ‘‘SNF QRP Exception or
Extension Request’’ and the email must
contain the following information:
• SNF CCN;
• SNF name;
• CEO or CEO-designated personnel
contact information including name,
telephone number, email address, and
mailing address (the address must be a
physical address, not a post office box);
• SNF’s reason for requesting an
exception or extension;
• Evidence of the impact of
extraordinary circumstances, including
but not limited to photographs,
newspaper and other media articles; and
• A date when the SNF believes it
will be able to again submit SNF QRP
data and a justification for the proposed
date.
We are proposing that exception and
extension requests be signed by the
SNF’s CEO or CEO designated
personnel, and that if the CEO
designates an individual to sign the
request, the CEO-designated individual
has the appropriate authority to submit
such a request on behalf of the SNF.
Following receipt of the email, we will:
(1) Provide a written acknowledgement,
using the contact information provided
in the email, to the CEO or CEOdesignated contact notifying them that
the request has been received; and (2)
provide a formal response to the CEO or
any CEO-designated SNF personnel,
using the contact information provided
in the email, indicating our decision.
This proposal does not preclude us
from granting exceptions or extensions
to SNFs that have not requested them
when we determine that an
extraordinary circumstance, such as an
act of nature, affects an entire region or
locale. If we make the determination to
grant an exception or extension to all
SNFs in a region or locale, we are
proposing to communicate this decision
through routine communication
channels to SNFs and vendors,
including, but not limited to, issuing
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memos, emails, and notices on our SNF
QRP Web site once it is available at
https://www.cms.gov/Medicare/QualityInitiatives-Patient-AssessmentInstruments/NursingHomeQualityInits/
SNF-QR-Reconsideration-andExceptionExtension.html.
We are also proposing that we may
grant an exception or extension to SNFs
if we determine that a systemic problem
with one of our data collection systems
directly affected the ability of the SNF
to submit data. Because we do not
anticipate that these types of systemic
errors will happen often, we do not
anticipate granting an exception or
extension on this basis frequently.
If a SNF is granted an exception, we
will not require that the SNF submit any
measure data for the period of time
specified in the exception request
decision. If we grant an extension to a
SNF, the SNF will still remain
responsible for submitting quality data
collected during the timeframe in
question, although we will specify a
revised deadline by which the SNF
must submit this quality data.
We also propose that any exception or
extension requests submitted for
purposes of the SNF QRP will apply to
that program only, and not to any other
program we administer for SNFs such as
survey and certification. MDS
requirements, including electronic
submission, during Declared Public
Health Emergencies can be found at
FAQs K–5, K–6 and K–9 on the
following link: https://www.cms.gov/
Medicare/Provider-Enrollment-andCertification/SurveyCertEmergPrep/
downloads/AllHazardsFAQs.pdf.
We intend to provide additional
information pertaining to exceptions
and extensions for the SNF QRP,
including any additional guidance, on
the SNF QRP Web site at https://
www.cms.gov/Medicare/QualityInitiatives-Patient-AssessmentInstruments/NursingHomeQualityInits/
SNF-QR-Reconsideration-andExceptionExtension.html.
We invite public comment on these
proposals for seeking and being granted
exceptions and extensions to the quality
reporting requirements.
11. SNF QRP Reconsideration and
Appeals Procedures for the FY 2018
Payment Determination and Subsequent
Years
At the conclusion of the required
quality data reporting and submission
period, we will review the data received
from each SNF during that reporting
period to determine if the SNF met the
quality data reporting requirements.
SNFs that are found to be noncompliant
with the reporting requirements for the
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applicable fiscal year will receive a 2
percentage point reduction to their
market basket percentage update for that
fiscal year.
We are aware that some of our other
quality reporting programs, such as the
HIQR Program, the LTCHQR Program,
and the IRF QRP include an opportunity
for the providers to request a
reconsideration of our initial noncompliance determination. Therefore, to
be consistent with other established
quality reporting programs and to
provide an opportunity for SNFs to seek
reconsideration of our initial noncompliance decision, we are proposing
a process that will enable a SNF to
request reconsideration of our initial
non-compliance decision in the event
that it believes that it was incorrectly
identified as being non-compliant with
the SNF QRP reporting requirements for
a particular fiscal year.
For the FY 2018 payment
determination, and that of subsequent
years, we are proposing that a SNF
would receive a notification of
noncompliance if we determine that the
SNF did not submit data in accordance
with the data reporting requirements
with respect to the applicable FY. The
purpose of this notification is to put the
SNF on notice of the following: (1) That
the SNF has been identified as being
non-compliant with the SNF QRP’s
reporting requirements for the
applicable fiscal year; (2) that the SNF
will be scheduled to receive a reduction
in the amount of two percentage points
to its market basket percentage update
for the applicable fiscal year; (3) that the
SNF may file a request for
reconsideration if it believes that the
finding of noncompliance is erroneous,
has submitted a request for an extension
or exception that has not yet been
decided, or has been granted an
extension or exception; and (4) that the
SNF must follow a defined process on
how to file a request for reconsideration,
which will be described in the
notification. We would only consider
requests for reconsideration after an
SNF has been found to be
noncompliant.
Notifications of noncompliance and
any subsequent notifications from CMS
would be sent via a traceable delivery
method, such as certified U.S. mail or
registered U.S. mail, or through other
practicable notification processes, such
as a report from CMS to the provider as
a Certification and Survey Provider
Enhanced Reports (CASPER) report, that
will provide information pertaining to
their compliance with the reporting
requirements for the given reporting
cycle. To obtain the CASPER report,
providers should access the CASPER
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Reporting Application. Information on
how to access the CASPER Reporting
Application is available on the Quality
Improvement Evaluation System (QIES)
Technical Support Office Web site
(direct link), https://web.qiesnet.org/
qiestosuccess/. Once access is
established providers can select
‘‘CASPER Reports’’ link. The ‘‘CASPER
Reports’’ link will connect a SNF to the
QIES National System Login page for
CASPER Reporting.
We seek comments on the most
preferable delivery method for the
notice of non-compliance, such as U.S.
Mail, email, CASPER, etc.
We propose to disseminate
communications regarding the
availability of compliance reports in the
CASPER reports through routine
channels to SNFs and vendors,
including, but not limited to issuing
memos, emails, Medicare Learning
Network (MLN) announcements, and
notices on our SNF QRP Web site once
it is available at https://www.cms.gov/
Medicare/Quality-Initiatives-PatientAssessment-Instruments/
NursingHomeQualityInits/SNF-QRReconsideration-andExceptionExtension.html.
A SNF would have 30 days from the
date of the initial notification of
noncompliance to submit to us a request
for reconsideration. This proposed time
frame allows us to balance our desire to
ensure that SNFs have the opportunity
to request reconsideration with our need
to complete the process and provide
SNFs with our reconsideration decision
in a timely manner. We are proposing
that a SNF may withdraw its request at
any time and may file an updated
request within the proposed 30-day
deadline. We are also proposing that, in
very limited circumstances, we may
grant a request by a SNF to extend the
proposed deadline for reconsideration
requests. It would be the responsibility
of a SNF to request an extension and
demonstrate that extenuating
circumstances existed that prevented
the filing of the reconsideration request
by the proposed deadline.
We also are proposing that as part of
the SNF’s request for reconsideration,
the SNF would be required to submit all
supporting documentation and evidence
demonstrating full compliance with all
SNF QRP reporting requirements for the
applicable fiscal year, that the SNF has
requested an extension or exception for
which a decision has not yet been made,
that the SNF has been granted an
extension or exception, or has
experienced an extenuating
circumstance as defined in section
V.C.10 of this rule but failed to file a
timely request of exception. We propose
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that we would not review any
reconsideration request that fails to
provide the necessary documentation
and evidence along with the request.
The documentation and evidence may
include copies of any communications
that demonstrate the SNF’s compliance
with the SNF QRP, as well as any other
records that support the SNF’s rationale
for seeking reconsideration, but should
not include any protected health
information (PHI). We intend to provide
a sample list of acceptable supporting
documentation and evidence, as well as
instructions for SNFs on how to retrieve
copies of the data submitted to CMS for
the appropriate program year in the
future on our SNF QRP Web site at
https://www.cms.gov/Medicare/QualityInitiatives-Patient-AssessmentInstruments/NursingHomeQualityInits/
SNF-QR-Reconsideration-andExceptionExtension.html.
We are proposing that a SNF wishing
to request a reconsideration of our
initial noncompliance determination
would be required to do so by
submitting an email to the following
email address:
SNFQRPReconsiderations@cms.hhs.gov.
Any request for reconsideration
submitted to us by a SNF would be
required to follow the guidelines
outlined on our SNF QRP Web site once
it is available at https://www.cms.gov/
Medicare/Quality-Initiatives-PatientAssessment-Instruments/
NursingHomeQualityInits/SNF-QRReconsideration-andExceptionExtension.html.
All emails must contain a subject line
that reads ‘‘SNF QRP Reconsideration
Request.’’ Electronic email submission
is the only form of reconsideration
request submission that will be accepted
by us. Any reconsideration requests
communicated through another channel
including, but not limited to, U.S. Postal
Service or phone, will not be considered
as a valid reconsideration request.
We are proposing that a
reconsideration request include the
following information:
• SNF CMS Certification Number
(CCN);
• SNF Business Name;
• SNF Business Address;
• The CEO contact information
including name, email address,
telephone number and physical mailing
address; or
The CEO-designated representative
contact information including name,
title, email address, telephone number
and physical mailing address; and
• CMS identified reason(s) for noncompliance from the non-compliance
notification; and
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• The reason(s) for requesting
reconsideration.
The request for reconsideration must
be accompanied by supporting
documentation demonstrating
compliance. Following receipt of a
request for reconsideration, we will
provide an email acknowledgment,
using the contact information provided
in the reconsideration request, to the
CEO or CEO-designated representative
that the request has been received. Once
we have reached a decision regarding
the reconsideration request, an email
will be sent to the SNF CEO or CEOdesignated representative, using the
contact information provided in the
reconsideration request, notifying the
SNF of our decision.
We also propose that the notifications
of our decision regarding
reconsideration requests may be made
available through the use of CASPER
reports or through a traceable delivery
method, such as certified U.S. mail or
registered U.S. mail. If the SNF is
dissatisfied with the decision rendered
at the reconsideration level, the SNF
may appeal the decision to the PRRB
under 42 CFR 405.1835. We believe this
proposed process is more efficient and
less costly for CMS and for SNFs
because it decreases the number of
PRRB appeals by resolving issues earlier
in the process. Additional information
about the reconsideration process
including details for submitting a
reconsideration request will be posted
in the future to our SNF QRP Web site
at https://www.cms.gov/Medicare/
Quality-Initiatives-Patient-AssessmentInstruments/NursingHomeQualityInits/
SNF-QR-Reconsideration-andExceptionExtension.html.
We invite public comment on the
proposed procedures for reconsideration
and appeals.
12. Public Display of Quality Measure
Data for the SNF QRP
Section 1899B(g)(1) of the Act
requires the Secretary to provide for the
public reporting of SNF provider
performance on the quality measures
specified under subsection (c)(1) and
the resource use and other measures
specified under subsection (d)(1) by
establishing procedures for making
available to the public data and
information on the performance of
individual SNFs with respect to the
measures. Under section 1899B(g)(2) of
the Act, such procedures must be
consistent with those under section
1886(b)(3)(B)(viii)(VII) of the Act and
also allow SNFs the opportunity to
review and submit corrections to the
data and other information before it is
made public. Section 1899B(g)(3) of the
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Act requires that the data and
information be made publicly available
not later than 2 years after the specified
application date applicable to such a
measure and provider. Finally, section
1899B(g)(4)(B) of the Act requires such
procedures be consistent with Sections
1819(i) and 1919(i) of the Act. We
intend to propose details related to the
public display of quality measures in
the future.
13. Mechanism for Providing Feedback
Reports to SNFs
Section 1899B(f) of the Act requires
the Secretary to provide confidential
feedback reports to post-acute care
providers on their performance with
respect to the measures specified under
subsections (c)(1) and (d)(1), beginning
1 year after the specified application
date that applies to such measures and
PAC providers. We intend to provide
detailed procedures to SNFs on how to
obtain their confidential feedback
reports on the SNF QRP Web site at
https://www.cms.gov/Medicare/QualityInitiatives-Patient-AssessmentInstruments/NursingHomeQualityInits/
SNF-Quality-Reporting.html.
D. Staffing Data Collection
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1. Background and Statutory Authority
Section 1819(d)(1)(A) of the Act for
SNFs and section 1919(d)(1)(A) of the
Act for NFs each state that, in general,
a facility must be administered in a
manner that enables it to use its
resources effectively and efficiently to
attain or maintain the highest
practicable physical, mental, and
psychosocial well-being of each
resident. Sections 1819(d)(4)(B) and
1919(d)(4)(B) of the Act give the
Secretary authority to issue rules, for
SNFs and NFs respectively, relating to
the health, safety and well-being of
residents and relating to the physical
facilities thereof.
Section 6106 of the Affordable Care
Act of 2010 (Pub. L. 111–148, March 23,
2010) added a new section 1128I to the
Act to promote greater accountability for
LTC facilities (defined under section
1128I(a) of the Act as skilled nursing
facilities and nursing facilities). Section
1128I(g) pertains to the submission of
staffing data by LTC facilities, and
specifies that the Secretary, after
consulting with state long-term care
ombudsman programs, consumer
advocacy groups, provider stakeholder
groups, employees and their
representatives and other parties the
Secretary deems appropriate, shall
require a facility to electronically
submit to the Secretary direct care
staffing information, including
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information for agency and contract
staff, based on payroll and other
verifiable and auditable data in a
uniform format according to
specifications established by the
Secretary in consultation with such
programs, groups, and parties. The
statute further requires that the
specifications established by the
Secretary specify the category of work a
certified employee performs (such as
whether the employee is a registered
nurse, licensed practical nurse, licensed
vocational nurse, certified nursing
assistant, therapist, or other medical
personnel), include resident census data
and information on resident case mix,
be reported on a regular schedule, and
include information on employee
turnover and tenure and on the hours of
care provided by each category of
certified employees per resident per
day. Section 1128I(g) of the Act
establishes that the Secretary may
require submission of information for
specific categories, such as nursing staff,
before other categories of certified
employees, and requires that
information for agency and contract staff
be kept separate from information on
employee staffing.
2. Consultation on Specifications
We have adopted a two-pronged
strategy to comply with section 1128I(g)
of the Act’s consultation requirement.
First, through this notice of proposed
rulemaking, we are soliciting input from
all interested parties, including, without
limitation, state long-term care
ombudsman programs, consumer
advocacy groups, provider stakeholder
groups, employees and their
representatives. Second, we are engaged
in ongoing consultation with the
statutorily identified entities regarding
the sub-regulatory reporting
specifications that we will establish. For
example, in 2012, we conducted a 6month pilot in which facilities
submitted staffing information
electronically based on payroll data, and
which allowed participants and other
stakeholders to provide feedback on the
computerized system we are
considering using to collect data.
Following the pilot, we continue to
receive feedback on the collection and
reporting of staffing information from
stakeholders in anticipation of
establishing the specifications for the
required submission by all facilities.
Over the next few months, we intend to
increase the level of engagement with
stakeholders, including industry
associations, consumer advocacy
groups, and long-term care facilities, to
solicit their input on these
specifications in advance of the
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proposed mandatory submission date.
We anticipate activities to solicit
feedback will include Open Door
Forums, general question and answer
sessions, and a voluntary submission
period whereby facilities can submit
staffing information on a voluntary basis
to become familiar with the system and
to provide feedback to CMS on systems
issues in advance of the mandatory
submission date. Through this proposed
rule, we invite public comment on our
proposed methods for consultation on
the submission specifications.
3. Provisions of the Proposed Rule
We propose to modify current
regulations applicable to LTC facilities
that participate in Medicare and
Medicaid to implement the new
statutory requirement in section
1128I(g) of the Act. Specifically, we
propose to amend the requirements for
the administration of a LTC facility at
§ 483.75 by adding a new paragraph (u),
Mandatory submission of staffing
information based on payroll data in a
uniform format.
The proposed regulation would
require facilities to electronically submit
to CMS complete and accurate direct
care staffing information, including
information for agency and contract
staff, based on payroll and other
verifiable and auditable data, beginning
on July 1, 2016.
a. Submission Requirements
We are proposing to add a new
§ 483.75(u)(1) to establish the categories
of information a facility must submit.
This provision would implement the
requirements in sections 1128I(g)(1), (2)
and (4) of the Act, which require that a
facility’s submission of staffing
information specify the category of work
a certified employee performs, include
resident census data and information on
resident case mix, and include
information on employee turnover and
tenure and on the hours of care
provided by each category of certified
employees per resident per day. In
keeping with Congress’s clear intent,
CMS is interpreting the statutory terms
‘‘Certified employee’’ and ‘‘employee’’
in section 1128Ig(1) and (4) of the Act
to include contract and agency staff as
well as direct employees.
The proposed rule also adopts certain
approaches to minimize industry
burden and duplication and to provide
clarity for long-term care facilities that
we believe are consistent with the
intent, and meet the requirements, of
the statute. For example, this rule does
not propose to require the collection of
resident case mix information as
specified at section 1128I(g)(2) of the
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Act because we already collect such
information under § 483.20, per which
LTC facilities are required to conduct
resident assessments by completing the
Minimum Data Set (MDS) and submit
the MDS data electronically to CMS.
Because the MDS data is used to
calculate a facility’s resident case mix,
long-term care facilities are already
required to meet this statutory
requirement.
Additionally, for purposes of
implementing the statutory reporting
requirements in section 1128I(g)(4) of
the Act, we proposed text for the new
§ 483.75(u)(1)(iii) to specify that the
staffing information a facility would
need to submit must include each
individual’s start date, end date (if
applicable) and hours worked. Although
the statute does not specifically require
reporting each individual’s start and
end dates, we believe that requiring
submission of these data elements is
necessary to satisfy section 1128I(g)(4)
of the Act’s requirement that facilities
submit information on turnover and
retention.
Finally, although the proposed text
for the new § 483.75(u)(1)(iii) would
require facilities to submit each
individual’s hours worked, we note that
section 1128I(g)(4) of the Act requires
LTC facilities to report on the hours of
care provided by each category of
certified employees per resident per
day. We believe the obligation to submit
information on ‘‘hours of care’’ is
satisfied by requiring facilities to submit
hours worked by staff. In contrast with
the statutory reference to ‘‘direct care
staffing information,’’ which we believe
is intended to establish that information
must be submitted for the categories of
individuals who render direct care, we
believe Congress’s intent in referring to
‘‘hours of care’’ was to require
submission of information regarding the
hours worked by individuals in those
categories of staff providing direct care
services. One of the primary objectives
of the statute is for facilities to submit
staffing information that is based on
payroll and other verifiable and
auditable data. We believe that most
payroll or employee time and
attendance systems capture the hours
worked by individuals, and do not
typically distinguish between hours
spent doing different tasks (unless the
tasks require different levels of pay). If
we were to assume that ‘‘hours or care’’
was a subset of the hours worked by
individuals, we would not be able to
verify or audit the data submitted. As
such, we believe that requiring facilities
to report data on hours worked will
yield the information Congress intended
regarding ‘‘hours of care provided.’’
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b. Distinguishing Employees From
Agency and Contract Staff
Under section 1128I(g) of the Act’s
requirement that information for agency
and contract staff be kept separate from
information on employee staffing, we
are proposing to add a new
§ 483.75(u)(2) to establish that, when
reporting direct care staffing
information for an individual, a facility
must specify whether the individual is
an employee of the facility or is engaged
by the facility as contract or agency
staff. We believe the statute’s intent is
to require LTC facilities to submit
staffing information in a manner that
can enable us to distinguish those staff
that are employed by the facility from
those that are engaged by the facility
under a contract or through an agency.
We do not believe the statute requires
such data to be submitted at separate
times or through separate systems,
which would merely engender
unnecessary costs and burden, so we
intend to collect all facility staffing
information at the same time and
through the same system, employing a
mechanism by which LTC facilities will
clearly specify whether staff members
are employees of the facility, or engaged
under contract or through an agency.
c. Data Format
We are proposing to add a new
§ 483.75(u)(3) to establish that a facility
must submit direct care staffing
information in the format specified by
CMS. This provision would implement
the requirement in section 1128I(g) of
the Act that facilities submit direct care
staffing information in a uniform format.
As noted, we are consulting with
stakeholders on potential format
specifications. The data that we propose
be required to be submitted are similar
to those already submitted by LTC
facilities to CMS on the forms CMS–671
and CMS–672 (we intend for this
proposed new information collection to
eventually supplant the data collections
via the CMS–671 and CMS–672). In
advance of the proposed July 1, 2016
implementation date, we will publicize
the established format specifications
and will offer training to help facilities
and other interested parties (for
example, payroll vendors) prepare to
meet the requirement.
d. Submission Schedule
Section 1128I(g)(3) of the Act requires
that facilities submit direct care staffing
information on a regular reporting
schedule. LTC facilities now submit
staffing information to CMS about once
a year. Because staffing levels may
change throughout the course of a year
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(based on, among other things, a
facility’s census and residents’ needs),
to have a more continuous and accurate
reflection of facility staffing, we believe
it is preferable for facilities to submit
staffing information quarterly.
Therefore, the proposed new
§ 483.75(u)(4) would establish that a
facility must submit direct care staffing
information on the schedule specified
by CMS, but no less frequently than
quarterly.
4. Compliance and Enforcement
This proposed new § 483.75(u) would
implement the provisions of section
1128I(g) of the Act as requirements a
LTC facility must meet to qualify to
participate as a SNF in the Medicare
program or a NF in the Medicaid
program. As such, we plan to enforce
the requirements under this new
regulation through 42 CFR part 488.
Should a facility fail to meet the
reporting requirements of, or report
inaccurate information under, the
proposed § 483.75(u), CMS or the state
may impose one or more remedies
available to address noncompliance
with the requirements for LTC facilities.
5. Conclusion
This proposed rule would implement
the new requirements regarding the
submission of staffing information based
on payroll and other verifiable and
auditable data by establishing that such
submissions are requirements that a
LTC facility must meet to qualify to
participate as a SNF in the Medicare
program or a NF in the Medicaid
program. While section 1128I(g) of the
Act does not make explicit that
submission of staffing information based
on these data is a condition of
participation for Medicare or Medicaid,
we believe that it is implicitly
authorized by the terms of section 6106
of the Affordable Care Act. Moreover, it
is explicitly permitted by the general
rulemaking authority of sections
1819(d)(4)(B) and 1919(d)(4)(B) of the
Act, which permit the Secretary to issue
rules relating to the health, safety and
well-being of residents. It is critical for
both CMS and consumers to have access
to accurate LTC staffing information to
evaluate the quality of care rendered by
such facilities. Several studies have
looked at the relationship between
staffing and the quality of care delivered
by long term care facilities, and it is
clear that staffing has an impact on the
quality of care received by residents.
This new collection and reporting of
staffing data should enable us to have
greater insight on the relationship
between staffing and quality, and can be
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used to inform future programs or
policies.
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VI. Collection of Information
Requirements
As indicated below, this rule only
proposes information collection
requirements that are exempt from the
Paperwork Reduction Act of 1995 (PRA)
(44 U.S.C. 3501 et seq.).
Specifically, section V.D. of this
preamble proposes to add § 483.75(u) to
implement the provisions of section
1128I(g) of the Act as requirements a
LTC facility must meet in order to
qualify to participate as a SNF in the
Medicare program or a NF in the
Medicaid program. As such, nursing
homes would be required to
electronically submit direct care staffing
information (including information with
respect to agency and contract staff)
based on payroll and other verifiable
and auditable data. This requirement is
exempt from the Paperwork Reduction
Act (PRA) in accordance with the 1987
Omnibus Budget Reconciliation Act
(OBRA) for SNF and NF information
collection activities (Pub. L. 100–203,
section 4204(b) and section 4214(d)).
Under sections 4204(b) and 4214(d) of
OBRA 1987, requirements related to the
submission and retention of resident
assessment data are not subject to the
Paperwork Reduction Act (PRA).
Section V.C.5. of this preamble
proposes the following three new
quality measures for the SNF QRP
beginning with the FY 2018 program
year: Percent of Residents or Patients
with Pressure Ulcers That Are New or
Worsened (Short Stay) (NQF #0678),
NQF-endorsed Percent of Residents
Experiencing One or More Falls with
Major Injury (Long Stay) (NQF #0674),
and an application of the Percent of
Long-Term Care Hospital Patients With
an Admission and Discharge Functional
Assessment and a Care Plan that
Addresses Function (NQF #2631; under
NQF review).
While the reporting of quality
measures is an information collection,
the requirement is exempt from the PRA
in accordance with the IMPACT Act
2014. More specifically, section
1899B(m) and section 1899B(a)(2)(B) of
the Act, exempt modifications that are
intended to achieve the standardization
of patient assessment data.
With regard to quality reporting
during extraordinary circumstances,
section V.C.10. of this rule proposes that
SNFs may request an exception or
extension from the FY 2018 payment
determination and that of subsequent
payment determinations. The request
must be submitted by email within 90
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days from the date that the
extraordinary circumstances occurred.
While the preparation and submission
of the request is an information
collection, the requirement is exempt
from the PRA in accordance with the
IMPACT Act 2014. More specifically,
section 1899B(m) of the Act and the
sections referenced in section
1899B(a)(2)(B) of the Act, as added by
the IMPACT Act 2014, exempt
modifications that are intended to
achieve the standardization of patient
assessment data.
In section V.C.7.b. of this preamble
we propose to require the collection of
data—by means of a SNF PPS Part A
Discharge Assessment—at the time of
transition from a SNF PPS Part A stay;
specifically, when the resident has not
physically been discharged from the
facility. Under this section we also
propose to add data items to the
scheduled Medicare required PPS
Admission/Entry Assessment (5-day).
While the reporting of quality
measures is an information collection,
the requirements are exempt from the
PRA in accordance with the IMPACT
Act 2014. More specifically, section
1899B(m) of the Act and the sections
referenced in subsection 1899B(a)(2)(B)
of the Act, as added by the IMPACT Act
2014, exempt modifications that are
intended to achieve the standardization
of patient assessment data.
As discussed in section V.C.11. of this
preamble, this rule proposes a process
that will enable SNFs to request
reconsideration of our initial noncompliance decision if the SNF believes
that it was incorrectly identified as not
having met its reporting requirements
for the applicable fiscal year. Because
the reconsideration and appeals
requirements are associated with an
administrative action (5 CFR
1320.4(a)(2) and (c)), they are exempt
from the requirements of the PRA.
If you wish to comment on any of the
aforementioned assumptions, please
submit your comments as specified
under the DATES and ADDRESSES
captions of this proposed rule.
VII. Response to Comments
Because of the large number of public
comments we normally receive on
Federal Register documents, we are not
able to acknowledge or respond to them
individually. We will consider all
comments we receive by the date and
time specified in the DATES section of
this preamble, and when we proceed
with a subsequent document, we will
respond to the comments in the
preamble to that document.
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VIII. Economic Analyses
A. Regulatory Impact Analysis
1. Introduction
We have examined the impacts of this
proposed rule as required by Executive
Order 12866 on Regulatory Planning
and Review (September 30, 1993),
Executive Order 13563 on Improving
Regulation and Regulatory Review
(January 18, 2011), the Regulatory
Flexibility Act (RFA, September 19,
1980, Pub. L. 96–354), section 1102(b) of
the Act, section 202 of the Unfunded
Mandates Reform Act of 1995 (UMRA,
March 22, 1995; Pub. L. 104–4),
Executive Order 13132 on Federalism
(August 4, 1999), and the Congressional
Review Act (5 U.S.C. 804(2)).
Executive Orders 12866 and 13563
direct agencies to assess all costs and
benefits of available regulatory
alternatives and, if regulation is
necessary, to select regulatory
approaches that maximize net benefits
(including potential economic,
environmental, public health and safety
effects, distributive impacts, and
equity). Executive Order 13563
emphasizes the importance of
quantifying both costs and benefits, of
reducing costs, of harmonizing rules,
and of promoting flexibility. This rule
has been designated an economically
significant rule, under section 3(f)(1) of
Executive Order 12866. Accordingly, we
have prepared a regulatory impact
analysis (RIA) as further discussed
below. Also, the rule has been reviewed
by OMB.
2. Statement of Need
This proposed rule would update the
SNF prospective payment rates for FY
2015 as required under section
1888(e)(4)(E) of the Act. It also responds
to section 1888(e)(4)(H) of the Act,
which requires the Secretary to provide
for publication in the Federal Register
before the August 1 that precedes the
start of each fiscal year, the unadjusted
federal per diem rates, the case-mix
classification system, and the factors to
be applied in making the area wage
adjustment. As these statutory
provisions prescribe a detailed
methodology for calculating and
disseminating payment rates under the
SNF PPS, we do not have the discretion
to adopt an alternative approach.
3. Overall Impacts
This proposed rule sets forth
proposed updates of the SNF PPS rates
contained in the SNF PPS final rule for
FY 2015 (79 FR 45628). Based on the
above, we estimate that the aggregate
impact would be an increase of $500
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million in payments to SNFs, resulting
from the SNF market basket update to
the payment rates, as adjusted by the
applicable forecast error adjustment and
by the MFP adjustment. The impact
analysis of this proposed rule represents
the projected effects of the changes in
the SNF PPS from FY 2015 to FY 2016.
Although the best data available are
utilized, there is no attempt to predict
behavioral responses to these changes,
or to make adjustments for future
changes in such variables as days or
case-mix.
Certain events may occur to limit the
scope or accuracy of our impact
analysis, as this analysis is futureoriented and, thus, very susceptible to
forecasting errors due to certain events
that may occur within the assessed
impact time period. Some examples of
possible events may include newlylegislated general Medicare program
funding changes by the Congress, or
changes specifically related to SNFs. In
addition, changes to the Medicare
program may continue to be made as a
result of previously-enacted legislation,
or new statutory provisions. Although
these changes may not be specific to the
SNF PPS, the nature of the Medicare
program is such that the changes may
interact and, thus, the complexity of the
interaction of these changes could make
it difficult to predict accurately the full
scope of the impact upon SNFs.
In accordance with sections
1888(e)(4)(E) and 1888(e)(5) of the Act,
we update the FY 2015 payment rates
by a factor equal to the market basket
index percentage change adjusted by the
FY 2014 forecast error and the MFP
adjustment to determine the payment
rates for FY 2016. As discussed
previously, for FY 2012 and each
subsequent FY, as required by section
1888(e)(5)(B) of the Act as amended by
section 3401(b) of the Affordable Care
Act, the market basket percentage is
reduced by the MFP adjustment. The
special AIDS add-on established by
section 511 of the MMA remains in
effect until such date as the Secretary
certifies that there is an appropriate
adjustment in the case mix. We have not
provided a separate impact analysis for
the MMA provision. Our latest estimates
indicate that there are fewer than 4,800
beneficiaries who qualify for the add-on
payment for residents with AIDS. The
impact to Medicare is included in the
total column of Table 12. In updating
the SNF PPS rates for FY 2016, we made
a number of standard annual revisions
and clarifications mentioned elsewhere
in this proposed rule (for example, the
update to the wage and market basket
indexes used for adjusting the federal
rates).
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The annual update set forth in this
proposed rule applies to SNF PPS
payments in FY 2016. Accordingly, the
analysis that follows only describes the
impact of this single year. In accordance
with the requirements of the Act, we
will publish a notice or rule for each
subsequent FY that will provide for an
update to the SNF PPS payment rates
and include an associated impact
analysis.
In accordance with sections 1888(g)
and (h)(2)(A) of the Act, we are
proposing to specify a Skilled Nursing
Facility 30-Day All-Cause Readmission
Measure (SNFRM) and adopt that
measure for the SNF VBP Program.
Because this proposed measure is
claims-based, its adoption under the
SNF VBP Program would not result in
any increased costs to SNFs.
However, we do not yet have
preliminary data with which we could
project economic impacts associated
with the measure. We intend to make
additional proposals for the SNF VBP
Program in future rulemaking, and we
will assess the impacts of the SNFRM
and any associated SNF VBP Program
proposals at that time.
We believe that the burden associated
with the SNF QRP is the time and effort
associated with data collection and
reporting. In this proposed rule, we
propose three quality measures to meet
the requirements of section
1888(e)(6)(B)(II) of the Act.
Our burden calculations take into
account all ‘‘new’’ items required on the
MDS 3.0 to support data collection and
reporting for these three proposed
measures. New items will be included
on the following assessments: SNF PPS
5-Day, Swing Bed PPS 5-Day, OMRA—
Start of Therapy Discharge, OMRA—
Other Discharge, OBRA Discharge,
Swing Bed OMRA—Start of Therapy
Discharge, Swing Bed OMRA—Other
Discharge, and Swing Bed Discharge on
the MDS 3.0. The SNF QRP also
requires the addition of a SNF PPS Part
A Discharge Assessment which will also
include new items. New items include
data elements required to identify
whether pressure ulcers were present on
admission, to inform future
development of the Percent of Residents
or Patients with Pressure Ulcers That
Are New or Worsened (Short Stay) (NQF
#0678), as well as changes in function
and occurrence of falls with major
injury. To the extent applicable, we will
use standardized items to collect data
for the three measures. For a copy of the
data collection instrument, please visit:
https://www.cms.gov/Medicare/QualityInitiatives-Patient-AssessmentInstruments/NursingHomeQualityInits/
SNF-Quality-Reporting-Program-
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Measures-and-TechnicalInformation.html.
We estimate a total additional burden
of $27.47 per Medicare-covered SNF
stay, based on the most recent data
available, in this case FY 2014, that
15,421 SNFs had a total of 2,599,656
Medicare-covered stays for fee-forservice beneficiaries. This would equate
to 1,012,566.13 total added hours or 66
hours per SNF annually.
We believe that the additional MDS
items we are proposing will be
completed by Registered Nurses (RN),
Occupational Therapists (OT), and/or
Physical Therapists (PT), depending on
the item. We identified the staff type per
item based on past LTCH and IRF
burden calculations in conjunction with
expert opinion. Our assumptions for
staff type was based on the categories
generally necessary to perform
assessment: Registered Nurse (RN),
Occupational Therapy (OT), and
Physical Therapy (PT). Individual
providers determine the staffing
resources necessary, therefore, we
averaged the national average for these
labor types and established a composite
cost estimate. We obtained mean hourly
wages for these staff from the U.S.
Bureau of Labor Statistics’ May 2013
National Occupational Employment and
Wage Estimates (https://www.bls.gov/
oes/current/oes_nat.htm), and to
account for overhead and fringe
benefits, we have doubled the mean
hourly wage. The mean hourly wage for
an RN is $33.13, doubled to $66.26 to
account for overhead and fringe
benefits. The mean hourly wage for an
OT is $37.45, doubled to $74.90 to
account for overhead and fringe
benefits. The mean hourly wage for a PT
is $39.51, doubled to $79.02 to account
for overhead and fringe benefits.
To calculate the added burden, we
first identified the total number of new
items to be added into assessment
instruments. We assume that each new
item accounts for 0.5 minutes of nursing
facility staff time. This assumption is
consistent with burden calculations in
past IRF and LTCH federal regulations.
For each staff type, we then multiply the
added burden in minutes with the
number of times we believe that each
item will be completed annually. To
identify the number of times an item
would be completed annually, we noted
the number of total SNF FFS Medicarecovered stays in FY 2014, the most
recent data available to us. We assume
that if an item was added to all
discharge assessments that that item
would be completed at least one time
per SNF FFS Medicare-covered stay. For
example, the time it takes to complete
an item added to all discharge
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assessments (0.5 minutes) would be
multiplied by the number of SNF FFS
Medicare-covered stays in FY 2014 to
identify the total added burden in
minutes associated with that item. Items
added only to the SNF PPS Part A
Discharge were weighted to reflect the
proportion of SNF stays for residents
who switch payers, but are not
physically discharged from the facility.
Added burden in minutes per staff type
was then converted to hours and
multiplied by the doubled hourly wage
to identify the annual cost per staff type.
Given these wages and time estimates,
the total cost related to the SNF PPS
Part A Discharge Assessment and SNF
QRP measures is estimated at $4,630.20
per SNF annually, or $71,402,283.86 for
all SNFs annually.
4. Detailed Economic Analysis
The FY 2016 SNF PPS payment
impacts appear in Table 12. Using the
most recently available data, in this case
FY 2014, we apply the current FY 2015
wage index and labor-related share
value to the number of payment days to
simulate FY 2015 payments. Then,
using the same FY 2014 data, we apply
the proposed FY 2016 wage index and
labor-related share value to simulate FY
2015 payments. We tabulate the
resulting payments according to the
classifications in Table 12 (for example,
facility type, geographic region, facility
ownership), and compare the difference
between current and proposed
payments to determine the overall
impact. The breakdown of the various
categories of data in the table follows.
The first column shows the
breakdown of all SNFs by urban or rural
status, hospital-based or freestanding
status, census region, and ownership.
The first row of figures describes the
estimated effects of the various changes
on all facilities. The next six rows show
the effects on facilities split by hospitalbased, freestanding, urban, and rural
categories. The next nineteen rows show
the effects on facilities by urban versus
rural status by census region. The last
three rows show the effects on facilities
by ownership (that is, government,
profit, and non-profit status).
The second column shows the
number of facilities in the impact
database.
The third column shows the effect of
the annual update to the wage index.
This represents the effect of using the
most recent wage data available. The
total impact of this change is zero
percent; however, there are
distributional effects of the change.
