Medicare Program; Prospective Payment System and Consolidated Billing for Skilled Nursing Facilities Proposed Rule for FY 2017, SNF Value-Based Purchasing Program, SNF Quality Reporting Program, and SNF Payment Models Research, 24229-24280 [2016-09399]
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Vol. 81
Monday,
No. 79
April 25, 2016
Part III
Department of Health and Human Services
asabaliauskas on DSK3SPTVN1PROD with PROPOSALS
Centers for Medicare & Medicaid Services
42 CFR Part 412
Medicare Program; Prospective Payment System and Consolidated Billing
for Skilled Nursing Facilities Proposed Rule for FY 2017, SNF Value-Based
Purchasing Program, SNF Quality Reporting Program, and SNF Payment
Models Research; Proposed Rule
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DEPARTMENT OF HEALTH AND
HUMAN SERVICES
Centers for Medicare & Medicaid
Services
42 CFR Part 412
[CMS–1645–P]
RIN 0938–AS75
Medicare Program; Prospective
Payment System and Consolidated
Billing for Skilled Nursing Facilities
Proposed Rule for FY 2017, SNF ValueBased Purchasing Program, SNF
Quality Reporting Program, and SNF
Payment Models Research
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) 2017. In addition, it
includes a proposal to specify a
potentially preventable readmission
measure for the Skilled Nursing Facility
Value-Based Purchasing Program (SNF
VBP), and other proposals for that
program aimed at implementing valuebased purchasing for SNFs.
Additionally, this proposed rule
proposes additional polices and
measures in the Skilled Nursing Facility
Quality Reporting Program (SNF QRP).
This proposed rule also includes an
update on the SNF Payment Models
Research (PMR) project.
DATES: To be assured consideration,
comments must be received at one of
the addresses provided below, no later
than 5 p.m. on June 20, 2016.
ADDRESSES: In commenting, please refer
to file code CMS–1645–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–1645–P, P.O. Box 8016, Baltimore,
MD 21244–8016.
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SUMMARY:
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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–1645–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.
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.
Stephanie Frilling, (410) 786–4507,
for information related to skilled
nursing facility value-based purchasing.
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Charlayne Van, (410) 786–8659, for
information related to skilled nursing
facility quality reporting.
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 2016 SNF PPS
final rule (80 FR 46390), 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.
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 2017 Update
A. Federal Base Rates
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B. SNF Market Basket Update
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)
B. Skilled Nursing Facility (SNF) Quality
Reporting Program (QRP)
C. SNF Payment Models Research
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 Reporting
CBSA Core-based statistical area
CCN CMS Certification Number
CFR Code of Federal Regulations
CMI Case-mix index
CMS Centers for Medicare & Medicaid
Services
FFS Fee-for-service
FR Federal Register
FY Fiscal year
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
IGI IHS (Information Handling Services)
Global Insight, Inc.
IMPACT Improving Medicare Post-Acute
Care Transformation Act of 2014, Pub. L.
113–185
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
NF Nursing facility
NQF National Quality Forum
OMB Office of Management and Budget
PAC Post-acute care
PAMA Protecting Access to Medicare Act of
2014, Pub. L 113–93
PMR Payment Models Research
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
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
SNF QRP Skill nursing facility quality
reporting program
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
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2017 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 (FY), certain
specified information relating to the
payment update (see section II.C.). This
proposed rule also includes an update
on the SNF PMR project. In addition, it
proposes to specify a potentially
preventable readmission measure for the
Skilled Nursing Facility (SNF) ValueBased Purchasing (VBP) Program, and
makes other proposals related to that
Program’s implementation for FY 2019.
We are also proposing four new quality
and resource use measures for the SNF
QRP and are proposing new SNF review
and correction procedures for
performance data that is to be publicly
reported.
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 2016 (80 FR
46390) which reflects the SNF market
basket index, as adjusted by the
multifactor productivity (MFP)
adjustment for FY 2017. We also
propose for the SNF VBP Program to
specify a potentially preventable
readmission measure, define
performance standards, and adopt a
scoring methodology, among other
policies. We are also proposing to adopt
and implement four new quality and
resource use measures for the SNF QRP
and are proposing new SNF review and
correction procedures for performance
data that is to be publicly reported as we
continue to implement this program and
meet the requirements of the IMPACT
Act.
C. Summary of Cost and Benefits
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Provision description
Total transfers
Proposed FY 2017 SNF PPS payment rate update.
The overall economic impact of this proposed rule would be an estimated increase of $800
million in aggregate payments to SNFs during FY 2017.
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
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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
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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
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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-ServicePayment/SNFPPS/Downloads/
Legislative_History_07302013.pdf.
Section 215(a) of PAMA added
section 1888(g) to the Act requiring the
Secretary to specify an all-cause allcondition hospital readmission measure
and a resource use measure, an allcondition risk-adjusted potentially
preventable hospital readmission
measure, for the SNF setting.
Additionally, section 215(b) of PAMA
added section 1888(h) to the Act
requiring the Secretary to implement a
VBP program for SNFs. 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.
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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
transition extended through the
facility’s first 3 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.
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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 2016 (80 FR
46390, August 4, 2015).
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 2017.
III. SNF PPS Rate Setting Methodology
and FY 2017 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
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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 2017 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 2016
forecast with historical data through
fourth quarter 2015. 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 2017. This is
based on the IGI first quarter 2016
forecast (with historical data through
the fourth quarter 2015) of the FY 2017
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 MFP adjustment as required by
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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), § 413.337(d)(2) provides 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 FYs. As we
stated in the final rule for FY 2004 that
first issued the market basket forecast
error adjustment (68 FR 46058, August
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4, 2003), the adjustment will reflect both
upward and downward adjustments, as
appropriate.
For FY 2015 (the most recently
available FY for which there is final
data), the estimated increase in the
market basket index was 2.5 percentage
points, while the actual increase for FY
2015 was 2.3 percentage points,
resulting in the actual increase being 0.2
percentage point lower than the
estimated increase. Accordingly, as the
difference between the estimated and
actual amount of change in the market
basket index does not exceed the 0.5
percentage point threshold, the FY 2017
market basket percentage change of 2.6
percent would be not adjusted to
account for the forecast error correction.
Table 1 shows the forecasted and actual
market basket amounts for FY 2015.
TABLE 1—DIFFERENCE BETWEEN THE FORECASTED AND ACTUAL MARKET BASKET INCREASES FOR FY 2015
Index
Forecasted
FY 2015
increase *
Actual
FY 2015
increase **
FY 2015
difference
SNF ..............................................................................................................................................
2.5
2.3
0.2
* Published in FEDERAL REGISTER; based on second quarter 2014 IGI forecast (2010-based index).
** Based on the first quarter 2016 IGI forecast, with historical data through the fourth quarter 2015 (2010-based index).
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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 FY, year, costreporting 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
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
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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. For a
discussion of the MFP projection
methodology, we refer readers to the FY
2012 SNF PPS final rule (76 FR 48527
through 48529) and the FY 2016 SNF
PPS final rule (80 FR 46395). 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.
a. Incorporating the MFP Adjustment
Into the Market Basket Update
Per section 1888(e)(5)(A) of the Act,
the Secretary shall 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.
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
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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 2017 update, the MFP
adjustment is calculated as the 10-year
moving average of changes in MFP for
the period ending September 30, 2017,
which is 0.5 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 2017
for the SNF PPS is based on IGI’s first
quarter 2016 forecast of the SNF market
basket update, which is estimated to be
2.6 percent. In accordance with section
E:\FR\FM\25APP3.SGM
25APP3
24234
Federal Register / Vol. 81, No. 79 / Monday, April 25, 2016 / Proposed Rules
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, 2017) of
0.5 percent, which is calculated as
described above and based on IGI’s first
quarter 2016 forecast. The resulting
MFP-adjusted SNF market basket
update is equal to 2.1 percent, or 2.6
percent less 0.5 percentage point.
5. Market Basket Update Factor for FY
2017
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
2017 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, 2015 through
September 30, 2016 to the average
market basket level for the period of
October 1, 2016 through September 30,
2017. 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
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 difference between
the forecasted FY 2015 SNF market
basket percentage change and the actual
FY 2015 SNF market basket percentage
change (FY 2015 is the most recently
available FY for which there is
historical data) did not exceed the 0.5
percentage point threshold, the FY 2017
market basket percentage change of 2.6
percent would not be adjusted by the
forecast error correction.
For FY 2017, 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, 2017) of
0.5 percent, as described in section
III.B.4. of this proposed rule. The
resulting net SNF market basket update
would equal 2.1 percent, or 2.6 percent
less the 0.5 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
2017 SNF market basket percentage
change, labor-related share relative
importance, forecast error adjustment,
and MFP adjustment in the FY 2017
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 2017 from average
prices for FY 2016. 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 2017, prior to
adjustment for case-mix.
TABLE 2—FY 2017 UNADJUSTED FEDERAL RATE PER DIEM URBAN
Rate component
Nursing—
Case-mix
Therapy—
Case-mix
Therapy—
Non-case-mix
Non-case-mix
Per Diem Amount ............................................................................................