The fourth column shows the effect of
all of the changes on the FY 2016
payments. The update of 1.4 percent
(consisting of the market basket increase
of 2.6 percentage points, reduced by the
0.6 percentage point forecast error
adjustment and further reduced by the
0.6 percentage point MFP adjustment) is
constant for all providers and, though
not shown individually, is included in
the total column. It is projected that
aggregate payments will increase by 1.4
percent, assuming facilities do not
change their care delivery and billing
practices in response.
As illustrated in Table 12, the
combined effects of all of the changes
vary by specific types of providers and
by location. For example, due to
changes proposed in this rule, providers
in the rural Pacific region would
experience a 1.6 percent increase in FY
2016 total payments.
TABLE 12—PROJECTED IMPACT TO THE SNF PPS FOR FY 2016
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Number of
facilities
FY 2016
Group:
Total ....................................................................................................................
Urban ..................................................................................................................
Rural ...................................................................................................................
Hospital based urban .........................................................................................
Freestanding urban ............................................................................................
Hospital based rural ...........................................................................................
Freestanding rural ..............................................................................................
Urban by region:
New England ......................................................................................................
Middle Atlantic ....................................................................................................
South Atlantic .....................................................................................................
East North Central ..............................................................................................
East South Central .............................................................................................
West North Central .............................................................................................
West South Central ............................................................................................
Mountain .............................................................................................................
Pacific .................................................................................................................
Outlying ...............................................................................................................
Rural by region:
New England ......................................................................................................
Middle Atlantic ....................................................................................................
South Atlantic .....................................................................................................
East North Central ..............................................................................................
East South Central .............................................................................................
West North Central .............................................................................................
West South Central ............................................................................................
Mountain .............................................................................................................
Pacific .................................................................................................................
Ownership:
Government ........................................................................................................
Profit ...................................................................................................................
Non-profit ............................................................................................................
Update wage data
(%)
Total change
(%)
15,421
10,887
4,534
546
10,341
626
3,908
0.0
0.1
¥0.5
0.1
0.1
¥0.6
¥0.5
1.4
1.5
0.8
1.5
1.5
0.8
0.9
801
1,485
1,853
2,068
543
899
1,310
501
1,420
7
0.7
0.7
¥0.1
¥0.2
0.0
¥0.4
¥0.1
¥0.1
0.2
¥1.5
2.1
2.1
1.3
1.2
1.4
1.0
1.3
1.3
1.6
¥0.1
142
222
510
937
535
1,089
764
232
103
¥0.7
¥1.2
¥0.1
¥0.2
¥0.7
¥0.7
¥1.1
¥0.6
0.2
0.7
0.2
1.3
1.2
0.7
0.7
0.3
0.8
1.6
881
10,862
3,678
0.1
0.0
0.0
1.5
1.4
1.4
Note: The Total column includes the 2.6 percent market basket increase, reduced by the 0.6 percentage point forecast error adjustment and
further reduced by the 0.6 percentage point MFP adjustment. Additionally, we found no SNFs in rural outlying areas.
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5. Alternatives Considered
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As described in this section, we
estimate that the aggregate impact for
FY 2016 would be an increase of $500
million in payments to SNFs, resulting
from the SNF market basket update to
the payment rates, as adjusted by the
applicable forecast error adjustment and
by the MFP adjustment.
Section 1888(e) of the Act establishes
the SNF PPS for the payment of
Medicare SNF services for cost reporting
periods beginning on or after July 1,
1998. This section of the statute
prescribes a detailed formula for
calculating payment rates under the
SNF PPS, and does not provide for the
use of any alternative methodology. It
specifies that the base year cost data to
be used for computing the SNF PPS
payment rates must be from FY 1995
(October 1, 1994, through September 30,
1995). In accordance with the statute,
we also incorporated a number of
elements into the SNF PPS (for example,
case-mix classification methodology, a
market basket index, a wage index, and
the urban and rural distinction used in
the development or adjustment of the
federal rates). Further, section
1888(e)(4)(H) of the Act specifically
requires us to disseminate the payment
rates for each new FY through the
Federal Register, and to do so before the
August 1 that precedes the start of the
new FY. Accordingly, we are not
pursuing alternatives for the payment
methodology as discussed previously.
TABLE 13—ACCOUNTING STATEMENT:
CLASSIFICATION OF ESTIMATED EXPENDITURES, FROM THE 2015 SNF
PPS FISCAL YEAR TO THE 2016
SNF PPS FISCAL YEAR—Continued
Category
From Whom To
Whom?
Transfers
Federal Government
to SNF Medicare
Providers.
* The net increase of $500 million in transfer
payments is a result of the forecast error and
MFP adjusted market basket increase of $500
million.
7. Conclusion
This proposed rule sets forth updates
of the SNF PPS rates contained in the
SNF PPS final rule for FY 2015 (79 FR
45628). Based on the above, we estimate
the overall estimated payments for SNFs
in FY 2016 are projected to increase by
$500 million, or 1.4 percent, compared
with those in FY 2015. We estimate that
in FY 2016 under RUG–IV, SNFs in
urban and rural areas would experience,
on average, a 1.5 and 0.8 percent
increase, respectively, in estimated
payments compared with FY 2015.
Providers in the urban New England
and Middle Atlantic regions would
experience the largest estimated
increase in payments of approximately
2.1 percent. Providers in the urban
Outlying region would experience a
small decrease in payments of 0.1
percent.
B. Regulatory Flexibility Act Analysis
The RFA requires agencies to analyze
6. Accounting Statement
options for regulatory relief of small
entities, if a rule has a significant impact
As required by OMB Circular A–4
on a substantial number of small
(available online at
www.whitehouse.gov/sites/default/files/ entities. For purposes of the RFA, small
entities include small businesses, nonomb/assets/regulatory_matters_pdf/a4.pdf), in Table 13, we have prepared an profit organizations, and small
governmental jurisdictions. Most SNFs
accounting statement showing the
and most other providers and suppliers
classification of the expenditures
are small entities, either by reason of
associated with the provisions of this
their non-profit status or by having
proposed rule. Table 13 provides our
revenues of $27.5 million or less in any
best estimate of the possible changes in
1 year. We utilized the revenues of
Medicare payments under the SNF PPS
individual SNF providers (from recent
as a result of the policies in this
Medicare Cost Reports) to classify a
proposed rule, based on the data for
small business, and not the revenue of
15,421 SNFs in our database. All
a larger firm with which they may be
expenditures are classified as transfers
affiliated. As a result, we estimate
to Medicare providers (that is, SNFs).
approximately 91 percent of SNFs are
TABLE 13—ACCOUNTING STATEMENT: considered small businesses according
CLASSIFICATION OF ESTIMATED EX- to the Small Business Administration’s
PENDITURES, FROM THE 2015 SNF latest size standards (NAICS 623110),
PPS FISCAL YEAR TO THE 2016 with total revenues of $27.5 million or
less in any 1 year. (For details, see the
SNF PPS FISCAL YEAR
Small Business Administration’s Web
site at https://www.sba.gov/category/
Category
Transfers
navigation-structure/contracting/
contracting-officials/eligibility-sizeAnnualized Monetized $500 million.*
standards). In addition, approximately
Transfers.
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22085
25 percent of SNFs classified as small
entities are non-profit organizations.
Finally, individuals and states are not
included in the definition of a small
entity.
This proposed rule sets forth updates
of the SNF PPS rates contained in the
SNF PPS final rule for FY 2015 (79 FR
45628). Based on the above, we estimate
that the aggregate impact would be an
increase of $500 million in payments to
SNFs, resulting from the SNF market
basket update to the payment rates, as
adjusted by the MFP adjustment and
forecast error adjustment. While it is
projected in Table 12 that most
providers would experience a net
increase in payments, we note that some
individual providers within the same
region or group may experience
different impacts on payments than
others due to the distributional impact
of the FY 2016 wage indexes and the
degree of Medicare utilization.
Guidance issued by the Department of
Health and Human Services on the
proper assessment of the impact on
small entities in rulemakings, utilizes a
cost or revenue impact of 3 to 5 percent
as a significance threshold under the
RFA. According to MedPAC, Medicare
covers approximately 12 percent of total
patient days in freestanding facilities
and 22 percent of facility revenue
(Report to the Congress: Medicare
Payment Policy, March 2015, available
at https://medpac.gov/documents/
reports/chapter-8-skilled-nursingfacility-services-(march-2015report).pdf). However, it is worth noting
that the distribution of days and
payments is highly variable. That is, the
majority of SNFs have significantly
lower Medicare utilization (Report to
the Congress: Medicare Payment Policy,
March 2015, available at https://
medpac.gov/documents/reports/
chapter-8-skilled-nursing-facilityservices-(march-2015-report).pdf). As a
result, for most facilities, when all
payers are included in the revenue
stream, the overall impact on total
revenues should be substantially less
than those impacts presented in Table
12. As indicated in Table 12, the effect
on facilities is projected to be an
aggregate positive impact of 1.4 percent.
As the overall impact on the industry as
a whole, and thus on small entities
specifically, is less than the 3 to 5
percent threshold discussed previously,
the Secretary has determined that this
proposed rule would not have a
significant impact on a substantial
number of small entities.
In addition, section 1102(b) of the Act
requires us to prepare a regulatory
impact analysis if a rule may have a
significant impact on the operations of
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a substantial number of small rural
hospitals. This analysis must conform to
the provisions of section 603 of the
RFA. For purposes of section 1102(b) of
the Act, we define a small rural hospital
as a hospital that is located outside of
a Metropolitan Statistical Area and has
fewer than 100 beds. This proposed rule
would affect small rural hospitals that
(1) furnish SNF services under a swingbed agreement or (2) have a hospitalbased SNF. We anticipate that the
impact on small rural hospitals would
be similar to the impact on SNF
providers overall. Moreover, as noted in
previous SNF PPS final rules (most
recently the one for FY 2014 (78 FR
47968)), the category of small rural
hospitals would be included within the
analysis of the impact of this proposed
rule on small entities in general. As
indicated in Table 12, the effect on
facilities is projected to be an aggregate
positive impact of 1.4 percent. As the
overall impact on the industry as a
whole is less than the 3 to 5 percent
threshold discussed above, the Secretary
has determined that this proposed rule
would not have a significant impact on
a substantial number of small rural
hospitals.
C. Unfunded Mandates Reform Act
Analysis
Section 202 of the Unfunded
Mandates Reform Act of 1995 (UMRA)
also requires that agencies assess
anticipated costs and benefits before
issuing any rule whose mandates
require spending in any 1 year of $100
million in 1995 dollars, updated
annually for inflation. In 2015, that
threshold is approximately $144
million. This proposed rule would not
impose spending costs on state, local, or
tribal governments in the aggregate, or
by the private sector, of $144 million.
D. Federalism Analysis
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Executive Order 13132 establishes
certain requirements that an agency
must meet when it issues a proposed
rule (and subsequent final rule) that
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imposes substantial direct requirement
costs on state and local governments,
preempts state law, or otherwise has
federalism implications. This proposed
rule would have no substantial direct
effect on state and local governments,
preempt state law, or otherwise have
federalism implications.
E. Congressional Review Act
This proposed regulation is subject to
the Congressional Review Act
provisions of the Small Business
Regulatory Enforcement Fairness Act of
1996 (5 U.S.C. 801 et seq.) and has been
transmitted to the Congress and the
Comptroller General for review.
In accordance with the provisions of
Executive Order 12866, this proposed
rule was reviewed by the Office of
Management and Budget.
List of Subjects in 42 CFR Part 483
Grant programs—health, Health
facilities, Health professions, Health
records, Medicaid, Medicare, Nursing
homes, Nutrition, Reporting and
recordkeeping requirements, Safety.
For the reasons set forth in the
preamble, the Centers for Medicare &
Medicaid Services proposes to amend
42 CFR chapter IV as set forth below:
PART 483—REQUIREMENTS FOR
STATES AND LONG TERM CARE
FACILITIES
1. The authority citation for part 483
is revised to read as follows:
■
Authority: Secs. 1102, 1128I, 1819, 1871
and 1919 of the Social Security Act, (42
U.S.C. 1302, 1320a–7, 1395i, 1395hh and
1396r).
2. Section 483.75 is amended by
adding paragraph (u) to read as follows:
■
§ 483.75
Administration.
*
*
*
*
*
(u) Mandatory submission of staffing
information based on payroll data in a
uniform format. Long-term care
facilities must electronically submit to
CMS complete and accurate direct care
staffing information, including
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information for agency and contract
staff, based on payroll and other
verifiable and auditable data in a
uniform format according to
specifications established by CMS.
(1) Submission requirements. The
facility must electronically submit to
CMS complete and accurate direct care
staffing information, including the
following:
(i) The category of work for each
individual that performs direct care
(including, but not limited to, whether
the individual is a registered nurse,
licensed practical nurse, licensed
vocational nurse, certified nursing
assistant, therapist, or other type of
medical personnel as specified by CMS);
(ii) Resident census data; and
(iii) Information on staff turnover and
tenure, and on the hours of care
provided by each category of staff per
resident per day (including, but not
limited to, start date, end date (as
applicable), and hours worked for each
individual).
(2) Distinguishing employee from
agency and contract staff. When
reporting direct care staffing
information for an individual, the
facility must specify whether the
individual is an employee of the facility,
or is engaged by the facility under
contract or through an agency.
(3) Data format. The facility must
submit direct care staffing information
in the format specified by CMS.
(4) Submission schedule. The facility
must submit direct care staffing
information on the schedule specified
by CMS, but no less frequently then
quarterly.
Dated: April 7, 2015.
Andrew M. Slavitt,
Acting Administrator, Centers for Medicare
& Medicaid Services.
Dated: April 13, 2015.
Sylvia M. Burwell,
Secretary, Department of Health and Human
Services.
[FR Doc. 2015–08944 Filed 4–15–15; 4:15 pm]
BILLING CODE 4120–01–P
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]]>Agencies
[Federal Register Volume 80, Number 75 (Monday, April 20, 2015)]
[Proposed Rules]
[Pages 22043-22086]
From the Federal Register Online via the Government Printing Office [www.gpo.gov]
[FR Doc No: 2015-08944]
[[Page 22043]]
Vol. 80
Monday,
No. 75
April 20, 2015
Part IV
Department of Health and Human Services
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Centers for Medicare & Medicaid Services
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42 CFR Part 483
Medicare Program; Prospective Payment System and Consolidated Billing
for Skilled Nursing Facilities (SNFs) for FY 2016, SNF Value-Based
Purchasing Program, SNF Quality Reporting Program, and Staffing Data
Collection; Proposed Rule
Federal Register / Vol. 80 , No. 75 / Monday, April 20, 2015 /
Proposed Rules
[[Page 22044]]
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DEPARTMENT OF HEALTH AND HUMAN SERVICES
Centers for Medicare & Medicaid Services
42 CFR Part 483
[CMS-1622-P]
RIN 0938-AS44
Medicare Program; Prospective Payment System and Consolidated
Billing for Skilled Nursing Facilities (SNFs) for FY 2016, SNF Value-
Based Purchasing Program, SNF Quality Reporting Program, and Staffing
Data Collection
AGENCY: Centers for Medicare & Medicaid Services (CMS), HHS.
ACTION: Proposed rule.
-----------------------------------------------------------------------
SUMMARY: This proposed rule would update the payment rates used under
the prospective payment system (PPS) for skilled nursing facilities
(SNFs) for fiscal year (FY) 2016. In addition, it includes a proposal
to specify a SNF all-cause all-condition hospital readmission measure,
as well as a proposal to adopt that measure for a new SNF Value-Based
Purchasing (VBP) Program and a discussion of SNF VBP Program policies
we are considering for future rulemaking to promote higher quality and
more efficient health care for Medicare beneficiaries. Additionally,
this proposed rule proposes to implement a new quality reporting
program for SNFs as specified in the Improving Medicare Post-Acute Care
Transformation Act of 2014 (IMPACT Act). It also would amend the
requirements that a long-term care (LTC) facility must meet to qualify
to participate as a skilled nursing facility (SNF) in the Medicare
program, or a nursing facility (NF) in the Medicaid program. These
requirements implement the provision in the Affordable Care Act
regarding the submission of staffing information based on payroll data.
DATES: To be assured consideration, comments must be received at one of
the addresses provided below, no later than 5 p.m. on June 19, 2015.
ADDRESSES: In commenting, please refer to file code CMS-1622-P. Because
of staff and resource limitations, we cannot accept comments by
facsimile (FAX) transmission.
You may submit comments in one of four ways (please choose only one
of the ways listed):
1. Electronically. You may submit electronic comments on this
regulation to https://www.regulations.gov. Within the search bar, enter
the Regulation Identifier Number associated with this regulation, 0938-
AS44, and then click on the ``Comment Now'' box
2. By regular mail. You may mail written comments to the following
address ONLY: Centers for Medicare & Medicaid Services, Department of
Health and Human Services, Attention: CMS-1622-P, P.O. Box 8016,
Baltimore, MD 21244-8016.
Please allow sufficient time for mailed comments to be received
before the close of the comment period.
3. By express or overnight mail. You may send written comments to
the following address ONLY: Centers for Medicare & Medicaid Services,
Department of Health and Human Services, Attention: CMS-1622-P, Mail
Stop C4-26-05, 7500 Security Boulevard, Baltimore, MD 21244-1850.
4. By hand or courier. If you prefer, you may deliver (by hand or
courier) your written comments before the close of the comment period
to either of the following addresses:
a. Centers for Medicare & Medicaid Services, Department of Health
and Human Services, Room 445-G, Hubert H. Humphrey Building, 200
Independence Avenue SW., Washington, DC 20201.
(Because access to the interior of the Hubert H. Humphrey Building
is not readily available to persons without Federal Government
identification, commenters are encouraged to leave their comments in
the CMS drop slots located in the main lobby of the building. A stamp-
in clock is available for persons wishing to retain a proof of filing
by stamping in and retaining an extra copy of the comments being
filed.)
b. Centers for Medicare & Medicaid Services, Department of Health
and Human Services, 7500 Security Boulevard, Baltimore, MD 21244-1850.
If you intend to deliver your comments to the Baltimore address,
please call telephone number (410) 786-7195 in advance to schedule your
arrival with one of our staff members.
Comments mailed to the addresses indicated as appropriate for hand
or courier delivery may be delayed and received after the comment
period.
For information on viewing public comments, see the beginning of
the SUPPLEMENTARY INFORMATION section.
FOR FURTHER INFORMATION CONTACT:
Penny Gershman, (410) 786-6643, for information related to SNF PPS
clinical issues (excluding any issues raised in Section V of this
proposed rule).
John Kane, (410) 786-0557, for information related to the
development of the payment rates and case-mix indexes.
Kia Sidbury, (410) 786-7816, for information related to the wage
index.
Bill Ullman, (410) 786-5667, for information related to level of
care determinations, consolidated billing, and general information.
Shannon Kerr, (410) 786-0666, for information related to skilled
nursing facility value-based purchasing.
Camillus Ezeike, (410) 786-8614, for information related to skilled
nursing facility quality reporting.
Lorelei Chapman, (410) 786-9254, for information related to
staffing data collection.
SUPPLEMENTARY INFORMATION:
Inspection of Public Comments: All comments received before the
close of the comment period are available for viewing by the public,
including any personally identifiable or confidential business
information that is included in a comment. We post all comments
received before the close of the comment period on the following Web
site as soon as possible after they have been received: https://www.regulations.gov. Follow the search instructions on that Web site to
view public comments.
Comments received timely will also be available for public
inspection as they are received, generally beginning approximately 3
weeks after publication of a document, at the headquarters of the
Centers for Medicare & Medicaid Services, 7500 Security Boulevard,
Baltimore, Maryland 21244, Monday through Friday of each week from 8:30
a.m. to 4 p.m. To schedule an appointment to view public comments,
phone 1-800-743-3951.
Availability of Certain Tables Exclusively Through the Internet on the
CMS Web Site
As discussed in the FY 2015 SNF PPS final rule (79 FR 45628),
tables setting forth the Wage Index for Urban Areas Based on CBSA Labor
Market Areas and the Wage Index Based on CBSA Labor Market Areas for
Rural Areas are no longer published in the Federal Register. Instead,
these tables are available exclusively through the Internet on the CMS
Web site. The wage index tables for this proposed rule can be accessed
on the SNF PPS Wage Index home page, at https://www.cms.gov/Medicare/Medicare-Fee-for-Service-Payment/SNFPPS/WageIndex.html.
Readers who experience any problems accessing any of these online
SNF PPS wage index tables should contact Kia Sidbury at (410) 786-7816.
To assist readers in referencing sections contained in this
document, we are providing the following Table of Contents.
[[Page 22045]]
Table of Contents
I. Executive Summary
A. Purpose
B. Summary of Major Provisions
C. Summary of Cost and Benefits
II. Background on SNF PPS
A. Statutory Basis and Scope
B. Initial Transition for the SNF PPS
C. Required Annual Rate Updates
III. SNF PPS Rate Setting Methodology and FY 2016 Update
A. Federal Base Rates
B. SNF Market Basket Update
1. SNF Market Basket Index
2. Use of the SNF Market Basket Percentage
3. Forecast Error Adjustment
4. Multifactor Productivity Adjustment
a. Incorporating the Multifactor Productivity Adjustment Into
the Market Basket Update
5. Market Basket Update Factor for FY 2016
C. Case-Mix Adjustment
D. Wage Index Adjustment
E. Adjusted Rate Computation Example
IV. Additional Aspects of the SNF PPS
A. SNF Level of Care--Administrative Presumption
B. Consolidated Billing
C. Payment for SNF-Level Swing-Bed Services
V. Other Issues
A. Skilled Nursing Facility Value-Based Purchasing Program (SNF
VBP)
1. Background
a. Overview
b. SNF VBP Report to Congress
2. Statutory Basis for the SNF VBP Program
3. Skilled Nursing Facility 30-Day All-Cause Readmission Measure
(SNFRM)
a. Overview
b. Measure Calculation
c. Exclusions
d. Eligible Readmissions
e. Risk Adjustment
f. Measurement Period
g. Stakeholder/MAP Input
h. Feedback Reports to SNFs
4. Performance Standards
a. Background
i. Hospital Value Based Purchasing Program
ii. Hospital-Acquired Conditions Reduction Program
iii. Hospital Readmissions Reduction Program (HRRP)
iv. End-Stage Renal Disease Quality Incentive Program (ESRD QIP)
b. Measuring Improvement
i. Improvement Points
ii. Measure Rate Increases
iii. Ranking Increases
iv. Performance Score Increases
5. FY 2019 Performance Period and Baseline Period Considerations
a. Performance Period
b. Baseline Period
6. SNF Performance Scoring
a. Considerations
i. Hospital Value-Based Purchasing
ii. Hospital-Acquired Conditions Reduction Program
iii. Other Considerations
b. Notification Procedures
c. Exchange Function
7. SNF Value-Based Incentive Payments
8. SNF VBP Public Reporting
a. SNF-specific Performance Information
b. Aggregate Performance Information
B. Advancing Health Information Exchange
C. Skilled Nursing Facility (SNF) Quality Reporting Program
(QRP)
1. Background and Statutory Authority
2. General Considerations Used for Selection of Quality Measures
for the SNF QRP
3. Policy for Retaining SNF QRP Measures for Future Payment
Determinations
4. Proposed Process for Adoption of Changes to SNF QRP Program
Measures
5. Proposed New Quality Measures for FY 2018 and Subsequent
Payment Determinations
a. Quality Measure Addressing the Domain of Skin Integrity and
Changes in Skin Integrity
b. Quality Measure Addressing the Domain of the Incidence of
Major Falls
c. Quality Measure Addressing the Domain of Functional Status,
Cognitive Function, and Changes in Function and Cognitive Function
6. SNF QRP Quality Measures and Under Consideration for Future
Years
7. Form, Manner, and Timing of Quality Data Submission
a. Participation/Timing for New SNFs
b. Data Collection Timelines and Requirements for FY 2018
Payment Determination and Subsequent Years
8. SNF QRP Data Completion Thresholds for FY 2018 Payment
Determination and Subsequent Years
9. SNF QRP Data Validation Requirements for the FY 2018 Payment
Determination and Subsequent Years
10. SNF QRP Submission Exception and Extension Requirements for
the FY 2018 Payment Determination and Subsequent Years
11. SNF QRP Reconsideration and Appeals Procedures for the FY
2018 Payment Determination and Subsequent Years
12. Public Display of Quality Measure Data for the SNF QRP
13. Mechanism for Providing Feedback Reports to SNFs
D. Staffing Data Collection
1. Background and Statutory Authority
2. Consultation on Specifications
3. Provisions of the Proposed Rule
a. Submission Requirements
b. Distinguishing Employee From Agency and Contract Staff
c. Data Format
d. Submission Schedule
4. Compliance and Enforcement
5. Conclusion
VI. Collection of Information Requirements
VII. Response to Comments
VIII. Economic Analyses
Regulation Text
Acronyms
In addition, because of the many terms to which we refer by acronym
in this proposed rule, we are listing these abbreviations and their
corresponding terms in alphabetical order below:
AIDS Acquired Immune Deficiency Syndrome
ARD Assessment reference date
BBA Balanced Budget Act of 1997, Pub. L. 105-33
BBRA Medicare, Medicaid, and SCHIP Balanced Budget Refinement Act of
1999, Pub. L. 106-113
BIPA Medicare, Medicaid, and SCHIP Benefits Improvement and
Protection Act of 2000, Pub. L. 106-554
CAH Critical access hospital
CASPER Certification and Survey Provider Enhanced Reports
CBSA Core-based statistical area
CCN CMS Certification Number
CFR Code of Federal Regulations
CMI Case-mix index
CMS Centers for Medicare & Medicaid Services
COT Change of therapy
ECI Employment Cost Index
EHR Electronic health record
EOT End of therapy
EOT-R End of therapy--resumption
ESRD-QIP End-Stage Renal Disease Quality Incentive Program
FAQ Frequently Asked Questions
FFS Fee-for-service
FR Federal Register
FY Fiscal year
GAO Government Accountability Office
HAC Hospital-Acquired Conditions
HACRP Hospital-Acquired Condition Reduction Program
HCPCS Healthcare Common Procedure Coding System
HIQR Hospital Inpatient Quality Reporting
HOQR Hospital Outpatient Quality Reporting
HRRP Hospital Readmissions Reduction Program
HVBP Hospital Value-Based Purchasing
ICR Information Collection Requirements
IGI IHS (Information Handling Services) Global Insight, Inc.
IMPACT Improving Medicare Post-Acute Care Transformation Act of 2014
IPPS Inpatient prospective payment system
IRF Inpatient Rehabilitation Facility
LTC Long-term care
LTCH Long-term care hospital
MAP Measures Application Partnership
MDS Minimum data set
MFP Multifactor productivity
MMA Medicare Prescription Drug, Improvement, and Modernization Act
of 2003, Pub. L. 108-173
MSA Metropolitan statistical area
NAICS North American Industrial Classification System
NF Nursing facility
NH Nursing Homes
NQF National Quality Forum
OMB Office of Management and Budget
OMRA Other Medicare Required Assessment
PAC Post-acute care
PAMA Protecting Access to Medicare Act of 2014, Pub. L 113-93
PPS Prospective Payment System
PQRS Physician Quality Reporting System
QIES Quality Improvement Evaluation System
QIES ASAP Quality Improvement and Evaluation System Assessment
Submission and Processing
QRP Quality Reporting Program
[[Page 22046]]
RAI Resident assessment instrument
RAVEN Resident assessment validation entry
RFA Regulatory Flexibility Act, Pub. L. 96-354
RIA Regulatory impact analysis
RUG-III Resource Utilization Groups, Version 3
RUG-IV Resource Utilization Groups, Version 4
RUG-53 Refined 53-Group RUG-III Case-Mix Classification System
SCHIP State Children's Health Insurance Program
sDTI Suspected deep tissue injuries
SNF Skilled nursing facility
SNFRM Skilled Nursing Facility 30-Day All-Cause Readmission Measure
STM Staff time measurement
STRIVE Staff time and resource intensity verification
TEP Technical expert panel
UMRA Unfunded Mandates Reform Act, Pub. L. 104-4
VBP Value-based purchasing
I. Executive Summary
A. Purpose
This proposed rule would update the SNF prospective payment rates
for FY 2016 as required under section 1888(e)(4)(E) of the Social
Security Act (the Act). It would also respond to section 1888(e)(4)(H)
of the Act, which requires the Secretary to provide for publication in
the Federal Register before the August 1 that precedes the start of
each fiscal year, certain specified information relating to the payment
update (see section II.C.). In addition, it proposes to implement a new
quality reporting program for SNFs under section 1888(e)(6) of the Act.
Furthermore, this proposed rule would establish new regulatory
reporting requirements for SNFs and NFs to implement the statutory
obligation to submit staffing information based on payroll data under
section 1128I(g) of the Act, specify a SNF all-cause all-condition
hospital readmission measure under section 1888(g)(1) of the Act and
adopt that measure for a new SNF value-based purchasing (VBP) program
under section 1888(h) of the Act. The proposed rule also seeks comment
on other policies under consideration for a SNF VBP Program, under
which value-based incentive payments will be made in a fiscal year to
SNFs beginning with payment for services furnished on or after October
1, 2018.
B. Summary of Major Provisions
In accordance with sections 1888(e)(4)(E)(ii)(IV) and 1888(e)(5) of
the Act, the federal rates in this proposed rule would reflect an
update to the rates that we published in the SNF PPS final rule for FY
2015 (79 FR 45628) which reflects the SNF market basket index, as
adjusted by the applicable forecast error correction and by the
multifactor productivity adjustment for FY 2016. We also propose to
specify a SNF all-cause all-condition hospital readmission measure
under section 1888(g) of the Act, as well as adopt that measure for a
new SNF Value-Based Purchasing (VBP) Program under section 1888(h) of
the Act. We also seek comment on other policies for the SNF VBP Program
that we are considering for adoption in future rulemaking to promote
higher quality and more efficient health care for Medicare
beneficiaries. We are also proposing to implement a new quality
reporting program for SNFs under section 1888(e)(6) of the Act, which
was added by section 2(c)(4) of the IMPACT Act of 2014 (Pub. L. 113-
85).
For payment determinations beginning with FY 2018, we propose to
adopt measures meeting three quality domains specified in section
1899B(c)(1) of the Act: Functional status, skin integrity, and
incidence of major falls.
In addition, we propose adding new language at 42 CFR part 483 to
implement section 1128I(g) of the Act. Specifically, we propose that,
beginning on July 1, 2016, LTC facilities that participate in Medicare
or Medicaid will be required to electronically submit direct care
staffing information (including information for agency and contract
staff) based on payroll and other verifiable and auditable data in a
uniform format. We invite public comment on CMS' proposed changes to 42
CFR part 483 to ensure compliance with this requirement.
C. Summary of Cost and Benefits
------------------------------------------------------------------------
Provision description Total transfers
------------------------------------------------------------------------
Proposed FY 2016 SNF PPS The overall economic impact of this
payment rate update. proposed rule would be an estimated
increase of $500 million in aggregate
payments to SNFs during FY 2016.
------------------------------------------------------------------------
II. Background on SNF PPS
A. Statutory Basis and Scope
As amended by section 4432 of the Balanced Budget Act of 1997 (BBA,
Pub. L. 105-33, enacted on August 5, 1997), section 1888(e) of the Act
provides for the implementation of a PPS for SNFs. This methodology
uses prospective, case-mix adjusted per diem payment rates applicable
to all covered SNF services defined in section 1888(e)(2)(A) of the
Act. The SNF PPS is effective for cost reporting periods beginning on
or after July 1, 1998, and covers all costs of furnishing covered SNF
services (routine, ancillary, and capital-related costs) other than
costs associated with approved educational activities and bad debts.
Under section 1888(e)(2)(A)(i) of the Act, covered SNF services include
post-hospital extended care services for which benefits are provided
under Part A, as well as those items and services (other than a small
number of excluded services, such as physician services) for which
payment may otherwise be made under Part B and which are furnished to
Medicare beneficiaries who are residents in a SNF during a covered Part
A stay. A comprehensive discussion of these provisions appears in the
May 12, 1998 interim final rule (63 FR 26252). In addition, a detailed
discussion of the legislative history of the SNF PPS is available
online at https://www.cms.gov/Medicare/Medicare-Fee-for-Service-Payment/SNFPPS/Downloads/Legislative_History_07302013.pdf.
Section 215(a) of PAMA added section 1888(g) to the Act requiring
the Secretary to specify certain quality measures for the skilled
nursing facility setting. Additionally, section 215(b) of PAMA added
section 1888(h) to the Act requiring the Secretary to implement a
value-based purchasing program for skilled nursing facilities. Finally,
section 2(a) of the IMPACT Act added section 1899B to the Act that,
among other things, requires SNFs to report standardized data for
measures in specified quality and resource use domains. In addition,
the IMPACT Act added section 1888(e)(6) to the Act, which requires the
Secretary to implement a quality reporting program for SNFs, which
includes a requirement that SNFs report certain data to receive their
full payment under the SNF PPS.
B. Initial Transition for the SNF PPS
Under sections 1888(e)(1)(A) and 1888(e)(11) of the Act, the SNF
PPS included an initial, three-phase transition that blended a
facility-specific rate (reflecting the individual facility's historical
cost experience) with the federal case-mix adjusted rate. The
[[Page 22047]]
transition extended through the facility's first three cost reporting
periods under the PPS, up to and including the one that began in FY
2001. Thus, the SNF PPS is no longer operating under the transition, as
all facilities have been paid at the full federal rate effective with
cost reporting periods beginning in FY 2002. As we now base payments
for SNFs entirely on the adjusted federal per diem rates, we no longer
include adjustment factors under the transition related to facility-
specific rates for the upcoming FY.
C. Required Annual Rate Updates
Section 1888(e)(4)(E) of the Act requires the SNF PPS payment rates
to be updated annually. The most recent annual update occurred in a
final rule that set forth updates to the SNF PPS payment rates for FY
2015 (79 FR 45628, August 5, 2014).
Section 1888(e)(4)(H) of the Act specifies that we provide for
publication annually in the Federal Register of the following:
The unadjusted federal per diem rates to be applied to
days of covered SNF services furnished during the upcoming FY.
The case-mix classification system to be applied for these
services during the upcoming FY.
The factors to be applied in making the area wage
adjustment for these services.
Along with other revisions discussed later in this preamble, this
proposed rule would provide the required annual updates to the per diem
payment rates for SNFs for FY 2016.
III. SNF PPS Rate Setting Methodology and FY 2016 Update
A. Federal Base Rates
Under section 1888(e)(4) of the Act, the SNF PPS uses per diem
federal payment rates based on mean SNF costs in a base year (FY 1995)
updated for inflation to the first effective period of the PPS. We
developed the federal payment rates using allowable costs from
hospital-based and freestanding SNF cost reports for reporting periods
beginning in FY 1995. The data used in developing the federal rates
also incorporated a Part B add-on, which is an estimate of the amounts
that, prior to the SNF PPS, would have been payable under Part B for
covered SNF services furnished to individuals during the course of a
covered Part A stay in a SNF.
In developing the rates for the initial period, we updated costs to
the first effective year of the PPS (the 15-month period beginning July
1, 1998) using a SNF market basket index, and then standardized for
geographic variations in wages and for the costs of facility
differences in case mix. In compiling the database used to compute the
federal payment rates, we excluded those providers that received new
provider exemptions from the routine cost limits, as well as costs
related to payments for exceptions to the routine cost limits. Using
the formula that the BBA prescribed, we set the federal rates at a
level equal to the weighted mean of freestanding costs plus 50 percent
of the difference between the freestanding mean and weighted mean of
all SNF costs (hospital-based and freestanding) combined. We computed
and applied separately the payment rates for facilities located in
urban and rural areas, and adjusted the portion of the federal rate
attributable to wage-related costs by a wage index to reflect
geographic variations in wages.
B. SNF Market Basket Update
1. SNF Market Basket Index
Section 1888(e)(5)(A) of the Act requires us to establish a SNF
market basket index that reflects changes over time in the prices of an
appropriate mix of goods and services included in covered SNF services.
Accordingly, we have developed a SNF market basket index that
encompasses the most commonly used cost categories for SNF routine
services, ancillary services, and capital-related expenses. We use the
SNF market basket index, adjusted in the manner described below, to
update the federal rates on an annual basis. In the SNF PPS final rule
for FY 2014 (78 FR 47939 through 47946), we revised and rebased the
market basket, which included updating the base year from FY 2004 to FY
2010.
For the FY 2016 proposed rule, the FY 2010-based SNF market basket
growth rate is estimated to be 2.6 percent, which is based on the IHS
Global Insight, Inc. (IGI) first quarter 2015 forecast with historical
data through fourth quarter 2014. In section III.B.5. of this proposed
rule, we discuss the specific application of this adjustment to the
forthcoming annual update of the SNF PPS payment rates.
2. Use of the SNF Market Basket Percentage
Section 1888(e)(5)(B) of the Act defines the SNF market basket
percentage as the percentage change in the SNF market basket index from
the midpoint of the previous FY to the midpoint of the current FY. For
the federal rates set forth in this proposed rule, we use the
percentage change in the SNF market basket index to compute the update
factor for FY 2016. This is based on the IGI first quarter 2015
forecast (with historical data through the fourth quarter 2014) of the
FY 2016 percentage increase in the FY 2010-based SNF market basket
index for routine, ancillary, and capital-related expenses, which is
used to compute the update factor in this proposed rule. As discussed
in sections III.B.3. and III.B.4. of this proposed rule, this market
basket percentage change would be reduced by the applicable forecast
error correction (as described in Sec. 413.337(d)(2)) and by the
multifactor productivity adjustment as required by section
1888(e)(5)(B)(ii) of the Act. Finally, as discussed in section II.B. of
this proposed rule, we no longer compute update factors to adjust a
facility-specific portion of the SNF PPS rates, because the initial
three-phase transition period from facility-specific to full federal
rates that started with cost reporting periods beginning in July 1998
has expired.