$174.71
$131.61
$17.33
$89.16
TABLE 3—FY 2017 UNADJUSTED FEDERAL RATE PER DIEM RURAL
Rate component
Nursing—
Case-mix
Therapy—
Case-mix
Therapy—
Non-case-mix
Non-case-mix
Per Diem Amount ............................................................................................
$166.91
$151.74
$18.52
$90.82
asabaliauskas on DSK3SPTVN1PROD with PROPOSALS
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
VerDate Sep<11>2014
20:42 Apr 22, 2016
Jkt 238001
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,
PO 00000
Frm 00006
Fmt 4701
Sfmt 4702
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
E:\FR\FM\25APP3.SGM
25APP3
Federal Register / Vol. 81, No. 79 / Monday, April 25, 2016 / Proposed Rules
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
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 this
certification 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 2014 data (which
still used ICD–9–CM coding), we
identified fewer than 4,800 SNF
residents with a diagnosis code of 042
(Human Immunodeficiency Virus (HIV)
Infection). As explained in the FY 2016
SNF PPS final rule (80 FR 46397
through 46398), on October 1, 2015
(consistent with section 212 of PAMA),
we converted to using ICD–10–CM code
B20 to identify those residents for
whom it is appropriate to apply the
AIDS add-on established by section 511
of the MMA. For FY 2017, an urban
facility with a resident with AIDS in
RUG–IV group ‘‘HC2’’ would have a
24235
case-mix adjusted per diem payment of
$436.69 (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 $995.65.
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,
2016, through September 30, 2017. 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. Tables 4 and 5 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
asabaliauskas on DSK3SPTVN1PROD with PROPOSALS
RUG–IV category
Nursing
index
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 ..............................
VerDate Sep<11>2014
20:42 Apr 22, 2016
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
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
Jkt 238001
Therapy
index
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
0.55
0.28
0.28
........................
........................
........................
........................
........................
........................
........................
........................
........................
........................
........................
PO 00000
Frm 00007
Nursing
component
$466.48
449.00
455.99
382.61
445.51
375.63
431.53
382.61
394.84
272.55
272.55
172.96
263.81
193.93
192.18
253.33
207.90
158.99
237.61
213.15
146.76
262.07
124.04
625.46
466.48
405.33
387.86
304.00
356.41
279.54
330.20
258.57
324.96
255.08
Fmt 4701
Therapy
component
Non-case mix
therapy comp
Non-case mix
component
$246.11
246.11
168.46
168.46
111.87
111.87
72.39
72.39
36.85
246.11
246.11
246.11
168.46
168.46
168.46
111.87
111.87
111.87
72.39
72.39
72.39
36.85
36.85
........................
........................
........................
........................
........................
........................
........................
........................
........................
........................
........................
........................
........................
........................
........................
........................
........................
........................
........................
........................
........................
........................
........................
........................
........................
........................
........................
........................
........................
........................
........................
........................
........................
........................
$17.33
17.33
17.33
17.33
17.33
17.33
17.33
17.33
17.33
17.33
17.33
$89.16
89.16
89.16
89.16
89.16
89.16
89.16
89.16
89.16
89.16
89.16
89.16
89.16
89.16
89.16
89.16
89.16
89.16
89.16
89.16
89.16
89.16
89.16
89.16
89.16
89.16
89.16
89.16
89.16
89.16
89.16
89.16
89.16
89.16
Sfmt 4702
E:\FR\FM\25APP3.SGM
25APP3
Total rate
$801.75
784.27
713.61
640.23
646.54
576.66
593.08
544.16
520.85
607.82
607.82
508.23
521.43
451.55
449.80
454.36
408.93
360.02
399.16
374.70
308.31
388.08
250.05
731.95
572.97
511.82
494.35
410.49
462.90
386.03
436.69
365.06
431.45
361.57
24236
Federal Register / Vol. 81, No. 79 / Monday, April 25, 2016 / Proposed Rules
TABLE 4—RUG–IV CASE-MIX ADJUSTED FEDERAL RATES AND ASSOCIATED INDEXES URBAN—Continued
RUG–IV category
Nursing
index
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 ..............................
1.96
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
........................
........................
........................
........................
........................
........................
........................
........................
........................
........................
........................
........................
........................
........................
........................
........................
........................
........................
........................
........................
........................
........................
........................
........................
........................
........................
........................
........................
........................
........................
........................
........................
Nursing
component
342.43
269.05
324.96
255.08
272.55
213.15
253.33
199.17
293.51
262.07
272.55
241.10
225.38
200.92
200.92
178.20
153.74
136.27
169.47
157.24
122.30
111.81
262.07
244.59
241.10
223.63
192.18
178.20
146.76
136.27
103.08
94.34
Therapy
component
Non-case mix
therapy comp
Non-case mix
component
17.33
17.33
17.33
17.33
17.33
17.33
17.33
17.33
17.33
17.33
17.33
17.33
17.33
17.33
17.33
17.33
17.33
17.33
17.33
17.33
17.33
17.33
17.33
17.33
17.33
17.33
17.33
17.33
17.33
17.33
17.33
17.33
89.16
89.16
89.16
89.16
89.16
89.16
89.16
89.16
89.16
89.16
89.16
89.16
89.16
89.16
89.16
89.16
89.16
89.16
89.16
89.16
89.16
89.16
89.16
89.16
89.16
89.16
89.16
89.16
89.16
89.16
89.16
89.16
........................
........................
........................
........................
........................
........................
........................
........................
........................
........................
........................
........................
........................
........................
........................
........................
........................
........................
........................
........................
........................
........................
........................
........................
........................
........................
........................
........................
........................
........................
........................
........................
Total rate
448.92
375.54
431.45
361.57
379.04
319.64
359.82
305.66
400.00
368.56
379.04
347.59
331.87
307.41
307.41
284.69
260.23
242.76
275.96
263.73
228.79
218.30
368.56
351.08
347.59
330.12
298.67
284.69
253.25
242.76
209.57
200.83
TABLE 5—RUG–IV CASE-MIX ADJUSTED FEDERAL RATES AND ASSOCIATED INDEXES RURAL
asabaliauskas on DSK3SPTVN1PROD with PROPOSALS
RUG–IV category
Nursing
index
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 ..............................
VerDate Sep<11>2014
20:42 Apr 22, 2016
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
0.84
1.50
0.71
3.58
2.67
2.32
2.22
1.74
2.04
1.60
1.89
1.48
Jkt 238001
Therapy
index
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
0.55
0.28
0.28
........................
........................
........................
........................
........................
........................
........................
........................
........................
PO 00000
Frm 00008
Nursing
component
$445.65
428.96
435.64
365.53
425.62
358.86
412.27
365.53
377.22
260.38
260.38
165.24
252.03
185.27
183.60
242.02
198.62
151.89
227.00
203.63
140.20
250.37
118.51
597.54
445.65
387.23
370.54
290.42
340.50
267.06
315.46
247.03
Fmt 4701
Therapy
component
Non-case mix
therapy comp
Non-case mix
component
$283.75
283.75
194.23
194.23
128.98
128.98
83.46
83.46
42.49
283.75
283.75
283.75
194.23
194.23
194.23
128.98
128.98
128.98
83.46
83.46
83.46
42.49
42.49
........................
........................
........................
........................
........................
........................
........................
........................
........................
........................
........................
........................
........................
........................
........................
........................
........................
........................
........................
........................
........................
........................
........................
........................
........................
........................
........................
........................
........................
........................
........................
........................
$18.52
18.52
18.52
18.52
18.52
18.52
18.52
18.52
18.52
$90.82
90.82
90.82
90.82
90.82
90.82
90.82
90.82
90.82
90.82
90.82
90.82
90.82
90.82
90.82
90.82
90.82
90.82
90.82
90.82
90.82
90.82
90.82
90.82
90.82
90.82
90.82
90.82
90.82
90.82
90.82
90.82
Sfmt 4702
E:\FR\FM\25APP3.SGM
25APP3
Total rate
$820.22
803.53
720.69
650.58
645.42
578.66
586.55
539.81
510.53
634.95
634.95
539.81
537.08
470.32
468.65
461.82
418.42
371.69
401.28
377.91
314.48
383.68
251.82
706.88
554.99
496.57
479.88
399.76
449.84
376.40
424.80
356.37
24237
Federal Register / Vol. 81, No. 79 / Monday, April 25, 2016 / Proposed Rules
TABLE 5—RUG–IV CASE-MIX ADJUSTED FEDERAL RATES AND ASSOCIATED INDEXES RURAL—Continued
RUG–IV category
Nursing
index
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 ..............................
1.86
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
........................
........................
........................
........................
........................
........................
........................
........................
........................
........................
........................
........................
........................
........................
........................
........................
........................
........................
........................
........................
........................
........................
........................
........................
........................
........................
........................
........................
........................
........................
........................
........................
........................