3. Forecast Error Adjustment
As discussed in the June 10, 2003 supplemental proposed rule (68 FR
34768) and finalized in the August 4, 2003, final rule (68 FR 46057
through 46059), the regulations at Sec. 413.337(d)(2) provide for an
adjustment to account for market basket forecast error. The initial
adjustment for market basket forecast error applied to the update of
the FY 2003 rate for FY 2004, and took into account the cumulative
forecast error for the period from FY 2000 through FY 2002, resulting
in an increase of 3.26 percent to the FY 2004 update. Subsequent
adjustments in succeeding FYs take into account the forecast error from
the most recently available FY for which there is final data, and apply
the difference between the forecasted and actual change in the market
basket when the difference exceeds a specified threshold. We originally
used a 0.25 percentage point threshold for this purpose; however, for
the reasons specified in the FY 2008 SNF PPS final rule (72 FR 43425,
August 3, 2007), we adopted a 0.5 percentage point threshold effective
for FY 2008 and subsequent fiscal years. As we stated in the final rule
for FY 2004 that first issued the market basket forecast error
adjustment (68 FR 46058, August 4, 2003), the adjustment will reflect
both upward and downward adjustments, as appropriate.
For FY 2014 (the most recently available FY for which there is
final data), the estimated increase in the market basket index was 2.3
percentage points, while the actual increase for FY 2014 was 1.7
percentage points, resulting in the actual increase being 0.6
[[Page 22048]]
percentage point lower than the estimated increase. Accordingly, as the
difference between the estimated and actual amount of change in the
market basket index exceeds the 0.5 percentage point threshold and
because the estimated amount of change exceeded the actual amount of
change, the FY 2016 market basket percentage change of 2.6 percent
would be adjusted downward by the forecast error correction of 0.6
percentage point, resulting in a SNF market basket increase of 2.0
percent, before application of the productivity adjustment discussed in
this section. Table 1 shows the forecasted and actual market basket
amounts for FY 2014.
Table 1--Difference Between the Forecasted and Actual Market Basket
Increases for FY 2014
------------------------------------------------------------------------
Forecasted Actual FY
Index FY 2014 2014 FY 2014
increase * increase ** difference
------------------------------------------------------------------------
SNF.............................. 2.3 1.7 -0.6
------------------------------------------------------------------------
* Published in Federal Register; based on second quarter 2013 IGI
forecast (2010-based index).
** Based on the first quarter 2015 IGI forecast, with historical data
through the fourth quarter 2014 (2010-based index).
4. Multifactor Productivity Adjustment
Section 3401(b) of the Affordable Care Act requires that, in FY
2012 (and in subsequent FYs), the market basket percentage under the
SNF payment system as described in section 1888(e)(5)(B)(i) of the Act
is to be reduced annually by the productivity adjustment described in
section 1886(b)(3)(B)(xi)(II) of the Act. Section 1886(b)(3)(B)(xi)(II)
of the Act, added by section 3401(a) of the Affordable Care Act, sets
forth the definition of this productivity adjustment. The statute
defines the productivity adjustment to be equal to the 10-year moving
average of changes in annual economy-wide private nonfarm business
multi-factor productivity (as projected by the Secretary for the 10-
year period ending with the applicable fiscal year, year, cost-
reporting period, or other annual period) (the MFP adjustment). The
Bureau of Labor Statistics (BLS) is the agency that publishes the
official measure of private nonfarm business multifactor productivity
(MFP). We refer readers to the BLS Web site at https://www.bls.gov/mfp
for the BLS historical published MFP data.
MFP is derived by subtracting the contribution of labor and capital
inputs growth from output growth. The projections of the components of
MFP are currently produced by IGI, a nationally recognized economic
forecasting firm with which CMS contracts to forecast the components of
the market baskets and MFP. To generate a forecast of MFP, IGI
replicates the MFP measure calculated by the BLS, using a series of
proxy variables derived from IGI's U.S. macroeconomic models. In
section III.F.3. of the FY 2012 SNF PPS final rule (76 FR 48527 through
48529), we identified each of the major MFP component series employed
by the BLS to measure MFP as well as provided the corresponding
concepts determined to be the best available proxies for the BLS
series.
Beginning with the FY 2016 rulemaking cycle, the MFP adjustment is
calculated using a revised series developed by IGI to proxy the
aggregate capital inputs. Specifically, IGI has replaced the Real
Effective Capital Stock used for Full Employment GDP with a forecast of
BLS aggregate capital inputs recently developed by IGI using a
regression model. This series provides a better fit to the BLS capital
inputs as measured by the differences between the actual BLS capital
input growth rates and the estimated model growth rates over the
historical time period. Therefore, we are using IGI's most recent
forecast of the BLS capital inputs series in the MFP calculations
beginning with the FY 2016 rulemaking cycle. A complete description of
the MFP projection methodology is available on our Web site at https://www.cms.gov/Research-Statistics-Data-and-Systems/Statistics-Trends-and-Reports/MedicareProgramRatesStats/MarketBasketResearch.html. Although
we discuss the IGI changes to the MFP proxy series in this proposed
rule, in the future, when IGI makes changes to the MFP methodology, we
will announce them on our Web site rather than in the annual
rulemaking.
a. Incorporating the Multifactor Productivity Adjustment Into the
Market Basket Update
According to section 1888(e)(5)(A) of the Act, the Secretary shall
establish a skilled nursing facility market basket index that reflects
changes over time in the prices of an appropriate mix of goods and
services included in covered skilled nursing facility services. Section
1888(e)(5)(B)(ii) of the Act, added by section 3401(b) of the
Affordable Care Act, requires that for FY 2012 and each subsequent FY,
after determining the market basket percentage described in section
1888(e)(5)(B)(i) of the Act, the Secretary shall reduce such percentage
by the productivity adjustment described in section
1886(b)(3)(B)(xi)(II) (which we refer to as the MFP adjustment).
Section 1888(e)(5)(B)(ii) of the Act further states that the reduction
of the market basket percentage by the MFP adjustment may result in the
market basket percentage being less than zero for a FY, and may result
in payment rates under section 1888(e) of the Act for a FY being less
than such payment rates for the preceding FY. Thus, if the application
of the MFP adjustment to the market basket percentage calculated under
section 1888(e)(5)(B)(i) of the Act results in an MFP-adjusted market
basket percentage that is less than zero, then the annual update to the
unadjusted federal per diem rates under section 1888(e)(4)(E)(ii) of
the Act would be negative, and such rates would decrease relative to
the prior FY.
For the FY 2016 update, the MFP adjustment is calculated as the 10-
year moving average of changes in MFP for the period ending September
30, 2016, which is 0.6 percent. Consistent with section
1888(e)(5)(B)(i) of the Act and Sec. 413.337(d)(2) of the regulations,
the market basket percentage for FY 2016 for the SNF PPS is based on
IGI's first quarter 2015 forecast of the SNF market basket update (2.6
percent) as adjusted by the forecast error adjustment (0.6 percentage
point), and is estimated to be 2.0 percent. In accordance with section
1888(e)(5)(B)(ii) of the Act (as added by section 3401(b) of the
Affordable Care Act) and Sec. 413.337(d)(3), this market basket
percentage is then reduced by the MFP adjustment (the 10-year moving
average of changes in MFP for the period ending September 30, 2016) of
0.6 percent, which is calculated as described above and based on IGI's
first quarter 2015 forecast. The resulting MFP-adjusted SNF market
basket update is equal to 1.4 percent, or 2.0 percent less 0.6
percentage point.
5. Market Basket Update Factor for FY 2016
Sections 1888(e)(4)(E)(ii)(IV) and 1888(e)(5)(i) of the Act require
that the update factor used to establish the FY 2016 unadjusted federal
rates be at a level equal to the market basket index percentage change.
Accordingly, we determined the total growth from the average market
basket level for the period of October 1, 2014 through September 30,
2015 to the average market basket level for the period of October 1,
2015 through September 30, 2016. This process yields a percentage
change in the market basket of 2.6 percent.
As further explained in section III.B.3. of this proposed rule, as
applicable, we adjust the market basket percentage change by the
forecast error from the most recently available FY for which
[[Page 22049]]
there is final data and apply this adjustment whenever the difference
between the forecasted and actual percentage change in the market
basket exceeds a 0.5 percentage point threshold. Since the forecasted
FY 2014 SNF market basket percentage change exceeded the actual FY 2014
SNF market basket percentage change (FY 2014 is the most recently
available FY for which there is historical data) by more than 0.5
percentage point, the FY 2016 market basket percentage change of 2.6
percent would be adjusted downward by the applicable difference, which
for FY 2014 is 0.6 percent.
In addition, for FY 2016, section 1888(e)(5)(B)(ii) of the Act
requires us to reduce the market basket percentage change by the MFP
adjustment (the 10-year moving average of changes in MFP for the period
ending September 30, 2016) of 0.6 percent, as described in section
III.B.4. of this proposed rule. The resulting net SNF market basket
update would equal 1.4 percent, or 2.6 percent less the 0.6 percentage
point forecast error adjustment, less the 0.6 percentage point MFP
adjustment. We propose that if more recent data become available (for
example, a more recent estimate of the FY 2010-based SNF market basket
and/or MFP adjustment), we would use such data, if appropriate, to
determine the FY 2016 SNF market basket percentage change, labor-
related share relative importance, forecast error adjustment, and MFP
adjustment in the FY 2016 SNF PPS final rule.
We used the SNF market basket, adjusted as described above, to
adjust each per diem component of the federal rates forward to reflect
the change in the average prices for FY 2016 from average prices for FY
2015. We would further adjust the rates by a wage index budget
neutrality factor, described later in this section. Tables 2 and 3
reflect the updated components of the unadjusted federal rates for FY
2016, prior to adjustment for case-mix.
Table 2--FY 2016 Unadjusted Federal Rate per Diem Urban
----------------------------------------------------------------------------------------------------------------
Therapy--non-case-
Rate component Nursing--case-mix Therapy--case-mix mix Non-case-mix
----------------------------------------------------------------------------------------------------------------
Per Diem Amount............. $171.46 $129.15 $17.01 $87.50
----------------------------------------------------------------------------------------------------------------
Table 3--FY 2016 Unadjusted Federal Rate per Diem Rural
----------------------------------------------------------------------------------------------------------------
Therapy--non-case-
Rate component Nursing--case-mix Therapy--case-mix mix Non-case-mix
----------------------------------------------------------------------------------------------------------------
Per Diem Amount............. $163.80 $148.91 $18.17 $89.12
----------------------------------------------------------------------------------------------------------------
C. Case-Mix Adjustment
Under section 1888(e)(4)(G)(i) of the Act, the federal rate also
incorporates an adjustment to account for facility case-mix, using a
classification system that accounts for the relative resource
utilization of different patient types. The statute specifies that the
adjustment is to reflect both a resident classification system that the
Secretary establishes to account for the relative resource use of
different patient types, as well as resident assessment data and other
data that the Secretary considers appropriate. In the interim final
rule with comment period that initially implemented the SNF PPS (63 FR
26252, May 12, 1998), we developed the RUG-III case-mix classification
system, which tied the amount of payment to resident resource use in
combination with resident characteristic information. Staff time
measurement (STM) studies conducted in 1990, 1995, and 1997 provided
information on resource use (time spent by staff members on residents)
and resident characteristics that enabled us not only to establish RUG-
III, but also to create case-mix indexes (CMIs). The original RUG-III
grouper logic was based on clinical data collected in 1990, 1995, and
1997. As discussed in the SNF PPS proposed rule for FY 2010 (74 FR
22208), we subsequently conducted a multi-year data collection and
analysis under the Staff Time and Resource Intensity Verification
(STRIVE) project to update the case-mix classification system for FY
2011. The resulting Resource Utilization Groups, Version 4 (RUG-IV)
case-mix classification system reflected the data collected in 2006-
2007 during the STRIVE project, and was finalized in the FY 2010 SNF
PPS final rule (74 FR 40288) to take effect in FY 2011 concurrently
with an updated new resident assessment instrument, version 3.0 of the
Minimum Data Set (MDS 3.0), which collects the clinical data used for
case-mix classification under RUG-IV.
We note that case-mix classification is based, in part, on the
beneficiary's need for skilled nursing care and therapy services. The
case-mix classification system uses clinical data from the MDS to
assign a case-mix group to each patient that is then used to calculate
a per diem payment under the SNF PPS. As discussed in section IV.A. of
this proposed rule, the clinical orientation of the case-mix
classification system supports the SNF PPS's use of an administrative
presumption that considers a beneficiary's initial case-mix
classification to assist in making certain SNF level of care
determinations. Further, because the MDS is used as a basis for
payment, as well as a clinical assessment, we have provided extensive
training on proper coding and the time frames for MDS completion in our
Resident Assessment Instrument (RAI) Manual. For an MDS to be
considered valid for use in determining payment, the MDS assessment
must be completed in compliance with the instructions in the RAI Manual
in effect at the time the assessment is completed. For payment and
quality monitoring purposes, the RAI Manual consists of both the Manual
instructions and the interpretive guidance and policy clarifications
posted on the appropriate MDS Web site at https://www.cms.gov/Medicare/Quality-Initiatives-Patient-Assessment-Instruments/NursingHomeQualityInits/MDS30RAIManual.html.
In addition, we note that section 511 of the Medicare Prescription
Drug, Improvement, and Modernization Act of 2003 (MMA, Pub. L. 108-173)
amended section 1888(e)(12) of the Act to provide for a temporary
increase of 128 percent in the PPS per diem payment for any SNF
residents with Acquired Immune Deficiency Syndrome (AIDS), effective
with services furnished on or after October 1, 2004. This special add-
on for SNF residents with AIDS was to remain in effect until the
Secretary certifies that there is an appropriate adjustment in the case
mix to compensate for the increased costs associated with such
[[Page 22050]]
residents. The add-on for SNF residents with AIDS is also discussed in
Program Transmittal #160 (Change Request #3291), issued on April 30,
2004, which is available online at www.cms.gov/transmittals/downloads/r160cp.pdf. In the SNF PPS final rule for FY 2010 (74 FR 40288), we did
not address the certification of the add-on for SNF residents with AIDS
in that final rule's implementation of the case-mix refinements for
RUG-IV, thus allowing the add-on payment required by section 511 of the
MMA to remain in effect. For the limited number of SNF residents that
qualify for this add-on, there is a significant increase in payments.
For example, using FY 2013 data, we identified fewer than 4,800 SNF
residents with a diagnosis code of 042 (Human Immunodeficiency Virus
(HIV) Infection). For FY 2016, an urban facility with a resident with
AIDS in RUG-IV group ``HC2'' would have a case-mix adjusted per diem
payment of $428.57 (see Table 4) before the application of the MMA
adjustment. After an increase of 128 percent, this urban facility would
receive a case-mix adjusted per diem payment of approximately $977.14.
Currently, we use the International Classification of Diseases, 9th
revision, Clinical Modification (ICD-9-CM) code 042 to identify those
residents for whom it is appropriate to apply the AIDS add-on
established by section 511 of the MMA. In this context, we note that
the Department published a final rule in the September 5, 2012 Federal
Register (77 FR 54664) which requires us to stop using ICD-9-CM on
September 30, 2014, and begin using the International Classification of
Diseases, 10th revision, Clinical Modification (ICD-10-CM), on October
1, 2014. Regarding the above-referenced ICD-9-CM diagnosis code of 042,
in the FY 2014 SNF PPS proposed rule (78 FR 26444, May 6, 2013), we
proposed to transition to the equivalent ICD-10-CM diagnosis code of
B20 upon the overall conversion to ICD-10-CM on October 1, 2014, and we
subsequently finalized that proposal in the FY 2014 SNF PPS final rule
(78 FR 47951 through 47952).
However, on April 1, 2014, the Protecting Access to Medicare Act of
2014 (PAMA) (Pub. L. 113-93) was enacted. Section 212 of PAMA, titled
``Delay in Transition from ICD-9 to ICD-10 Code Sets,'' provides that
the Secretary of Health and Human Services may not, prior to October 1,
2015, adopt ICD-10 code sets as the standard for code sets under
section 1173(c) of the Act (42 U.S.C. 1320d-2(c)) and section 162.1002
of title 45, Code of Federal Regulations. In the FY 2015 SNF PPS final
rule (79 FR 45633), we stated that the Department expected to release
an interim final rule in the near future that would include a new
compliance date that would require the use of ICD-10 beginning October
1, 2015. In light of this, in the FY 2015 SNF PPS final rule, we stated
that the effective date of the change from ICD-9-CM code 042 to ICD-10-
CM code B20 for purposes of applying the AIDS add-on is October 1,
2015, and that until that time we would continue to use the ICD-9-CM
code 042 for this purpose. On August 4, 2014, the U.S. Department of
Health and Human Services released a final rule in the Federal Register
(79 FR 45128 through 45134) that included a new compliance date that
requires the use of ICD-10 beginning October 1, 2015. The August 4,
2014 final rule is available for viewing on the Internet at https://www.gpo.gov/fdsys/pkg/FR-2014-08-04/pdf/2014-18347.pdf. That final rule
also requires HIPAA covered entities to continue to use ICD-9-CM
through September 30, 2015. Thus, as we finalized in the FY 2015 SNF
PPS final rule, the effective date of the change from ICD-9-CM code 042
to ICD-10-CM code B20 for the purpose of applying the AIDS add-on
enacted by section 511 of the MMA is October 1, 2015.
Under section 1888(e)(4)(H), each update of the payment rates must
include the case-mix classification methodology applicable for the
upcoming FY. The payment rates set forth in this proposed rule reflect
the use of the RUG-IV case-mix classification system from October 1,
2015, through September 30, 2016. We list the proposed case-mix
adjusted RUG-IV payment rates, provided separately for urban and rural
SNFs, in Tables 4 and 5 with corresponding case-mix values. We use the
revised OMB delineations adopted in the FY 2015 SNF PPS final rule (79
FR 45632, 45634) to identify a facility's urban or rural status for the
purpose of determining which set of rate tables would apply to the
facility. These tables do not reflect the add-on for SNF residents with
AIDS enacted by section 511 of the MMA, which we apply only after
making all other adjustments (such as wage index and case-mix).
TABLE 4--RUG-IV Case-Mix Adjusted Federal Rates and Associated Indexes
URBAN
--------------------------------------------------------------------------------------------------------------------------------------------------------
Non-case Non-case
RUG-IV Category Nursing Therapy Nursing Therapy mix therapy mix Total rate
index index component component comp component
--------------------------------------------------------------------------------------------------------------------------------------------------------
RUX.......................................................... 2.67 1.87 $457.80 $241.51 ........... $87.50 $786.81
RUL.......................................................... 2.57 1.87 440.65 241.51 ........... 87.50 769.66
RVX.......................................................... 2.61 1.28 447.51 165.31 ........... 87.50 700.32
RVL.......................................................... 2.19 1.28 375.50 165.31 ........... 87.50 628.31
RHX.......................................................... 2.55 0.85 437.22 109.78 ........... 87.50 634.50
RHL.......................................................... 2.15 0.85 368.64 109.78 ........... 87.50 565.92
RMX.......................................................... 2.47 0.55 423.51 71.03 ........... 87.50 582.04
RML.......................................................... 2.19 0.55 375.50 71.03 ........... 87.50 534.03
RLX.......................................................... 2.26 0.28 387.50 36.16 ........... 87.50 511.16
RUC.......................................................... 1.56 1.87 267.48 241.51 ........... 87.50 596.49
RUB.......................................................... 1.56 1.87 267.48 241.51 ........... 87.50 596.49
RUA.......................................................... 0.99 1.87 169.75 241.51 ........... 87.50 498.76
RVC.......................................................... 1.51 1.28 258.90 165.31 ........... 87.50 511.71
RVB.......................................................... 1.11 1.28 190.32 165.31 ........... 87.50 443.13
RVA.......................................................... 1.10 1.28 188.61 165.31 ........... 87.50 441.42
RHC.......................................................... 1.45 0.85 248.62 109.78 ........... 87.50 445.90
RHB.......................................................... 1.19 0.85 204.04 109.78 ........... 87.50 401.32
RHA.......................................................... 0.91 0.85 156.03 109.78 ........... 87.50 353.31
RMC.......................................................... 1.36 0.55 233.19 71.03 ........... 87.50 391.72
RMB.......................................................... 1.22 0.55 209.18 71.03 ........... 87.50 367.71
[[Page 22051]]
RMA.......................................................... 0.84 0.55 144.03 71.03 ........... 87.50 302.56
RLB.......................................................... 1.50 0.28 257.19 36.16 ........... 87.50 380.85
RLA.......................................................... 0.71 0.28 121.74 36.16 ........... 87.50 245.40
ES3.......................................................... 3.58 ........... 613.83 ........... 17.01 87.50 718.34
ES2.......................................................... 2.67 ........... 457.80 ........... 17.01 87.50 562.31
ES1.......................................................... 2.32 ........... 397.79 ........... 17.01 87.50 502.30
HE2.......................................................... 2.22 ........... 380.64 ........... 17.01 87.50 485.15
HE1.......................................................... 1.74 ........... 298.34 ........... 17.01 87.50 402.85
HD2.......................................................... 2.04 ........... 349.78 ........... 17.01 87.50 454.29
HD1.......................................................... 1.60 ........... 274.34 ........... 17.01 87.50 378.85
HC2.......................................................... 1.89 ........... 324.06 ........... 17.01 87.50 428.57
HC1.......................................................... 1.48 ........... 253.76 ........... 17.01 87.50 358.27
HB2.......................................................... 1.86 ........... 318.92 ........... 17.01 87.50 423.43
HB1.......................................................... 1.46 ........... 250.33 ........... 17.01 87.50 354.84
LE2.......................................................... 1.96 ........... 336.06 ........... 17.01 87.50 440.57
LE1.......................................................... 1.54 ........... 264.05 ........... 17.01 87.50 368.56
LD2.......................................................... 1.86 ........... 318.92 ........... 17.01 87.50 423.43
LD1.......................................................... 1.46 ........... 250.33 ........... 17.01 87.50 354.84
LC2.......................................................... 1.56 ........... 267.48 ........... 17.01 87.50 371.99
LC1.......................................................... 1.22 ........... 209.18 ........... 17.01 87.50 313.69
LB2.......................................................... 1.45 ........... 248.62 ........... 17.01 87.50 353.13
LB1.......................................................... 1.14 ........... 195.46 ........... 17.01 87.50 299.97
CE2.......................................................... 1.68 ........... 288.05 ........... 17.01 87.50 392.56
CE1.......................................................... 1.50 ........... 257.19 ........... 17.01 87.50 361.70
CD2.......................................................... 1.56 ........... 267.48 ........... 17.01 87.50 371.99
CD1.......................................................... 1.38 ........... 236.61 ........... 17.01 87.50 341.12
CC2.......................................................... 1.29 ........... 221.18 ........... 17.01 87.50 325.69
CC1.......................................................... 1.15 ........... 197.18 ........... 17.01 87.50 301.69
CB2.......................................................... 1.15 ........... 197.18 ........... 17.01 87.50 301.69
CB1.......................................................... 1.02 ........... 174.89 ........... 17.01 87.50 279.40
CA2.......................................................... 0.88 ........... 150.88 ........... 17.01 87.50 255.39
CA1.......................................................... 0.78 ........... 133.74 ........... 17.01 87.50 238.25
BB2.......................................................... 0.97 ........... 166.32 ........... 17.01 87.50 270.83
BB1.......................................................... 0.90 ........... 154.31 ........... 17.01 87.50 258.82
BA2.......................................................... 0.70 ........... 120.02 ........... 17.01 87.50 224.53
BA1.......................................................... 0.64 ........... 109.73 ........... 17.01 87.50 214.24
PE2.......................................................... 1.50 ........... 257.19 ........... 17.01 87.50 361.70
PE1.......................................................... 1.40 ........... 240.04 ........... 17.01 87.50 344.55
PD2.......................................................... 1.38 ........... 236.61 ........... 17.01 87.50 341.12
PD1.......................................................... 1.28 ........... 219.47 ........... 17.01 87.50 323.98
PC2.......................................................... 1.10 ........... 188.61 ........... 17.01 87.50 293.12
PC1.......................................................... 1.02 ........... 174.89 ........... 17.01 87.50 279.40
PB2.......................................................... 0.84 ........... 144.03 ........... 17.01 87.50 248.54
PB1.......................................................... 0.78 ........... 133.74 ........... 17.01 87.50 238.25
PA2.......................................................... 0.59 ........... 101.16 ........... 17.01 87.50 205.67
PA1.......................................................... 0.54 ........... 92.59 ........... 17.01 87.50 197.10
--------------------------------------------------------------------------------------------------------------------------------------------------------
TABLE 5--RUG-IV Case-Mix Adjusted Federal Rates and Associated Indexes
RURAL
--------------------------------------------------------------------------------------------------------------------------------------------------------
Non-case Non-case
RUG-IV Category Nursing Therapy Nursing Therapy mix therapy mix Total rate
index index component component comp component
--------------------------------------------------------------------------------------------------------------------------------------------------------
RUX.......................................................... 2.67 1.87 $437.35 $278.46 ........... $89.12 $804.93
RUL.......................................................... 2.57 1.87 420.97 278.46 ........... 89.12 788.55
RVX.......................................................... 2.61 1.28 427.52 190.60 ........... 89.12 707.24
RVL.......................................................... 2.19 1.28 358.72 190.60 ........... 89.12 638.44
RHX.......................................................... 2.55 0.85 417.69 126.57 ........... 89.12 633.38
RHL.......................................................... 2.15 0.85 352.17 126.57 ........... 89.12 567.86
RMX.......................................................... 2.47 0.55 404.59 81.90 ........... 89.12 575.61
RML.......................................................... 2.19 0.55 358.72 81.90 ........... 89.12 529.74
RLX.......................................................... 2.26 0.28 370.19 41.69 ........... 89.12 501.00
RUC.......................................................... 1.56 1.87 255.53 278.46 ........... 89.12 623.11
RUB.......................................................... 1.56 1.87 255.53 278.46 ........... 89.12 623.11
RUA.......................................................... 0.99 1.87 162.16 278.46 ........... 89.12 529.74
RVC.......................................................... 1.51 1.28 247.34 190.60 ........... 89.12 527.06
RVB.......................................................... 1.11 1.28 181.82 190.60 ........... 89.12 461.54
[[Page 22052]]
RVA.......................................................... 1.10 1.28 180.18 190.60 ........... 89.12 459.90
RHC.......................................................... 1.45 0.85 237.51 126.57 ........... 89.12 453.20
RHB.......................................................... 1.19 0.85 194.92 126.57 ........... 89.12 410.61
RHA.......................................................... 0.91 0.85 149.06 126.57 ........... 89.12 364.75
RMC.......................................................... 1.36 0.55 222.77 81.90 ........... 89.12 393.79
RMB.......................................................... 1.22 0.55 199.84 81.90 ........... 89.12 370.86
RMA.......................................................... 0.84 0.55 137.59 81.90 ........... 89.12 308.61
RLB.......................................................... 1.50 0.28 245.70 41.69 ........... 89.12 376.51
RLA.......................................................... 0.71 0.28 116.30 41.69 ........... 89.12 247.11
ES3.......................................................... 3.58 ........... 586.40 ........... $18.17 89.12 693.69
ES2.......................................................... 2.67 ........... 437.35 ........... 18.17 89.12 544.64
ES1.......................................................... 2.32 ........... 380.02 ........... 18.17 89.12 487.31
HE2.......................................................... 2.22 ........... 363.64 ........... 18.17 89.12 470.93
HE1.......................................................... 1.74 ........... 285.01 ........... 18.17 89.12 392.30
HD2.......................................................... 2.04 ........... 334.15 ........... 18.17 89.12 441.44
HD1.......................................................... 1.60 ........... 262.08 ........... 18.17 89.12 369.37
HC2.......................................................... 1.89 ........... 309.58 ........... 18.17 89.12 416.87
HC1.......................................................... 1.48 ........... 242.42 ........... 18.17 89.12 349.71
HB2.......................................................... 1.86 ........... 304.67 ........... 18.17 89.12 411.96
HB1.......................................................... 1.46 ........... 239.15 ........... 18.17 89.12 346.44
LE2.......................................................... 1.96 ........... 321.05 ........... 18.17 89.12 428.34
LE1.......................................................... 1.54 ........... 252.25 ........... 18.17 89.12 359.54
LD2.......................................................... 1.86 ........... 304.67 ........... 18.17 89.12 411.96
LD1.......................................................... 1.46 ........... 239.15 ........... 18.17 89.12 346.44
LC2.......................................................... 1.56 ........... 255.53 ........... 18.17 89.12 362.82
LC1.......................................................... 1.22 ........... 199.84 ........... 18.17 89.12 307.13
LB2.......................................................... 1.45 ........... 237.51 ........... 18.17 89.12 344.80
LB1.......................................................... 1.14 ........... 186.73 ........... 18.17 89.12 294.02
CE2.......................................................... 1.68 ........... 275.18 ........... 18.17 89.12 382.47
CE1.......................................................... 1.50 ........... 245.70 ........... 18.17 89.12 352.99
CD2.......................................................... 1.56 ........... 255.53 ........... 18.17 89.12 362.82
CD1.......................................................... 1.38 ........... 226.04 ........... 18.17 89.12 333.33
CC2.......................................................... 1.29 ........... 211.30 ........... 18.17 89.12 318.59
CC1.......................................................... 1.15 ........... 188.37 ........... 18.17 89.12 295.66
CB2.......................................................... 1.15 ........... 188.37 ........... 18.17 89.12 295.66
CB1.......................................................... 1.02 ........... 167.08 ........... 18.17 89.12 274.37
CA2.......................................................... 0.88 ........... 144.14 ........... 18.17 89.12 251.43
CA1.......................................................... 0.78 ........... 127.76 ........... 18.17 89.12 235.05
BB2.......................................................... 0.97 ........... 158.89 ........... 18.17 89.12 266.18
BB1.......................................................... 0.90 ........... 147.42 ........... 18.17 89.12 254.71
BA2.......................................................... 0.70 ........... 114.66 ........... 18.17 89.12 221.95
BA1.......................................................... 0.64 ........... 104.83 ........... 18.17 89.12 212.12
PE2.......................................................... 1.50 ........... 245.70 ........... 18.17 89.12 352.99
PE1.......................................................... 1.40 ........... 229.32 ........... 18.17 89.12 336.61
PD2.......................................................... 1.38 ........... 226.04 ........... 18.17 89.12 333.33
PD1.......................................................... 1.28 ........... 209.66 ........... 18.17 89.12 316.95
PC2.......................................................... 1.10 ........... 180.18 ........... 18.17 89.12 287.47
PC1.......................................................... 1.02 ........... 167.08 ........... 18.17 89.12 274.37
PB2.......................................................... 0.84 ........... 137.59 ........... 18.17 89.12 244.88
PB1.......................................................... 0.78 ........... 127.76 ........... 18.17 89.12 235.05
PA2.......................................................... 0.59 ........... 96.64 ........... 18.17 89.12 203.93
PA1.......................................................... 0.54 ........... 88.45 ........... 18.17 89.12 195.74
--------------------------------------------------------------------------------------------------------------------------------------------------------
D. Wage Index Adjustment
Section 1888(e)(4)(G)(ii) of the Act requires that we adjust the
federal rates to account for differences in area wage levels, using a
wage index that the Secretary determines appropriate. Since the
inception of the SNF PPS, we have used hospital inpatient wage data in
developing a wage index to be applied to SNFs. We propose to continue
this practice for FY 2016, as we continue to believe that in the
absence of SNF-specific wage data, using the hospital inpatient wage
index data is appropriate and reasonable for the SNF PPS. As explained
in the update notice for FY 2005 (69 FR 45786), the SNF PPS does not
use the hospital area wage index's occupational mix adjustment, as this
adjustment serves specifically to define the occupational categories
more clearly in a hospital setting; moreover, the collection of the
occupational wage data also excludes any wage data related to SNFs.
Therefore, we believe that using the updated wage data exclusive of the
occupational mix adjustment continues to be appropriate for SNF
payments. For FY 2016, the updated wage data are for hospital cost
reporting periods beginning on or after October 1, 2011 and before
October 1, 2012 (FY 2012 cost report data).
We note that section 315 of the Medicare, Medicaid, and SCHIP
Benefits Improvement and Protection
[[Page 22053]]
Act of 2000 (BIPA, Pub. L. 106-554, enacted on December 21, 2000)
authorized us to establish a geographic reclassification procedure that
is specific to SNFs, but only after collecting the data necessary to
establish a SNF wage index that is based on wage data from nursing
homes. However, to date, this has proven to be unfeasible due to the
volatility of existing SNF wage data and the significant amount of
resources that would be required to improve the quality of that data.
In addition, we propose to continue to use the same methodology
discussed in the SNF PPS final rule for FY 2008 (72 FR 43423) to
address those geographic areas in which there are no hospitals, and
thus, no hospital wage index data on which to base the calculation of
the FY 2016 SNF PPS wage index. For rural geographic areas that do not
have hospitals, and therefore, lack hospital wage data on which to base
an area wage adjustment, we would use the average wage index from all
contiguous Core-Based Statistical Areas (CBSAs) as a reasonable proxy.
For FY 2016, there are no rural geographic areas that do not have
hospitals, and thus, this methodology would not be applied. For rural
Puerto Rico, we would not apply this methodology due to the distinct
economic circumstances that exist there (for example, due to the close
proximity to one another of almost all of Puerto Rico's various urban
and non-urban areas, this methodology would produce a wage index for
rural Puerto Rico that is higher than that in half of its urban areas);
instead, we would continue to use the most recent wage index previously
available for that area. For urban areas without specific hospital wage
index data, we would use the average wage indexes of all of the urban
areas within the state to serve as a reasonable proxy for the wage
index of that urban CBSA. For FY 2016, the only urban area without wage
index data available is CBSA 25980, Hinesville-Fort Stewart, GA. The
proposed wage index applicable to FY 2016 is set forth in Table A
available on the CMS Web site at https://cms.gov/Medicare/Medicare-Fee-for-Service-Payment/SNFPPS/WageIndex.html.
Once calculated, we would apply the wage index adjustment to the
labor-related portion of the federal rate. Each year, we calculate a
revised labor-related share, based on the relative importance of labor-
related cost categories (that is, those cost categories that are labor-
intensive and vary with the local labor market) in the input price
index. In the SNF PPS final rule for FY 2014 (78 FR 47944 through
47946), we finalized a proposal to revise the labor-related share to
reflect the relative importance of the revised FY 2010-based SNF market
basket cost weights for the following cost categories: Wages and
salaries; employee benefits; the labor-related portion of nonmedical
professional fees; administrative and facilities support services; all
other--labor-related services; and a proportion of capital-related
expenses.
We calculate the labor-related relative importance from the SNF
market basket, and it approximates the labor-related portion of the
total costs after taking into account historical and projected price
changes between the base year and FY 2016. The price proxies that move
the different cost categories in the market basket do not necessarily
change at the same rate, and the relative importance captures these
changes. Accordingly, the relative importance figure more closely
reflects the cost share weights for FY 2016 than the base year weights
from the SNF market basket.
We calculate the labor-related relative importance for FY 2016 in
four steps. First, we compute the FY 2016 price index level for the
total market basket and each cost category of the market basket.
Second, we calculate a ratio for each cost category by dividing the FY
2016 price index level for that cost category by the total market
basket price index level. Third, we determine the FY 2016 relative
importance for each cost category by multiplying this ratio by the base
year (FY 2010) weight. Finally, we add the FY 2016 relative importance
for each of the labor-related cost categories (wages and salaries,
employee benefits, the labor-related portion of non-medical
professional fees, administrative and facilities support services, all
other: labor-related services, and a portion of capital-related
expenses) to produce the FY 2016 labor-related relative importance.
Table 6 summarizes the proposed updated labor-related share for FY
2016, compared to the labor-related share that was used for the FY 2015
SNF PPS final rule.
We are proposing for FY 2016 and subsequent fiscal years, to report
and apply the SNF PPS labor-related share at a tenth of a percentage
point (rather than at a thousandth of a percentage point) consistent
with the manner in which we report and apply the market basket update
percentage under the SNF PPS and the IPPS and the manner in which we
report and apply the IPPS labor-related share. The level of precision
specified for the IPPS labor-related share is three decimal places or a
tenth of a percentage point (0.696 or 69.6 percent), which we believe
provides a reasonable level of precision. We believe it is appropriate
to maintain such consistency across all payment systems so that the
level of precision specified is both reasonable and similar for all
providers. We invite public comments on this proposal.
Table 6--Labor-Related Relative Importance, FY 2015 and FY 2016
----------------------------------------------------------------------------------------------------------------
Relative importance, Relative importance,
labor-related, FY 2015 labor-related, FY 2016
14:2 forecast \1\ 15:1 forecast \2\
----------------------------------------------------------------------------------------------------------------
Wages and salaries............................................ 48.816 48.9
Employee benefits............................................. 11.365 11.4
Nonmedical Professional fees: labor-related................... 3.450 3.4
Administrative and facilities support services................ 0.502 0.5
All Other: Labor-related services............................. 2.276 2.3
Capital-related (.391)........................................ 2.771 2.7
-------------------------------------------------
Total..................................................... 69.180 69.2
----------------------------------------------------------------------------------------------------------------
\1\ Published in the Federal Register; based on second quarter 2014 IGI forecast.
\2\ Based on first quarter 2015 IGI forecast, with historical data through fourth quarter 2014.
Tables 7 and 8 show the RUG-IV case-mix adjusted federal rates by
labor-related and non-labor-related components.