........................
asabaliauskas on DSK3SPTVN1PROD with PROPOSALS
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 2017, as we continue to
believe that in the absence of SNFspecific 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 2017, the updated wage data are for
hospital cost reporting periods
VerDate Sep<11>2014
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Nursing
component
310.45
243.69
327.14
257.04
310.45
243.69
260.38
203.63
242.02
190.28
280.41
250.37
260.38
230.34
215.31
191.95
191.95
170.25
146.88
130.19
161.90
150.22
116.84
106.82
250.37
233.67
230.34
213.64
183.60
170.25
140.20
130.19
98.48
90.13
Therapy
component
Frm 00009
Fmt 4701
Non-case mix
component
18.52
18.52
18.52
18.52
18.52
18.52
18.52
18.52
18.52
18.52
18.52
18.52
18.52
18.52
18.52
18.52
18.52
18.52
18.52
18.52
18.52
18.52
18.52
18.52
18.52
18.52
18.52
18.52
18.52
18.52
18.52
18.52
18.52
18.52
90.82
90.82
90.82
90.82
90.82
90.82
90.82
90.82
90.82
90.82
90.82
90.82
90.82
90.82
90.82
90.82
90.82
90.82
90.82
90.82
90.82
90.82
90.82
90.82
90.82
90.82
90.82
90.82
90.82
90.82
90.82
90.82
90.82
90.82
........................
........................
........................
........................
........................
........................
........................
........................
........................
........................
........................
........................
........................
........................
........................
........................
........................
........................
........................
........................
........................
........................
........................
........................
........................
........................
........................
........................
........................
........................
........................
........................
........................
........................
beginning on or after October 1, 2012
and before October 1, 2013 (FY 2013
cost report data).
We note that section 315 of the
Medicare, Medicaid, and SCHIP
Benefits Improvement and Protection
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 2017 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
PO 00000
Non-case mix
therapy comp
Sfmt 4702
Total rate
419.79
353.03
436.48
366.38
419.79
353.03
369.72
312.97
351.36
299.62
389.75
359.71
369.72
339.68
324.65
301.29
301.29
279.59
256.22
239.53
271.24
259.56
226.18
216.16
359.71
343.01
339.68
322.98
292.94
279.59
249.54
239.53
207.82
199.47
average wage index from all contiguous
Core-Based Statistical Areas (CBSAs) as
a reasonable proxy. For FY 2017, 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 2017, the only
urban area without wage index data
available is CBSA 25980, HinesvilleFort Stewart, GA. The proposed wage
index applicable to FY 2017 is set forth
in Tables A and B available on the CMS
Web site at https://www.cms.gov/
E:\FR\FM\25APP3.SGM
25APP3
24238
Federal Register / Vol. 81, No. 79 / Monday, April 25, 2016 / Proposed Rules
Medicare/Medicare-Fee-for-ServicePayment/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 FY 2010-based SNF
market basket cost weights for the
following cost categories: Wages and
salaries; employee benefits; the laborrelated portion of nonmedical
professional fees; administrative and
facilities support services; all other—
basket. Second, we calculate a ratio for
each cost category by dividing the FY
2017 price index level for that cost
category by the total market basket price
index level. Third, we determine the FY
2017 relative importance for each cost
category by multiplying this ratio by the
base year (FY 2010) weight. Finally, we
add the FY 2017 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 2017 labor-related relative
importance. Table 6 summarizes the
proposed updated labor-related share
for FY 2017, compared to the laborrelated share that was used for the FY
2016 SNF PPS final rule.
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 2017. 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 2017 than the base
year weights from the SNF market
basket.
We calculate the labor-related relative
importance for FY 2017 in four steps.
First, we compute the FY 2017 price
index level for the total market basket
and each cost category of the market
TABLE 6—LABOR-RELATED RELATIVE IMPORTANCE, FY 2016 AND FY 2017
Relative importance,
labor-related,
FY 2016
15:2 forecast 1
Relative importance,
labor-related,
FY 2017
16:1 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) ...................................................................................................................
48.8
11.3
3.5
0.5
2.3
2.7
48.8
11.2
3.4
0.5
2.3
2.7
Total ......................................................................................................................................
69.1
68.9
1 Published
in the Federal Register; based on second quarter 2015 IGI forecast.
2 Based on first quarter 2016 IGI forecast, with historical data through fourth quarter 2015.
Tables 7 and 8 show the RUG–IV
case-mix adjusted federal rates by labor-
related and non-labor-related
components.
TABLE 7—RUG–IV CASE-MIX ADJUSTED FEDERAL RATES FOR URBAN SNFS BY LABOR AND NON-LABOR COMPONENT
asabaliauskas on DSK3SPTVN1PROD with PROPOSALS
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 ..........................................................................................................................
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Sfmt 4702
Labor portion
801.75
784.27
713.61
640.23
646.54
576.66
593.08
544.16
520.85
607.82
607.82
508.23
521.43
451.55
449.80
454.36
408.93
360.02
399.16
374.70
308.31
388.08
250.05
E:\FR\FM\25APP3.SGM
$552.41
540.36
491.68
441.12
445.47
397.32
408.63
374.93
358.87
418.79
418.79
350.17
359.27
311.12
309.91
313.05
281.75
248.05
275.02
258.17
212.43
267.39
172.28
25APP3
Non-labor portion
$249.34
243.91
221.93
199.11
201.07
179.34
184.45
169.23
161.98
189.03
189.03
158.06
162.16
140.43
139.89
141.31
127.18
111.97
124.14
116.53
95.88
120.69
77.77
Federal Register / Vol. 81, No. 79 / Monday, April 25, 2016 / Proposed Rules
24239
TABLE 7—RUG–IV CASE-MIX ADJUSTED FEDERAL RATES FOR URBAN SNFS BY LABOR AND NON-LABOR COMPONENT—
Continued
RUG–IV category
Total rate
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
731.95
572.97
511.82
494.35
410.49
462.90
386.03
436.69
365.06
431.45
361.57
448.92
375.54
431.45
361.57
379.04
319.64
359.82
305.66
400.00
368.56
379.04
347.59
331.87
307.41
307.41
284.69
260.23
242.76
275.96
263.73
228.79
218.30
368.56
351.08
347.59
330.12
298.67
284.69
253.25
242.76
209.57
200.83
504.31
394.78
352.64
340.61
282.83
318.94
265.97
300.88
251.53
297.27
249.12
309.31
258.75
297.27
249.12
261.16
220.23
247.92
210.60
275.60
253.94
261.16
239.49
228.66
211.81
211.81
196.15
179.30
167.26
190.14
181.71
157.64
150.41
253.94
241.89
239.49
227.45
205.78
196.15
174.49
167.26
144.39
138.37
Non-labor portion
227.64
178.19
159.18
153.74
127.66
143.96
120.06
135.81
113.53
134.18
112.45
139.61
116.79
134.18
112.45
117.88
99.41
111.90
95.06
124.40
114.62
117.88
108.10
103.21
95.60
95.60
88.54
80.93
75.50
85.82
82.02
71.15
67.89
114.62
109.19
108.10
102.67
92.89
88.54
78.76
75.50
65.18
62.46
TABLE 8—RUG–IV CASE-MIX ADJUSTED FEDERAL RATES FOR RURAL SNFS BY LABOR AND NON-LABOR COMPONENT
asabaliauskas on DSK3SPTVN1PROD with PROPOSALS
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 ..........................................................................................................................
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Fmt 4701
Sfmt 4702
Labor portion
820.22
803.53
720.69
650.58
645.42
578.66
586.55
539.81
510.53
634.95
634.95
539.81
537.08
470.32
468.65
461.82
418.42
371.69
401.28
377.91
314.48
383.68
E:\FR\FM\25APP3.SGM
$565.13
553.63
496.56
448.25
444.69
398.70
404.13
371.93
351.76
437.48
437.48
371.93
370.05
324.05
322.90
318.19
288.29
256.09
276.48
260.38
216.68
264.36
25APP3
Non-Labor portion
$255.09
249.90
224.13
202.33
200.73
179.96
182.42
167.88
158.77
197.47
197.47
167.88
167.03
146.27
145.75
143.63
130.13
115.60
124.80
117.53
97.80
119.32
24240
Federal Register / Vol. 81, No. 79 / Monday, April 25, 2016 / Proposed Rules
TABLE 8—RUG–IV CASE-MIX ADJUSTED FEDERAL RATES FOR RURAL SNFS BY LABOR AND NON-LABOR COMPONENT—
Continued
RUG–IV category
Total rate
asabaliauskas on DSK3SPTVN1PROD with PROPOSALS
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
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
adjustment had not been made. For FY
2017 (federal rates effective October 1,
2016), 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 2016 to the weighted
average wage adjustment factor for FY
2017. For this calculation, we would use
the same FY 2015 claims utilization
data for both the numerator and
denominator of this ratio. We define the
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Jkt 238001
251.82
706.88
554.99
496.57
479.88
399.76
449.84
376.40
424.80
356.37
419.79
353.03
436.48
366.38
419.79
353.03
369.72
312.97
351.36
299.62
389.75
359.71
369.72
339.68
324.65
301.29
301.29
279.59
256.22
239.53
271.24
259.56
226.18
216.16
359.71
343.01
339.68
322.98
292.94
279.59
249.54
239.53
207.82
199.47
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 2017 would be 1.0000.
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
PO 00000
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Fmt 4701
Sfmt 4702
Labor portion
173.50
487.04
382.39
342.14
330.64
275.43
309.94
259.34
292.69
245.54
289.24
243.24
300.73
252.44
289.24
243.24
254.74
215.64
242.09
206.44
268.54
247.84
254.74
234.04
223.68
207.59
207.59
192.64
176.54
165.04
186.88
178.84
155.84
148.93
247.84
236.33
234.04
222.53
201.84
192.64
171.93
165.04
143.19
137.43
Non-Labor portion
78.32
219.84
172.60
154.43
149.24
124.33
139.90
117.06
132.11
110.83
130.55
109.79
135.75
113.94
130.55
109.79
114.98
97.33
109.27
93.18
121.21
111.87
114.98
105.64
100.97
93.70
93.70
86.95
79.68
74.49
84.36
80.72
70.34
67.23
111.87
106.68
105.64
100.45
91.10
86.95
77.61
74.49
64.63
62.04
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.
Generally, OMB issues major
revisions to statistical areas every 10
years, based on the results of the
decennial census. 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
E:\FR\FM\25APP3.SGM
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24241
Federal Register / Vol. 81, No. 79 / Monday, April 25, 2016 / Proposed Rules
2015, including a 1-year transition with
a blended wage index for FY 2015. OMB
Bulletin No. 13–01 established revised
delineations for Metropolitan Statistical
Areas, Micropolitan Statistical Areas,
and Combined Statistical Areas in the
United States and Puerto Rico based on
the 2010 Census, and provided guidance
on the use of the delineations of these
statistical areas using standards
published on June 28, 2010 in the
Federal Register (75 FR 37246 through
37252). In addition, OMB occasionally
issues minor updates and revisions to
statistical areas in the years between the
decennial censuses. On July 15, 2015,
OMB issued OMB Bulletin No. 15–01,
which provides minor updates to and
supersedes OMB Bulletin No. 13–01
that was issued on February 28, 2013.
The attachment to OMB Bulletin No.
15–01 provides detailed information on
the update to statistical areas since
February 28, 2013. The updates
provided in OMB Bulletin No. 15–01 are
based on the application of the 2010
Standards for Delineating Metropolitan
and Micropolitan Statistical Areas to
Census Bureau population estimates for
July 1, 2012 and July 1, 2013. A copy
of this bulletin may be obtained on the
Web site at https://
www.whitehouse.gov/sites/default/files/
omb/bulletins/2015/15-01.pdf. As we
previously stated in the FY 2008 SNF
PPS proposed and final rules (72 FR
25538 through 25539, and 72 FR 43423),
we again wish to clarify that this and all
subsequent SNF PPS rules and notices
are considered to incorporate any such
updates and revisions set forth in the
most recent OMB bulletin that applies
to the hospital wage data used to
determine the current SNF PPS wage
index. As noted above, the proposed
wage index applicable to FY 2017 is set
forth in Tables A and B available on the
CMS Web site at https://www.cms.gov/
Medicare/Medicare-Fee-for-ServicePayment/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 $46,782.60.
TABLE 9—ADJUSTED RATE COMPUTATION EXAMPLE SNF XYZ: LOCATED IN FREDERICK, MD (URBAN CBSA 43524)
WAGE INDEX: 0.9820
[See Proposed Wage Index in Table A] 1
RUG–IV group
Labor
RVX ...................................
ES2 ....................................
RHA ...................................
CC2 * .................................
BA2 ....................................
Wage index
$491.68
394.78
248.05
228.66
157.64
Adjusted labor
0.982
0.982
0.982
0.982
0.982
$482.83
387.67
243.59
224.54
154.80
Non-labor
Adjusted rate
$221.93
178.19
111.97
103.21
71.15
$704.76
565.86
355.56
327.75
225.95
Percent
adjustment
$704.76
565.86
355.56
747.27
225.95
Medicare days
14
30
16
10
30
100
Payment
$9,866.64
16,975.80
5,688.96
7,472.70
6,778.50
46,782.60
* 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
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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 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.
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
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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
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 (ARD) on the
5-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
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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
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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.
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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 ARD of the 5day 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) of the Act places the
responsibility with the SNF for billing
Medicare for physical therapy,
occupational therapy, and speechlanguage 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,
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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
PPS. 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
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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
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, 2016). 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 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
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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 through
40357), effective October 1, 2010, nonCAH swing-bed rural hospitals are
required to complete an MDS 3.0 swingbed 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
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A. Skilled Nursing Facility Value-Based
Purchasing Program (SNF VBP)
1. Background
Section 215 of the Protecting Access
to Medicare Act of 2014 (PAMA)
authorizes the SNF VBP Program by
adding sections 1888(g) and (h) to the
Act. These sections provide structure for
the development of the SNF VBP
Program, including, among other things,
the requirements of only two
measures—an all-cause, all-condition
hospital readmission measure, which is
to be replaced as soon as practicable by
an all-condition risk-adjusted
potentially preventable hospital
readmission measure—and confidential
and public reporting requirements for
the SNF VBP Program. We began
development of the SNF VBP Program
in the FY 2016 SNF PPS final rule with,
among other things, the adoption of an
all-cause, all-condition hospital
readmission measure, as required under
section 1888(g)(1) of the Act. We will
continue the process in this proposed
rule with our proposal for an allcondition risk-adjusted potentially
preventable hospital readmission
measure for SNFs, which the Secretary
is required to specify no later than
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October 1, 2016 under section 1888(g)(2)
of the Act. The Act requires that the
SNF VBP apply to payments for services
furnished on or after October 1, 2018.
The SNF VBP Program applies to
freestanding SNFs, SNFs affiliated with
acute care facilities, and all non-CAH
swing-bed rural hospitals. We believe
the implementation of the SNF VBP
Program is an important step toward
transforming how care is paid for,
moving increasingly toward rewarding
better value, outcomes, and innovations
instead of merely volume.
For additional background
information on the SNF VBP Program,
including an overview of the SNF VBP
Report to Congress and a summary of
the Program’s statutory requirements,
we refer readers to the FY 2016 SNF
PPS final rule (80 FR 46409 through
46410).
2. Measures
a. SNF 30-Day All-Cause Readmission
Measure (SNFRM) (NQF #2510)
Per the requirement at section
1888(g)(1) of the Act, in the FY 2016
SNF PPS final rule (80 FR 46419), we
finalized our proposal to specify the
SNF 30-Day All-Cause Readmission
Measure (SNFRM) (NQF #2510) as the
SNF all-cause, all-condition hospital
readmission measure for the SNF VBP
Program. The SNFRM assesses the riskstandardized rate of all-cause, allcondition, 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, CAH, or psychiatric
hospital. The measure is claims-based,
requiring no additional data collection
or submission burden for SNFs. For
additional details on the SNFRM,
including our responses to public
comments, we refer readers to the FY
2016 SNF PPS final rule (80 FR 46411
through 46419).
b. Skilled Nursing Facility 30-Day
Potentially Preventable Readmission
Measure (SNFPPR)
We are proposing to specify the SNF
30-Day Potentially Preventable
Readmission Measure (SNFPPR) as the
SNF all-condition risk-adjusted
potentially preventable hospital
readmission measure to meet the
requirements of section 1888(g)(2) of the
Act. This proposed measure assesses the
facility-level risk-standardized rate of
unplanned, potentially preventable
hospital readmissions for SNF patients
within 30 days of discharge from a prior
admission to an IPPS hospital, CAH, or
psychiatric hospital. Hospital
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24243
readmissions include readmissions to a
short-stay acute-care hospital or CAH,
with a diagnosis considered to be
unplanned and potentially preventable.
This proposed measure is claims-based,
requiring no additional data collection
or submission burden for SNFs.
Hospital readmissions among the
Medicare population, including
beneficiaries that utilize post-acute care,
are common, costly, and often
preventable.1 2 The Medicare Payment
Advisory Commission (MedPAC) and a
study by Jencks et al. estimated that 17
to 20 percent of Medicare beneficiaries
discharged from the hospital were
readmitted within 30 days. MedPAC
found that more than 75 percent of 30day and 15-day readmissions and 84
percent of 7-day readmissions were
considered potentially preventable.3 In
addition, MedPAC calculated that
annual Medicare spending on
potentially preventable readmissions
would be $12B for 30-day, $8B for 15day, and $5B for 7-day readmissions.4
For hospital readmissions from SNFs,
MedPAC deemed 76 percent of
readmissions as potentially avoidable—
associated with $12B in Medicare
expenditures.5 Mor et al. analyzed 2006
Medicare claims and SNF assessment
data (Minimum Data Set), and reported
a 23.5 percent readmission rate from
SNFs, associated with $4.3B in
expenditures.6
We have addressed the high rates of
hospital readmissions in the acute care
setting, as well as in PAC by developing
the SNF 30-Day All-Cause Readmission
Measure (NQF #2510), as well as similar
measures for other PAC providers (NQF
#2502 for IRFs and NQF #2512 for
LTCHs).7 These measures are endorsed
by the National Quality Forum (NQF),
and the NQF-endorsed measure (NQF
1 Friedman, B., and Basu, J.: The rate and cost of
hospital readmissions for preventable conditions.