[[Page 22054]]
Table 7--RUG-IV Case-Mix Adjusted Federal Rates for Urban SNFs by Labor and Non-Labor Component
----------------------------------------------------------------------------------------------------------------
RUG-IV category Total rate Labor portion Non-labor portion
----------------------------------------------------------------------------------------------------------------
RUX.................................................... 786.81 $544.47 $242.34
RUL.................................................... 769.66 532.60 237.06
RVX.................................................... 700.32 484.62 215.70
RVL.................................................... 628.31 434.79 193.52
RHX.................................................... 634.50 439.07 195.43
RHL.................................................... 565.92 391.62 174.30
RMX.................................................... 582.04 402.77 179.27
RML.................................................... 534.03 369.55 164.48
RLX.................................................... 511.16 353.72 157.44
RUC.................................................... 596.49 412.77 183.72
RUB.................................................... 596.49 412.77 183.72
RUA.................................................... 498.76 345.14 153.62
RVC.................................................... 511.71 354.10 157.61
RVB.................................................... 443.13 306.65 136.48
RVA.................................................... 441.42 305.46 135.96
RHC.................................................... 445.90 308.56 137.34
RHB.................................................... 401.32 277.71 123.61
RHA.................................................... 353.31 244.49 108.82
RMC.................................................... 391.72 271.07 120.65
RMB.................................................... 367.71 254.46 113.25
RMA.................................................... 302.56 209.37 93.19
RLB.................................................... 380.85 263.55 117.30
RLA.................................................... 245.40 169.82 75.58
ES3.................................................... 718.34 497.09 221.25
ES2.................................................... 562.31 389.12 173.19
ES1.................................................... 502.30 347.59 154.71
HE2.................................................... 485.15 335.72 149.43
HE1.................................................... 402.85 278.77 124.08
HD2.................................................... 454.29 314.37 139.92
HD1.................................................... 378.85 262.16 116.69
HC2.................................................... 428.57 296.57 132.00
HC1.................................................... 358.27 247.92 110.35
HB2.................................................... 423.43 293.01 130.42
HB1.................................................... 354.84 245.55 109.29
LE2.................................................... 440.57 304.87 135.70
LE1.................................................... 368.56 255.04 113.52
LD2.................................................... 423.43 293.01 130.42
LD1.................................................... 354.84 245.55 109.29
LC2.................................................... 371.99 257.42 114.57
LC1.................................................... 313.69 217.07 96.62
LB2.................................................... 353.13 244.37 108.76
LB1.................................................... 299.97 207.58 92.39
CE2.................................................... 392.56 271.65 120.91
CE1.................................................... 361.70 250.30 111.40
CD2.................................................... 371.99 257.42 114.57
CD1.................................................... 341.12 236.06 105.06
CC2.................................................... 325.69 225.38 100.31
CC1.................................................... 301.69 208.77 92.92
CB2.................................................... 301.69 208.77 92.92
CB1.................................................... 279.40 193.34 86.06
CA2.................................................... 255.39 176.73 78.66
CA1.................................................... 238.25 164.87 73.38
BB2.................................................... 270.83 187.41 83.42
BB1.................................................... 258.82 179.10 79.72
BA2.................................................... 224.53 155.37 69.16
BA1.................................................... 214.24 148.25 65.99
PE2.................................................... 361.70 250.30 111.40
PE1.................................................... 344.55 238.43 106.12
PD2.................................................... 341.12 236.06 105.06
PD1.................................................... 323.98 224.19 99.79
PC2.................................................... 293.12 202.84 90.28
PC1.................................................... 279.40 193.34 86.06
PB2.................................................... 248.54 171.99 76.55
PB1.................................................... 238.25 164.87 73.38
PA2.................................................... 205.67 142.32 63.35
PA1.................................................... 197.10 136.39 60.71
----------------------------------------------------------------------------------------------------------------
Table 8--RUG-IV Case-Mix Adjusted Federal Rates for Rural SNFs by Labor and Non-Labor Component
----------------------------------------------------------------------------------------------------------------
RUG-IV category Total rate Labor portion Non-labor portion
----------------------------------------------------------------------------------------------------------------
RUX.................................................... 804.93 $557.01 $247.92
[[Page 22055]]
RUL.................................................... 788.55 545.68 242.87
RVX.................................................... 707.24 489.41 217.83
RVL.................................................... 638.44 441.80 196.64
RHX.................................................... 633.38 438.30 195.08
RHL.................................................... 567.86 392.96 174.90
RMX.................................................... 575.61 398.32 177.29
RML.................................................... 529.74 366.58 163.16
RLX.................................................... 501.00 346.69 154.31
RUC.................................................... 623.11 431.19 191.92
RUB.................................................... 623.11 431.19 191.92
RUA.................................................... 529.74 366.58 163.16
RVC.................................................... 527.06 364.73 162.33
RVB.................................................... 461.54 319.39 142.15
RVA.................................................... 459.90 318.25 141.65
RHC.................................................... 453.20 313.61 139.59
RHB.................................................... 410.61 284.14 126.47
RHA.................................................... 364.75 252.41 112.34
RMC.................................................... 393.79 272.50 121.29
RMB.................................................... 370.86 256.64 114.22
RMA.................................................... 308.61 213.56 95.05
RLB.................................................... 376.51 260.54 115.97
RLA.................................................... 247.11 171.00 76.11
ES3.................................................... 693.69 480.03 213.66
ES2.................................................... 544.64 376.89 167.75
ES1.................................................... 487.31 337.22 150.09
HE2.................................................... 470.93 325.88 145.05
HE1.................................................... 392.30 271.47 120.83
HD2.................................................... 441.44 305.48 135.96
HD1.................................................... 369.37 255.60 113.77
HC2.................................................... 416.87 288.47 128.40
HC1.................................................... 349.71 242.00 107.71
HB2.................................................... 411.96 285.08 126.88
HB1.................................................... 346.44 239.74 106.70
LE2.................................................... 428.34 296.41 131.93
LE1.................................................... 359.54 248.80 110.74
LD2.................................................... 411.96 285.08 126.88
LD1.................................................... 346.44 239.74 106.70
LC2.................................................... 362.82 251.07 111.75
LC1.................................................... 307.13 212.53 94.60
LB2.................................................... 344.80 238.60 106.20
LB1.................................................... 294.02 203.46 90.56
CE2.................................................... 382.47 264.67 117.80
CE1.................................................... 352.99 244.27 108.72
CD2.................................................... 362.82 251.07 111.75
CD1.................................................... 333.33 230.66 102.67
CC2.................................................... 318.59 220.46 98.13
CC1.................................................... 295.66 204.60 91.06
CB2.................................................... 295.66 204.60 91.06
CB1.................................................... 274.37 189.86 84.51
CA2.................................................... 251.43 173.99 77.44
CA1.................................................... 235.05 162.65 72.40
BB2.................................................... 266.18 184.20 81.98
BB1.................................................... 254.71 176.26 78.45
BA2.................................................... 221.95 153.59 68.36
BA1.................................................... 212.12 146.79 65.33
PE2.................................................... 352.99 244.27 108.72
PE1.................................................... 336.61 232.93 103.68
PD2.................................................... 333.33 230.66 102.67
PD1.................................................... 316.95 219.33 97.62
PC2.................................................... 287.47 198.93 88.54
PC1.................................................... 274.37 189.86 84.51
PB2.................................................... 244.88 169.46 75.42
PB1.................................................... 235.05 162.65 72.40
PA2.................................................... 203.93 141.12 62.81
PA1.................................................... 195.74 135.45 60.29
----------------------------------------------------------------------------------------------------------------
Section 1888(e)(4)(G)(ii) of the Act also requires that we apply
this wage index in a manner that does not result in aggregate payments
under the SNF PPS that are greater or less than would otherwise be made
if the wage
[[Page 22056]]
adjustment had not been made. For FY 2016 (federal rates effective
October 1, 2014), we would apply an adjustment to fulfill the budget
neutrality requirement. We would meet this requirement by multiplying
each of the components of the unadjusted federal rates by a budget
neutrality factor equal to the ratio of the weighted average wage
adjustment factor for FY 2015 to the weighted average wage adjustment
factor for FY 2016. For this calculation, we use the same FY 2014
claims utilization data for both the numerator and denominator of this
ratio. We define the wage adjustment factor used in this calculation as
the labor share of the rate component multiplied by the wage index plus
the non-labor share of the rate component. The budget neutrality factor
for FY 2016 would be 0.9989.
In the SNF PPS final rule for FY 2006 (70 FR 45026, August 4,
2005), we adopted the changes discussed in the OMB Bulletin No. 03-04
(June 6, 2003), available online at www.whitehouse.gov/omb/bulletins/b03-04.html, which announced revised definitions for MSAs and the
creation of micropolitan statistical areas and combined statistical
areas.
In adopting the CBSA geographic designations, we provided for a
one-year transition in FY 2006 with a blended wage index for all
providers. For FY 2006, the wage index for each provider consisted of a
blend of 50 percent of the FY 2006 MSA-based wage index and 50 percent
of the FY 2006 CBSA-based wage index (both using FY 2002 hospital
data). We referred to the blended wage index as the FY 2006 SNF PPS
transition wage index. As discussed in the SNF PPS final rule for FY
2006 (70 FR 45041), since the expiration of this one-year transition on
September 30, 2006, we have used the full CBSA-based wage index values.
On February 28, 2013, OMB issued OMB Bulletin No. 13-01, announcing
revisions to the delineation of MSAs, Micropolitan Statistical Areas,
and Combined Statistical Areas, and guidance on uses of the delineation
of these areas. A copy of this bulletin is available online at https://www.whitehouse.gov/sites/default/files/omb/bulletins/2013/b-13-01.pdf.
This bulletin states that it provides the delineations of all
Metropolitan Statistical Areas, Metropolitan Divisions, Micropolitan
Statistical Areas, Combined Statistical Areas, and New England City and
Town Areas in the United States and Puerto Rico based on the standards
published on June 28, 2010, in the Federal Register (75 FR 37246-37252)
and Census Bureau data.
While the revisions OMB published on February 28, 2013 are not as
sweeping as the changes made when we adopted the CBSA geographic
designations for FY 2006, the February 28, 2013 bulletin does contain a
number of significant changes. For example, there are new CBSAs, urban
counties that became rural, rural counties that became urban, and
existing CBSAs that were split apart.
In the FY 2015 SNF PPS final rule (79 FR 45644 through 45646), we
finalized changes to the SNF PPS wage index based on the newest OMB
delineations, as described in OMB Bulletin No. 13-01, beginning in FY
2015, including a 1-year transition with a blended wage index for FY
2015. Because the 1-year transition period expires at the end of FY
2015, the proposed SNF PPS wage index for FY 2016 is fully based on the
revised OMB delineations adopted in FY 2015. As noted above, the
proposed wage index applicable to FY 2016 is set forth in Table A
available on the CMS Web site at https://cms.gov/Medicare/Medicare-Fee-for-Service-Payment/SNFPPS/WageIndex.html.
E. Adjusted Rate Computation Example
Using the hypothetical SNF XYZ described below, Table 9 shows the
adjustments made to the federal per diem rates to compute the
provider's actual per diem PPS payment. We derive the Labor and Non-
labor columns from Table 7. The wage index used in this example is
based on the proposed wage index, which may be found in Table A as
referenced above. As illustrated in Table 9, SNF XYZ's total PPS
payment would equal $45,462.10.
Table 9--Adjusted Rate Computation Example
SNF XYZ: Located in Frederick, MD (Urban CBSA 43524)
Wage Index: 0.9681
[See Proposed Wage Index in Table A] \1\
--------------------------------------------------------------------------------------------------------------------------------------------------------
Adjusted Adjusted Percent Medicare
RUG-IV Group Labor Wage index labor Non-labor rate adjustment days Payment
--------------------------------------------------------------------------------------------------------------------------------------------------------
RVX............................................. $484.62 0.9681 $469.16 $215.70 $684.86 $684.86 14 $9,588.04
ES2............................................. 389.12 0.9681 376.71 173.19 549.90 549.90 30 16,497.00
RHA............................................. 244.49 0.9681 236.69 108.82 345.51 345.51 16 5,528.16
CC2*............................................ 225.38 0.9681 218.19 100.31 318.50 726.18 10 7,261.80
BA2............................................. 155.37 0.9681 150.41 69.16 219.57 219.57 30 6,587.10
100 45,462.10
--------------------------------------------------------------------------------------------------------------------------------------------------------
* Reflects a 128 percent adjustment from section 511 of the MMA.
\1\ Available on the CMS Web site at https://www.cms.gov/Medicare/Medicare-Fee-for-Service-Payment/SNFPPS/WageIndex.html.
IV. Additional Aspects of the SNF PPS
A. SNF Level of Care--Administrative Presumption
The establishment of the SNF PPS did not change Medicare's
fundamental requirements for SNF coverage. However, because the case-
mix classification is based, in part, on the beneficiary's need for
skilled nursing care and therapy, we have attempted, where possible, to
coordinate claims review procedures with the existing resident
assessment process and case-mix classification system discussed in
section III.C. of this proposed rule. This approach includes an
administrative presumption that utilizes a beneficiary's initial
classification in one of the upper 52 RUGs of the 66-group RUG-IV case-
mix classification system to assist in making certain SNF level of care
determinations.
In accordance with section 1888(e)(4)(H)(ii) of the Act and the
regulations at Sec. 413.345, we include in each update of the federal
payment rates in the Federal Register the designation of those specific
RUGs under the classification system that represent the required SNF
level of care, as provided in Sec. 409.30. As set forth in the FY 2011
SNF PPS update notice (75 FR 42910), this designation reflects an
administrative presumption under the
[[Page 22057]]
66-group RUG-IV system that beneficiaries who are correctly assigned to
one of the upper 52 RUG-IV groups on the initial five-day, Medicare-
required assessment are automatically classified as meeting the SNF
level of care definition up to and including the assessment reference
date on the five-day Medicare-required assessment.
A beneficiary assigned to any of the lower 14 RUG-IV groups is not
automatically classified as either meeting or not meeting the
definition, but instead receives an individual level of care
determination using the existing administrative criteria. This
presumption recognizes the strong likelihood that beneficiaries
assigned to one of the upper 52 RUG-IV groups during the immediate
post-hospital period require a covered level of care, which would be
less likely for those beneficiaries assigned to one of the lower 14
RUG-IV groups.
In the July 30, 1999 final rule (64 FR 41670), we indicated that we
would announce any changes to the guidelines for Medicare level of care
determinations related to modifications in the case-mix classification
structure. In this proposed rule, we would continue to designate the
upper 52 RUG-IV groups for purposes of this administrative presumption,
consisting of all groups encompassed by the following RUG-IV
categories:
Rehabilitation plus Extensive Services.
Ultra High Rehabilitation.
Very High Rehabilitation.
High Rehabilitation.
Medium Rehabilitation.
Low Rehabilitation.
Extensive Services.
Special Care High.
Special Care Low.
Clinically Complex.
However, we note that this administrative presumption policy does
not supersede the SNF's responsibility to ensure that its decisions
relating to level of care are appropriate and timely, including a
review to confirm that the services prompting the beneficiary's
assignment to one of the upper 52 RUG-IV groups (which, in turn, serves
to trigger the administrative presumption) are themselves medically
necessary. As we explained in the FY 2000 SNF PPS final rule (64 FR
41667), the administrative presumption:
. . . is itself rebuttable in those individual cases in which the
services actually received by the resident do not meet the basic
statutory criterion of being reasonable and necessary to diagnose or
treat a beneficiary's condition (according to section 1862(a)(1) of
the Act). Accordingly, the presumption would not apply, for example,
in those situations in which a resident's assignment to one of the
upper . . . groups is itself based on the receipt of services that
are subsequently determined to be not reasonable and necessary.
Moreover, we want to stress the importance of careful monitoring for
changes in each patient's condition to determine the continuing need
for Part A SNF benefits after the assessment reference date of the 5-
day assessment.
B. Consolidated Billing
Sections 1842(b)(6)(E) and 1862(a)(18) of the Act (as added by
section 4432(b) of the BBA) require a SNF to submit consolidated
Medicare bills to its Medicare Administrative Contractor for almost all
of the services that its residents receive during the course of a
covered Part A stay. In addition, section 1862(a)(18) places the
responsibility with the SNF for billing Medicare for physical therapy,
occupational therapy, and speech-language pathology services that the
resident receives during a noncovered stay. Section 1888(e)(2)(A) of
the Act excludes a small list of services from the consolidated billing
provision (primarily those services furnished by physicians and certain
other types of practitioners), which remain separately billable under
Part B when furnished to a SNF's Part A resident. These excluded
service categories are discussed in greater detail in section V.B.2. of
the May 12, 1998 interim final rule (63 FR 26295 through 26297).
A detailed discussion of the legislative history of the
consolidated billing provision is available on the SNF PPS Web site at
https://www.cms.gov/Medicare/Medicare-Fee-for-Service-Payment/SNFPPS/Downloads/Legislative_History_07302013.pdf. In particular, section 103
of the Medicare, Medicaid, and SCHIP Balanced Budget Refinement Act of
1999 (BBRA) (Pub. L. 106-113, enacted on November 29, 1999) amended
section 1888(e)(2)(A) of the Act by further excluding a number of
individual high-cost, low probability services, identified by
Healthcare Common Procedure Coding System (HCPCS) codes, within several
broader categories (chemotherapy items, chemotherapy administration
services, radioisotope services, and customized prosthetic devices)
that otherwise remained subject to the provision. We discuss this BBRA
amendment in greater detail in the SNF PPS proposed and final rules for
FY 2001 (65 FR 19231 through 19232, April 10, 2000, and 65 FR 46790
through 46795, July 31, 2000), as well as in Program Memorandum AB-00-
18 (Change Request #1070), issued March 2000, which is available online
at www.cms.gov/transmittals/downloads/ab001860.pdf.
As explained in the FY 2001 proposed rule (65 FR 19232), the
amendments enacted in section 103 of the BBRA not only identified for
exclusion from this provision a number of particular service codes
within four specified categories (that is, chemotherapy items,
chemotherapy administration services, radioisotope services, and
customized prosthetic devices), but also gave the Secretary the
authority to designate additional, individual services for exclusion
within each of the specified service categories. In the proposed rule
for FY 2001, we also noted that the BBRA Conference report (H.R. Rep.
No. 106-479 at 854 (1999) (Conf. Rep.)) characterizes the individual
services that this legislation targets for exclusion as high-cost, low
probability events that could have devastating financial impacts
because their costs far exceed the payment SNFs receive under the
prospective payment system. According to the conferees, section 103(a)
of the BBRA is an attempt to exclude from the PPS certain services and
costly items that are provided infrequently in SNFs. By contrast, we
noted that the Congress declined to designate for exclusion any of the
remaining services within those four categories (thus, leaving all of
those services subject to SNF consolidated billing), because they are
relatively inexpensive and are furnished routinely in SNFs.
As we further explained in the final rule for FY 2001 (65 FR
46790), and as our longstanding policy, any additional service codes
that we might designate for exclusion under our discretionary authority
must meet the same statutory criteria used in identifying the original
codes excluded from consolidated billing under section 103(a) of the
BBRA: They must fall within one of the four service categories
specified in the BBRA; and they also must meet the same standards of
high cost and low probability in the SNF setting, as discussed in the
BBRA Conference report. Accordingly, we characterized this statutory
authority to identify additional service codes for exclusion as
essentially affording the flexibility to revise the list of excluded
codes in response to changes of major significance that may occur over
time (for example, the development of new medical technologies or other
advances in the state of medical practice) (65 FR 46791). In this
proposed rule, we specifically invite public comments identifying HCPCS
codes in any of these four service categories (chemotherapy items,
chemotherapy administration services, radioisotope services, and
[[Page 22058]]
customized prosthetic devices) representing recent medical advances
that might meet our criteria for exclusion from SNF consolidated
billing. We may consider excluding a particular service if it meets our
criteria for exclusion as specified above. Commenters should identify
in their comments the specific HCPCS code that is associated with the
service in question, as well as their rationale for requesting that the
identified HCPCS code(s) be excluded.
We note that the original BBRA amendment (as well as the
implementing regulations) identified a set of excluded services by
means of specifying HCPCS codes that were in effect as of a particular
date (in that case, as of July 1, 1999). Identifying the excluded
services in this manner made it possible for us to utilize program
issuances as the vehicle for accomplishing routine updates of the
excluded codes, to reflect any minor revisions that might subsequently
occur in the coding system itself (for example, the assignment of a
different code number to the same service). Accordingly, in the event
that we identify through the current rulemaking cycle any new services
that would actually represent a substantive change in the scope of the
exclusions from SNF consolidated billing, we would identify these
additional excluded services by means of the HCPCS codes that are in
effect as of a specific date (in this case, as of October 1, 2015). By
making any new exclusions in this manner, we could similarly accomplish
routine future updates of these additional codes through the issuance
of program instructions.
C. Payment for SNF-Level Swing-Bed Services
Section 1883 of the Act permits certain small, rural hospitals to
enter into a Medicare swing-bed agreement, under which the hospital can
use its beds to provide either acute- or SNF-level care, as needed. For
critical access hospitals (CAHs), Part A pays on a reasonable cost
basis for SNF-level services furnished under a swing-bed agreement.
However, in accordance with section 1888(e)(7) of the Act, these
services furnished by non-CAH rural hospitals are paid under the SNF
PPS, effective with cost reporting periods beginning on or after July
1, 2002. As explained in the FY 2002 final rule (66 FR 39562), this
effective date is consistent with the statutory provision to integrate
swing-bed rural hospitals into the SNF PPS by the end of the transition
period, June 30, 2002.
Accordingly, all non-CAH swing-bed rural hospitals have now come
under the SNF PPS. Therefore, all rates and wage indexes outlined in
earlier sections of this proposed rule for the SNF PPS also apply to
all non-CAH swing-bed rural hospitals. A complete discussion of
assessment schedules, the MDS, and the transmission software (RAVEN-SB
for Swing Beds) appears in the FY 2002 final rule (66 FR 39562) and in
the FY 2010 final rule (74 FR 40288). As finalized in the FY 2010 SNF
PPS final rule (74 FR 40356-57), effective October 1, 2010, non-CAH
swing-bed rural hospitals are required to complete an MDS 3.0 swing-bed
assessment which is limited to the required demographic, payment, and
quality items. The latest changes in the MDS for swing-bed rural
hospitals appear on the SNF PPS Web site at https://www.cms.gov/Medicare/Medicare-Fee-for-Service-Payment/SNFPPS/.
V. Other Issues
A. Skilled Nursing Facility Value-Based Purchasing Program (SNF VBP
Program)
1. Background
a. Overview
In recent years, we have undertaken a number of initiatives to
promote higher quality and more efficient health care for Medicare
beneficiaries. These initiatives, which include demonstration projects,
quality reporting programs, and value-based purchasing programs, have
been implemented in various health care settings, including physician
offices, ambulatory surgical centers (ASCs), hospitals, nursing homes,
home health agencies (HHAs), and dialysis facilities. Many of these
programs link a portion of Medicare payments to provider reporting or
performance on quality measures. The overarching goal of these
initiatives is to transform Medicare from a passive payer of claims to
an active purchaser of quality health care for its beneficiaries.
We view value-based purchasing as an important step toward
revamping how care is paid for, moving increasingly toward rewarding
better value, outcomes, and innovations instead of merely volume.
b. SNF VBP Report to Congress
Section 3006(a) of the Affordable Care Act required the Secretary
to develop a plan to implement a value-based purchasing program under
the Medicare program for SNFs (as defined in section 1819(a) of the
Act) and to submit that plan to Congress. In developing the plan, this
section required the Secretary to consider several issues, including
the ongoing development, selection, and modification process for
measures, the reporting, collection, and validation of quality data,
the structure of value-based payment adjustments, methods for public
disclosure of SNF performance, and any other issues determined
appropriate by the Secretary. The Secretary was also required to
consult with relevant affected parties and consider experience with
demonstrations relevant to the SNF VBP Program.
HHS submitted the Report to Congress required under section 3006 of
the Affordable Care Act in March 2012. The report explains that a
significant number of elderly Americans receive care in SNFs/NFs,
either as short-term post-acute care or as long-term custodial care,
and that quality of care is a significant concern for a subset of SNFs/
NFs. The report also states that the SNF PPS does not strongly
incentivize SNFs to furnish high quality care to this very fragile
patient population. The report concludes that if HHS harnesses the
significant and growing purchasing power of Medicare in this sector, it
can incentivize SNFs to improve the quality of care for their patients.
In the report, we explained our belief that the implementation of a
SNF VBP Program is a central step in revamping Medicare's payments for
health care services to reward better value, outcome, and innovations,
rather than the volume of care. We also explained our belief that a SNF
VBP Program should promote the development and use of robust quality
measures, including measures that assess functional status, to promote
timely, safe, and high-quality care for Medicare beneficiaries. We
noted that the creation of a SNF VBP Program would align with numerous
HHS and CMS efforts to improve care coordination, and would be
consistent with the National Quality Strategy and its aims of Better
Care, Healthy People and Communities, and Affordable Care.
The full report is available on our Web site at https://www.cms.gov/Medicare/Medicare-Fee-for-Service-Payment/SNFPPS/Downloads/SNF-VBP-RTC.pdf.
2. Statutory Basis for the SNF VBP Program
Section 215 of PAMA added sections 1888(g) and (h) to the Act.
Section 1888(g)(1) of the Act requires the Secretary to specify a
skilled nursing facility all-cause all-condition hospital readmission
measure (or any successor to such a measure) not later than
[[Page 22059]]
October 1, 2015. Section 1888(g)(2) of the Act requires the Secretary
to specify an all-condition risk-adjusted potentially preventable
hospital readmission rate for SNFs not later than October 1, 2016.
Section 1888(g)(3) of the Act directs the Secretary to develop a
methodology to achieve high reliability and validity for these
measures, especially for SNFs with a low volume of readmissions.
Section 1888(g)(4) of the Act makes the pre-rulemaking Measure
Applications Partnership process of Section 1890A of the Act optional
for these measures. Under section 1888(g)(5) of the Act, the Secretary
is directed to provide quarterly confidential feedback reports to SNFs
on their performance on the readmission or resource use measure
beginning on October 1, 2016. Under section 1888(g)(6) of the Act, not
later than October 1, 2017, the Secretary must establish procedures for
making performance data on readmission and resource use measures public
on Nursing Home Compare or a successor Web site. That paragraph also
requires that the procedures ensure that a SNF has the opportunity to
review and submit corrections to the information that is to be made
public for it before that information is made public.
Section 1888(h)(1)(A) of the Act requires the Secretary to
establish a SNF value-based purchasing program under which value-based
incentive payments are made in a fiscal year to SNFs, and section
1888(h)(1)(B) of the Act requires that the Program apply to payments
for services furnished on or after October 1, 2018. Under section
1888(h)(2)(A) of the Act, the Secretary must apply the readmission
measure specified under section 1888(g)(1) of the Act for purposes of
the Program, and section 1888(h)(1)(B) of the Act requires the
Secretary to apply the resource use measure specified under section
1888(g)(2) of the Act instead of the readmission measure specified
under section 1888(g)(1) as soon as practicable. Sections 1888(h)(3)(A)
and (B) of the Act require the Secretary to establish performance
standards for the measure applied under section 1888(h)(2) of the Act
for a performance period for a fiscal year and that those performance
standards include levels of achievement and improvement. In addition,
in calculating the SNF performance score for the measure under the
Program, section 1888(h)(3)(B) of the Act requires the Secretary to use
the higher of achievement or improvement scores. Further, the
performance standards established under section 1888(h)(3) of the Act
must, under section 1888(h)(3)(C), be established and announced by the
Secretary not later than 60 days prior to the beginning of the
performance period for the fiscal year involved.
Section 1888(h)(4) of the Act directs the Secretary to develop a
methodology to assess each SNF's total performance based on the
performance standards for the applicable measure for each performance
period. Under section 1888(h)(4)(B) of the Act, SNF performance scores
for the performance period for each fiscal year must be ranked from low
to high.
Section 1888(h)(5) of the Act outlines several requirements for
value-based incentive payments under the SNF VBP Program. Under section
1888(h)(5)(A) of the Act, the Secretary is directed to increase the
adjusted federal per diem rate determined under section 1888(e)(4)(G)
for services furnished by a skilled nursing facility by the value-based
incentive payment amount determined under section 1888(h)(5)(B). This
section also directs that the value-based incentive payment amount be
equal to the product of the adjusted federal per diem rate and the
value-based incentive payment percentage specified under section
1888(h)(5)(C) of the Act for the SNF for the fiscal year. Section
1888(h)(5)(C) requires the Secretary to specify a value-based incentive
payment percentage for a SNF for a fiscal year, which may include a
zero percentage. The Secretary is further directed under section
1888(h)(5)(C) to ensure that such percentage is based on the SNF
performance score for the performance period for the fiscal year, that
the application of all such percentages in a fiscal year results in an
appropriate distribution of value-based incentive payments, and that
the total amount of value-based incentive payments for all SNFs for a
fiscal year be greater than or equal to 50 percent, but not greater
than 70 percent, of the total amount of the reductions to payments for
the fiscal year under section 1888(h)(6), as estimated by the
Secretary.
Section 1888(h)(6) of the Act requires the Secretary to reduce the
adjusted federal per diem rate for SNFs otherwise applicable to each
SNF for services furnished by that SNF during the applicable fiscal
year by the applicable percent, which is defined in paragraph (b) as
two percent for FY 2019 and subsequent years. Section 1888(h)(7) of the
Act requires the Secretary to inform each SNF of its payment
adjustments under the Program not later than 60 days prior to the
fiscal year involved, and under section 1888(h)(8) of the Act, the
value-based incentive payments calculated for a fiscal year apply only
for that fiscal year.
Section 1888(h)(9)(A) of the Act requires the Secretary to publish
SNF-specific performance information on the Nursing Home Compare Web
site or a successor Web site, including SNF performance scores and
rankings. Section 1888(h)(9)(B) of the Act requires the Secretary to
post aggregate information on the SNF VBP Program, including the range
of SNF performance scores and the number of SNFs receiving value-based
incentive payments and the range and total amount of those payments.
3. Skilled Nursing Facility 30-Day All-Cause Readmission Measure
(SNFRM) (NQF #2510; Measure Steward: CMS)
a. Overview
Reducing hospital readmissions is important for quality of care and
patient safety. Readmission to a hospital may be an adverse event for
patients and in many cases imposes a financial burden on the health
care system. Successful efforts to reduce preventable readmission rates
will improve the quality of care furnished to beneficiaries while
simultaneously decreasing the cost of that care. Hospitals and other
health care providers can work with their communities to lower
readmission rates and improve patient care in a number of ways, such as
by ensuring that patients are clinically ready to be discharged,
reducing infection risk, reconciling medications, improving
communication with community providers responsible for post-discharge
patient care, improving care transitions, and ensuring that patients
understand their care plans upon discharge.
Many studies have demonstrated the effectiveness of these types of
in-hospital and post-discharge interventions in reducing the risk of
readmission, confirming that hospitals and their partners have the
ability to lower readmission rates.1 2 3 These types of
efforts during and after a hospitalization have been shown to be
effective in reducing readmission rates
[[Page 22060]]
in geriatric populations generally,4 5 as well as for
multiple specific conditions. Moreover, such interventions can result
in cost saving. Financial incentives to reduce readmissions will in
turn promote improvement in care transitions and care coordination, as
these are important means of reducing preventable readmissions.\6\ In
its 2007 Report to Congress on Promoting Better Efficiency in
Medicare,\7\ MedPAC noted the potential benefit to patients of lowering
readmissions and suggested payment strategies that would incentivize
hospitals to reduce these rates. Readmission rates are important
markers of quality of care, particularly of the care of a patient in
transition from an acute care setting to a non-acute care setting, and
improving readmissions can positively influence patient outcomes and
the cost of care.
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\1\ Gwadry-Sridhar FH, Flintoft V, Lee DS, Lee H, Guyatt GH: A
systematic review and meta-analysis of studies comparing readmission
rates and mortality rates in patients with heart failure. Arch
Intern Med. 2004;164(21):2315-2320.
\2\ McAlister FA, Lawson FM, Teo KK, Armstrong PW.: A systematic
review of randomized trials of disease management programs in heart
failure. AmJMed. 2001;110(5):378-384.
\3\ Krumholz HM, Amatruda J, Smith GL, et al.: Randomized trial
of an education and support intervention to prevent readmission of
patients with heart failure. J Am Coll Cardiol. 2002;39(1):83-89.
\4\ Coleman EA, Parry C, Chalmers S, Min SJ.: The care
transitions intervention: Results of a randomized controlled trial.
Arch Intern Med. 2006;166:1822-8.
\5\ Naylor MD, Brooten D, Campbell R, Jacobsen BS, Mezey MD,
Pauly MV, Schwartz JS.: Comprehensive discharge planning and home
follow-up of hospitalized elders: A randomized clinical trial. JAMA.
1999;281:613-20. 186
\6\ Coleman EA.: 2005. Background Paper on Transitional Care
Performance Measurement. Appendix I. In: Institute of Medicine,
Performance Measurement: Accelerating Improvement. Washington, DC:
National Academy Press.
\7\ Medicare Payment Advisory Commission (MedPAC). Report to
Congress: Promoting Greater Efficiency in Medicare; 2007. Available
at https://www.medpac.gov/documents/Jun07_EntireReport.pdf. Accessed
January 10, 2011.
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We are proposing to specify the Skilled Nursing Facility 30-Day
All-Cause Readmission Measure (SNFRM) (NQF #2510) as the skilled
nursing facility all-cause, all-condition hospital readmission measure
under section 1888(g)(1) of the Act. This measure assesses the risk-
standardized rate of all-cause, all-condition, unplanned inpatient
hospital readmissions of Medicare fee-for-service (FFS) SNF patients
within 30 days of discharge from an admission to an inpatient
prospective payment system (IPPS) hospital, critical access hospital
(CAH), or psychiatric hospital. This measure is claims-based, requiring
no additional data collection or submission burden for SNFs.
We are also proposing to apply this measure for purposes of the SNF
VBP Program under section 1888(h)(2)(A) of the Act. We believe that
this measure will (1) incentivize SNFs to make quality improvements
that result in successful transitions of care for patients discharged
from the hospital (IPPS, CAH or psychiatric hospital) setting to a SNF,
and subsequently to the community or to another post-acute care
setting, (2) reduce unplanned readmission rates of these patients to
hospitals; and (3) align the SNF VBP Program with the National Quality
Strategy priorities of safer, better coordinated care and lower
costs.\8\
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\8\ Wilson, N. U.S. Department of Health and Human Services,
Agency for Healthcare Research and Quality. (2014). National quality
strategy: Overview.
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We developed this measure based upon the NQF-endorsed Hospital-Wide
All-Cause Unplanned Readmission Measure (HWR) (NQF #1789) (https://www.qualityforum.org/QPS/1789) \9\ implemented in the Hospital
Inpatient Quality Reporting Program. To the extent methodologically and
clinically appropriate, we harmonized the SNFRM with the HWR measure
specifications.
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\9\ Adopted for the Hospital IQR Program in the FY 2013 IPPS/
LTCH PPS Final Rule (77 FR 53521 through 53528).
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b. Measure Calculation
The SNFRM estimates the risk-standardized rate of all-cause,
unplanned, hospital readmissions for SNF Medicare FFS beneficiaries
within 30 days of discharge from their prior proximal acute
hospitalization. The SNF admission must have occurred within one day
after discharge from the prior proximal hospitalization. The prior
proximal hospitalization is defined as an inpatient admission to an
IPPS, CAH, or a psychiatric hospital. Because the measure denominator
is based on SNF admissions, each Medicare beneficiary may be included
in the measure multiple times within a given year if they have more
than one SNF stay meeting all measure inclusion criteria including a
prior proximal hospitalization.
Patient readmissions included in the measure are identified by
examining Medicare claims data for readmissions of SNF Medicare FFS
beneficiaries to an IPPS hospital or CAH occurring within 30 days of
discharge from the prior proximal hospitalization. If the patient was
admitted to the SNF within 1 day of discharge from the prior proximal
hospitalization and the hospital readmission occurred within the 30-day
risk window, it is counted in the numerator regardless of whether the
patient is readmitted directly from the SNF or has been discharged from
the SNF. Because patients differ in complexity and morbidity, the
measure is risk-adjusted for patient case-mix. The measure also
excludes planned readmissions, because these are not considered to be
indicative of poor quality of care by the SNF. Details regarding how
readmissions are identified are available in our SNFRM Technical
Report.\10\
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\10\ Available on the Nursing Home Quality Initiative Web site
at https://www.cms.gov/Medicare/Quality-nitiatives-Patient-Assessment-Instruments/NursingHomeQualityInits/?redirect=/nursinghomequalityinits/.
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The SNFRM (NQF # 2510) assesses readmission rates while accounting
for patient demographics, principal diagnosis in the prior
hospitalization, comorbidities, and other patient factors. While
estimating the predictive power of patient characteristics, the model
also estimates a facility-specific effect common to patients treated at
that SNF.
The SNFRM is calculated based on the ratio, for each SNF, of the
number of risk-adjusted all-cause, unplanned readmissions to an IPPS
hospital or CAH that occurred within 30 days of discharge from the
prior proximal hospitalization, including the estimated facility
effect, to the estimated number of risk-adjusted predicted unplanned
inpatient hospital readmissions for the same patients treated at the
average SNF. A ratio above 1.0 indicates a higher than expected
readmission rate, or lower level of quality, while a ratio below 1.0
indicates a lower than expected readmission rate, or higher level of
quality. This ratio is referred to as the standardized risk ratio or
SRR. The SRR is then multiplied by the overall national raw readmission
rate for all SNF stays. The resulting rate is the risk-standardized
readmission rate (RSRR). The full methodology is detailed in the SNFRM
Technical Report.