Med. Care Res. Rev. 61(2):225–240, 2004.
doi:10.1177/1077558704263799.
2 Jencks, S.F., Williams, M.V., and Coleman, E.A.:
Rehospitalizations among patients in the Medicare
Fee-for-Service Program. N. Engl. J. Med.
360(14):1418–1428, 2009. doi:10.1016/
j.jvs.2009.05.045.
3 MedPAC: Payment policy for inpatient
readmissions, in Report to the Congress: Promoting
Greater Efficiency in Medicare. Washington, DC, pp.
103–120, 2007. Available from https://
www.medpac.gov/documents/reports/
Jun07_EntireReport.pdf.
4 Ibid.
5 Ibid.
6 Mor, V., Intrator, O., Feng, Z., et al.: The
revolving door of rehospitalization from SNFs.
Health Aff. 29(1):57–64, 2010. doi:10.1377/
hlthaff.2009.0629.
7 National Quality Forum: All-Cause Admissions
and Readmissions Measures. pp. 1–319, April 2015.
Available from https://www.qualityforum.org/
Publications/2015/04/All-Cause_Admissions_
and_Readmissions_Measures_-_Final_Report.aspx.
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#2510) was adopted for the SNF VBP
program in the FY 2016 SNF PPS final
rule (80 FR 46411 through 46419).
These NQF-endorsed measures assess
all-cause unplanned readmissions.
Several general methods and
algorithms have been developed to
assess potentially avoidable or
preventable hospitalizations and
readmissions for the Medicare
population. These include the Agency
for Healthcare Research and Quality’s
(AHRQ) Prevention Quality Indicators,
approaches developed by MedPAC, and
proprietary approaches, such as the
3MTM algorithm for Potentially
Preventable Readmissions (PPR).8 9 10
Recent work led by Kramer et al. for
MedPAC identified 13 conditions for
which readmissions were deemed as
potentially preventable among SNF and
IRF populations; 11 12 however, these
conditions did not differ by PAC setting
or readmission window (that is,
readmissions during the PAC stay or
post-PAC discharge). Although much of
the existing literature addresses hospital
readmissions more broadly and
potentially avoidable hospitalizations
for specific settings like skilled nursing
facilities, these findings are relevant to
the development of potentially
preventable readmission measures for
PAC.13 14 15
8 Goldfield, N.I., McCullough, E.C., Hughes, J.S.,
et al.: Identifying potentially preventable
readmissions. Health Care Finan. Rev. 30(1):75–91,
2008. Available from https://www.ncbi.nlm.nih.gov/
pmc/articles/PMC4195042/.
9 National Quality Forum: Prevention Quality
Indicators Overview. 2008.
10 MedPAC: Online Appendix C: Medicare
Ambulatory Care Indicators for the Elderly. pp. 1–
12, prepared for Chapter 4, 2011. Available from
https://www.medpac.gov/documents/reports/
Mar11_Ch04_APPENDIX.pdf?sfvrsn=0.
11 Kramer, A., Lin, M., Fish, R., et al.:
Development of Inpatient Rehabilitation Facility
Quality Measures: Potentially Avoidable
Readmissions, Community Discharge, and
Functional Improvement. pp. 1–42, 2015. Available
from https://www.medpac.gov/documents/
contractor-reports/development-of-inpatientrehabilitation-facility-quality-measures-potentiallyavoidable-readmissions-community-discharge-andfunctional-improvement.pdf?sfvrsn=0.
12 Kramer, A., Lin, M., Fish, R., et al.:
Development of Potentially Avoidable Readmission
and Functional Outcome SNF Quality Measures.
pp. 1–75, 2014. Available from https://
www.medpac.gov/documents/contractor-reports/
mar14_snfqualitymeasures_
contractor.pdf?sfvrsn=0.
13 Allaudeen, N., Vidyarthi, A., Maselli, J., et al.:
Redefining readmission risk factors for general
medicine patients. J. Hosp. Med. 6(2):54–60, 2011.
doi:10.1002/jhm.805.
14 4 Gao, J., Moran, E., Li, Y.-F., et al.: Predicting
potentially avoidable hospitalizations. Med. Care
52(2):164–171, 2014. doi:10.1097/
MLR.0000000000000041.
15 Walsh, E.G., Wiener, J.M., Haber, S., et al.:
Potentially avoidable hospitalizations of dually
eligible Medicare and Medicaid beneficiaries from
nursing facility and home-and community-based
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Based on the evidence discussed
above and to meet PAMA requirements,
we are proposing to specify this
measure, entitled, SNF 30-Day
Potentially Preventable Readmission
Measure (SNFPPR), for the SNF VBP
Program. The SNFPPR measure was
developed by CMS to harmonize with
the NQF-endorsed SNF 30-Day AllCause Readmission Measure (NQF
#2510) 16 adopted in the FY 2016 SNF
final rule (80 FR 46411 through 46419)
and the Hospital-Wide Risk-Adjusted
All-Cause Unplanned Readmission
Measure (NQF #1789) (Hospital-Wide
Readmission or HWR measure 17),
finalized for the Hospital IQR Program
in the FY 2013 IPPS/LTCH PPS final
rule (77 FR 53521 through 53528).
Although these existing measures focus
on all-cause unplanned readmissions
and the proposed SNFPPR measure
assesses potentially preventable hospital
readmissions, the SNFPPR will use the
same statistical approach, the same time
window as NQF measure #2510 (that is,
30 days post-hospital discharge), and a
similar set of patient characteristics for
risk adjustment. As appropriate, the
proposed potentially preventable
hospital readmission measure for SNFs
is being harmonized with similar
measures being proposed for LTCHs,
IRFs, and HHAs to meet the
requirements of the Improving Medicare
Post-Acute Care Transformation Act of
2014 (IMPACT Act) (Pub. L. 113–185).
The SNFPPR measure estimates the
risk-standardized rate of unplanned,
potentially preventable hospital
readmissions for Medicare FFS
beneficiaries that occur within 30 days
of discharge from the prior proximal
hospitalization. This is a departure from
readmission measures in other PAC
settings, such as the two measures
proposed in the Inpatient Rehabilitation
Facility (IRF) Quality Reporting
Program, one of which assesses
readmissions that take place during the
IRF stay and the other that assesses
readmissions within 30 days following
discharge from the IRF. The proposed
measure here is distinct because section
1888(h)(2) of the Act requires that only
a single quality measure be
implemented in the SNF VBP program
at one time. A purely within-stay
services waiver programs. J. Am. Geriatr. Soc.
60(5):821–829, 2012. doi:10.1111/j.1532–
5415.2012.03920.x.
16 National Quality Forum: All-Cause Admissions
and Readmissions Measures. pp. 1–319, April 2015.
National Quality Forum: All-Cause Admissions and
Readmissions Measures. pp. 1–319, April 2015.
Available from https://www.qualityforum.org/
Publications/2015/04/All-Cause_Admissions_
and_Readmissions_Measures_-_Final_Report.aspx.
17 Available by searching for ‘‘1789’’ at https://
www.qualityforum.org/QPS/QPSTool.aspx.
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measure (that is, a measure that assesses
readmission rates only when those
readmissions occurred during a SNF
stay) would perversely incentivize the
premature discharge of residents from
SNFs to avoid penalty. Conversely,
limiting the measure to readmissions
that occur within 30-days postdischarge from the SNF would not
capture readmissions that occur during
the SNF stay. In order to qualify for this
proposed measure, the SNF admission
must take place within 1 day of
discharge from a prior proximal hospital
stay. The prior proximal hospital stay is
defined as an inpatient admission to an
acute care hospital (including IPPS,
CAH, or a psychiatric hospital). Because
the measure denominator is based on
SNF admissions, a single Medicare
beneficiary could be included in the
measure multiple times within a given
year. Readmissions counted in this
measure are identified by examining
Medicare FFS claims data for
readmissions to either acute care
hospitals (IPPS or CAH) that occur
within 30 days of discharge from the
prior proximal hospitalization,
regardless of whether the readmission
occurs during the SNF stay or takes
place after the patient is discharged
from the SNF. Because patients differ in
complexity and morbidity, the measure
is risk-adjusted for case-mix. Our
approach for defining potentially
preventable readmissions is described
below.