The patient population includes SNF patients who:
Had a prior hospital discharge (IPPS, CAH or psychiatric
hospital) within one day of their admission to a SNF.
Had at least 12 months of Medicare Part A, FFS coverage
prior to their discharge date from the prior proximal hospitalization.
Had Medicare Part A, FFS coverage during the 30 days (the
30-day risk window) following their discharge date from the prior
proximal hospitalization.
c. Exclusions
Patients whose prior proximal hospitalization was for the medical
treatment for cancer are excluded. Analyses of this population during
measure development showed them to have a different trajectory of
illness and mortality than other patient populations, which is
consistent with
[[Page 22061]]
findings in studies in other patient populations.\11\
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\11\ National Quality Forum. ``Patient Outcomes: All-Cause
Readmissions Expedited Review 2011''. July 2012. pp12.
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SNF stays excluded from the measure are:
SNF stays where the patient had one or more intervening
post-acute care (PAC) admissions (inpatient rehabilitation facility
(IRF), long-term care hospital (LTCH), or another SNF) which occurred
either between the prior proximal hospital discharge and SNF admission
(from which the patient was readmitted) or after the SNF discharge but
before the readmission, within the 30-day risk window.
SNF stays with a gap of greater than 1 day between
discharge from the prior proximal hospitalization and the SNF
admission.
SNF stays in which the patient was discharged from the SNF
against medical advice (AMA).
SNF stays in which the principal diagnosis for the prior
proximal hospitalization was for rehabilitation care; fitting of
prostheses and for the adjustment of devices.
SNF stays in which the prior proximal hospitalization was
for pregnancy.
SNF stays in which data were missing on any variable used
in the SNFRM construction.
Readmissions within the 30-day risk window that are usually
considered planned due to the nature of the procedures and principal
diagnoses of the readmission are also excluded from the measure. In
addition to the list of planned procedures is a list of diagnoses
(provided in the SNFRM Technical Report), which, if found as the
principal diagnosis on the readmission claim, would indicate that the
usually planned procedure occurred during an unplanned acute
readmission. In addition to the HWR Planned Readmission Algorithm, the
SNFRM incorporates procedures that are considered planned in post-acute
care settings as identified in consultation with technical expert
panels. Full details on the planned readmissions criteria used,
including the additional procedures considered planned for post-acute
care may be found in the SNFRM Technical Report. Details regarding the
TEP proceedings can be found in the SNFRM TEP Report.
d. Eligible Readmissions
An eligible SNF admission is considered to be in the 30-day risk
window from the date of discharge from the proximal acute
hospitalization until: (1) The 30-day period ends; or (2) the patient
is readmitted to an IPPS hospital or CAH. If the readmission is
unplanned, it is counted as a readmission in the numerator of the
measure. If the readmission is planned, the readmission is not counted
in the numerator of the measure. The occurrence of a planned
readmission ends further tracking for readmissions in the 30-day risk
window.
e. Risk Adjustment
Readmission rates are risk-adjusted for patient case-mix
characteristics, independent of quality. The risk adjustment modeling
estimates the effects of patient characteristics, comorbidities, and
select health status variables on the probability of readmission. More
specifically, the risk-adjustment model for SNFs accounts for
demographic characteristics (age and sex), principal diagnosis during
the prior proximal hospitalization, comorbidities based on the
secondary medical diagnoses listed on the patient's prior proximal
hospital claim and diagnoses from prior hospitalizations that occurred
in the previous 365 days, length of stay during the patient's prior
proximal hospitalization, length of stay in the intensive care unit
(ICU), body system specific surgical indicators, end-stage renal
disease status, whether the patient was disabled, and the number of
prior hospitalizations in the previous 365 days.
f. Measurement Period
The SNFRM utilizes 1 year of data to calculate the measure rate.
Given that there are more than 2 million Medicare FFS SNF admissions
per year in more than 15,000 SNFs, 1 year of data is sufficient to
calculate this measure with a model in which the risk adjusters have
sufficient sample size to have good precision. The relevant reliability
testing may be found in the SNFRM Technical Report.
g. Stakeholder/MAP Input
Our measure development contractor convened a technical expert
panel (TEP) which provided input on the technical specifications of
this quality measure. The TEP was supportive of the design of this
measure. We also solicited stakeholder feedback on the development of
this measure through a public comment process from July 15th to 29th,
2013. In December 2014, the NQF endorsed the Skilled Nursing Facility
30-Day All-Cause Readmission Measure (NQF #2510).
We also considered input from the Measures Application Partnership
(MAP) when selecting measures under the CMS SNF VBP Program. The MAP is
composed of multi-stakeholder groups convened by the NQF, our current
contractor under section 1890(a) of the Act. The MAP has noted the need
for care transition measures in PAC/Long term care (LTC) performance
measurement programs and stated that setting-specific admission and
readmission measures under consideration would address this need.\12\
We included the SNFRM on the December 1, 2014 List of Measures under
Consideration (MUC List), and the MAP supported the measure. A
spreadsheet of MAP's 2015 Final Recommendations is available at NQF's
Web site at https://www.qualityforum.org/WorkArea/linkit.aspx?LinkIdentifier=id&ItemID=78711.
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\12\ National Quality Forum. Measure Applications Partnership
Pre-Rulemaking Report: 2013 Recommendations of Measures Under
Consideration by HHS: February 2013. Available at https://www.qualityforum.org/WorkArea/linkit.aspx?LinkIdentifier=id&ItemID=72738.
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We invite public comment on our proposal to adopt the Skilled
Nursing Facility 30-Day All-Cause Readmission Measure (SNFRM) (NQF
#2510) for use in the SNF VBP Program.
h. Feedback Reports to SNFs
Section 1888(g)(5) of the Act requires that beginning October 1,
2016, SNFs be provided quarterly confidential feedback reports on their
performance on measures specified under sections 1888(g)(1) or (2) of
the Act.
We intend to address this topic in future rulemaking. However, we
request public comment on the best means by which to communicate these
reports to SNFs. For example, we could consider providing confidential,
downloadable feedback reports to SNFs through a secure portal, such as
QualityNet. We also seek comment on the level of detail that would be
most helpful to SNFs in understanding their performance on the new
quality measures.
4. Performance Standards
a. Background
Section 1888(h)(3) of the Act requires the Secretary to establish
performance standards for the SNF VBP Program. The performance
standards must include levels of achievement and improvement, and must
be established and announced not later than 60 days prior to the
beginning of the performance period for the fiscal year involved. To
assist us in developing our proposals to establish performance
standards for the SNF VBP program, we reviewed a number of innovative
health care programs and demonstration
[[Page 22062]]
projects, both public and private, to discover if any could serve as a
prototype for the SNF VBP program. One methodology of important note
that provides us an analogous framework for implementation of
performance standards is the Performance Assessment Model, implemented
for our Hospital VBP program. We also reviewed the Hospital Acquired
Conditions Reduction Program, as well as the Hospital Readmissions
Reduction Program and the End-Stage Renal Disease Quality Incentive
Program (ESRD QIP). We seek comment on several potential approaches for
calculating performance standards under the SNF VBP Program.
i. Hospital Value-Based Purchasing Program
Under the Hospital VBP Program, a hospital's Total Performance
Score is determined by aggregating and weighting domain scores, which
are calculated based on hospital performance on measures within each
domain. The domain scores are then weighted to calculate a TPS that
ranges between 0 and 100 points. At this time, we do not anticipate
proposing to adopt quality measurement domains akin to other CMS
quality programs under the SNF VBP Program due to fact that this
program is based on only one measure.
To calculate HVBP measure scores, hospital performance on specified
quality measures is compared to performance standards established by
the Secretary. These performance standards include levels of
achievement and improvement and enable us to award between 0 and 10
points to each hospital based on its performance on each measure during
the performance period. An achievement threshold, generally defined as
the median of all hospital performance on most measures during a
specified baseline period, is the minimum level of performance required
to receive achievement points. The benchmark, generally defined as the
mean of the top decile of all hospital performance on a measure during
the baseline period, is the performance level required for receiving
the maximum number of points on a given measure. The Program also
establishes an improvement threshold for each measure, set at each
individual hospital's performance on the measure during the baseline
period, to award points for improvement over time.
We believe that the Hospital VBP Program's performance standards
methodology is a well-understood methodology under which health care
providers and suppliers can be rewarded both for providing high-quality
care and for improving their performance over time. The statutory
authority for the Hospital VBP Program is structured similarly to the
statutory authority for the SNF VBP Program, and we are considering
adoption of a similar methodology for establishing performance
standards under the SNF VBP Program. We also seek to align our pay-for-
performance and quality reporting programs as much as possible.
Specifically, we could consider adopting performance standards based on
all SNF performance during the baseline period on the measure specified
under section 1888(g)(1) or (2) of the Act in the form of the
achievement threshold--median of all SNF performance during a baseline
period--and the benchmark--mean of the top decile of all SNF
performance during a baseline period. We could then consider awarding
points along a continuum relative to those performance levels.
ii. Hospital-Acquired Conditions Reduction Program
We also considered whether we should adopt any components of the
scoring methodology that we have finalized for the HAC Reduction
Program under the SNF VBP Program. The HAC Reduction Program requires
the Secretary to reduce eligible hospitals' Medicare payments to 99
percent of what would otherwise have been paid for discharges when
hospitals rank in the worst performing quartile for risk-adjusted HAC
quality measures. These quality measures comprise efforts to promote
quality of care by reducing the number of HACs in the acute inpatient
hospital setting.
We determine a hospital's Total HAC Score by first assigning each
hospital a score of between 1 and 10 for each measure based on the
hospital's relative performance ranking in 10 groups (or deciles) for
that measure. Second, the measure score is used to calculate the domain
score. We discuss other details of the HAC Reduction Program's scoring
methodology in further detail below.
Although the HACRP statutory authority is not structured the same
as the SNF VBP statutory authority, we view the HACRP's use of decile-
based performance standards as one conceptual possibility for
constructing performance standards under the SNF VBP Program.
Specifically, we could consider setting performance standards based on
SNFs' ranked performance on the measures specified under sections
1888(g)(1) or (2) of the Act during the performance period. We could
divide SNFs' performance on the measures into deciles and award between
1 and 10 points to all SNFs within each decile. While this type of
performance standards calculation would measure and reward achievement,
we are concerned that it would not incorporate improvement, and we seek
comment on the best means by which we could include improvement in this
type of calculation.
iii. Hospital Readmissions Reduction Program (HRRP)
We also considered aspects of the Hospital Readmissions Reduction
Program (HRRP) for adaptation under the SNF VBP Program. HRRP reduces
Medicare payments to hospitals with a higher number of readmissions for
applicable conditions over a specified time period.
Hospital readmissions are defined as Medicare patients that are
readmitted to the same or another hospital within 30 days of a
discharge from the same or another hospital, which includes short-term
inpatient acute care hospitals. The initial hospital inpatient
admission (the discharge from which starts the 30-day potential penalty
clock) is termed the index admission. The hospital inpatient
readmission (which can be used to determine application of a penalty if
the readmission occurs within 30 days of the index inpatient admission
stay) can be for any cause, that is, it does not have to be for the
same cause as the index admission.
Using historical data, we determine whether eligible IPPS hospitals
have readmission rates that are higher than expected, given the
hospital's case mix, while accounting for the patient risk factors,
including age, and chronic medical conditions identified from inpatient
and outpatient claims for the 12 months prior to the hospitalization. A
hospital's excess readmission ratio for each condition is a measure of
a hospital's readmission performance compared to the national average
for the hospital's set of patients with that applicable condition. If
the hospital's actual readmission rate, based on the hospital's actual
performance, for the year is greater than its CMS-expected readmission
rate, the hospital incurs a penalty up to the maximum cap. If a
hospital performs better than an average hospital that admitted similar
patients, the hospital will not be subjected to a payment reduction. If
a hospital performs worse than average (below a 1.000 score), the
poorer performance triggers a payment reduction. For FY 2013, the
reduction was capped at 1 percent, for FY 2014 at 2 percent, and at 3
percent for FY 2015 and for subsequent years.
[[Page 22063]]
We view the Hospital Readmissions Reduction Program as a potential
model for the SNF VBP Program because that program does not weight
scores based on domains. That is, under the HRRP, hospitals' risk-
adjusted readmissions ratios form the basis for Medicare payment
adjustments. Under SNF VBP (and as discussed further in this section),
the Program's statute requires us to select only one measure to form
the basis for the SNF Performance Score. We believe that this
conceptual similarity stands distinct from certain other CMS quality
programs that incorporate quality measurement domains and domain
weighting into the scoring calculations. However, the HRRP sets an
effective performance standard based on the average readmissions
adjustment factor of 1.000. We seek comment on whether or not we should
adopt a similar form of performance standard under the SNF VBP Program.
This performance standard could take the form of the median or mean
performance on the specified quality measure during the performance
period. However, we believe we would also need to consider more
granular delineations in SNF scoring to ensure an appropriate
distribution of value-based incentive payments under the Program, and
we seek comment on what additional policies we should consider adopting
in this topic area.
iv. End-Stage Renal Disease Quality Incentive Program (ESRD QIP)
The End-Stage Renal Disease Quality Incentive Program (ESRD QIP) is
authorized by section 1881(h) of the Act. The program promotes patient
health by providing a financial incentive for renal dialysis facilities
to deliver high-quality care to their patients.
Section 1881(h)(3)(A)(i) of the Act requires the Secretary to
develop a methodology for assessing the total performance of each
provider and facility based on performance standards. For each clinical
measure adopted under the ESRD QIP, we assess performance on both
achievement and improvement. For the achievement score, facility
performance on a measure during a performance period is compared
against national facility performance on that measure during a
specified baseline period. To calculate the improvement score, we
compare a facility's performance during the performance period to its
performance during a specified baseline period. In determining a
clinical measure score for each measure, we take the higher of the
improvement or achievement score.
For each reporting measure, we assess performance based on whether
the facility completed the reporting for that measure as specified. If
a facility reports data according to the specifications we have
adopted, then the facility earns the maximum number of points on the
measure. If the facility partially reports data according to the
specifications we have adopted, the hospital earns some points on the
measure, but less than the maximum.
We believe that the ESRD QIP performance standards methodology is a
well-understood methodology under which health care providers and
suppliers can be rewarded both for providing high-quality care and for
improving their performance over time. The scoring methodology rewards
achievement and improvement, and is generally aligned with other pay-
for-performance and quality reporting programs. Like the Hospital VBP
Program statutory language, the ESRD QIP statutory language is
structured similar to the SNF VBP Program statutory language, and we
are considering adoption of a similar methodology for calculating
performance standards under the SNF VBP Program. Specifically, we could
consider adopting performance standards based on all SNF performance
during the baseline period on the measure specified under sections
1888(g)(1) or (2) of the Act in the forms of the achievement
threshold--median of all SNF performance--and the benchmark--mean of
the top decile of all SNF performance. We could then consider awarding
points for those performance levels.
b. Measuring Improvement
We are considering several methodologies for improvement scoring
under the SNF VBP Program, and we welcome public comments on these
options or others that we should consider as we develop our SNF VBP
Program policies for future rulemaking.
Section 1888(h)(4)(B) of the Act specifically requires us to
construct a ranking of SNF performance scores. While we view such a
ranking system as fairly straightforward when based on achievement
scoring--for example, ranking SNFs based on their performance on a
measure during the performance period could be achieved by ordering SNF
performance rates on the measure specified for the Program year--we are
considering several approaches for including improvement in the SNF
scoring methodology because we are limited to one measure for each SNF
Program year. These approaches include:
Improvement points, awarded using a similar methodology as
the one we use to award improvement points in the Hospital VBP Program.
Measure rate increases, in which a SNF's performance rate
on a measure would be increased as a result of its improvement over
time.
Ranking increases, in which a SNF's ranking relative to
other SNFs would be increased as a result of improvement.
Performance score increases, in which a SNF's performance
score would be increased as a result of improvement.
We discuss each of these options in further detail below.
i. Improvement Points
The Hospital VBP Program calculates both achievement and
improvement points for participating hospitals with sufficient data on
each measure adopted under the Program, and the score a hospital
receives on a measure is the higher of the achievement and improvement
score. We could consider adopting a similar methodology under the SNF
VBP Program, in which points would be calculated for SNFs for both
achievement (in comparison to all SNFs during the performance period)
and for improvement (in comparison to that individual SNF's performance
during the baseline period). Points awarded could be, similar to the
HVBP Program, between 0 and 10 points, or we could consider awarding
points on a broader range, such as from 0 to 50, or 0 to 100.
We believe that adapting the Hospital VBP Program's performance
standards methodology presents certain advantages, in that it is well
understood by the public and reflects a fair means to fulfill the
statutory requirement at section 1888(h)(3)(B) of the Act to include
both achievement and improvement. However, since there is only one
measure in the SNF VBP Program, such a policy could result in
significant differences in SNF value-based incentive payments between
SNFs with relatively small differences in measured performance. We seek
comment on whether or not we should adopt improvement points in a
similar form to that which we have adopted for the Hospital VBP
Program.
ii. Measure Rate Increases
Given the limited number of measures that we may select for the SNF
VBP Program, we are considering whether we should include improvement
in the program by way of increasing a SNF's performance rate on the
Program's measure by a certain amount. Such a measure rate increase
could take several forms, and could rely on any number of
[[Page 22064]]
qualifying criteria. For example, an increase of 10 percent of measured
performance could be awarded to any SNF's measure rate that rises
between the baseline and performance periods. We could also consider
limiting this increase to SNFs whose improvement on the Program's
measure placed them in the top 50 percent of improving SNFs between the
baseline and performance period. Additionally, we could consider
incorporating a penalty into the scoring methodology if a SNF's
performance on the measure selected under the Program should decline
significantly, and we seek comment on whether or not we should consider
such a policy.
However, we are concerned about the methodological implications to
quality measurement of awarding increases in measured performance rates
to recognize improvement. We understand that quality measures are
developed with robust considerations for the clinical topic covered,
the recommended care provided, and in many cases, for the health of the
underlying patient population, and we seek comment on whether such an
adjustment would be methodologically sound.
iii. Ranking Increases
Another possibility for rewarding improvement is to adopt certain
elements of the Hospital VBP Program's scoring methodology--that is, 0
to 10 points for measured performance--and increase a SNF's relative
placement as a result of improvement. Under this type of scenario, SNF
performance would be rank-ordered, and each SNF would be placed in a
cohort numbered from 0 to 10, which would correspond to the points that
would be awarded to that SNF for achievement along a 0 to 10 point
scale of SNF performance scores based on their measured performance.
Once SNF performance has been ranked from 0 to 10, we could consider
increasing SNFs' ranking, and basing value-based incentive payments
under the program on the resulting adjusted ranking. For example, a SNF
whose performance on a measure resulted in a score of 3 on the 0 to 10
point scale, but whose performance improved, could have its score
increased to 4. We could also consider limiting this increase to only
those SNFs whose improvement places them in the top 50 percent of
improving SNFs between the baseline and performance period.
However, we are concerned that this type of ranking may not provide
us with enough granularity to meaningfully differentiate performance
between groups of SNFs, and may result in substantial differences in
value-based incentive payments between SNFs with relatively small
differences in measured performance. We are also concerned about
comparability once this type of ranking increase has been performed,
because comparing two SNFs that both ended at a given point on the 0 to
10 scale may not be meaningful if one of them reached that point via
improvement. Because we are limited in the number of measures that we
may adopt, we believe that we may need to consider adopting a scoring
methodology that allows additional granularity to capture improvement
appropriately. We seek comment on this issue.
iv. Performance Score Increases
This option is a variation on the HVBP improvement points scenario
described further above. Under this option, we would construct SNF
performance scores based on measured performance during the performance
period, and would award an increased performance score to SNFs whose
measured performance rose between the baseline and performance periods.
This option could take the form of a percentage-based increase--such as
a 25 percent increase to a SNF performance score if the SNF improved
over time--and could also be limited to top improvers, as described
above in reference to other options.
This option would not result in direct adjustments to quality
measure rates. We would instead be adjusting the SNF performance score,
and given the broad authority that the SNF VBP statute provides us in
calculating the SNF performance score, we believe this option be to
operationally feasible. However, we remain concerned about the
challenges associated with comparability between SNFs with different
performance rates on the measure but the same SNF performance score. We
specifically seek comment on how, if at all, we should differentiate
SNFs' performance scores when based on achievement or improvement to
address this issue.
5. FY 2019 Performance Period and Baseline Period Considerations
a. Performance Period
We intend to specify a performance period for a payment year with
an end date as close as feasibly possible to the payment year's start
date. We strive to link performance furnished by SNFs as closely as
possible to the payment year to ensure clear connections between
quality measurement and value-based payment. We also strive to measure
performance using a sufficiently reliable population of patients that
broadly represent the total care provided by SNFs. As such, we
anticipate that our annual performance period end date must provide
sufficient time for SNFs to submit claims for the patients included in
our measure population. In other programs, such as HRRP and the
Hospital Inpatient Quality Reporting Program (HIQR), this time lag
between care delivered to patients who are included in the readmission
measures and application of a payment consequence linked to reporting
or performance on those measures has historically been close to one
year. We also recognize that other factors contribute to this time lag,
including the processing time we need to calculate measure rates using
multiple sources of claims needed for statistical modeling, time for
providers to review their measure rates and included patients, and
processing time we need to determine whether a payment adjustment needs
to be made to a provider's reimbursement rate under the applicable PPS
based on its reporting or performance on measures.
For the FY 2019 SNF VBP Program's performance period, we are also
considering the necessary timeline we need to complete measure scoring
to announce the net result of the Program's adjustments to Medicare
payments not later than 60 days prior to the fiscal year, in accordance
with section 1888(h)(7) of the Act. We are also considering the number
of SNF stays typically covered by Medicare each year. As discussed
previously, Medicare typically covers more than two million Medicare
Part A stays per year in more than 15,000 SNFs, and we therefore
believe that one year of SNFRM data is sufficient to ensure that the
measure rates are statistically reliable.
We intend to propose a performance period for the FY 2019 SNF VBP
Program in future rulemaking. However, we seek public comment on the
most appropriate performance period length.
b. Baseline Period
As described previously, in other Medicare quality programs such as
the Hospital Value-Based Purchasing Program and the End-Stage Renal
Disease Quality Incentive Program, we generally adopt a baseline period
that occurs prior to the performance period for a fiscal year to
measure improvement and establish performance standards.
We view the SNF VBP Program as necessitating a similarly-adopted
baseline period for each fiscal year to measure improvement (as
required by section 1888(h)(3)(B) of the Act) and to
[[Page 22065]]
enable us to calculate performance standards that we must establish and
announce prior to the performance period (as required by section
1888(h)(3)(A) of the Act). As with the Hospital VBP Program, we intend
to adopt baseline periods that are as close as possible in duration as
the performance period specified for a fiscal year. However, we may
occasionally need to adopt a baseline period that is shorter than the
performance period to meet operational timelines. We also intend to
adopt baseline periods that are seasonally aligned with the performance
periods to avoid any effects on quality measurement that may result
from tracking SNF performance during different times of the calendar
year.
We intend to propose a baseline period for purposes of calculating
performance standards and measuring improvement in future rulemaking.
We seek public comment on the most appropriate baseline period for the
FY 2019 Program, including what considerations we should take into
account when developing this policy for future rulemaking.
6. SNF Performance Scoring
a. Considerations
As with our performance standards policy considerations described
above, we considered how other Medicare quality programs score eligible
facilities. Specifically, we considered how the Hospital Value-Based
Purchasing Program and the Hospital-Acquired Conditions Reduction
Program score eligible hospitals. We discussed the Hospital
Readmissions Reduction Program's scoring above in relation to
performance standards.
i. Hospital Value-Based Purchasing
A Hospital VBP domain score is calculated by combining the measure
scores within that domain, weighting each measure equally. The domain
score reflects the number of points the hospital has earned based on
its performance on the measures within that domain for which it is
eligible to receive a score. After summing the weighted domain scores,
the TPS is translated using a linear exchange function into the
percentage multiplier to be applied to each Medicare discharge claim
submitted by the hospital during the applicable fiscal year. (We
discuss the Exchange Function in further detail below).
Unlike the Hospital VBP Program, the SNF VBP program focuses on a
single readmission measure, one that will be replaced by a single
resource use measure as soon as is practicable. As described above, we
do not anticipate adopting quality measure domains akin to other CMS
quality programs under the SNF VBP Program. We therefore seek comment
on how, if at all, we should adapt the HVBP Program's scoring
methodology to accommodate both the smaller number of measures and the
ranking required under the SNF VBP Program.
ii. Hospital-Acquired Conditions Reduction Program
The Hospital-Acquired Conditions (HAC) Reduction Program scores
measures that have been categorized into domains, in a manner that is
similar to the HVBP Program's domain structure. For Domain 1, the
points awarded to the single assigned measure yield the Domain 1 score,
since Domain 1 only contains one measure. For Domain 2, the points
awarded for the domain measures are averaged to yield a Domain 2 score.
A hospital's Total HAC Score is determined by the sum of weighted
Domain 1 and Domain 2 scores. Higher scores indicate worse performance
relative to the performance of all other eligible hospitals. Hospitals
with a Total HAC Score above the 75th percentile of the Total HAC Score
distribution are subject to a payment reduction.
Unlike the Hospital VBP program, referenced above, there is no
requirement in the HAC Reduction Program that measures or performance
standards must incorporate improvement and achievement scores. As with
the HVBP Program above, we seek public comments on the extent to which,
if at all, we should adopt components of the HAC Reduction Program's
scoring methodology for purposes of the SNF VBP Program. We
specifically seek comment on whether or not we should set an absolute
level of performance that must be reached to receive a positive SNF
value-based incentive payment.
iii. Other Considerations
We intend to consider several additional factors when developing
the performance scoring methodology. We believe that it is important to
ensure that the performance scoring methodology is straightforward and
transparent to SNFs, patients, and other stakeholders. SNFs must be
able to clearly understand performance scoring methods and performance
expectations to maximize their quality improvement efforts. The public
must understand the scoring methodology to make the best use of the
publicly reported information when choosing a SNF. We also believe that
scoring methodologies for all Medicare value-based purchasing programs
should be aligned as appropriate given their specific statutory
requirements. This alignment will facilitate the public's understanding
of quality information disseminated in these programs and foster more
informed consumer decision making about health care. We believe that
differences in performance scores must reflect true differences in
performance. To ensure that these beliefs are appropriately reflected
in the SNF VBP Program, we intend to assess the quantitative
characteristics of the measures specified under sections 1888(g)(1) and
(2) of the Act, including the current state of measure development, to
ensure an appropriate distribution of value-based incentive payments as
required by the SNF VBP statute.
We seek public comment on what other considerations we should take
into account when developing our proposed scoring methodology for the
SNF VBP Program in future rulemaking.
b. Notification Procedures
As described above, we intend to address the topic of quarterly
feedback reports to SNFs related to measures specified under sections
1888(g)(1) and (2) of the Act in future rulemaking. We also intend to
address how to notify SNFs of the adjustments to their PPS payments
based on their performance scores and ranking under the SNF VBP
Program, in accordance with the requirement in section 1888(h)(7) of
the Act, in future rulemaking.
However, we seek public comment on the best means by which to so
notify SNFs.
c. Exchange Function
As described above in reference to the Hospital VBP Program's
scoring methodology, we use a linear exchange function to translate a
hospital's Total Performance Score under that Program into the
percentage multiplier to be applied to each Medicare discharge claim
submitted by the hospital during the applicable fiscal year. We refer
readers to the Hospital Inpatient VBP Program Final Rule (76 FR 26531
through 26534) for detailed discussion of the Hospital VBP Program's
Exchange Function, as well as responses to public comments on this
issue.
We believe we could consider adopting a similar exchange function
methodology to translate SNF performance scores into value-based
incentive payments under the SNF VBP Program, and we seek comment on
whether or not we should do so. However, as we did for the Hospital
[[Page 22066]]
VBP Program, we believe we would need to consider the appropriate form
and slope of the exchange function to determine how best to reward high
performance and encourage SNFs to improve the quality of care provided
to Medicare beneficiaries. As illustrated in figure 1, we could
consider the following four mathematical exchange function options:
Straight line (linear); concave curve (cube root function); convex
curve (cube function); and S-shape (logistic function), and we seek
comment on what form of the exchange function we should consider
implementing if we adopt such a function under the SNF VBP Program.
[GRAPHIC] [TIFF OMITTED] TP20AP15.005
We also seek comment on what considerations we should take into
account when determining the appropriate form of the exchange function
under the SNF VBP Program. We intend to consider how such options would
distribute the value-based incentive payments among SNFs, the potential
differences between the value-based incentive payment amounts for SNFs
that perform poorly and SNFs that perform very well, the different
marginal incentives created by the different exchange function slopes,
and the relative importance of having the exchange function be as
simple and straightforward as possible. We request public comments on
what additional considerations, if any, we should take into account.
7. SNF Value-Based Incentive Payments
Sections 1888(h)(5) and (6) of the Act outline several requirements
for value-based incentive payments under the SNF VBP Program, including
the value-based incentive payment percentage that must be determined
for each SNF and the funding available for value-based incentive
payments.
We intend to address this topic in future rulemaking.
8. SNF VBP Public Reporting
a. SNF-Specific Performance Information
Section 1888(h)(9)(A) of the Act requires the Secretary to post
information on the performance of individual SNFs under the SNF VBP
Program on the Nursing Home Compare Web site or its successor. This
information is to include the SNF performance score for the facility
for the applicable fiscal year and the SNF's ranking for the
performance period for such fiscal year.
We intend to address this topic in future rulemaking. However, we
seek public comment on how we should display this SNF-specific
performance information, whether or not we should allow SNFs an
opportunity to review and correct the SNF-specific performance
information that we will post on Nursing Home Compare, and how such a
review and correction process should operate.
b. Aggregate Performance Information
Section 1888(h)(9)(B) of the Act requires the Secretary to post
aggregate information on the SNF VBP Program on the Nursing Home
Compare Web site, or a successor Web site, to include the range of SNF
performance scores and the number of SNFs that received value-based
incentive payments and the range and total amount of such value-based
incentive payments.
We intend to address this topic in future rulemaking. However, we
seek public comment on the most appropriate form for posting this
[[Page 22067]]
aggregate information to make such information easily understandable
for the public.
B. Advancing Health Information Exchange
HHS has a number of initiatives designed to encourage and support
the adoption of health information technology and to promote nationwide
health information exchange to improve health care. As discussed in the
August 2013 Statement ``Principles and Strategies for Accelerating
Health Information Exchange'' (available at https://www.healthit.gov/sites/default/files/acceleratinghieprinciples_strategy.pdf), HHS
believes that all individuals, their families, their healthcare and
social service providers, and payers should have consistent and timely
access to health information in a standardized format that can be
securely exchanged between the patient, providers, and others involved
in the individual's care. Health IT that facilitates the secure,
efficient and effective sharing and use of health-related information
when and where it is needed is an important tool for settings across
the continuum of care, including SNFs and NFs. While these facilities
are not eligible for the Medicare and Medicaid EHR Incentive Programs,
effective adoption and use of health information exchange and health IT
tools will be essential as these settings seek to improve quality and
lower costs through initiatives such as value-based purchasing.
The Office of the National Coordinator for Health Information
Technology (ONC) has released a document entitled ``Connecting Health
and Care for the Nation: A Shared Nationwide Interoperability Roadmap
Draft Version 1.0 (draft Roadmap) (available at https://www.healthit.gov/sites/default/files/nationwide-interoperability-roadmap-draft-version-1.0.pdf) which describes barriers to
interoperability across the current health IT landscape, the desired
future state that the industry believes will be necessary to enable a
learning health system, and a suggested path for moving from the
current state to the desired future state. In the near term, the draft
Roadmap focuses on actions that will enable a majority of individuals
and providers across the care continuum to send, receive, find and use
a common set of electronic clinical information at the nationwide level
by the end of 2017. The Roadmap's goals also align with the IMPACT Act
of 2014 which requires assessment data to be standardized and
interoperable to allow for exchange of the data. Moreover, the vision
described in the draft Roadmap significantly expands the types of
electronic health information, information sources and information
users well beyond clinical information derived from electronic health
records (EHRs). This shared strategy is intended to reflect important
actions that both public and private sector stakeholders can take to
enable nationwide interoperability of electronic health information
such as: (1) Establishing a coordinated governance framework and
process for nationwide health IT interoperability; (2) improving
technical standards and implementation guidance for sharing and using a
common clinical data set; (3) enhancing incentives for sharing
electronic health information according to common technical standards,
starting with a common clinical data set; and (4) clarifying privacy
and security requirements that enable interoperability.
In addition, ONC has released the draft version of the 2015
Interoperability Standards Advisory (available at https://www.healthit.gov/standards-advisory), which provides a list of the best
available standards and implementation specifications to enable
priority health information exchange functions. Providers, payers, and
vendors are encouraged to take these ``best available standards'' into
account as they implement interoperable health information exchange
across the continuum of care, including care settings such as
behavioral health, long-term and post-acute care, and home and
community-based service providers.
We encourage stakeholders to utilize health information exchange
and certified health IT to effectively and efficiently help providers
improve internal care delivery practices, support management of care
across the continuum, enable the reporting of electronically specified
clinical quality measures (eCQMs), and improve efficiencies and reduce
unnecessary costs. As adoption of certified health IT increases and
interoperability standards continue to mature, HHS will seek to
reinforce standards through relevant policies and programs.
C. Skilled Nursing Facility (SNF) Quality Reporting Program (QRP)
1. Background and Statutory Authority
We seek to promote higher quality and more efficient health care
for Medicare beneficiaries, and our efforts are furthered by quality
reporting programs coupled with public reporting of that information.
Such quality reporting programs already exist for various settings such
as the Hospital Inpatient Quality Reporting (HIQR) Program, the
Hospital Outpatient Quality Reporting (HOQR) Program, the Physician
Quality Reporting System, the Long-Term Care Hospital (LTCH) Quality
Reporting Program (QRP), the Inpatient Rehabilitation Facility (IRF)
Quality Reporting Program (QRP), the Home Health Quality Reporting
Program (HHQRP), and the Hospice Quality Reporting Program (HQRP). We
have also implemented quality reporting programs for home health
agencies (HHAs) that are based on conditions of participation, and an
End-Stage Renal Disease (ESRD) Quality Incentive Program (QIP) and a
Hospital Value-Based Purchasing (HVBP) Program that link payment to
performance.
SNFs are providers that meet conditions of participation for
Medicare. Some SNFs are also certified under Medicaid as nursing
facilities, and these types of long-term care facilities furnish
services to both Medicare beneficiaries and Medicaid enrollees. SNFs
provide short-term skilled nursing services, including but not limited
to rehabilitative therapy, physical therapy, occupational therapy, and
speech-language pathology services. Such services are provided to
beneficiaries who are recovering from surgical procedures, such as hip
and knee replacements, or from medical conditions, such as stroke and
pneumonia. SNF services are provided when needed to maintain or improve
a beneficiary's current condition, or to prevent a condition from
worsening. The care provided in a SNF (as a free-standing facility or
part of a hospital), is aimed at enabling the beneficiary to maintain
or improve his/her health and to function independently. SNF care is a
benefit under Medicare Part A and such care is covered for up to 100
days in a benefit period if all coverage requirements are met.\13\ In
2014, 2.6 million covered stays occurred within 15,421 SNFs.
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\13\ Section 1812(a)(2) and (b)(2) of the Social Security Act;
42 CFR 409.61; https://www.medicare.gov/Pubs/pdf/10153.pdf.
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Section 1888(e)(6)(B)(i)(II) of the Act requires that each SNF
submit, for fiscal years (FYs) beginning on or after the specified
application date (as defined in section 1899B(a)(2)(E) of the Act),
data on quality measures specified under section 1899B(c)(1) of the Act
and data on resource use and other measures specified under section
1899B(d)(1) of the Act in a manner and within the timeframes specified
by the Secretary. In addition, section 1888(e)(6)(B)(i)(III) of the Act
requires, for FYs beginning on or after October 1, 2018, that each SNF
[[Page 22068]]
submit standardized patient assessment data required under section
1899B(b)(1) of the Act in a manner and within the timeframes specified
by the Secretary. Section 1888(e)(6)(A)(i) of the Act requires that,
for FYs beginning with FY 2018, if a SNF does not submit data, as
applicable, on quality and resource use and other measures in
accordance with section 1888(e)(6)(B)(i)(II) of the Act and
standardized patient assessment in accordance with section
1888(e)(6)(B)(i)(III) of the Act for such FY, the Secretary reduce the
market basket percentage described in section 1888(e)(5)(B)(ii) of the
Act by 2 percentage points.
The IMPACT Act adds section 1899B to the Act that imposes new data
reporting requirements for certain PAC providers, including SNFs.
Sections 1899B(c)(1) and 1899B(d)(1) of the Act collectively require
that the Secretary specify quality measures and resource use and other
measures with respect to certain domains not later than the specified
application date that applies to each measure domain and PAC provider
setting. Section 1899B(a)(2)(E) of the Act delineates the specified
application dates for each measure domain and PAC provider. The IMPACT
Act also added section 1886(e)(6) to the Act, to require the Secretary
to reduce the otherwise applicable PPS payment to a SNF that does not
report the new data in a form and manner, and at a time, specified by
the Secretary. For SNFs, new section 1886(e)(6)(A)(i) of the Act would
require the Secretary to reduce the payment update for any SNF that
does not satisfactorily submit the new required data.
Under the SNF QRP, we are proposing that the general timeline and
sequencing of measure implementation would occur as follows:
Specification of measures; proposal and finalization of measures
through notice-and-comment rulemaking; SNF submission of data on the
adopted measures; analysis and processing of the submitted data;
notification to SNFs regarding their quality reporting compliance with
respect to a particular fiscal year; consideration of any
reconsideration requests; and imposition of a payment reduction in a
particular fiscal year for failure to satisfactorily submit data with
respect to that fiscal year. We are also proposing that any payment
reductions that are taken with respect to a fiscal would year begin
approximately one year after the end of the data submission period for
that fiscal year and approximately two years after we first adopt the
measure.
This timeline, which is followed in the other quality reporting
programs, reflects operational and other practical constraints,
including the time needed to specify and adopt valid and reliable
measures, collect the data, and determine whether a SNF has complied
with our quality reporting requirements. It also takes into
consideration our desire to give SNFs enough notice of new data
reporting obligations so that they are prepared to timely start
reporting the data. Therefore, we intend to follow the same timing and
sequence of events for measures specified under section 1899B(c)(1) and
(d)(1) of the Act that we currently follow for the other quality
reporting programs. We intend to specify each of these measures no
later than the specified application dates set forth in section
1899B(a)(2)(E) of the Act and propose to adopt them consistent with the
requirements in the Act and Administrative Procedure Act. To the extent
that we finalize a proposal to adopt a measure for the SNF QRP that
satisfies an IMPACT Act measure domain, we intend to require SNFs to
report data on the measure for the fiscal year that begins 2 years
after the specified application date for that measure. Likewise, we
intend to require SNFs to begin reporting any other data specifically
required under the IMPACT Act for the fiscal year that begins 2 years
after we adopt requirements that would govern the submission of that
data.
As provided at section 1888(e)(6)(A)(ii) of the Act, depending on
the market basket percentage for a particular year, the 2 percentage
point reduction under section 1888(e)(6)(A)(i) of the Act may result in
this percentage, after application of the productivity adjustment under
section 1888(e)(5)(B)(ii) of the Act, being less than 0.0 percent for a
FY and may result in payment rates under the SNF PPS being less than
payment rates for the preceding FY. In addition, as set forth at
section 1888(e)(6)(A)(iii) of the Act, any reduction based on failure
to comply with the SNF QRP reporting requirements applies only to the
particular FY involved, and any such reduction must not be taken into
account in computing the SNF PPS payment rates for subsequent FYs.
For purposes of meeting the reporting requirements under the SNF
QRP, section 1888(e)(6)(B)(ii) of the Act states that SNFs (or other
facilities described in section 1888(e)(7)(B) of the Act, other than a
CAH) may submit the resident assessment data required under section
1819(b)(3) of the Act using the standard instrument designated by the
state under section 1819(e)(5) of the Act. Currently, the resident
assessment instrument is titled the MDS 3.0. To the extent data
required for submission under subclause (II) or (III) of section
1888(e)(6)(B)(i) of the Act duplicates other data required to be
submitted under clause (i)(I), section 1888(e)(6)(B)(iii) provides that
the submission of data under subclause (II) or (III) is to be in lieu
of the submission of such data under clause (I), unless the Secretary
makes a determination that such duplication is necessary to avoid delay
in the implementation of section 1899B of the Act taking into account
the different specified application dates under section 1899B(a)(2)(E)
of the Act.
In addition to requiring a quality reporting program for SNFs under
new section 1888(e)(6), the IMPACT Act requires feedback to SNFs and
public reporting of their performance. More specifically, section
1899B(f)(1) of the Act requires the Secretary to provide confidential
feedback reports to SNFs on their performance on the quality measures
and resource use and other measures specified under that section. The
Secretary must make such confidential feedback reports available to
SNFs beginning one year after the specified application date that
applies to the measures in that section and, to the extent feasible, no
less frequently than on a quarterly basis, except in the case of
measures reported on an annual basis, as to which the confidential
feedback reports may be made available annually.
Section 1899B(g)(1) of the Act requires the Secretary to provide
for the public reporting of SNF performance on the quality measures
specified under section 1899B(c)(1) of the Act and the resource use and
other measures specified under section 1899B(d)(1) of the Act by
establishing procedures for making the performance data available to
the public. Such procedures must ensure, including through a process
consistent with the process applied under section
1886(b)(3)(B)(viii)(VII) of the Act, that SNFs have the opportunity to
review and submit corrections to the data and other information before
it is made public as required by section 1899B(g)(2) of the Act.
Section 1899B(g)(3) of the Act requires that the data and information
is made publicly available beginning no later than two years after the
specified application date applicable to such a measure and SNFs.
Finally, section 1899B(g)(4)(B) of the Act requires that such
procedures must provide that the data and information described in
section 1899B(g)(1) of the Act with respect to quality and resource use
measures be made publicly available consistent with sections 1819(i)
and 1919(i) of the Act.
[[Page 22069]]
2. General Considerations Used for Selection of Quality Measures for
the SNF QRP
We strive to promote high quality and efficiency in the delivery of
health care to the beneficiaries we serve. Performance improvement
leading to the highest quality health care requires continuous
evaluation to identify and address performance gaps and reduce the
unintended consequences that may arise in treating a large, vulnerable,
and aging population. Quality reporting programs, coupled with public
reporting of quality information, are critical to the advancement of
health care quality improvement efforts.
Valid, reliable, relevant quality measures are fundamental to the
effectiveness of our quality reporting programs. Therefore, selection
of quality measures is a priority for CMS in all of its quality
reporting programs.
We are proposing to adopt for the SNF QRP three measures that we
are specifying under section 1899(B)(c)(1) of the Act for purposes of
meeting the following three domains: Functional status, cognitive
function, and changes in function and cognitive function; skin
integrity and changes in skin integrity; and incidence of major falls.
These measures align with the CMS Quality Strategy,\14\ which
incorporates the three broad aims of the National Quality Strategy:
\15\
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\14\ https://www.cms.gov/Medicare/Quality-Initiatives-Patient-Assessment-Instruments/QualityInitiativesGenInfo/CMS-Quality-Strategy.html
\15\ https://www.ahrq.gov/workingforquality/nqs/nqs2011annlrpt.htm
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Better Care: Improve the overall quality of care by making
healthcare more patient-centered, reliable, accessible, and safe.
Healthy People, Healthy Communities: Improve the health of
the U.S. population by supporting proven interventions to address
behavioral, social, and environmental determinants of health in
addition to delivering higher-quality care.
Affordable Care: Reduce the cost of quality healthcare for
individuals, families, employers, and government.
In deciding to propose these measures, we also took into account
national priorities, including those established by the National
Priorities Partnership (https://www.qualityforum.org/Setting_Priorities/NPP/National_Priorities_Partnership.aspx), and the HHS Strategic Plan
(https://www.hhs.gov/secretary/about/priorities/priorities.html).
These measures also incorporate common standards and definitions
that can be used across post-acute care settings to allow for the
exchange of data among post-acute care providers, to provide access to
longitudinal information for such providers to facilitate coordinated
and improved outcomes, and to enable comparison of such assessment data
across all such providers as required by section 1899B(a) of the Act.
We initiated an Ad Hoc MAP process to obtain input on the measures
that we are proposing to adopt in this proposed rule. On February 5th,
2015, we made publicly available a list of Measures Under Consideration
(called the ``List of Ad Hoc Measures Under Consideration for the
Improving Medicare Post-Acute Care Transformation (IMPACT) Act of
2014'') (MUC list) as part of an Ad Hoc Measures Application
Partnership (MAP) convened by the National Quality Forum (NQF). The MAP
Post-Acute Care/Long-Term Care Workgroup convened on February 9, 2015
to ``review the measures technical properties as they are adapted for
use in new settings and whether the new settings impact the measures'
adherence to the NQF Scientific Acceptability criterion.'' \16\ The NQF
published the MUC list on our behalf for public comment from February
11, 2015 through February 19, 2015 on its Web site. The MAP
Coordinating Committee convened on February 27, 2015 to discuss the
public comments received, and those public comments are listed here
https://public.qualityforum.org/MAP/MAP%20Coordinating%20Committee/MAP_CC%20Feb%2027_Discussion_Guide.html#agenda.
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\16\ . Ad-hoc Review: Expansion of Settings. (n.d.). Retrieved
March 5, 2015, from https://www.qualityforum.org/Projects/a-b/Ad_Hoc_Reviews/CMS/Ad_Hoc_Reviews-CMS.aspx
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The MAP issued a pre-rulemaking report on March 6, 2015 Pre-
Rulemaking Report, which is available for download at https://www.qualityforum.org/Project_Pages/MAP_Post-Acute_CareLong-Term_Care_Workgroup.aspx. The MAP's input for each of the proposed
measures is discussed in this section.
Section 1899B(j) of the Act requires that we allow for stakeholder
input as part of the pre-rulemaking process. Therefore, we sought
stakeholder input on the measures we are proposing to adopt in this
proposed rule as follows: We convened a technical expert panel that
included stakeholder experts and patient representatives on February 3,
2015; we sought public input during the February 2015 ad hoc MAP
process; and we implemented a public mail box for the submission of
comments in January 2015, PACQualityInitiative@cms.hhs.gov which is
located on our post-acute care quality initiatives Web site at https://www.cms.gov/Medicare/Quality-Initiatives-Patient-Assessment-Instruments/Post-Acute-Care-Quality-Initiatives/IMPACT-Act-of-2014-and-Cross-Setting-Measures.html. In addition, we held a National
Stakeholder Special Open Door Forum on February 25, 2015 for the
purpose of seeking input on these measures. Lastly, we held two
separate listening sessions on February 10 and March 24, 2015,
respectively.
3. Policy for Retaining SNF QRP Measures for Future Payment
Determinations
For the SNF QRP, for the purpose of streamlining the rulemaking
process, we are proposing that when we adopt a measure for the SNF QRP
for a payment determination, this measure would be automatically
retained for all subsequent payment determinations unless we propose to
remove, suspend, or replace the measure.
Section 1899B(h)(1) of the Act provides that the Secretary may
remove, suspend or add a quality measure or resource use or other
measure specified under section 1899B(c)(1) or (d)(1) of the Act so
long as the Secretary publishes a justification for the action in the
Federal Register with a notice and comment period. Consistent with the
policies of other quality reporting programs including the HIQR
Program, the HOQR Program, LTCH QRP, and the IRF QRP, we are proposing
that quality measures would be considered for removal if: (1) Measure
performance among SNFs is so high and unvarying that meaningful
distinctions in improvements in performance can no longer be made in
which case the measure may be removed or suspended; (2) performance or
improvement on a measure does not result in better resident outcomes;
(3) a measure does not align with current clinical guidelines or
practice; (4) a more broadly applicable measure (across settings,
populations, or conditions) for the particular topic is available; (5)
a measure that is more proximal in time to desired resident outcomes
for the particular topic is available; (6) a measure that is more
strongly associated with desired resident outcomes for the particular
topic is available; or (7) collection or public reporting of a measure
leads to negative unintended consequences other than resident harm.
We also note that under section 1899B(h)(2) of the Act, in the case
of a quality measure or resource use or other measure for which there
is a reason to
[[Page 22070]]
believe that the continued collection raises possible safety concerns
or would cause other unintended consequences, the Secretary may
promptly suspend or remove the measure and publish the justification
for the suspension or removal in the Federal Register during the next
rulemaking cycle.
For any measure that meets this criteria (that is, a measure that
raises safety concerns), we will take immediate action to remove the
measure from SNF QRP, and, in addition to publishing a justification in
the next rulemaking cycle, will immediately notify SNFs and the public
through the usual communication channels, including listening session,
memos, email notification, and web postings. We are inviting public
comment on these proposals and policies.
4. Proposed Process for Adoption of Changes to SNF QRP Program Measures
Quality measures selected for the SNF QRP must be endorsed by the
NQF unless they meet the statutory criteria for exception. The NQF is a
voluntary consensus standard-setting organization with a diverse
representation of consumer, purchaser, provider, academic, clinical,
and other healthcare stakeholder organizations. The NQF was established
to standardize healthcare quality measurement and reporting through its
consensus development process (https://www.qualityforum.org/About_NQF/Mission_and_Vision.aspx). The NQF undertakes review of: (a) New quality
measures and national consensus standards for measuring and publicly
reporting on performance, (b) regular maintenance processes for
endorsed quality measures, (c) measures with time-limited endorsement
for consideration of full endorsement, and (d) ad hoc review of
endorsed quality measures, practices, consensus standards, or events
with adequate justification to substantiate the review (https://www.qualityforum.org/Measuring_Performance/Ad_Hoc_Reviews/Ad_Hoc_Review.aspx).
The NQF solicits information from measure stewards for annual
reviews and in order to review measures for continued endorsement in a
specific 3-year cycle. In this measure maintenance process, the measure
steward is responsible for updating and maintaining the currency and
relevance of the measure and for confirming existing specifications to
the NQF on an annual basis. As part of the ad hoc review process, the
ad hoc review requester and the measure steward are responsible for
submitting evidence for review by a NQF Technical Expert panel which,
in turn, provides input to the Consensus Standards Approval Committee
which then makes a decision on endorsement status and/or specification
changes for the measure, practice, or event.
The NQF regularly maintains its endorsed measures through annual
and triennial reviews, which may result in the NQF making updates to
the measures. We believe that it is important to have in place a
subregulatory process to incorporate nonsubstantive updates made by the
NQF into the measure specifications as we have adopted for the Hospital
IQR Program so that these measures remain up-to-date. We also recognize
that some changes the NQF might make to its endorsed measures are
substantive in nature and might not be appropriate for adoption using a
subregulatory process.
Therefore, in the FY 2013 IPPS/LTCH PPS final rule (77 FR 53504
through 53505), we finalized a policy under which we use a
subregulatory process to make nonsubstantive updates to measures used
for the Hospital IQR Program. For what constitutes substantive versus
nonsubstantive changes, we expect to make this determination on a case-
by-case basis. Examples of nonsubstantive changes to measures might
include updated diagnosis or procedure codes, medication updates for
categories of medications, broadening of age ranges, and exclusions for
a measure (such as the addition of a hospice exclusion to the 30-day
mortality measures). We believe that nonsubstantive changes may include
updates to NQF-endorsed measures based upon changes to guidelines upon
which the measures are based.
Therefore, we propose to use rulemaking to adopt substantive
updates made to measures as we have for the Hospital IQR Program.
Examples of changes that we might consider to be substantive would be
those in which the changes are so significant that the measure is no
longer the same measure, or when a standard of performance assessed by
a measure becomes more stringent (for example, changes in acceptable
timing of medication, procedure/process, or test administration).
Another example of a substantive change would be where the NQF has
extended its endorsement of a previously endorsed measure to a new
setting, such as extending a measure from the inpatient setting to
hospice. These policies regarding what is considered substantive versus
nonsubstantive would apply to all measures in the SNF QRP. We also note
that the NQF process incorporates an opportunity for public comment and
engagement in the measure maintenance process.
We believe this policy adequately balances our need to incorporate
updates to the SNF QRP measures in the most expeditious manner possible
while preserving the public's ability to comment on updates that so
fundamentally change an endorsed measure that it is no longer the same
measure that we originally adopted.
We are inviting public comment on this proposal.
5. Proposed New Quality Measures for FY 2018 and Subsequent Payment
Determinations
For the FY 2018 SNF QRP and subsequent years, we are proposing to
adopt three post-acute care (PAC) cross-setting quality measures. These
measures address the following domains: (1) Skin integrity and changes
in skin integrity; (2) incidence of major falls; and (3) functional
status, cognitive function, and changes in function and cognitive
function, which are all required under section 1899B(c)(1) of the Act.
The proposed quality measure addressing skin integrity and changes in
skin integrity is the NQF-endorsed measure, Percent of Residents or
Patients with Pressure Ulcers That Are New or Worsened (Short Stay)
(NQF #0678) (https://www.qualityforum.org/QPS/0678). The proposed
quality measure addressing the incidence of major falls is an
application of the NQF-endorsed Percent of Residents Experiencing One
or More Falls with Major Injury (Long Stay) (NQF #0674) (https://www.qualityforum.org/QPS/0674). Finally, the proposed quality measure
addressing functional status, cognitive function, and changes in
function and cognitive function is an application of the Percent of
Long-Term Care Hospital Patients With an Admission and Discharge
Functional Assessment and a Care Plan that Addresses Function (NQF
#2631; under NQF review) (https://www.qualityforum.org/QPS/2631).
The proposed quality measures addressing the domains of incidence
of major falls and functional status, as well as cognitive function,
and changes in function and cognitive function, are not currently NQF-
endorsed for the SNF population. We reviewed the NQF's endorsed
measures and were unable to identify any NQF-endorsed cross-setting
quality measures that focused on these domains. We are also unaware of
any other cross-setting quality measures that have been endorsed or
adopted by another consensus organization.
[[Page 22071]]
a. Quality Measure Addressing the Domain of Skin Integrity and Changes
in Skin Integrity: Percent of Residents or Patients With Pressure
Ulcers That Are New or Worsened (Short Stay) (NQF #0678)
We are proposing to adopt for the SNF QRP, beginning with the FY
2018 payment determination, NQF #0678, Percent of Residents or Patients
with Pressure Ulcers that are New or Worsened (Short Stay) as a cross-
setting quality measure that satisfies the skin integrity and changes
in skin integrity domain. This measure assesses the percentage of
short-stay residents or patients in SNFs, IRFs, and LTCHs with Stage 2
through 4 pressure ulcers that are new or worsened since a prior
assessment.
Pressure ulcers are a serious medical condition that result in
pain, decreased quality of life, and increased mortality in aging
populations.\17\ \18\ \19\ \20\ Pressure ulcers typically are the
result of prolonged periods of uninterrupted pressure on the skin, soft
tissue, muscle, and bone.\21\ \22\ \23\ Elderly individuals in SNFs are
prone to a wide range of medical conditions that increase their risk of
developing pressure ulcers. These include impaired mobility or
sensation, malnutrition or undernutrition, obesity, stroke, diabetes,
dementia, cognitive impairments, circulatory diseases, dehydration, the
use of wheelchairs, medical devices, and a history of pressure ulcers
or a pressure ulcer at admission.\24\ \25\ \26\ \27\ \28\ \29\ \30\
\31\ \32\ \33\ \34\
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\17\ Casey, G. (2013). ``Pressure ulcers reflect quality of
nursing care.'' Nurs N Z 19(10): 20-24.
\18\ Gorzoni, M. L. and S. L. Pires (2011). ``Deaths in nursing
homes.'' Rev Assoc Med Bras 57(3): 327-331.
\19\ Thomas, J. M., et al. (2013). ``Systematic review: Health-
related characteristics of elderly hospitalized adults and nursing
home residents associated with short-term mortality.'' J Am Geriatr
Soc 61(6): 902-911.
\20\ White-Chu, E. F., et al. (2011). ``Pressure ulcers in long-
term care.'' Clin Geriatr Med 27(2): 241-258.
\21\ Bates-Jensen BM. Quality indicators for prevention and
management of pressure ulcers in vulnerable elders. Ann Int Med.
2001;135 (8 Part 2), 744-51.
\22\ Institute for Healthcare Improvement (IHI). Relieve the
pressure and reduce harm. May 21, 2007. Available from https://www.ihi.org/IHI/Topics/PatientSafety/SafetyGeneral/ImprovementStories/FSRelievethePressureandReduceHarm.htm
\23\ Russo CA, Steiner C, Spector W. Hospitalizations related to
pressure ulcers among adults 18 years and older, 2006 (Healthcare
Cost and Utilization Project Statistical Brief No. 64). December
2008. Available from https://www.hcupus.ahrq.gov/reports/statbriefs/sb64.pdf.
\24\ Agency for Healthcare Research and Quality (AHRQ). Agency
news and notes: pressure ulcers are increasing among hospital
patients. January 2009. Available from https://www.ahrq.gov/research/jan09/0109RA22.htm.=
\25\ Bates-Jensen BM. Quality indicators for prevention and
management of pressure ulcers in vulnerable elders. Ann Int Med.
2001;135 (8 Part 2), 744-51.
\26\ Cai, S., et al. (2013). ``Obesity and pressure ulcers among
nursing home residents.'' Med Care 51(6): 478-486.
\27\ Casey, G. (2013). ``Pressure ulcers reflect quality of
nursing care.'' Nurs N Z 19(10): 20-24.
\28\ Hurd D, Moore T, Radley D, Williams C. Pressure ulcer
prevalence and incidence across post-acute care settings. Home
Health Quality Measures & Data Analysis Project, Report of Findings,
prepared for CMS/OCSQ, Baltimore, MD, under Contract No. 500-2005-
000181 TO 0002. 2010.
\29\ MacLean DS. Preventing & managing pressure sores. Caring
for the Ages. March 2003;4(3):34-7. Available from https://www.amda.com/publications/caring/march2003/policies.cfm.
\30\ Michel, J. M., et al. (2012). ``As of 2012, what are the
key predictive risk factors for pressure ulcers? Developing French
guidelines for clinical practice.'' Ann Phys Rehabil Med 55(7): 454-
465
\31\ National Pressure Ulcer Advisory Panel (NPUAP) Board of
Directors; Cuddigan J, Berlowitz DR, Ayello EA (Eds). Pressure
ulcers in America: Prevalence, incidence, and implications for the
future. An executive summary of the National Pressure Ulcer Advisory
Panel Monograph. Adv Skin Wound Care. 2001;14(4):208-15
\32\ Park-Lee E, Caffrey C. Pressure ulcers among nursing home
residents: United States, 2004 (NCHS Data Brief No. 14).
Hyattsville, MD: National Center for Health Statistics, 2009.
Available from https://www.cdc.gov/nchs/data/databriefs/db14.htm
\33\ Reddy, M. (2011). ``Pressure ulcers.'' Clin Evid (Online)
2011.
\34\ Teno, J. M., et al. (2012). ``Feeding tubes and the
prevention or healing of pressure ulcers.'' Arch Intern Med 172(9):
697-701.
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Section 1899B(a)(1)(B) of the Act requires that the data submitted
on quality measures under section 1899B(c)(1) of the Act be
standardized and interoperable across PAC settings, and section
1899B(c)(2)(A) of the Act requires that the measures be reported
through the use of a PAC assessment instrument. These requirements are
in line with the NQF Steering Committee report, which stated that to
understand the impact of pressure ulcers across settings, quality
measures addressing prevention, incidence, and prevalence of pressure
ulcers must be harmonized and aligned. This measure has been
implemented in nursing homes for resident population with stays of less
than 100 days under CMS's Nursing Home Quality Initiative. We also
adopted the measure for use in the LTCH QRP (76 FR 51753 through 51756)
beginning with the FY 2014 payment determination, and for use in the
IRF QRP (76 FR 24254) beginning with the FY 2014 payment determination.
We have not, to date, adopted the measure for the home health setting.
More information on the NQF endorsed measure, the Percent of Residents
or Patients with Pressure Ulcers That Are New or Worsened (Short Stay),
is available at https://www.qualityforum.org/QPS/0678.
A TEP convened by our measure development contractor provided input
on the technical specifications of this quality measure, including the
feasibility of implementing the measure across PAC settings. The TEP
supported the measure's implementation across PAC settings and was also
supportive of our efforts to standardize the measure for cross-setting
development. The MAP also supported the use of NQF #0678, Percent of
Residents or Patients with Pressure Ulcers that are New or Worsened
(Short Stay) in the SNF QRP as a cross-setting quality measure.
We are proposing that the data for this quality measure would be
collected using the MDS 3.0, currently submitted by SNFs through the
Quality Improvement and Evaluation System (QIES) Assessment Submission
and Processing (ASAP) system. We believe that this data collection
method will minimize the reporting burden on SNFs because SNFs are
already required to submit MDS data for payment purposes. For more
information on SNF submission using the QIES ASAP system, readers are
referred to https://www.cms.gov/Medicare/Quality-Initiatives-Patient-Assessment-Instruments/NursingHomeQualityInits/NHQIMDS30TechnicalInformation.html.
The data items that we would use to calculate the proposed quality
measure include: M0800A (Worsening in Pressure Ulcer Status Since Prior
Assessment (OBRA or scheduled PPS assessment) or Last Admission/Entry
or Reentry, Stage 2), M0800B (Worsening in Pressure Ulcer Status Since
Prior Assessment (OBRA or scheduled PPS assessment) or Last Admission/
Entry or Reentry, Stage 3), and M0800C (Worsening in Pressure Ulcer
Status Since Prior Assessment (OBRA or scheduled PPS assessment) or
Last Admission/Entry or Reentry, Stage 4). This measure would be
calculated at two points in time, at admission and discharge (see
Proposed Form, Manner, and Timing of Quality Data Submission). The
specifications and data items for the Percent of Residents or Patients
with Pressure Ulcers that are New or Worsened (Short Stay), are
available in the MDS 3.0 Quality Measures User's Manual available on
our Web site at https://www.cms.gov/Medicare/Quality-Initiatives-Patient-Assessment-Instruments/NursingHomeQualityInits/NHQIQualityMeasures.html.
We invite public comment on our proposal to adopt NQF #0678 Percent
of Residents or Patients with Pressure Ulcers that are New or Worsened
(Short Stay) for the SNF QRP for the FY 2018
[[Page 22072]]
payment determination and subsequent years.
As part of our ongoing measure development efforts, we are
considering a future update to the numerator of the quality measure NQF
#0678, Percent of Residents or Patients with Pressure Ulcers that are
New or Worsened (Short Stay). This update would require PAC providers
to report the development of unstageable pressure ulcers and suspected
deep tissue injuries (sDTIs). Under this potential change we are
considering, the numerator of the quality measure would be updated to
include unstageable pressure ulcers, including sDTIs that are new/
developed in the facility, as well as Stage 1 or 2 pressure ulcers that
become unstageable due to slough or eschar (indicating progression to a
stage 3 or 4 pressure ulcer) after admission. SNFs are already required
to complete the unstageable pressure ulcer items on the MDS 3.0. As
such, this update would require a change in the way the measure is
calculated but would not increase the data collection burden for SNFs.
A TEP convened by our measure development contractor strongly
recommended that CMS update the specifications for the measure to
include these pressure ulcers in the numerator, although it
acknowledged that unstageable pressure ulcers and sDTIs cannot and
should not be assigned a numeric stage. The TEP also recommended that a
Stage 1 or 2 pressure ulcer that becomes unstageable due to slough or
eschar should be considered worsened because the presence of slough or
eschar indicates a full thickness (equivalent to Stage 3 or 4)
wound.\35\ \36\ These recommendations were supported by technical and
clinical advisors and the National Pressure Ulcer Advisory Panel.\37\
Additionally, exploratory data analysis conducted by our measure
development contractor suggests that the addition of unstageable
pressure ulcers, including sDTIs, will increase the observed incidence
of new or worsened pressure ulcers at the facility level and may
improve the ability of the quality measure to discriminate between
poor- and high-performing facilities.
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\35\ Schwartz, M., Nguyen, K.H., Swinson Evans, T.M., Ignaczak,
M.K., Thaker, S., and Bernard, S.L.: Development of a Cross-Setting
Quality Measure for Pressure Ulcers: OY2 Information Gathering,
Final Report. Centers for Medicare & Medicaid Services, November
2013. Available: https://www.cms.gov/Medicare/Quality-Initiatives-Patient-Assessment-Instruments/Post-Acute-Care-Quality-Initiatives/Downloads/Development-of-a-Cross-Setting-Quality-Measure-for-Pressure-Ulcers-Information-Gathering-Final-Report.pdf
\36\ Schwartz, M., Ignaczak, M.K., Swinson Evans, T.M., Thaker,
S., and Smith, L.: The Development of a Cross-Setting Pressure Ulcer
Quality Measure: Summary Report on November 15, 2013, Technical
Expert Panel Follow-Up Webinar. Centers for Medicare & Medicaid
Services, January 2014. Available: https://www.cms.gov/Medicare/Quality-Initiatives-Patient-Assessment-Instruments/Post-Acute-Care-Quality-Initiatives/Downloads/Development-of-a-Cross-Setting-Pressure-Ulcer-Quality-Measure-Summary-Report-on-November-15-2013-Technical-Expert-Pa.pdf.
\37\ Schwartz, M., Nguyen, K.H., Swinson Evans, T.M., Ignaczak,
M.K., Thaker, S., and Bernard, S.L.: Development of a Cross-Setting
Quality Measure for Pressure Ulcers: OY2 Information Gathering,
Final Report. Centers for Medicare & Medicaid Services, November
2013. Available: https://www.cms.gov/Medicare/Quality-Initiatives-Patient-Assessment-Instruments/Post-Acute-Care-Quality-Initiatives/Downloads/Development-of-a-Cross-Setting-Quality-Measure-for-Pressure-Ulcers-Information-Gathering-Final-Report.pdf.
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We invite public comment to inform our consideration of the
inclusion of unstageable pressure ulcers and sDTIs in the numerator of
the quality measure NQF #0678 Percent of Residents or Patients with
Pressure Ulcers that are New or Worsened (Short Stay) as part of our
future measure development efforts.
b. Quality Measure Addressing the Domain of the Incidence of Major
Falls: An Application of the Measure Percent of Residents Experiencing
One or More Falls With Major Injury (Long Stay) (NQF #0674)
We are proposing to adopt beginning with the FY 2018 SNF QRP an
application to the SNF setting of the Percent of Residents Experiencing
One or More Falls with Major Injury (Long Stay) (NQF #0674) measure
that satisfies the incidence of major falls domain. This outcome
measure reports the percentage of residents who have experienced falls
with major injury over a 3-month period. This measure was developed by
CMS and is NQF-endorsed for long-stay residents of nursing facilities.
Research indicates that fall-related injuries are the most common
cause of accidental death in people aged 65 and older, responsible for
approximately 41 percent of accidental deaths annually.\38\ Rates
increase to 70 percent of accidental deaths among individuals aged 75
and older.\39\ In addition to death, falls can lead to fracture, soft
tissue or head injury, fear of falling, anxiety, and depression.\40\
Research also indicates that approximately 75 percent of nursing
facility residents fall at least once a year. This is twice the rate of
their counterparts in the community.\41\ Further, it is estimated that
10 percent to 25 percent of nursing facility resident falls result in
fractures and/or hospitalization.\42\
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\38\ Currie LM. Fall and injury prevention. Annu Rev Nurs Res.
2006;24:39-74.
\39\ Fuller GF. Falls in the elderly. Am Fam Physician. Apr 1
2000;61(7):2159-2168, 2173-2154.
\40\ Premier Inc. Causes of Falls. 2013. Available: https://www.premierinc.com/quality-safety/toolsservices/safety/topics/falls/causes_of_falls.jsp.
\41\ Rubenstein LZ, Josephson KR, Robbins AS. Falls in the
nursing home. Ann Intern Med. 1994 Sep 15; 121(6):442-51.
\42\ Vu MQ, Weintraub N, Rubenstein LZ. Falls in the nursing
home: are they preventable? J Am Med Dir Assoc. 2004 Nov-Dec;
5(6):401-6. Review.
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Falls also represent a significant cost burden to the entire health
care system, with injurious falls accounting for 6 percent of medical
expenses among those age 65 and older.\43\ In their 2006 work, Sorensen
et al. estimate the costs associated with falls of varying severity
among nursing home residents. Their work suggests that acute care costs
incurred for falls among nursing home residents range from $979 for a
typical case with a simple fracture to $14,716 for a typical case with
multiple injuries.\44\ A similar study of hospitalizations of nursing
home residents due to serious fall-related injuries (intracranial
bleed, hip fracture, other fracture) found an average cost of
$23,723.\45\ Among the SNF population, the average 6-month cost of a
resident with a hip fracture was estimated at $11,719 in 1996 U.S.
dollars.\46\
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\43\ Tinetti ME, Williams CS. The effect of falls and fall
injuries on functioning in community-dwelling older persons. J
Gerontol A Biol Sci Med Sci. 1998 Mar;53(2):M112-9.
\44\ Sorensen SV, de Lissovoy G, Kunaprayoon D, Resnick B,
Rupnow MF, Studenski S. A taxonomy and economic consequence of
nursing home falls. Drugs Aging. 2006;23(3):251-62.
\45\ Quigley PA, Campbell RR, Bulat T, Olney RL, Buerhaus P,
Needleman J. Incidence and cost of serious fall-related injuries in
nursing homes. Clin Nurs Res. Feb 2012;21(1):10-23.
\46\ Kramer AM, Steiner JF, Schlenker RE, et al. Outcomes and
costs after hip fracture and stroke: a comparison of rehabilitation
settings. JAMA. 1997;277(5):396-404.
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According to Morse, 78 percent of falls are anticipated physiologic
falls, which are falls among individuals who scored high on a risk
assessment scale, meaning their risk could have been identified in
advance of the fall.\47\ To date, studies have identified a number of
risk factors for falls.48 49 50 51 52 53 54 55 56
[[Page 22073]]
The identification of such risk factors suggests the potential for
health care facilities to reduce and prevent the incidence of falls.
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\47\ Ibid. Ibid.Morse, J. M. (1996). Preventing patient falls.
Sage.
\48\ Rothschild JM, Bates DW, Leape LL. Preventable medical
injuries in older patients. Arch Intern Med. 2000 Oct 9;
160(18):2717-28.
\49\ Morris JN, Moore T, Jones R, et al. Validation of long-term
and post-acute care quality indicators. CMS Contract No: 500-95-
0062/T.O. #4. Cambridge, MA: Abt Associates, Inc., June 2003.
\50\ Avidan AY, Fries BE, James ML, Szafara KL, Wright GT,
Chervin RD. Insomnia and hypnotic use, recorded in the minimum data
set, as predictors of falls and hip fractures in Michigan nursing
homes. J Am Geriatr Soc. 2005 Jun; 53(6):955-62.
\51\ Fonad E, Wahlin TB, Winblad B, Emami A, Sandmark H. Falls
and fall risk among nursing home residents. J Clin Nurs. 2008 Jan;
17(1):126- 34.
\52\ Currie LM. Fall and injury prevention. Annu Rev Nurs Res.
2006;24:39-74.
\53\ Ellis AA, Trent RB. Do the risks and consequences of
hospitalized fall injuries among older adults in California vary by
type of fall? J Gerontol A Biol Sci Med Sci. Nov 2001;56(11):M686-
692.
\54\ Chen XL, Liu YH, Chan DK, Shen Q, Van Nguyen H. Chin Med J
(Engl). Characteristics associated with falls among the elderly
within aged care wards in a tertiary hospital: a retrospective. 2010
Jul;123(13):1668-72.
\55\ Frisina PG, Guellnitz R, Alverzo J. A time series analysis
of falls and injury in the inpatient rehabilitation setting. Rehabil
Nurs. 2010 JulAug;35(4):141-6, 166.
\56\ Lee JE, Stokic DS. Risk factors for falls during inpatient
rehabilitant Am J Phys Med Rehabil. 2008 May;87(5):341-50; quiz 351,
422.
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The Percent of Residents Experiencing One or More Falls with Major
Injury (Long Stay) (NQF #0674) quality measure is NQF-endorsed and has
been successfully implemented in nursing facilities for long-stay
residents since 2011. In addition, the quality measure is currently
publicly reported on CMS' Nursing Home Compare Web site at https://www.medicare.gov/nursinghomecompare/search.html. Further, an
application of the quality measure was adopted for use in the LTCH QRP
in the FY 2015 IPPS/LTCH PPS final rule (79 FR 50290).
Although NQF #0674 is not currently endorsed for the SNF setting,
we reviewed the NQF's consensus endorsed measures and were unable to
identify any NQF-endorsed cross-setting quality measures for that
setting that are focused on falls with major injury. We are aware of
one NQF-endorsed measure, Falls with Injury (NQF #0202), which is a
measure designed for adult acute inpatient and rehabilitation patients
capturing ``all documented patient falls with an injury level of minor
or greater on eligible unit types in a calendar quarter, reported as
injury falls per 100 days.'' \57\ NQF #0202 is not appropriate to meet
the IMPACT Act domain as it includes minor injury in the numerator
definition. Additionally, including all falls could result in providers
limiting the freedom of activity for individuals at higher risk for
falls. We are unaware of any other cross-setting quality measures for
falls with major injury that have been endorsed or adopted by another
consensus organization for the SNF setting. Therefore, we are proposing
to adopt this measure under the Secretary's authority to specify non-
NQF-endorsed measures under section 1899B.
---------------------------------------------------------------------------
\57\ American Nurses Association (2014, April 9). Falls with
injury. Retrieved from https://www.qualityforum.org/QPS/0202.
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A TEP convened by our measure development contractor provided input
on the technical specifications of this quality measure, including the
feasibility of implementing the measure across PAC settings. The TEP
was supportive of the implementation of this measure across PAC
settings and was also supportive of our efforts to standardize this
measure for cross-setting development. The MAP conditionally supported
the use of an application of NQF #0674 Percent of Residents
Experiencing One or More Falls with Major Injury (Long Stay) in the SNF
QRP as a cross-setting quality measure. More information about the
MAP's recommendations for this measure is available in the report
entitled MAP Off-Cycle Deliberations 2015: Measures under
Considerations to Implement Provisions of the IMPACT Act, which can be
found at https://www.qualityforum.org/Project_Pages/MAP_Post-Acute_CareLong-Term_Care_Workgroup.aspx.
More information on the NQF endorsed measure, the Percent of
Residents Experiencing One or More Falls with Major Injury (Long Stay)
is available at https://www.qualityforum.org/QPS/0674.
We are proposing that data for this quality measure will be
collected using the MDS 3.0, currently submitted by SNFs through the
QIES ASAP system for the reason noted previously.