Potentially Preventable Readmission
Measure Definition: We conducted a
comprehensive environmental scan,
analyzed claims data, and obtained
input from a technical expert panel
(TEP) to develop a working conceptual
definition and list of conditions for
which hospital readmissions may be
considered potentially preventable. The
Ambulatory Care Sensitive Conditions
(ACSC)/Prevention Quality Indicators
(PQI), developed by AHRQ, served as
the starting point in this work. For the
purposes of the SNFPPR measure, the
definition of potentially preventable
readmissions differs based on whether
the resident is admitted to the SNF
(referred to as ‘‘within-stay’’) or in the
post-SNF discharge period; however,
there is considerable overlap of the
definitions. For patients readmitted to a
hospital during within the SNF stay,
potentially preventable readmissions
(PPR) should be avoidable with
sufficient medical monitoring and
appropriate treatment. The within-stay
list of PPR conditions includes the
following, which are categorized by 4
clinical rationale groupings: (1)
Inadequate management of chronic
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conditions; (2) Inadequate management
of infections; (3) Inadequate
management of other unplanned events;
and (4) Inadequate injury prevention.
For individuals in the post the post-SNF
discharge period, a potentially
preventable readmission refers to a
readmission in which the probability of
occurrence could be minimized with
adequately planned, explained, and
implemented post discharge
instructions, including the
establishment of appropriate follow-up
ambulatory care. Our list of PPR
conditions in the post-SNF discharge
period includes the following,
categorized by 3 clinical rationale
groupings: (1) Inadequate management
of chronic conditions; (2) Inadequate
management of infections; and (3)
Inadequate management of other
unplanned events. Additional details
regarding the definitions of potentially
preventable readmissions are available
in our Measure Specification (available
at https://www.cms.gov/Medicare/
Quality-Initiatives-Patient-AssessmentInstruments/Value-Based-Programs/
Other-VBPs/SNF-VBP.html).
This proposed measure focuses on
readmissions that are potentially
preventable and also unplanned.
Similar to the SNF 30-Day All-Cause
Readmission Measure (SNFRM) (NQF
#2510), this measure uses the CMS
Planned Readmission Algorithm to
define planned readmissions. In
addition to the CMS Planned
Readmission Algorithm, this measure
incorporates procedures that are
considered planned in post-acute care
settings, as identified in consultation
with TEPs. Full details on the planned
readmissions criteria used, including
the additional procedures considered
planned for post-acute care, can be
found in the Measure Specifications
(available at https://www.cms.gov/
Medicare/Quality-Initiatives-PatientAssessment-Instruments/Value-BasedPrograms/Other-VBPs/SNF-VBP.html).
This proposed measure assesses
potentially preventable readmission
rates while accounting for patient or
resident demographics, principal
diagnosis in the prior hospital stay,
comorbidities, and other patient factors.
The model also estimates a facilityspecific effect, common to patients or
residents treated in each facility. This
proposed measure is calculated for each
SNF based on the ratio of the predicted
number of risk-adjusted, unplanned,
potentially preventable hospital
readmissions that occurred within 30
days of discharge from the prior
proximal hospitalization, including the
estimated facility effect, to the estimated
predicted number of risk-adjusted,
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unplanned hospital readmissions for the
same individuals receiving care at the
average SNF. A ratio above 1.0 indicates
a higher than expected readmission rate
(worse), while a ratio below 1.0
indicates a lower than expected
readmission rate (better). This ratio is
referred to as the standardized risk ratio
or SRR. The SRR is then multiplied by
the overall national raw rate of
potentially preventable readmissions for
all SNF stays. The resulting rate is the
risk-standardized readmission rate
(RSRR) of potentially preventable
readmissions. The full methodology is
detailed in the Measure Specifications
(available at https://www.cms.gov/
Medicare/Quality-Initiatives-PatientAssessment-Instruments/Value-BasedPrograms/Other-VBPs/SNFVBP.html).18
Eligible SNF stays in the measure are
assessed until: (1) The 30-day period
ends; or (2) the patient is readmitted to
an acute care hospital (IPPS or CAH). If
the readmission is classified as
unplanned and potentially preventable,
it is counted as a readmission in the
measure calculation. If the readmission
is planned or not preventable, the
readmission is not counted in the
measure rate.
Readmission rates are risk-adjusted
for case-mix characteristics. The risk
adjustment modeling estimates the
effects of patient/resident
characteristics, comorbidities, and select
health care variables on the probability
of readmission. More specifically, the
risk-adjustment model for SNFs
accounts for sociodemographic
characteristics (age, sex, original reason
for entitlement), principal diagnosis
during the prior proximal hospital stay,
body system specific surgical indicators,
comorbidities, length of stay during the
resident’s prior proximal hospital stay,
intensive care utilization, end-stage
renal disease status, and number of
prior acute care hospitalizations in the
preceding 365 days. This measure is
calculated using one full calendar year
of data. The full measure specifications
and results of the reliability testing can
be found in the Measure Specifications
(available at https://www.cms.gov/
Medicare/Quality-Initiatives-PatientAssessment-Instruments/Value-BasedPrograms/Other-VBPs/SNFVBP.html).19
Our measure development contractor
convened a TEP, which provided input
on the technical specifications of this
18 Note
to reviewers: The specifications will be
posted at this link by the time the proposed rule
is displayed.
19 Note to reviewers: The specifications will be
posted at this link by the time the proposed rule
is displayed.
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24245
measure, including the development of
an approach to define potentially
preventable hospital readmissions for a
number of PAC settings, including
SNFs. Details from the TEP meetings,
including TEP members’ ratings of
conditions proposed as being
potentially preventable, are available in
the TEP Summary Report available on
the CMS Web site (https://
www.cms.gov/Medicare/QualityInitiatives-Patient-AssessmentInstruments/Post-Acute-Care-QualityInitiatives/IMPACT-Act-of-2014/
IMPACT-Act-Downloads-andVideos.html). We also solicited
stakeholder feedback on the
development of this measure through a
public comment period held from
November 2 through December 1, 2015.
A summary of the public comments we
received is also available on the CMS
Web site (https://www.cms.gov/
Medicare/Quality-Initiatives-PatientAssessment-Instruments/Post-AcuteCare-Quality-Initiatives/IMPACT-Act-of2014/IMPACT-Act-Downloads-andVideos.html).
In addition to our TEP and public
comment feedback, we also considered
input from the Measures Application
Partnership (MAP) on the SNFPPR. The
MAP is composed of multi-stakeholder
groups convened by the NQF. The MAP
provides input on the measures we are
considering for implementation in
certain quality reporting and pay-forperformance programs. In general, the
MAP has noted the need for care
transition measures in PAC/LTC
performance measurement programs
and stated that setting-specific
admission and readmission measures
would address this need.20 We included
the SNFPPR measure being proposed for
the SNF VBP Program in this proposed
rule in the List of Measures under
Consideration (MUC List) for December
1, 2015.21
The MAP encouraged continued
development of the proposed measure
in the SNF VBP Program to meet the
mandate of PAMA. Specifically, the
MAP stressed the need to promote
shared accountability and ensure
effective care transitions. More
information about the MAP’s
recommendations for this measure is
available at https://
www.qualityforum.org/Publications/
2016/02/MAP_2016_Considerations_
for_Implementing_Measures_
20 National Quality Forum: Measure Applications
Partnership Pre-Rulemaking Report: 2013
Recommendations of Measures Under
Consideration by HHS. pp. 1–394, February 2013.
Available from https://www.qualityforum.org/
Publications/2013/02/MAP_Pre-Rulemaking_
Report_-_February_2013.aspx.
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in_Federal_Programs_-_PAC-LTC.aspx.
At the time, the risk-adjustment model
was still under development. Following
completion of that development work,
we were able to test for measure validity
and reliability as available in the
measure specifications document
provided above. Testing results are
within range for similar outcome
measures finalized in public reporting
and value-based purchasing programs,
including the SNFRM finalized for this
this program.
We invite public comment on our
proposal to adopt this measure, the SNF
30-Day Potentially Preventable
Readmission Measure (SNFPPR).
Section 1888(h)(2)(B) of the Act
requires the Secretary to apply the allcondition risk-adjusted potentially
preventable hospital readmission
measure specified under paragraph
(g)(2) instead of the measure specified
under paragraph (g)(1) as soon as
practicable. We intend to propose the
timing for the change to the paragraph
(g)(2) measure in future rulemaking. We
seek comment on when we should
propose this change for the SNF VBP
Program.
3. Performance Standards
asabaliauskas on DSK3SPTVN1PROD with PROPOSALS
a. Background
Sections 1888(h)(3)(A) of the Act
requires the Secretary to establish
performance standards for the SNF VBP
Program. Under paragraph (h)(3)(B), the
performance standards must include
levels of achievement and improvement,
and under paragraph (h)(3)(C), must be
established and announced not later
than 60 days prior to the beginning of
the performance period for the FY
involved.
In the FY 2016 SNF PPS final rule (80
FR 46419 through 46422), we
summarized public comments we
received on possible approaches to
calculating performance standards
under the SNF VBP Program. We
specifically sought comment on the
approaches that we have adopted for
other Medicare VBP programs such as
the Hospital VBP Program (Hospital
VBP Program), the Hospital-Acquired
Conditions Reduction Program (HAC
Reduction Program), the Hospital
Readmissions Reduction Program
(HRRP), and the End-Stage Renal
Disease Quality Incentive Program
(ESRD QIP). We also sought comment
on the best possible approach to
measuring improvement, particularly
given the SNF VBP Program’s limitation
to one measure for each program year.