The data items that we would use to calculate this proposed quality
measure include: J1800 (Any Falls Since Admission/Entry (OBRA or
Scheduled PPS) or Reentry or Prior Assessment, whichever is more
recent), and J1900 (Number of Falls Since Admission/Entry (OBRA or
Scheduled PPS) or Reentry or Prior Assessment, whichever is more
recent). This measure would be calculated at the time of discharge (see
Proposed Form, Manner, and Timing of Quality Data Submission). The
specifications for the application of the measure, the Percent of
Residents Experiencing One or More Falls with Major Injury (Long Stay),
for the SNF population are available on our SNF QRP measures and
technical Web site at https://www.cms.gov/Medicare/Quality-Initiatives-Patient-Assessment-Instruments/NursingHomeQualityInits/SNF-Quality-Reporting-Program-Measures-and-Technical-Information.html.
We refer readers to the Form, Manner, and Timing of Quality Data
Submission section of this proposed rule for more information on the
proposed data collection and submission timeline for this proposed
quality measure.
We invite public comment on our proposal to adopt an application of
Percent of Residents Experiencing One or More Falls with Major Injury
(Long Stay) (NQF #0674) measure for the SNF QRP beginning with the FY
2018 payment determination.
c. Quality Measure Addressing the Domain of Functional Status,
Cognitive Function, and Changes in Function and Cognitive Function:
Application of Percent of Long-Term Care Hospital Patients With an
Admission and Discharge Functional Assessment and a Care Plan That
Addresses Function (NQF #2631; Under NQF Review)
We are proposing to adopt beginning with the FY 2018 SNF QRP an
application of the quality measure Percent of Long-Term Care Hospital
Patients with an Admission and Discharge Functional Assessment and a
Care Plan that Addresses Function (NQF #2631; under NQF review) as a
cross-setting quality measure that satisfies the functional status,
cognitive function, and changes in functional status and cognitive
function domain. This quality measure reports the percent of patients
or residents with both an admission and a discharge functional
assessment and an activity (self-care or mobility) a goal that
addresses function.
The National Committee on Vital and Health Statistics' Subcommittee
on Health,\58\ noted that ``information on functional status is
becoming increasingly essential for fostering healthy people and a
healthy population. Achieving optimal health and well-being for
Americans requires an understanding across the life span of the effects
of people's health conditions on their ability to do basic activities
and participate in life situations in other words, their functional
status.'' This is supported by research showing that patient and
resident functioning is associated with important outcomes such as
discharge destination and length of stay in inpatient settings,\59\ as
well as the risk of nursing home placement and hospitalization of older
adults living in the community.\60\
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\58\ Subcommittee on Health National Committee on Vital and
Health Statistics, ``Classifying and Reporting Functional Status''
(2001).
\59\ Reistetter TA, Graham JE, Granger CV, Deutsch A,
Ottenbacher KJ. Utility of Functional Status for Classifying
Community Versus Institutional Discharges after Inpatient
Rehabilitation for Stroke. Archives of Physical Medicine and
Rehabilitation, 2010; 91:345-350.
\60\ Miller EA, Weissert WG. Predicting Elderly People's Risk
for Nursing Home Placement, Hospitalization, Functional Impairment,
and Mortality: A Synthesis. Medical Care Research and Review, 57; 3:
259-297.
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[[Page 22074]]
The majority of individuals who receive PAC services, including
care provided by SNFs, HHAs, IRFs, and LTCHs, have functional
limitations and many of these individuals are at risk for further
decline in function due to limited mobility and ambulation.\61\ The
patient and resident populations treated by SNFs, HHAs, IRFs, and LTCHs
vary in terms of their functional abilities at the time of the PAC
admission and their goals of care. For IRF patients and many SNF
residents, treatment goals may include fostering the person's ability
to manage his or her daily activities so that he or she can complete
self-care and/or mobility activities as independently as possible, and
if feasible, return to a safe, active, and productive life in a
community-based setting. For home health patients, achieving
independence within the home environment and promoting community
mobility may be the goal of care. For other home care patients, the
goal of care may be to slow the rate of functional decline in order to
allow the person to remain at home and avoid institutionalization.\62\
Lastly, in addition to having complex medical care needs for an
extended period of time, LTCH patients often have limitations in
functioning because of the nature of their conditions, as well as
deconditioning due to prolonged bed rest and treatment requirements
(for example, ventilator use). The clinical practice guideline
Assessment of Physical Function \63\ recommends that clinicians
document functional status at baseline and over time to validate
capacity, decline, or progress. Therefore, assessment of functional
status at admission and discharge and establishing a functional goal
for discharge as part of the care plan is an important aspect of
patient or resident care in all of these PAC settings.
---------------------------------------------------------------------------
\61\ Kortebein P, Ferrando A, Lombebeida J, Wolfe R, Evans WJ.
Effect of 10 days of bed rest on skeletal muscle in health adults.
JAMA; 297(16):1772-4.
\62\ Ellenbecker CH, Samia L, Cushman MJ, Alster K. Patient
safety and quality in home health care. Patient Safety and Quality:
An Evidence-Based Handbook for Nurses. Vol 1.
\63\ Kresevic DM. Assessment of physical function. In: Boltz M,
Capezuti E, Fulmer T, Zwicker D, editor(s). Evidence-based geriatric
nursing protocols for best practice. 4th ed. New York (NY): Springer
Publishing Company; 2012. p. 89-103.
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Given the variation in patient or resident populations across the
PAC settings, the functional activities that are typically assessed by
clinicians for each type of PAC provider may vary. For example, rolling
left and right in bed is an example of a functional activity that may
be most relevant for low-functioning patients or residents who are
chronically critically ill. However, certain functional activities such
as eating, oral hygiene, lying to sitting on the side of the bed,
toilet transfers, and walking or wheelchair mobility are important
activities for patients or residents in each PAC setting.
Although, functional assessment data are currently collected by all
four PAC providers and in NFs, this data collection has employed
different assessment instruments, scales, and item definitions. The
data cover similar topics, but are not standardized across PAC
settings. The different sets of functional assessment items coupled
with different rating scales makes communication about patient and
resident functioning challenging when patients and residents transition
from one type of setting to another. Collection of standardized
functional assessment data across SNFs, HHAs, IRFs, and LTCHs using
common data items would establish a common language for patient and
resident functioning, which may facilitate communication and care
coordination as patients and residents transition from one type of
provider to another. The collection of standardized functional status
data may also help improve patient and resident functioning during an
episode of care by ensuring that basic daily activities are assessed
for all PAC residents at the start and end of care and that at least
one functional goal is established.
The functional assessment items included in the proposed functional
status quality measure were originally developed and tested as part of
the Post-Acute Care Payment Reform Demonstration version of the
Continuity Assessment Record and Evaluation (CARE) Item Set, which was
designed to standardize the assessment of a person's status, including
functional status, across acute and post-acute settings (SNFs, HHAs,
IRFs, and LTCHs). The functional status items on the CARE Item Set are
daily activities that clinicians typically assess at the time of
admission and/or discharge in order to determine patient's or
resident's needs, evaluate patient or resident progress, and prepare
patients, residents, and their families for a transition to home or to
another setting.
The development of the CARE Item Set and a description and
rationale for each item is described in a report entitled ``The
Development and Testing of the Continuity Assessment Record and
Evaluation (CARE) Item Set: Final Report on the Development of the CARE
Item Set: Volume 1 of 3.'' \64\ Reliability and validity testing were
conducted as part of CMS's Post-Acute Care Payment Reform
Demonstration, and we concluded that the functional status items have
acceptable reliability and validity. A description of the testing
methodology and results are available in several reports, including the
report entitled ``The Development and Testing of the Continuity
Assessment Record And Evaluation (CARE) Item Set: Final Report On
Reliability Testing: Volume 2 of 3'' \65\ and the report entitled ``The
Development and Testing of The Continuity Assessment Record And
Evaluation (CARE) Item Set: Final Report on Care Item Set and Current
Assessment Comparisons: Volume 3 of 3.'' \66\ These reports are
available on our Post-Acute Care Quality Initiatives Web page at https://www.cms.gov/Medicare/Quality-Initiatives-Patient-Assessment-Instruments/Post-Acute-Care-Quality-Initiatives/CARE-Item-Set-and-B-CARE.html.
---------------------------------------------------------------------------
\64\ Barbara Gage et al., ``The Development and Testing of the
Continuity Assessment Record and Evaluation (CARE) Item Set: Final
Report on the Development of the CARE Item Set'' (RTI International,
2012).
\65\ Ibid.
\66\ Ibid.
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The functional status quality measure we are proposing to adopt
beginning with the FY 2018 SNF QRP is a process quality measure that is
an application of the quality measure, Percent of Long-Term Care
Hospital Patients with an Admission and Discharge Functional Assessment
and a Care Plan that Addresses Function'' (NQF #2631; under NQF
review). This quality measure reports the percent of patients or
residents with both an admission and a discharge functional assessment
and a treatment goal that addresses function.
This process measure requires the collection of admission and
discharge functional status data by clinicians using standardized
clinical assessment items, or data elements, which assess specific
functional activities, that is, self-care and mobility activities. The
self-care and mobility function activities are coded using a 6-level
rating scale that indicates the resident's level of independence with
the activity at both admission and discharge. A higher score indicates
more independence.
For this quality measure, there must be documentation at the time
of admission that at least one activity performance (function) goal is
recorded for at least one of the standardized self-care or mobility
function items using the 6-level rating scale. This indicates that an
activity goal(s) has been established. Following this initial
assessment, the clinical best practice would be to ensure that the
resident's
[[Page 22075]]
care plan reflected and included a plan to achieve such an activity
goal(s). At the time of discharge, goal setting and establishment of a
care plan to achieve the goal, is reassessed using the same 6-level
rating scale, enabling the ability to evaluate success in achieving the
resident's activity performance goals.
To the extent that a resident has an unplanned discharge, for
example, for the purpose of being admitted to an acute care facility,
the collection of discharge functional status data might not be
feasible. Therefore, for patients or residents with unplanned
discharges, admission functional status data and at least one treatment
goal must be reported, but discharge functional status data are not
required to be reported.
A TEP convened by the measure development contractor for CMS
provided input on the technical specifications of this quality measure,
including the feasibility of implementing the measure across PAC
settings. The TEP was supportive of the implementation of this measure
across PAC settings and was also supportive of our efforts to
standardize this measure for cross-setting use. Additionally, the MAP
conditionally supported the use of an application of the Percent of
Long-Term Care Hospital Patients With an Admission and Discharge
Functional Assessment and a Care Plan that Addresses Function (NQF
#2631; under NQF review) for use in the SNF QRP as a cross-setting
measure. The MAP noted that this functional status measure addresses an
IMPACT Act domain and a MAP PAC/LTC core concept. The MAP conditionally
supported this measure pending NQF-endorsement and resolution of
concerns about the use of two different functional status scales for
quality reporting and payment purposes. Finally, the MAP reiterated its
support for adding measures addressing function, noting the group's
special interest in this PAC/LTC core concept. More information about
the MAP's recommendations for this measure is available in the report
entitled MAP Off-Cycle Deliberations 2015: Measures under
Considerations to Implement Provisions of the IMPACT Act, which can be
found at https://www.qualityforum.org/Project_Pages/MAP_Post-Acute_CareLong-Term_Care_Workgroup.aspx.
The proposed measure is derived from the Percent of Long-Term Care
Hospital Patients With an Admission and Discharge Functional Assessment
and a Care Plan that Addresses Function quality measure, and we intend
to submit the proposed measure to NQF for endorsement. The
specifications are available for review at the SNF QRP measures and
technical Web site at https://www.cms.gov/Medicare/Quality-Initiatives-Patient-Assessment-Instruments/NursingHomeQualityInits/SNF-Quality-Reporting-Program-Measures-and-Technical-Information.html.
We reviewed the NQF's endorsed measures and were unable to identify
any NQF-endorsed cross-setting quality measures focused on assessment
of function for PAC patients and residents. We are also unaware of any
other cross-setting quality measures for functional assessment that
have been endorsed or adopted by another consensus organization.
Therefore, we are proposing to adopt this function measure for use in
the SNF QRP for the FY 2018 payment determination and subsequent years
under the Secretary's authority to select non-NQF-endorsed measures.
We are proposing that data for the proposed quality measure would
be collected through the MDS 3.0, which SNFs currently submit through
the QIES ASAP system. We refer readers to section V.C.7. of this
proposed rule for more information on the proposed data collection and
submission timeline for this proposed quality measure.
The calculation algorithm of the proposed measure is: (1) For each
SNF stay, records of residents discharged during the 12-month target
time period are identified and counted. This count is the denominator;
(2) The records of residents with complete stays are identified and the
number of these resident stays with complete admission functional
assessment data and at least one self-care or mobility activity goal
and complete discharge functional assessment data is counted; (3) The
records of residents with incomplete stays are identified, and the
number of these resident records with complete admission functional
status data and at least one self-care or mobility goal is counted; (4)
The counts from step 2 (complete SNF stays) and step 3 (incomplete SNF
stays) are summed. The sum is the numerator count; and (5) the
numerator count is divided by the denominator count to calculate this
quality measure. This measure would be calculated at two points in
time, at admission and discharge.
For purposes of assessment data collection, we propose to add new
functional status items to the MDS 3.0. The items would assess specific
self-care and mobility activities, and would be based on functional
items included in the Post-Acute Care Payment Reform Demonstration
version of the CARE Item Set. The items have been developed and tested
for reliability and validity in SNFs, HHAs, IRFs, and LTCHs. More
information pertaining to item testing is available on our Post-Acute
Care Quality Initiatives Web page at https://www.cms.gov/Medicare/Quality-Initiatives-Patient-Assessment-Instruments/Post-Acute-Care-Quality-Initiatives/CARE-Item-Set-and-B-CARE.html.
The proposed function items that we would add to the MDS for
purposes of the calculation of this proposed quality measure do not
duplicate existing items currently collected in that assessment
instrument for other purposes. The currently used MDS function items
evaluate a resident's greatest dependence on three or more occasions,
whereas the proposed functional items would evaluate an individual's
usual performance at the time of admission and at the time of discharge
for goal setting purposes. Additionally, there are several key
differences between the existing and new proposed function items that
may result in variation in the resident assessment results including:
(1) The data collection and associated data collection instructions;
(2) the rating scales used to score a resident's level of independence;
and (3) the item definitions. A description of these differences is
provided with the measure specifications on our SNF QRP measures and
technical Web site at https://www.cms.gov/Medicare/Quality-Initiatives-Patient-Assessment-Instruments/NursingHomeQualityInits/SNF-Quality-Reporting-Program-Measures-and-Technical-Information.html.
Because of the differences between the current function assessment
items (section G of the MDS 3.0) and the proposed function assessment
items that we would collect for purposes of calculating the proposed
measure, we would require that SNFs submit data on both sets of items.
Data collection for the new proposed function items do not substitute
for the data collection under the current Section G.
We invite public comments on our proposal to adopt beginning with
the FY 2018 SNF QRP an application of the quality measure Percent of
Long-Term Care Hospital Patients with an Admission and Discharge
Functional Assessment and a care Plan that Addresses Function (NQF
#2631; under review).
6. SNF QRP Quality Measures Under Consideration for Future Years
[[Page 22076]]
Table 10--SNF QRP Quality Measures and Concepts Under Consideration for
Future Years
------------------------------------------------------------------------
------------------------------------------------------------------------
Impact Act Domain................. Measures to reflect all-condition
risk-adjusted potentially
preventable hospital readmission
rates.
Measures.......................... (NQF #2510): Skilled Nursing
Facility 30-Day All-Cause
Readmission Measure (SNFRM).
(NQF #2512; NQF #2502): Application
of the LTCH/IRF All-Cause Unplanned
Readmission Measure for 30 Days
Post Discharge from LTCHs/IRFs.
Impact Act Domain................. Resource Use, including total
estimated Medicare spending per
beneficiary.
Measure........................... Application of the Payment
Standardized Medicare Spending Per
Beneficiary (MSPB).
Impact Act Domain................. Discharge to community.
Measure........................... Percentage residents/patients at
discharge assessment, who are
discharged to a higher level of
care or to the community. Measure
assesses if the patient/resident
went to the community and whether
they stayed there. Ideally, this
measure would be paired with the 30-
day all-cause readmission measure.
------------------------------------------------------------------------
We invite comment on the measure domains and associated measures
and measure concepts listed in Table 10. In addition, in alignment with
the requirements of the IMPACT Act to develop quality measures and
standardize data for comparative purposes, we believe that evaluating
outcomes across the post-acute settings using standardized data is an
important priority. Therefore, in addition to proposing a process-based
measure for the domain in the IMPACT Act of ``Functional status,
cognitive function, and changes in function and cognitive function'',
which is included in this year's proposed rule, we also intend to
develop outcomes-based quality measures, including functional status
and other quality outcome measures to further satisfy this domain.
These measures will be proposed in future rulemaking in order to assess
functional change for each care setting as well as across care
settings.
7. Form, Manner, and Timing of Quality Data Submission
a. Participation/Timing for New SNFs
Beginning with the submission of data required for the FY 2018
payment determination, we propose that a new SNF would be required to
begin reporting data on any quality measures finalized for that program
year by no later than the first day of the calendar quarter subsequent
to 30 days after the date on its CMS Certification Number (CCN)
notification letter. For example, for FY 2018 payment determinations,
if a SNF received its CCN on August 28, 2016, and 30 days are added
(for example, August 28 + 30 days = September 27), the SNF would be
required to submit data for residents who are admitted beginning on
October 1, 2016.
We invite public comment on this proposed timing for new SNFs to
begin reporting quality data under the SNF QRP.
b. Data Collection Timelines and Requirements for the FY 2018 Payment
Determination and Subsequent Years
As discussed previously, we are proposing that SNFs would submit
data on the proposed functional status, skin integrity, and incidence
of major falls measures by completing items on the MDS and then
submitting the MDS to CMS through the Quality Improvement and
Evaluation System (QIES), Assessment Submission and Processing System
(ASAP) system. We seek comment on this proposed method of data
collection.
Currently, there is no discharge assessment required when a
resident is discharged from the SNF Medicare Part A coverage stay but
does not leave the facility, and we are aware that this affects nearly
30 percent of all SNF residents. To collect the data at the time these
beneficiaries are discharged from the SNF Part A coverage stay, we
propose to add an item set in addition to the 5-Day PPS Assessment.
Further, to collect the data elements required to calculate the
function quality measure (an application of Percent of Long-Term Care
Hospital Patients With an Admission and Discharge Functional Assessment
and a Care Plan that Addresses Function [NQF #2631; under NQF review])
at the time of a residents admission, we also propose to add the
necessary items to the 5-day PPS Assessment.
A list of the data items that we are proposing to add to the SNF
PPS Part A Discharge and the 5-Day PPS Assessments is available on our
Web site at https://www.cms.gov/Medicare/Quality-Initiatives-Patient-Assessment-Instruments/NursingHomeQualityInits/SNF-Quality-Reporting-Program-Measures-and-Technical-Information.html. We recognize that
there may be instances where SNFs want to combine the SNF PPS Part A
Discharge Assessment with other required assessments, as happens with
other PPS and OBRA assessments, or scenarios in which the end of the
Part A coverage stay occurs at the same time as a scheduled PPS
assessment. Therefore, we invite comment on any situations where
assessments may be combined or interact, which should be considered in
implementing the SNF PPS Part A Discharge Assessment with a view toward
addressing any issues that we may identify through the public comment
process as requiring additional clarification.
For the FY 2018 payment determination, we are proposing that SNFs
submit data on the three proposed quality measures for residents who
are admitted to the SNF on and after October 1, 2016 and discharged
from the SNF up to and including December 31, 2016, using the data
submission schedule that we are proposing in this section.
We are proposing to collect a single quarter of data for FY 2018 to
remain consistent with the usual October release schedule for the MDS,
to give SNFs a sufficient amount of time to update their systems so
that they can comply with the new data reporting requirements, and to
give CMS a sufficient amount of time to determine compliance for the FY
2018 program. The proposed use of one quarter of data for the initial
year of quality reporting is consistent with the approach we used to
implement a number of other quality reporting programs, including the
LTCH, IRF, and Hospice QRPs.
We also propose that following the close of the reporting quarter,
October 1, 2016 through December 31, 2016 for the FY 2018 payment
determination, SNFs would have an additional 5\1/2\ months to correct
and/or submit their quality data. Consistent with the IRF QRP, we
propose that the final deadline for submitting data for the FY 2018
payment determination would be May 15, 2017. We further propose that
for the FY 2019 payment determination, we would collect data from the
2nd through 4th quarters of FY 2017 (that is, data for residents who
are admitted from January 1st and discharged up to and including
September 30th) to determine whether a SNF has met its quality
reporting requirements with respect to that fiscal year. Beginning with
the FY
[[Page 22077]]
2020 payment determination, we propose to move to a full year of fiscal
year data collection. We intend to propose the FY 2019 payment
determination quality reporting data submission deadlines in future
rulemaking.
Table 11--Proposed Measures, Data Collection Source, Data Collection Period and Data Submission Deadlines
Affecting the FY 2018 Payment Determination
----------------------------------------------------------------------------------------------------------------
Proposed data submission
Quality measure Data collection source Proposed data deadline for FY 2018
collection period payment determination
----------------------------------------------------------------------------------------------------------------
NQF #0678: Percent of Patients or MDS....................... 10/01/16-12/31/16 May 15, 2017.
Residents with Pressure Ulcers
that are New or Worsened.
NQF #0674: Application of Percent MDS....................... 10/01/16-12/31/16 May 15, 2017.
of Residents Experiencing One or
More Falls with Major Injury
(Long Stay).
NQF #2631*: Application of Percent MDS....................... 10/01/16-12/31/16 May 15, 2017.
of Long-Term Care Hospital
Patients with an Admission and
Discharge Functional Assessment
and a Care Plan that Addresses
Function.
----------------------------------------------------------------------------------------------------------------
* Status: under review at NQF, please see: https://www.qualityforum.org/ProjectMeasures.aspx?projectID=73867, see
NQF #2631.
We seek public comment on these proposals.
8. SNF QRP Data Completion Thresholds for the FY 2018 Payment
Determination and Subsequent Years
We are proposing that, beginning with the FY 2018 payment
determination, SNFs must report all of the data necessary to calculate
the proposed quality measures on at least eighty percent of the MDS
assessments that they submit. We are proposing that a SNF has reported
all of the data necessary to calculate the measures if the data
actually can be used for purposes of calculating the quality measures,
as opposed to, for example, the use of a dash [-], to indicate that the
SNF was unable to perform a pressure ulcer assessment.
We believe that because SNFs have long been required to submit MDS
assessments for other purposes, SNFs should easily be able to meet this
proposed requirement for the SNF QRP. Our proposal to set reporting
thresholds is consistent with policies we have adopted for the Long-
Term Care Hospital (79 FR 50314), Inpatient-Rehabilitation Hospital (79
FR 45923) and Home Health (79 FR 66079) Quality Reporting Programs.
Although we are proposing to adopt an 80 percent threshold
initially, we intend to propose to raise the threshold level for
subsequent program years through future rulemaking.
We are also proposing that for the FY 2018 SNF QRP, any SNF that
does not meet the proposed requirement that 80 percent of all MDS
assessments submitted contain 100 percent of all data items necessary
to calculate the SNF QRP measures would be subject to a reduction of 2
percentage points to its FY 2018 market basket percentage.
We invite comment on the proposed SNF QRP data completion
requirements.
9. SNF QRP Data Validation Requirements for the FY 2018 Payment
Determination and Subsequent Years
To ensure the reliability and accuracy of the data submitted under
the SNF QRP, we intend to propose to adopt policies and processes for
validating the data submitted under the SNF QRP in future rulemaking.
At this time, we are seeking comment on what elements we should
consider including in such a process.
10. SNF QRP Submission Exception and Extension Requirements for the FY
2018 Payment Determination and Subsequent Years
Our experience with other quality reporting programs has shown that
there are times when providers are unable to submit quality data due to
extraordinary circumstances beyond their control (for example, natural,
or man-made disasters). Other extenuating circumstances are reviewed on
a case-by-case basis. We have defined a ``disaster'' as any natural or
man-made catastrophe which causes damages of sufficient severity and
magnitude to partially or completely destroy or delay access to medical
records and associated documentation. Natural disasters could include
events such as hurricanes, tornadoes, earthquakes, volcanic eruptions,
fires, mudslides, snowstorms, and tsunamis. Man-made disasters could
include such events as terrorist attacks, bombings, floods caused by
man-made actions, civil disorders, and explosions. A disaster may be
widespread and impact multiple structures or be isolated and impact a
single site only.
In certain instances of either natural or man-made disasters, a SNF
may have the ability to conduct a full resident assessment, and record
and save the associated data either during or before the occurrence of
the extraordinary event. In this case, the extraordinary event has not
caused the facility's data files to be destroyed, but it could hinder
the SNF's ability to meet the quality reporting program's data
submission deadlines. In this scenario, the SNF would potentially have
the ability to report the data at a later date, after the emergency has
passed. In such cases, a temporary extension of the deadlines for
reporting might be appropriate.
In other circumstances of natural or man-made disaster, a SNF may
not have had the ability to conduct a full resident assessment, or to
record and save the associated data before the occurrence of the
extraordinary event. In such a scenario, the facility may not have
complete data to submit to CMS. We believe that it may be appropriate,
in these situations, to grant a full exception to the reporting
requirements for a specific period of time.
We do not wish to penalize SNFs in these circumstances or to unduly
increase their burden during these times. Therefore, we are proposing a
process for SNFs to request and for us to grant exceptions and
extensions with respect to the quality data reporting requirements of
the SNF QRP for one or more quarters, beginning with the FY 2018
payment determination, when there are certain extraordinary
circumstances beyond the control of the SNF. When an exception or
extension is granted, we would not reduce the SNF's PPS payment for
failure to comply with the requirements of the SNF QRP.
We are proposing that if a SNF seeks to request an exception or
extension
[[Page 22078]]
with respect to the SNF QRP, the SNF should request an exception or
extension within 90 days of the date that the extraordinary
circumstances occurred. The SNF may request an exception or extension
for one or more quarters by submitting a written request to CMS that
contains the information noted below, via email to the SNF Exception
and Extension mailbox at SNFQRPReconsiderations@cms.hhs.gov. Requests
sent to CMS through any other channel will not be considered as valid
requests for an exception or extension from the SNF QRP's reporting
requirements for any payment determination.
We note that the subject of the email must read ``SNF QRP Exception
or Extension Request'' and the email must contain the following
information:
SNF CCN;
SNF name;
CEO or CEO-designated personnel contact information
including name, telephone number, email address, and mailing address
(the address must be a physical address, not a post office box);
SNF's reason for requesting an exception or extension;
Evidence of the impact of extraordinary circumstances,
including but not limited to photographs, newspaper and other media
articles; and
A date when the SNF believes it will be able to again
submit SNF QRP data and a justification for the proposed date.
We are proposing that exception and extension requests be signed by
the SNF's CEO or CEO designated personnel, and that if the CEO
designates an individual to sign the request, the CEO-designated
individual has the appropriate authority to submit such a request on
behalf of the SNF. Following receipt of the email, we will: (1) Provide
a written acknowledgement, using the contact information provided in
the email, to the CEO or CEO-designated contact notifying them that the
request has been received; and (2) provide a formal response to the CEO
or any CEO-designated SNF personnel, using the contact information
provided in the email, indicating our decision.
This proposal does not preclude us from granting exceptions or
extensions to SNFs that have not requested them when we determine that
an extraordinary circumstance, such as an act of nature, affects an
entire region or locale. If we make the determination to grant an
exception or extension to all SNFs in a region or locale, we are
proposing to communicate this decision through routine communication
channels to SNFs and vendors, including, but not limited to, issuing
memos, emails, and notices on our SNF QRP Web site once it is available
at https://www.cms.gov/Medicare/Quality-Initiatives-Patient-Assessment-Instruments/NursingHomeQualityInits/SNF-QR-Reconsideration-and-ExceptionExtension.html.
We are also proposing that we may grant an exception or extension
to SNFs if we determine that a systemic problem with one of our data
collection systems directly affected the ability of the SNF to submit
data. Because we do not anticipate that these types of systemic errors
will happen often, we do not anticipate granting an exception or
extension on this basis frequently.
If a SNF is granted an exception, we will not require that the SNF
submit any measure data for the period of time specified in the
exception request decision. If we grant an extension to a SNF, the SNF
will still remain responsible for submitting quality data collected
during the timeframe in question, although we will specify a revised
deadline by which the SNF must submit this quality data.
We also propose that any exception or extension requests submitted
for purposes of the SNF QRP will apply to that program only, and not to
any other program we administer for SNFs such as survey and
certification. MDS requirements, including electronic submission,
during Declared Public Health Emergencies can be found at FAQs K-5, K-6
and K-9 on the following link: https://www.cms.gov/Medicare/Provider-Enrollment-and-Certification/SurveyCertEmergPrep/downloads/AllHazardsFAQs.pdf.
We intend to provide additional information pertaining to
exceptions and extensions for the SNF QRP, including any additional
guidance, on the SNF QRP Web site at https://www.cms.gov/Medicare/Quality-Initiatives-Patient-Assessment-Instruments/NursingHomeQualityInits/SNF-QR-Reconsideration-and-ExceptionExtension.html.
We invite public comment on these proposals for seeking and being
granted exceptions and extensions to the quality reporting
requirements.
11. SNF QRP Reconsideration and Appeals Procedures for the FY 2018
Payment Determination and Subsequent Years
At the conclusion of the required quality data reporting and
submission period, we will review the data received from each SNF
during that reporting period to determine if the SNF met the quality
data reporting requirements. SNFs that are found to be noncompliant
with the reporting requirements for the applicable fiscal year will
receive a 2 percentage point reduction to their market basket
percentage update for that fiscal year.
We are aware that some of our other quality reporting programs,
such as the HIQR Program, the LTCHQR Program, and the IRF QRP include
an opportunity for the providers to request a reconsideration of our
initial non-compliance determination. Therefore, to be consistent with
other established quality reporting programs and to provide an
opportunity for SNFs to seek reconsideration of our initial non-
compliance decision, we are proposing a process that will enable a SNF
to request reconsideration of our initial non-compliance decision in
the event that it believes that it was incorrectly identified as being
non-compliant with the SNF QRP reporting requirements for a particular
fiscal year.
For the FY 2018 payment determination, and that of subsequent
years, we are proposing that a SNF would receive a notification of
noncompliance if we determine that the SNF did not submit data in
accordance with the data reporting requirements with respect to the
applicable FY. The purpose of this notification is to put the SNF on
notice of the following: (1) That the SNF has been identified as being
non-compliant with the SNF QRP's reporting requirements for the
applicable fiscal year; (2) that the SNF will be scheduled to receive a
reduction in the amount of two percentage points to its market basket
percentage update for the applicable fiscal year; (3) that the SNF may
file a request for reconsideration if it believes that the finding of
noncompliance is erroneous, has submitted a request for an extension or
exception that has not yet been decided, or has been granted an
extension or exception; and (4) that the SNF must follow a defined
process on how to file a request for reconsideration, which will be
described in the notification. We would only consider requests for
reconsideration after an SNF has been found to be noncompliant.
Notifications of noncompliance and any subsequent notifications
from CMS would be sent via a traceable delivery method, such as
certified U.S. mail or registered U.S. mail, or through other
practicable notification processes, such as a report from CMS to the
provider as a Certification and Survey Provider Enhanced Reports
(CASPER) report, that will provide information pertaining to their
compliance with the reporting requirements for the given reporting
cycle. To obtain the CASPER report, providers should access the CASPER
[[Page 22079]]
Reporting Application. Information on how to access the CASPER
Reporting Application is available on the Quality Improvement
Evaluation System (QIES) Technical Support Office Web site (direct
link), https://web.qiesnet.org/qiestosuccess/. Once access is
established providers can select ``CASPER Reports'' link. The ``CASPER
Reports'' link will connect a SNF to the QIES National System Login
page for CASPER Reporting.
We seek comments on the most preferable delivery method for the
notice of non-compliance, such as U.S. Mail, email, CASPER, etc.
We propose to disseminate communications regarding the availability
of compliance reports in the CASPER reports through routine channels to
SNFs and vendors, including, but not limited to issuing memos, emails,
Medicare Learning Network (MLN) announcements, and notices on our SNF
QRP Web site once it is available at https://www.cms.gov/Medicare/Quality-Initiatives-Patient-Assessment-Instruments/NursingHomeQualityInits/SNF-QR-Reconsideration-and-ExceptionExtension.html.
A SNF would have 30 days from the date of the initial notification
of noncompliance to submit to us a request for reconsideration. This
proposed time frame allows us to balance our desire to ensure that SNFs
have the opportunity to request reconsideration with our need to
complete the process and provide SNFs with our reconsideration decision
in a timely manner. We are proposing that a SNF may withdraw its
request at any time and may file an updated request within the proposed
30-day deadline. We are also proposing that, in very limited
circumstances, we may grant a request by a SNF to extend the proposed
deadline for reconsideration requests. It would be the responsibility
of a SNF to request an extension and demonstrate that extenuating
circumstances existed that prevented the filing of the reconsideration
request by the proposed deadline.
We also are proposing that as part of the SNF's request for
reconsideration, the SNF would be required to submit all supporting
documentation and evidence demonstrating full compliance with all SNF
QRP reporting requirements for the applicable fiscal year, that the SNF
has requested an extension or exception for which a decision has not
yet been made, that the SNF has been granted an extension or exception,
or has experienced an extenuating circumstance as defined in section
V.C.10 of this rule but failed to file a timely request of exception.
We propose that we would not review any reconsideration request that
fails to provide the necessary documentation and evidence along with
the request.
The documentation and evidence may include copies of any
communications that demonstrate the SNF's compliance with the SNF QRP,
as well as any other records that support the SNF's rationale for
seeking reconsideration, but should not include any protected health
information (PHI). We intend to provide a sample list of acceptable
supporting documentation and evidence, as well as instructions for SNFs
on how to retrieve copies of the data submitted to CMS for the
appropriate program year in the future on our SNF QRP Web site at
https://www.cms.gov/Medicare/Quality-Initiatives-Patient-Assessment-Instruments/NursingHomeQualityInits/SNF-QR-Reconsideration-and-ExceptionExtension.html.
We are proposing that a SNF wishing to request a reconsideration of
our initial noncompliance determination would be required to do so by
submitting an email to the following email address:
SNFQRPReconsiderations@cms.hhs.gov. Any request for reconsideration
submitted to us by a SNF would be required to follow the guidelines
outlined on our SNF QRP Web site once it is available at https://www.cms.gov/Medicare/Quality-Initiatives-Patient-Assessment-Instruments/NursingHomeQualityInits/SNF-QR-Reconsideration-and-ExceptionExtension.html.
All emails must contain a subject line that reads ``SNF QRP
Reconsideration Request.'' Electronic email submission is the only form
of reconsideration request submission that will be accepted by us. Any
reconsideration requests communicated through another channel
including, but not limited to, U.S. Postal Service or phone, will not
be considered as a valid reconsideration request.
We are proposing that a reconsideration request include the
following information:
SNF CMS Certification Number (CCN);
SNF Business Name;
SNF Business Address;
The CEO contact information including name, email address,
telephone number and physical mailing address; or
The CEO-designated representative contact information including
name, title, email address, telephone number and physical mailing
address; and
CMS identified reason(s) for non-compliance from the non-
compliance notification; and
The reason(s) for requesting reconsideration.
The request for reconsideration must be accompanied by supporting
documentation demonstrating compliance. Following receipt of a request
for reconsideration, we will provide an email acknowledgment, using the
contact information provided in the reconsideration request, to the CEO
or CEO-designated representative that the request has been received.
Once we have reached a decision regarding the reconsideration request,
an email will be sent to the SNF CEO or CEO-designated representative,
using the contact information provided in the reconsideration request,
notifying the SNF of our decision.
We also propose that the notifications of our decision regarding
reconsideration requests may be made available through the use of
CASPER reports or through a traceable delivery method, such as
certified U.S. mail or registered U.S. mail. If the SNF is dissatisfied
with the decision rendered at the reconsideration level, the SNF may
appeal the decision to the PRRB under 42 CFR 405.1835. We believe this
proposed process is more efficient and less costly for CMS and for SNFs
because it decreases the number of PRRB appeals by resolving issues
earlier in the process. Additional information about the
reconsideration process including details for submitting a
reconsideration request will be posted in the future to our SNF QRP Web
site at https://www.cms.gov/Medicare/Quality-Initiatives-Patient-Assessment-Instruments/NursingHomeQualityInits/SNF-QR-Reconsideration-and-ExceptionExtension.html.
We invite public comment on the proposed procedures for
reconsideration and appeals.
12. Public Display of Quality Measure Data for the SNF QRP
Section 1899B(g)(1) of the Act requires the Secretary to provide
for the public reporting of SNF provider performance on the quality
measures specified under subsection (c)(1) and the resource use and
other measures specified under subsection (d)(1) by establishing
procedures for making available to the public data and information on
the performance of individual SNFs with respect to the measures. Under
section 1899B(g)(2) of the Act, such procedures must be consistent with
those under section 1886(b)(3)(B)(viii)(VII) of the Act and also allow
SNFs the opportunity to review and submit corrections to the data and
other information before it is made public. Section 1899B(g)(3) of the
[[Page 22080]]
Act requires that the data and information be made publicly available
not later than 2 years after the specified application date applicable
to such a measure and provider. Finally, section 1899B(g)(4)(B) of the
Act requires such procedures be consistent with Sections 1819(i) and
1919(i) of the Act. We intend to propose details related to the public
display of quality measures in the future.
13. Mechanism for Providing Feedback Reports to SNFs
Section 1899B(f) of the Act requires the Secretary to provide
confidential feedback reports to post-acute care providers on their
performance with respect to the measures specified under subsections
(c)(1) and (d)(1), beginning 1 year after the specified application
date that applies to such measures and PAC providers. We intend to
provide detailed procedures to SNFs on how to obtain their confidential
feedback reports on the SNF QRP Web site at https://www.cms.gov/Medicare/Quality-Initiatives-Patient-Assessment-Instruments/NursingHomeQualityInits/SNF-Quality-Reporting.html.