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b. Proposed Performance Standards
Calculation Methodology
We believe that an essential goal of
the SNF VBP program is to provide
incentives for all SNFs to improve the
quality of care that they furnish to their
residents. In determining what level of
SNF performance would be appropriate
to select as the performance standard for
the quality measures specified under the
SNF VBP program, we focused on
selecting levels that would challenge
SNFs to improve continuously or to
maintain high levels of performance. To
achieve this aim, we analyzed SNFRM
data and examined how different
achievement performance standards
would impact SNFs’ scores under the
proposed scoring methodology
described further below. As more data
becomes available, we will continue to
assess the appropriateness of these
performance standards for the SNF VBP
program and, if necessary, propose to
refine these standards’ definitions and
calculation methodologies to better
incentivize the provision of high-quality
care.
(1) Proposed Achievement Performance
Standard and Benchmark
Beginning with the FY 2019 SNF VBP
program, we propose to define the
achievement performance standard
(which we will refer to as the
‘‘achievement threshold’’) for quality
measures specified under the SNF VBP
program as the 25th percentile of
national SNF performance on the
quality measure during the applicable
baseline period. We believe this
achievement threshold definition
represents an achievable standard of
excellence and will reward SNFs
appropriately for their performance on
the quality measures specified for the
SNF VBP program. We further believe
this achievement threshold definition
will provide strong incentives for SNFs
to improve their performance on the
measures specified for the SNF VBP
Program continuously, and will result in
a wide range of SNF measure scores that
can be used in public reporting. We also
seek comment on whether we should
consider adopting either the 50th or
15th percentiles of national SNFs’
performance on the quality measure
during the applicable baseline period.
We seek comment on data or other
analysis that we should consider
regarding the impact on SNFs’ financial
viability and service delivery to
beneficiaries at either the higher or
lower alternative standard. For example,
while the 50th percentile would
represent a more challenging threshold
for care quality improvement, that
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standard would align with the Hospital
VBP Program and would likely result in
higher value-based incentive payments
to top-performing SNFs than other
definitions, though the actual
distribution of value-based incentive
payments would depend on all SNFs’
performance and on the statutory rules
governing their distribution. Such a
standard would likely result in lower
value-based incentive payments to
lower-performing SNFs, which could
create substantial payment disparities
among participating SNFs. Conversely,
the 15th percentile would likely result
in higher value-based incentive
payments for lower-performing SNFs
than other thresholds, with the
corresponding result of lower valuebased incentive-payments for topperforming SNFs compared to other
thresholds.
We further propose to define the
‘‘benchmark’’ for quality measures
specified under the SNF VBP program
as the mean of the top decile of SNF
performance on the quality measure
during the applicable baseline period.
We believe this definition represents
demonstrably high but achievable
standards of excellence; in other words,
the benchmark will reflect observed
scores for the group of highestperforming SNFs on a given measure.
This proposed benchmark policy aligns
with that used by the Hospital VBP
Program. As stated in the FY 2016 SNF
PPS final rule (80 FR 46419 through
46420), we believe 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 highquality care and for improving their
performance over time. We therefore
believe it is appropriate to align with
the Hospital VBP Program in setting
benchmarks for the SNF VBP Program.
We also propose that SNFs would
receive points along an achievement
range, which is the scale between the
achievement threshold and the
benchmark. Under this proposal, SNFs
would receive achievement points if
they meet or exceed the achievement
threshold for the specified measure, and
could increase their achievement score
based on higher levels of performance.
(We describe the proposed scoring
methodology, including how we
propose to award points for both
achievement and improvement, in the
scoring methodology section of this
proposed rule). This proposed
achievement range policy aligns with
that used by the Hospital VBP Program.
We refer readers to the FY 2016 SNF
PPS final rule (80 FR 46419 through
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46420) for a discussion of the rationale
behind aligning SNF VBP Program
policies with the Hospital VBP Program.
As stated in that rule, we believe that
the Hospital VBP Program’s
performance standards methodology is
well-understood and would allow us to
reward SNFs both for providing highquality care and for improving their
performance over time. We therefore
believe it is appropriate to align with
the Hospital VBP Program in setting
benchmarks for the SNF VBP Program.
At this time, we do not have the
complete CY 2015 data set necessary to
calculate a numerical value for the
proposed achievement threshold for the
SNFRM. However, we are able to
estimate this numerical value based on
the most recent four quarters of SNFRM
24247
data available and have provided this
estimate in Table 10. We intend to
publish the final performance standards
using complete data from CY 2015 in
the FY 2017 SNF PPS final rule. For
clarity, and as discussed further below,
we have inverted the SNFRM rate so
that a higher rate represents better
performance.
TABLE 10—INTERIM FY 2019 SNF VBP PROGRAM PERFORMANCE STANDARDS
Measure ID
Measure description
Achievement
threshold
Benchmark
SNFRM ............................................
SNF 30-Day All-Cause Readmission Measure (NQF #2510) ..................
0.79551
0.83915
We welcome public comment on the
proposed definitions for achievement
performance standards, as well as our
intention to publish the final
achievement threshold and benchmark
for the FY 2019 Program year in the FY
2017 SNF PPS final rule.
(2) Proposed Improvement Performance
Standard
Beginning with the FY 2019 SNF VBP
program, we propose to define the
improvement performance standard
(which we will refer to as the
‘‘improvement threshold’’) for quality
measures specified under the SNF VBP
program as each specific SNF’s
performance on the specified measure
during the applicable baseline period.
As discussed further below, we will
measure SNFs’ performance during both
the proposed performance and baseline
periods, and will award improvement
points by comparing SNFs’ performance
to the improvement threshold. We
believe this improvement performance
standard ensures that SNFs will be
adequately incentivized to improve
continuously their performance on the
quality measures specified under the
SNF VBP Program, and appropriately
balances our view that we should both
reward SNFs for high performance and
encourage improved performance over
time.
We welcome public comment on this
proposal.
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(3) Publication of Performance Standard
Values
Section 1888(h)(3)(C) of the Act
requires the Secretary to establish and
announce the performance standards for
a given SNF VBP program year not later
than 60 days prior to the beginning of
the performance period for the FY
involved. Based on the proposed
performance period of CY 2017 for the
FY 2019 SNF VBP Program, we believe
that we must establish and announce
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performance standards for the FY 2019
Program not later than November 1,
2016. We intend to establish and
announce performance standards for the
Program in the annual SNF PPS rule,
which is effective on October 1 of each
year.
However, finalizing numerical values
of these performance standards is often
logistically difficult because it requires
the collection and analysis of large
amounts of quality measure data in a
short period of time. For example, the
data file for a full year of SNF claims
data is typically completed around May
of the following year. To calculate a
numerical value for a performance
standard, we must perform multiple
levels of analyses on the data to ensure
that all appropriate SNFs and patients
are included in measure calculations;
perform the measure calculations
themselves; and then use those
calculations to determine the numerical
value for the performance standards. If
any individual step of this process is
delayed, it may preclude us from
publishing finalized numerical values
for the finalized performance standards
in the applicable SNF PPS final rule,
which is typically displayed publicly by
August 1 of each year.
To retain the flexibility needed to
ensure that numerical values published
for the finalized performance standards
are accurate, we are proposing to
publish these numerical values no later
than 60 days prior to the beginning of
the performance period but, if
necessary, outside of notice-andcomment rulemaking. As noted, we
intend to publish numerical values for
those performance standards in the final
rule when practicable. However, in
instances in which we cannot complete
the necessary analyses in time to
include them in the SNF PPS final rule,
we propose to publish the numerical
values for the performance standards on
the QualityNet Web site used by SNFs
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to receive VBP information as soon as
practicable but in no event later than the
statutorily required 60 days prior to the
beginning of the performance period for
the fiscal year involved. In this instance,
we would notify SNFs and the public of
the publication of the performance
standards using a listserv email and
posting on the QualityNet News portion
of the Web site.
We welcome public comment on this
proposal.
4. FY 2019 Performance Period and
Baseline Period
a. Background
We refer readers to the FY 2016 SNF
PPS final rule (80 FR 46422) for
discussion of the considerations that we
intended to take into account when
specifying a performance period under
the SNF VBP Program. We also
explained our view that the SNF VBP
Program necessitates adoption of a
baseline period, similar to those
adopted under the Hospital VBP
Program and ESRD QIP, which we
would use to establish performance
standards and measure improvement.
We received public comments on this
topic, and we refer readers to the FY
2016 SNF PPS final rule for a summary
of those comments and our responses.
We considered those comments when
developing our performance and
baseline period proposals for this
proposed rule.
b. Proposed FY 2019 Performance
Period
In considering various performance
periods that could apply for the FY 2019
SNF VBP Program, we recognized that
we must balance the length of the
performance period used to collect
quality measure data and the amount of
data needed to calculate reliable, valid
measure rates with the need to finalize
a performance period through notice
and comment rulemaking. We are
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therefore proposing to adopt CY 2017
(January 1, 2017 through December 31,
2017) as the performance period for the
FY 2019 SNF VBP Program, with a 90day run out period immediately
thereafter for claims processing, based
on the following considerations.