D. Staffing Data Collection
1. Background and Statutory Authority
Section 1819(d)(1)(A) of the Act for SNFs and section 1919(d)(1)(A)
of the Act for NFs each state that, in general, a facility must be
administered in a manner that enables it to use its resources
effectively and efficiently to attain or maintain the highest
practicable physical, mental, and psychosocial well-being of each
resident. Sections 1819(d)(4)(B) and 1919(d)(4)(B) of the Act give the
Secretary authority to issue rules, for SNFs and NFs respectively,
relating to the health, safety and well-being of residents and relating
to the physical facilities thereof.
Section 6106 of the Affordable Care Act of 2010 (Pub. L. 111-148,
March 23, 2010) added a new section 1128I to the Act to promote greater
accountability for LTC facilities (defined under section 1128I(a) of
the Act as skilled nursing facilities and nursing facilities). Section
1128I(g) pertains to the submission of staffing data by LTC facilities,
and specifies that the Secretary, after consulting with state long-term
care ombudsman programs, consumer advocacy groups, provider stakeholder
groups, employees and their representatives and other parties the
Secretary deems appropriate, shall require a facility to electronically
submit to the Secretary direct care staffing information, including
information for agency and contract staff, based on payroll and other
verifiable and auditable data in a uniform format according to
specifications established by the Secretary in consultation with such
programs, groups, and parties. The statute further requires that the
specifications established by the Secretary specify the category of
work a certified employee performs (such as whether the employee is a
registered nurse, licensed practical nurse, licensed vocational nurse,
certified nursing assistant, therapist, or other medical personnel),
include resident census data and information on resident case mix, be
reported on a regular schedule, and include information on employee
turnover and tenure and on the hours of care provided by each category
of certified employees per resident per day. Section 1128I(g) of the
Act establishes that the Secretary may require submission of
information for specific categories, such as nursing staff, before
other categories of certified employees, and requires that information
for agency and contract staff be kept separate from information on
employee staffing.
2. Consultation on Specifications
We have adopted a two-pronged strategy to comply with section
1128I(g) of the Act's consultation requirement. First, through this
notice of proposed rulemaking, we are soliciting input from all
interested parties, including, without limitation, state long-term care
ombudsman programs, consumer advocacy groups, provider stakeholder
groups, employees and their representatives. Second, we are engaged in
ongoing consultation with the statutorily identified entities regarding
the sub-regulatory reporting specifications that we will establish. For
example, in 2012, we conducted a 6-month pilot in which facilities
submitted staffing information electronically based on payroll data,
and which allowed participants and other stakeholders to provide
feedback on the computerized system we are considering using to collect
data. Following the pilot, we continue to receive feedback on the
collection and reporting of staffing information from stakeholders in
anticipation of establishing the specifications for the required
submission by all facilities. Over the next few months, we intend to
increase the level of engagement with stakeholders, including industry
associations, consumer advocacy groups, and long-term care facilities,
to solicit their input on these specifications in advance of the
proposed mandatory submission date. We anticipate activities to solicit
feedback will include Open Door Forums, general question and answer
sessions, and a voluntary submission period whereby facilities can
submit staffing information on a voluntary basis to become familiar
with the system and to provide feedback to CMS on systems issues in
advance of the mandatory submission date. Through this proposed rule,
we invite public comment on our proposed methods for consultation on
the submission specifications.
3. Provisions of the Proposed Rule
We propose to modify current regulations applicable to LTC
facilities that participate in Medicare and Medicaid to implement the
new statutory requirement in section 1128I(g) of the Act. Specifically,
we propose to amend the requirements for the administration of a LTC
facility at Sec. 483.75 by adding a new paragraph (u), Mandatory
submission of staffing information based on payroll data in a uniform
format.
The proposed regulation would require facilities to electronically
submit to CMS complete and accurate direct care staffing information,
including information for agency and contract staff, based on payroll
and other verifiable and auditable data, beginning on July 1, 2016.
a. Submission Requirements
We are proposing to add a new Sec. 483.75(u)(1) to establish the
categories of information a facility must submit. This provision would
implement the requirements in sections 1128I(g)(1), (2) and (4) of the
Act, which require that a facility's submission of staffing information
specify the category of work a certified employee performs, include
resident census data and information on resident case mix, and include
information on employee turnover and tenure and on the hours of care
provided by each category of certified employees per resident per day.
In keeping with Congress's clear intent, CMS is interpreting the
statutory terms ``Certified employee'' and ``employee'' in section
1128Ig(1) and (4) of the Act to include contract and agency staff as
well as direct employees.
The proposed rule also adopts certain approaches to minimize
industry burden and duplication and to provide clarity for long-term
care facilities that we believe are consistent with the intent, and
meet the requirements, of the statute. For example, this rule does not
propose to require the collection of resident case mix information as
specified at section 1128I(g)(2) of the
[[Page 22081]]
Act because we already collect such information under Sec. 483.20, per
which LTC facilities are required to conduct resident assessments by
completing the Minimum Data Set (MDS) and submit the MDS data
electronically to CMS. Because the MDS data is used to calculate a
facility's resident case mix, long-term care facilities are already
required to meet this statutory requirement.
Additionally, for purposes of implementing the statutory reporting
requirements in section 1128I(g)(4) of the Act, we proposed text for
the new Sec. 483.75(u)(1)(iii) to specify that the staffing
information a facility would need to submit must include each
individual's start date, end date (if applicable) and hours worked.
Although the statute does not specifically require reporting each
individual's start and end dates, we believe that requiring submission
of these data elements is necessary to satisfy section 1128I(g)(4) of
the Act's requirement that facilities submit information on turnover
and retention.
Finally, although the proposed text for the new Sec.
483.75(u)(1)(iii) would require facilities to submit each individual's
hours worked, we note that section 1128I(g)(4) of the Act requires LTC
facilities to report on the hours of care provided by each category of
certified employees per resident per day. We believe the obligation to
submit information on ``hours of care'' is satisfied by requiring
facilities to submit hours worked by staff. In contrast with the
statutory reference to ``direct care staffing information,'' which we
believe is intended to establish that information must be submitted for
the categories of individuals who render direct care, we believe
Congress's intent in referring to ``hours of care'' was to require
submission of information regarding the hours worked by individuals in
those categories of staff providing direct care services. One of the
primary objectives of the statute is for facilities to submit staffing
information that is based on payroll and other verifiable and auditable
data. We believe that most payroll or employee time and attendance
systems capture the hours worked by individuals, and do not typically
distinguish between hours spent doing different tasks (unless the tasks
require different levels of pay). If we were to assume that ``hours or
care'' was a subset of the hours worked by individuals, we would not be
able to verify or audit the data submitted. As such, we believe that
requiring facilities to report data on hours worked will yield the
information Congress intended regarding ``hours of care provided.''
b. Distinguishing Employees From Agency and Contract Staff
Under section 1128I(g) of the Act's requirement that information
for agency and contract staff be kept separate from information on
employee staffing, we are proposing to add a new Sec. 483.75(u)(2) to
establish that, when reporting direct care staffing information for an
individual, a facility must specify whether the individual is an
employee of the facility or is engaged by the facility as contract or
agency staff. We believe the statute's intent is to require LTC
facilities to submit staffing information in a manner that can enable
us to distinguish those staff that are employed by the facility from
those that are engaged by the facility under a contract or through an
agency. We do not believe the statute requires such data to be
submitted at separate times or through separate systems, which would
merely engender unnecessary costs and burden, so we intend to collect
all facility staffing information at the same time and through the same
system, employing a mechanism by which LTC facilities will clearly
specify whether staff members are employees of the facility, or engaged
under contract or through an agency.
c. Data Format
We are proposing to add a new Sec. 483.75(u)(3) to establish that
a facility must submit direct care staffing information in the format
specified by CMS. This provision would implement the requirement in
section 1128I(g) of the Act that facilities submit direct care staffing
information in a uniform format. As noted, we are consulting with
stakeholders on potential format specifications. The data that we
propose be required to be submitted are similar to those already
submitted by LTC facilities to CMS on the forms CMS-671 and CMS-672 (we
intend for this proposed new information collection to eventually
supplant the data collections via the CMS-671 and CMS-672). In advance
of the proposed July 1, 2016 implementation date, we will publicize the
established format specifications and will offer training to help
facilities and other interested parties (for example, payroll vendors)
prepare to meet the requirement.
d. Submission Schedule
Section 1128I(g)(3) of the Act requires that facilities submit
direct care staffing information on a regular reporting schedule. LTC
facilities now submit staffing information to CMS about once a year.
Because staffing levels may change throughout the course of a year
(based on, among other things, a facility's census and residents'
needs), to have a more continuous and accurate reflection of facility
staffing, we believe it is preferable for facilities to submit staffing
information quarterly. Therefore, the proposed new Sec. 483.75(u)(4)
would establish that a facility must submit direct care staffing
information on the schedule specified by CMS, but no less frequently
than quarterly.
4. Compliance and Enforcement
This proposed new Sec. 483.75(u) would implement the provisions of
section 1128I(g) of the Act as requirements a LTC facility must meet to
qualify to participate as a SNF in the Medicare program or a NF in the
Medicaid program. As such, we plan to enforce the requirements under
this new regulation through 42 CFR part 488. Should a facility fail to
meet the reporting requirements of, or report inaccurate information
under, the proposed Sec. 483.75(u), CMS or the state may impose one or
more remedies available to address noncompliance with the requirements
for LTC facilities.
5. Conclusion
This proposed rule would implement the new requirements regarding
the submission of staffing information based on payroll and other
verifiable and auditable data by establishing that such submissions are
requirements that a LTC facility must meet to qualify to participate as
a SNF in the Medicare program or a NF in the Medicaid program. While
section 1128I(g) of the Act does not make explicit that submission of
staffing information based on these data is a condition of
participation for Medicare or Medicaid, we believe that it is
implicitly authorized by the terms of section 6106 of the Affordable
Care Act. Moreover, it is explicitly permitted by the general
rulemaking authority of sections 1819(d)(4)(B) and 1919(d)(4)(B) of the
Act, which permit the Secretary to issue rules relating to the health,
safety and well-being of residents. It is critical for both CMS and
consumers to have access to accurate LTC staffing information to
evaluate the quality of care rendered by such facilities. Several
studies have looked at the relationship between staffing and the
quality of care delivered by long term care facilities, and it is clear
that staffing has an impact on the quality of care received by
residents. This new collection and reporting of staffing data should
enable us to have greater insight on the relationship between staffing
and quality, and can be
[[Page 22082]]
used to inform future programs or policies.
VI. Collection of Information Requirements
As indicated below, this rule only proposes information collection
requirements that are exempt from the Paperwork Reduction Act of 1995
(PRA) (44 U.S.C. 3501 et seq.).
Specifically, section V.D. of this preamble proposes to add Sec.
483.75(u) to implement the provisions of section 1128I(g) of the Act as
requirements a LTC facility must meet in order to qualify to
participate as a SNF in the Medicare program or a NF in the Medicaid
program. As such, nursing homes would be required to electronically
submit direct care staffing information (including information with
respect to agency and contract staff) based on payroll and other
verifiable and auditable data. This requirement is exempt from the
Paperwork Reduction Act (PRA) in accordance with the 1987 Omnibus
Budget Reconciliation Act (OBRA) for SNF and NF information collection
activities (Pub. L. 100-203, section 4204(b) and section 4214(d)).
Under sections 4204(b) and 4214(d) of OBRA 1987, requirements related
to the submission and retention of resident assessment data are not
subject to the Paperwork Reduction Act (PRA).
Section V.C.5. of this preamble proposes the following three new
quality measures for the SNF QRP beginning with the FY 2018 program
year: Percent of Residents or Patients with Pressure Ulcers That Are
New or Worsened (Short Stay) (NQF #0678), NQF-endorsed Percent of
Residents Experiencing One or More Falls with Major Injury (Long Stay)
(NQF #0674), and an application of the Percent of Long-Term Care
Hospital Patients With an Admission and Discharge Functional Assessment
and a Care Plan that Addresses Function (NQF #2631; under NQF review).
While the reporting of quality measures is an information
collection, the requirement is exempt from the PRA in accordance with
the IMPACT Act 2014. More specifically, section 1899B(m) and section
1899B(a)(2)(B) of the Act, exempt modifications that are intended to
achieve the standardization of patient assessment data.
With regard to quality reporting during extraordinary
circumstances, section V.C.10. of this rule proposes that SNFs may
request an exception or extension from the FY 2018 payment
determination and that of subsequent payment determinations. The
request must be submitted by email within 90 days from the date that
the extraordinary circumstances occurred.
While the preparation and submission of the request is an
information collection, the requirement is exempt from the PRA in
accordance with the IMPACT Act 2014. More specifically, section
1899B(m) of the Act and the sections referenced in section
1899B(a)(2)(B) of the Act, as added by the IMPACT Act 2014, exempt
modifications that are intended to achieve the standardization of
patient assessment data.
In section V.C.7.b. of this preamble we propose to require the
collection of data--by means of a SNF PPS Part A Discharge Assessment--
at the time of transition from a SNF PPS Part A stay; specifically,
when the resident has not physically been discharged from the facility.
Under this section we also propose to add data items to the scheduled
Medicare required PPS Admission/Entry Assessment (5-day).
While the reporting of quality measures is an information
collection, the requirements are exempt from the PRA in accordance with
the IMPACT Act 2014. More specifically, section 1899B(m) of the Act and
the sections referenced in subsection 1899B(a)(2)(B) of the Act, as
added by the IMPACT Act 2014, exempt modifications that are intended to
achieve the standardization of patient assessment data.
As discussed in section V.C.11. of this preamble, this rule
proposes a process that will enable SNFs to request reconsideration of
our initial non-compliance decision if the SNF believes that it was
incorrectly identified as not having met its reporting requirements for
the applicable fiscal year. Because the reconsideration and appeals
requirements are associated with an administrative action (5 CFR
1320.4(a)(2) and (c)), they are exempt from the requirements of the
PRA.
If you wish to comment on any of the aforementioned assumptions,
please submit your comments as specified under the DATES and ADDRESSES
captions of this proposed rule.
VII. Response to Comments
Because of the large number of public comments we normally receive
on Federal Register documents, we are not able to acknowledge or
respond to them individually. We will consider all comments we receive
by the date and time specified in the DATES section of this preamble,
and when we proceed with a subsequent document, we will respond to the
comments in the preamble to that document.
VIII. Economic Analyses
A. Regulatory Impact Analysis
1. Introduction
We have examined the impacts of this proposed rule as required by
Executive Order 12866 on Regulatory Planning and Review (September 30,
1993), Executive Order 13563 on Improving Regulation and Regulatory
Review (January 18, 2011), the Regulatory Flexibility Act (RFA,
September 19, 1980, Pub. L. 96-354), section 1102(b) of the Act,
section 202 of the Unfunded Mandates Reform Act of 1995 (UMRA, March
22, 1995; Pub. L. 104-4), Executive Order 13132 on Federalism (August
4, 1999), and the Congressional Review Act (5 U.S.C. 804(2)).
Executive Orders 12866 and 13563 direct agencies to assess all
costs and benefits of available regulatory alternatives and, if
regulation is necessary, to select regulatory approaches that maximize
net benefits (including potential economic, environmental, public
health and safety effects, distributive impacts, and equity). Executive
Order 13563 emphasizes the importance of quantifying both costs and
benefits, of reducing costs, of harmonizing rules, and of promoting
flexibility. This rule has been designated an economically significant
rule, under section 3(f)(1) of Executive Order 12866. Accordingly, we
have prepared a regulatory impact analysis (RIA) as further discussed
below. Also, the rule has been reviewed by OMB.
2. Statement of Need
This proposed rule would update the SNF prospective payment rates
for FY 2015 as required under section 1888(e)(4)(E) of the Act. It also
responds to section 1888(e)(4)(H) of the Act, which requires the
Secretary to provide for publication in the Federal Register before the
August 1 that precedes the start of each fiscal year, the unadjusted
federal per diem rates, the case-mix classification system, and the
factors to be applied in making the area wage adjustment. As these
statutory provisions prescribe a detailed methodology for calculating
and disseminating payment rates under the SNF PPS, we do not have the
discretion to adopt an alternative approach.
3. Overall Impacts
This proposed rule sets forth proposed updates of the SNF PPS rates
contained in the SNF PPS final rule for FY 2015 (79 FR 45628). Based on
the above, we estimate that the aggregate impact would be an increase
of $500
[[Page 22083]]
million in payments to SNFs, resulting from the SNF market basket
update to the payment rates, as adjusted by the applicable forecast
error adjustment and by the MFP adjustment. The impact analysis of this
proposed rule represents the projected effects of the changes in the
SNF PPS from FY 2015 to FY 2016. Although the best data available are
utilized, there is no attempt to predict behavioral responses to these
changes, or to make adjustments for future changes in such variables as
days or case-mix.
Certain events may occur to limit the scope or accuracy of our
impact analysis, as this analysis is future-oriented and, thus, very
susceptible to forecasting errors due to certain events that may occur
within the assessed impact time period. Some examples of possible
events may include newly-legislated general Medicare program funding
changes by the Congress, or changes specifically related to SNFs. In
addition, changes to the Medicare program may continue to be made as a
result of previously-enacted legislation, or new statutory provisions.
Although these changes may not be specific to the SNF PPS, the nature
of the Medicare program is such that the changes may interact and,
thus, the complexity of the interaction of these changes could make it
difficult to predict accurately the full scope of the impact upon SNFs.
In accordance with sections 1888(e)(4)(E) and 1888(e)(5) of the
Act, we update the FY 2015 payment rates by a factor equal to the
market basket index percentage change adjusted by the FY 2014 forecast
error and the MFP adjustment to determine the payment rates for FY
2016. As discussed previously, for FY 2012 and each subsequent FY, as
required by section 1888(e)(5)(B) of the Act as amended by section
3401(b) of the Affordable Care Act, the market basket percentage is
reduced by the MFP adjustment. The special AIDS add-on established by
section 511 of the MMA remains in effect until such date as the
Secretary certifies that there is an appropriate adjustment in the case
mix. We have not provided a separate impact analysis for the MMA
provision. Our latest estimates indicate that there are fewer than
4,800 beneficiaries who qualify for the add-on payment for residents
with AIDS. The impact to Medicare is included in the total column of
Table 12. In updating the SNF PPS rates for FY 2016, we made a number
of standard annual revisions and clarifications mentioned elsewhere in
this proposed rule (for example, the update to the wage and market
basket indexes used for adjusting the federal rates).
The annual update set forth in this proposed rule applies to SNF
PPS payments in FY 2016. Accordingly, the analysis that follows only
describes the impact of this single year. In accordance with the
requirements of the Act, we will publish a notice or rule for each
subsequent FY that will provide for an update to the SNF PPS payment
rates and include an associated impact analysis.
In accordance with sections 1888(g) and (h)(2)(A) of the Act, we
are proposing to specify a Skilled Nursing Facility 30-Day All-Cause
Readmission Measure (SNFRM) and adopt that measure for the SNF VBP
Program. Because this proposed measure is claims-based, its adoption
under the SNF VBP Program would not result in any increased costs to
SNFs.
However, we do not yet have preliminary data with which we could
project economic impacts associated with the measure. We intend to make
additional proposals for the SNF VBP Program in future rulemaking, and
we will assess the impacts of the SNFRM and any associated SNF VBP
Program proposals at that time.
We believe that the burden associated with the SNF QRP is the time
and effort associated with data collection and reporting. In this
proposed rule, we propose three quality measures to meet the
requirements of section 1888(e)(6)(B)(II) of the Act.
Our burden calculations take into account all ``new'' items
required on the MDS 3.0 to support data collection and reporting for
these three proposed measures. New items will be included on the
following assessments: SNF PPS 5-Day, Swing Bed PPS 5-Day, OMRA--Start
of Therapy Discharge, OMRA--Other Discharge, OBRA Discharge, Swing Bed
OMRA--Start of Therapy Discharge, Swing Bed OMRA--Other Discharge, and
Swing Bed Discharge on the MDS 3.0. The SNF QRP also requires the
addition of a SNF PPS Part A Discharge Assessment which will also
include new items. New items include data elements required to identify
whether pressure ulcers were present on admission, to inform future
development of the Percent of Residents or Patients with Pressure
Ulcers That Are New or Worsened (Short Stay) (NQF #0678), as well as
changes in function and occurrence of falls with major injury. To the
extent applicable, we will use standardized items to collect data for
the three measures. For a copy of the data collection instrument,
please visit: https://www.cms.gov/Medicare/Quality-Initiatives-Patient-Assessment-Instruments/NursingHomeQualityInits/SNF-Quality-Reporting-Program-Measures-and-Technical-Information.html.
We estimate a total additional burden of $27.47 per Medicare-
covered SNF stay, based on the most recent data available, in this case
FY 2014, that 15,421 SNFs had a total of 2,599,656 Medicare-covered
stays for fee-for-service beneficiaries. This would equate to
1,012,566.13 total added hours or 66 hours per SNF annually.
We believe that the additional MDS items we are proposing will be
completed by Registered Nurses (RN), Occupational Therapists (OT), and/
or Physical Therapists (PT), depending on the item. We identified the
staff type per item based on past LTCH and IRF burden calculations in
conjunction with expert opinion. Our assumptions for staff type was
based on the categories generally necessary to perform assessment:
Registered Nurse (RN), Occupational Therapy (OT), and Physical Therapy
(PT). Individual providers determine the staffing resources necessary,
therefore, we averaged the national average for these labor types and
established a composite cost estimate. We obtained mean hourly wages
for these staff from the U.S. Bureau of Labor Statistics' May 2013
National Occupational Employment and Wage Estimates (https://www.bls.gov/oes/current/oes_nat.htm), and to account for overhead and
fringe benefits, we have doubled the mean hourly wage. The mean hourly
wage for an RN is $33.13, doubled to $66.26 to account for overhead and
fringe benefits. The mean hourly wage for an OT is $37.45, doubled to
$74.90 to account for overhead and fringe benefits. The mean hourly
wage for a PT is $39.51, doubled to $79.02 to account for overhead and
fringe benefits.
To calculate the added burden, we first identified the total number
of new items to be added into assessment instruments. We assume that
each new item accounts for 0.5 minutes of nursing facility staff time.
This assumption is consistent with burden calculations in past IRF and
LTCH federal regulations. For each staff type, we then multiply the
added burden in minutes with the number of times we believe that each
item will be completed annually. To identify the number of times an
item would be completed annually, we noted the number of total SNF FFS
Medicare-covered stays in FY 2014, the most recent data available to
us. We assume that if an item was added to all discharge assessments
that that item would be completed at least one time per SNF FFS
Medicare-covered stay. For example, the time it takes to complete an
item added to all discharge
[[Page 22084]]
assessments (0.5 minutes) would be multiplied by the number of SNF FFS
Medicare-covered stays in FY 2014 to identify the total added burden in
minutes associated with that item. Items added only to the SNF PPS Part
A Discharge were weighted to reflect the proportion of SNF stays for
residents who switch payers, but are not physically discharged from the
facility. Added burden in minutes per staff type was then converted to
hours and multiplied by the doubled hourly wage to identify the annual
cost per staff type. Given these wages and time estimates, the total
cost related to the SNF PPS Part A Discharge Assessment and SNF QRP
measures is estimated at $4,630.20 per SNF annually, or $71,402,283.86
for all SNFs annually.
4. Detailed Economic Analysis
The FY 2016 SNF PPS payment impacts appear in Table 12. Using the
most recently available data, in this case FY 2014, we apply the
current FY 2015 wage index and labor-related share value to the number
of payment days to simulate FY 2015 payments. Then, using the same FY
2014 data, we apply the proposed FY 2016 wage index and labor-related
share value to simulate FY 2015 payments. We tabulate the resulting
payments according to the classifications in Table 12 (for example,
facility type, geographic region, facility ownership), and compare the
difference between current and proposed payments to determine the
overall impact. The breakdown of the various categories of data in the
table follows.
The first column shows the breakdown of all SNFs by urban or rural
status, hospital-based or freestanding status, census region, and
ownership.
The first row of figures describes the estimated effects of the
various changes on all facilities. The next six rows show the effects
on facilities split by hospital-based, freestanding, urban, and rural
categories. The next nineteen rows show the effects on facilities by
urban versus rural status by census region. The last three rows show
the effects on facilities by ownership (that is, government, profit,
and non-profit status).
The second column shows the number of facilities in the impact
database.
The third column shows the effect of the annual update to the wage
index. This represents the effect of using the most recent wage data
available. The total impact of this change is zero percent; however,
there are distributional effects of the change.
The fourth column shows the effect of all of the changes on the FY
2016 payments. The update of 1.4 percent (consisting of the market
basket increase of 2.6 percentage points, reduced by the 0.6 percentage
point forecast error adjustment and further reduced by the 0.6
percentage point MFP adjustment) is constant for all providers and,
though not shown individually, is included in the total column. It is
projected that aggregate payments will increase by 1.4 percent,
assuming facilities do not change their care delivery and billing
practices in response.
As illustrated in Table 12, the combined effects of all of the
changes vary by specific types of providers and by location. For
example, due to changes proposed in this rule, providers in the rural
Pacific region would experience a 1.6 percent increase in FY 2016 total
payments.
Table 12--Projected Impact to the SNF PPS for FY 2016
----------------------------------------------------------------------------------------------------------------
Number of
facilities FY Update wage data Total change (%)
2016 (%)
----------------------------------------------------------------------------------------------------------------
Group:
Total.............................................. 15,421 0.0 1.4
Urban.............................................. 10,887 0.1 1.5
Rural.............................................. 4,534 -0.5 0.8
Hospital based urban............................... 546 0.1 1.5
Freestanding urban................................. 10,341 0.1 1.5
Hospital based rural............................... 626 -0.6 0.8
Freestanding rural................................. 3,908 -0.5 0.9
Urban by region:
New England........................................ 801 0.7 2.1
Middle Atlantic.................................... 1,485 0.7 2.1
South Atlantic..................................... 1,853 -0.1 1.3
East North Central................................. 2,068 -0.2 1.2
East South Central................................. 543 0.0 1.4
West North Central................................. 899 -0.4 1.0
West South Central................................. 1,310 -0.1 1.3
Mountain........................................... 501 -0.1 1.3
Pacific............................................ 1,420 0.2 1.6
Outlying........................................... 7 -1.5 -0.1
Rural by region:
New England........................................ 142 -0.7 0.7
Middle Atlantic.................................... 222 -1.2 0.2
South Atlantic..................................... 510 -0.1 1.3
East North Central................................. 937 -0.2 1.2
East South Central................................. 535 -0.7 0.7
West North Central................................. 1,089 -0.7 0.7
West South Central................................. 764 -1.1 0.3
Mountain........................................... 232 -0.6 0.8
Pacific............................................ 103 0.2 1.6
Ownership:
Government......................................... 881 0.1 1.5
Profit............................................. 10,862 0.0 1.4
Non-profit......................................... 3,678 0.0 1.4
----------------------------------------------------------------------------------------------------------------
Note: The Total column includes the 2.6 percent market basket increase, reduced by the 0.6 percentage point
forecast error adjustment and further reduced by the 0.6 percentage point MFP adjustment. Additionally, we
found no SNFs in rural outlying areas.
[[Page 22085]]
5. Alternatives Considered
As described in this section, we estimate that the aggregate impact
for FY 2016 would be an increase of $500 million in payments to SNFs,
resulting from the SNF market basket update to the payment rates, as
adjusted by the applicable forecast error adjustment and by the MFP
adjustment.
Section 1888(e) of the Act establishes the SNF PPS for the payment
of Medicare SNF services for cost reporting periods beginning on or
after July 1, 1998. This section of the statute prescribes a detailed
formula for calculating payment rates under the SNF PPS, and does not
provide for the use of any alternative methodology. It specifies that
the base year cost data to be used for computing the SNF PPS payment
rates must be from FY 1995 (October 1, 1994, through September 30,
1995). In accordance with the statute, we also incorporated a number of
elements into the SNF PPS (for example, case-mix classification
methodology, a market basket index, a wage index, and the urban and
rural distinction used in the development or adjustment of the federal
rates). Further, section 1888(e)(4)(H) of the Act specifically requires
us to disseminate the payment rates for each new FY through the Federal
Register, and to do so before the August 1 that precedes the start of
the new FY. Accordingly, we are not pursuing alternatives for the
payment methodology as discussed previously.
6. Accounting Statement
As required by OMB Circular A-4 (available online at
www.whitehouse.gov/sites/default/files/omb/assets/regulatory_matters_pdf/a-4.pdf), in Table 13, we have prepared an
accounting statement showing the classification of the expenditures
associated with the provisions of this proposed rule. Table 13 provides
our best estimate of the possible changes in Medicare payments under
the SNF PPS as a result of the policies in this proposed rule, based on
the data for 15,421 SNFs in our database. All expenditures are
classified as transfers to Medicare providers (that is, SNFs).
Table 13--Accounting Statement: Classification of Estimated
Expenditures, From the 2015 SNF PPS Fiscal Year to the 2016 SNF PPS
Fiscal Year
------------------------------------------------------------------------
Category Transfers
------------------------------------------------------------------------
Annualized Monetized Transfers............ $500 million.*
From Whom To Whom? Federal Government to SNF
Medicare Providers.
------------------------------------------------------------------------
* The net increase of $500 million in transfer payments is a result of
the forecast error and MFP adjusted market basket increase of $500
million.
7. Conclusion
This proposed rule sets forth updates of the SNF PPS rates
contained in the SNF PPS final rule for FY 2015 (79 FR 45628). Based on
the above, we estimate the overall estimated payments for SNFs in FY
2016 are projected to increase by $500 million, or 1.4 percent,
compared with those in FY 2015. We estimate that in FY 2016 under RUG-
IV, SNFs in urban and rural areas would experience, on average, a 1.5
and 0.8 percent increase, respectively, in estimated payments compared
with FY 2015. Providers in the urban New England and Middle Atlantic
regions would experience the largest estimated increase in payments of
approximately 2.1 percent. Providers in the urban Outlying region would
experience a small decrease in payments of 0.1 percent.
B. Regulatory Flexibility Act Analysis
The RFA requires agencies to analyze options for regulatory relief
of small entities, if a rule has a significant impact on a substantial
number of small entities. For purposes of the RFA, small entities
include small businesses, non-profit organizations, and small
governmental jurisdictions. Most SNFs and most other providers and
suppliers are small entities, either by reason of their non-profit
status or by having revenues of $27.5 million or less in any 1 year. We
utilized the revenues of individual SNF providers (from recent Medicare
Cost Reports) to classify a small business, and not the revenue of a
larger firm with which they may be affiliated. As a result, we estimate
approximately 91 percent of SNFs are considered small businesses
according to the Small Business Administration's latest size standards
(NAICS 623110), with total revenues of $27.5 million or less in any 1
year. (For details, see the Small Business Administration's Web site at
https://www.sba.gov/category/navigation-structure/contracting/contracting-officials/eligibility-size-standards). In addition,
approximately 25 percent of SNFs classified as small entities are non-
profit organizations. Finally, individuals and states are not included
in the definition of a small entity.
This proposed rule sets forth updates of the SNF PPS rates
contained in the SNF PPS final rule for FY 2015 (79 FR 45628). Based on
the above, we estimate that the aggregate impact would be an increase
of $500 million in payments to SNFs, resulting from the SNF market
basket update to the payment rates, as adjusted by the MFP adjustment
and forecast error adjustment. While it is projected in Table 12 that
most providers would experience a net increase in payments, we note
that some individual providers within the same region or group may
experience different impacts on payments than others due to the
distributional impact of the FY 2016 wage indexes and the degree of
Medicare utilization.
Guidance issued by the Department of Health and Human Services on
the proper assessment of the impact on small entities in rulemakings,
utilizes a cost or revenue impact of 3 to 5 percent as a significance
threshold under the RFA. According to MedPAC, Medicare covers
approximately 12 percent of total patient days in freestanding
facilities and 22 percent of facility revenue (Report to the Congress:
Medicare Payment Policy, March 2015, available at https://medpac.gov/documents/reports/chapter-8-skilled-nursing-facility-services-(march-
2015-report).pdf). However, it is worth noting that the distribution of
days and payments is highly variable. That is, the majority of SNFs
have significantly lower Medicare utilization (Report to the Congress:
Medicare Payment Policy, March 2015, available at https://medpac.gov/documents/reports/chapter-8-skilled-nursing-facility-services-(march-
2015-report).pdf). As a result, for most facilities, when all payers
are included in the revenue stream, the overall impact on total
revenues should be substantially less than those impacts presented in
Table 12. As indicated in Table 12, the effect on facilities is
projected to be an aggregate positive impact of 1.4 percent. As the
overall impact on the industry as a whole, and thus on small entities
specifically, is less than the 3 to 5 percent threshold discussed
previously, the Secretary has determined that this proposed rule would
not have a significant impact on a substantial number of small
entities.
In addition, section 1102(b) of the Act requires us to prepare a
regulatory impact analysis if a rule may have a significant impact on
the operations of
[[Page 22086]]
a substantial number of small rural hospitals. This analysis must
conform to the provisions of section 603 of the RFA. For purposes of
section 1102(b) of the Act, we define a small rural hospital as a
hospital that is located outside of a Metropolitan Statistical Area and
has fewer than 100 beds. This proposed rule would affect small rural
hospitals that (1) furnish SNF services under a swing-bed agreement or
(2) have a hospital-based SNF. We anticipate that the impact on small
rural hospitals would be similar to the impact on SNF providers
overall. Moreover, as noted in previous SNF PPS final rules (most
recently the one for FY 2014 (78 FR 47968)), the category of small
rural hospitals would be included within the analysis of the impact of
this proposed rule on small entities in general. As indicated in Table
12, the effect on facilities is projected to be an aggregate positive
impact of 1.4 percent. As the overall impact on the industry as a whole
is less than the 3 to 5 percent threshold discussed above, the
Secretary has determined that this proposed rule would not have a
significant impact on a substantial number of small rural hospitals.
C. Unfunded Mandates Reform Act Analysis
Section 202 of the Unfunded Mandates Reform Act of 1995 (UMRA) also
requires that agencies assess anticipated costs and benefits before
issuing any rule whose mandates require spending in any 1 year of $100
million in 1995 dollars, updated annually for inflation. In 2015, that
threshold is approximately $144 million. This proposed rule would not
impose spending costs on state, local, or tribal governments in the
aggregate, or by the private sector, of $144 million.
D. Federalism Analysis
Executive Order 13132 establishes certain requirements that an
agency must meet when it issues a proposed rule (and subsequent final
rule) that imposes substantial direct requirement costs on state and
local governments, preempts state law, or otherwise has federalism
implications. This proposed rule would have no substantial direct
effect on state and local governments, preempt state law, or otherwise
have federalism implications.
E. Congressional Review Act
This proposed regulation is subject to the Congressional Review Act
provisions of the Small Business Regulatory Enforcement Fairness Act of
1996 (5 U.S.C. 801 et seq.) and has been transmitted to the Congress
and the Comptroller General for review.
In accordance with the provisions of Executive Order 12866, this
proposed rule was reviewed by the Office of Management and Budget.
List of Subjects in 42 CFR Part 483
Grant programs--health, Health facilities, Health professions,
Health records, Medicaid, Medicare, Nursing homes, Nutrition, Reporting
and recordkeeping requirements, Safety.
For the reasons set forth in the preamble, the Centers for Medicare
& Medicaid Services proposes to amend 42 CFR chapter IV as set forth
below:
PART 483--REQUIREMENTS FOR STATES AND LONG TERM CARE FACILITIES
0
1. The authority citation for part 483 is revised to read as follows:
Authority: Secs. 1102, 1128I, 1819, 1871 and 1919 of the Social
Security Act, (42 U.S.C. 1302, 1320a-7, 1395i, 1395hh and 1396r).
0
2. Section 483.75 is amended by adding paragraph (u) to read as
follows:
Sec. 483.75 Administration.
* * * * *
(u) Mandatory submission of staffing information based on payroll
data in a uniform format. Long-term care facilities must electronically
submit to CMS complete and accurate direct care staffing information,
including information for agency and contract staff, based on payroll
and other verifiable and auditable data in a uniform format according
to specifications established by CMS.
(1) Submission requirements. The facility must electronically
submit to CMS complete and accurate direct care staffing information,
including the following:
(i) The category of work for each individual that performs direct
care (including, but not limited to, whether the individual is a
registered nurse, licensed practical nurse, licensed vocational nurse,
certified nursing assistant, therapist, or other type of medical
personnel as specified by CMS);
(ii) Resident census data; and
(iii) Information on staff turnover and tenure, and on the hours of
care provided by each category of staff per resident per day
(including, but not limited to, start date, end date (as applicable),
and hours worked for each individual).
(2) Distinguishing employee from agency and contract staff. When
reporting direct care staffing information for an individual, the
facility must specify whether the individual is an employee of the
facility, or is engaged by the facility under contract or through an
agency.
(3) Data format. The facility must submit direct care staffing
information in the format specified by CMS.
(4) Submission schedule. The facility must submit direct care
staffing information on the schedule specified by CMS, but no less
frequently then quarterly.
Dated: April 7, 2015.
Andrew M. Slavitt,
Acting Administrator, Centers for Medicare & Medicaid Services.
Dated: April 13, 2015.
Sylvia M. Burwell,
Secretary, Department of Health and Human Services.
[FR Doc. 2015-08944 Filed 4-15-15; 4:15 pm]
BILLING CODE 4120-01-P