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. Based on
past experience with claims processing
in other quality reporting and valuebased purchasing programs, this time
lag between care delivered to patients
who are included in 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 the delay between data
collection and payment impacts,
including: The processing time needed
to calculate measure rates using
multiple sources of claims needed for
statistical modeling; time for
determining achievement and
improvement scores; time for providers
to review their measure rates and
included patients; and processing time
needed to determine whether a payment
adjustment needs to be made to a
provider’s reimbursement rate under the
applicable PPS based on its
performance. Further, our preference is
to adopt at least a 12-month period as
the performance period, consistent with
our view that using a full year’s
performance period provides sufficient
levels of data accuracy and reliability
for scoring SNF performance on the
SNFRM and SNFPPR. We also believe
that adopting a 12-month period for the
performance period supports the
direction provided of section 1888(g)(3)
of the Act that the quality measures
specified under the SNF VBP Program
shall be designed to achieve a high level
of reliability and validity. Specifically,
we believe using a full year of claims
data better ensures that the variation
found among SNF performance on the
measures is due to real differences
between SNFs, and not within-facility
variation due to issues such as
seasonality. Additionally, we believe
that adopting 12-month performance
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and baseline periods enables us to
measure SNFs’ performance on the
specified measures in sequence, which
we believe is necessary in order to
measure SNFs on both achievement and
improvement, as required by section
1888(h)(3)(B) of the Act.
Finally, we also considered the time
necessary to calculate SNF-specific
performance on the SNFRM after the
conclusion of the performance period
and to develop and provide SNF VBP
scoring reports, including the
requirement under section 1888(h)(7) of
the Act that we inform each SNF of the
adjustments to the SNF’s payments as a
result of the program not later than 60
days prior to the FY involved. Based on
the requirements and concerns
discussed above, we believe a 12-month
time period is the only operationally
feasible performance period for the SNF
VBP Program.
We welcome public comment on this
proposal.
c. Proposed FY 2019 Baseline Period
As we have done in the Hospital VBP
Program and the ESRD QIP, we are
proposing to adopt a baseline period for
use in the SNF VBP Program.
We propose to adopt calendar year
2015 claims (January 1, 2015 through
December 31, 2015) as the baseline
period for the FY 2019 SNF VBP
Program and to use that baseline period
as the basis for calculating performance
standards. We will allow for a 90-day
claims run out following the last date of
discharge (December 31, 2015) before
incorporating the 2015 claims in our
database into the measure calculation.
We welcome public comment on this
proposal.
5. Proposed SNF VBP Performance
Scoring
a. Background
We refer readers to the FY 2016 SNF
PPS final rule (80 FR 46422 through
46425) for a discussion of other
Medicare VBP scoring methodologies,
including the methodologies used by
the Hospital VBP Program and HAC
Reduction Program. We also discussed
policy considerations related to the
Hospital Readmission Reduction
Program and the ESRD QIP in the
performance standards section of that
final rule (80 FR 46420 through 46421).
We also discussed the potential
application of an exchange function (80
FR 46424 through 46425) to translate
SNF performance scores into valuebased incentive payments under the
SNF VBP Program.
We considered those issues, as well as
comments we received on these issues,
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when developing our performance
scoring policy below.
b. Proposed SNF VBP Program Scoring
Methodology
Section 1888(h)(4)(A) of the Act
requires the Secretary develop a
methodology for assessing the total
performance of each SNF based on the
performance standards established
under section 1888(h)(3) of the Act for
the measure applied under section
1888(h)(2) of the Act. Section
1888(h)(3)(B) of the Act further requires
that these performance standards
include levels of achievement and
improvement and that, in calculating a
facility’s SNF performance score, the
Secretary use the higher of either
improvement or achievement.
After carefully reviewing and
evaluating a number of scoring
methodologies for the SNF VBP
Program, we propose to adopt a scoring
model for the SNF VBP Program similar
conceptually to that used by the
Hospital VBP Program and the ESRD
QIP, with certain modifications to allow
us to better differentiate between SNFs’
performance on the quality measures
specified under the SNF VBP
Program.22 We believe this hybrid
appropriately accounts for the SNF VBP
Program’s statutory limitation to a single
measure, will maintain consistency and
alignment with other VBP programs
already in place, and in doing so, better
enable SNFs to understand the SNF VBP
Program. Specifically, we propose to
implement a 0 to 100 point scale for
achievement scoring and a 0 to 90 point
scale for improvement scoring. In
addition, as discussed above, we are
proposing to set the achievement
threshold for the SNF VBP Program at
the 25th percentile of SNF national
performance on the quality measure
during the baseline period rather than
the 50th percentile achievement
threshold used in the Hospital VBP
Program, though as noted above, we are
also seeking comment on whether or not
we should consider adopting the 50th
percentile or the 15th percentile.
We believe using wider scales of 0 to
100 points and 0 to 90 points instead of
the 0 to 10 and 0 to 9 scales used in the
Hospital VBP Program and ESRD QIP
will allow us to calculate more granular
performance scores for individual SNFs
and provide greater differentiation
between facilities’ performance. We
further believe that setting the
achievement threshold for the SNF VBP
Program at the 25th percentile of
22 We refer readers to the FY 2013 IPPS final rule
for a discussion of the Hospital VBP Program
scoring methodology (76 FR 2466 through 2470).
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The results of this formula would be
rounded to the nearest whole number.
The SNF achievement score would
therefore range between 0 and 100
points, with a higher achievement score
indicating higher performance.
We welcome public comment on this
proposal.
(3) Scoring SNF Performance Based on
Improvement
We propose that a SNF would earn an
improvement score of 0 to 90 points
based on how much its performance on
the specified measure during the
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definitions and calculation
methodologies to better incentivize the
provision of high-quality care.
For these reasons, we propose to
adopt the following scoring
methodology beginning with the FY
2019 SNF VBP Program.
(1) Proposed Scoring of SNF
Performance on the SNFRM
Because the SNF VBP Program uses
only one measure to incentivize and
assess facility performance and
improvement, we believe it is important
to ensure that SNFs and the public are
able to understand these measure scores
easily. SNFRM rates represent the
percentage of qualifying patients at a
facility that were readmitted within the
risk window for the measure. As a
result, lower SNFRM rates indicate
lower rates of readmission, and are
therefore an indicator of higher quality
care. For example, a SNFRM rate of
0.14159 means that approximately 14.2
percent of qualifying patients
discharged from that SNF were
readmitted during the risk window.
We understand that the use of a
‘‘lower is better’’ rate could cause
confusion among SNFs and the public.
Therefore, we propose to calculate
scores under the Program by first
inverting SNFRM rates using the
following calculation:
SNFRM Inverted Rate = 1 ¥ Facility’s
SNFRM Rate
This calculation inverts SNFs’
SNFRM rates such that higher SNFRM
performance reflects better performance
on the SNFRM. As a result, the same
SNFRM rate presented above (0.14159)
would result in a SNFRM inverted rate
of 0.85841, which means that
approximately 86 percent of qualifying
patients discharged from that SNF were
not readmitted during the risk window.
performance period improved from its
performance on the measure during the
baseline period. Under this proposal, a
unique improvement range would be
established for each SNF that defines
the distance between the SNF’s baseline
period score and the national
benchmark for the measure (which we
propose to define as the mean of the top
decile of SNF performance on the
measure during the baseline period). We
would then calculate a SNF
improvement score for each SNF
depending on its performance period
score:
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We believe this inversion is important
to incentivize improvement in a clear
and understandable manner, and will
also simplify public reporting of SNF
performance for use in consumer,
family, and caregiver decision-making.
Further, under this proposal, all SNFRM
inverted rates would be rounded to the
fifth significant digit.
We welcome public comment on this
proposal.
(2) Scoring SNFs’ Performance Based on
Achievement
We propose that a SNF would earn an
achievement score of 0 to 100 points
based on where its performance on the
specified measure fell relative to the
achievement threshold (which we
propose above to define for the quality
measures specified under the SNF VBP
program as the 25th percentile of SNF
performance on the quality measure
during the applicable baseline period)
and the benchmark (which we propose
to define as the mean of the top decile
of SNF performance on the measure
during the baseline period). As with the
Hospital VBP Program, we propose to
award points to SNFs based on their
performance as follows:
• If a SNF’s SNFRM inverted rate was
equal to or greater than the benchmark,
the SNF would receive 100 points for
achievement;
• If a SNF’s SNFRM inverted rate was
less than the achievement threshold
(that is, the lower bound of the
achievement range), the SNF would
receive 0 points for achievement.
• If a SNF’s SNFRM inverted rate was
equal to or greater than the achievement
threshold, but less than the benchmark,
we would award between 0 and 100
points to the SNF according to the
following formula:
• If the SNF’s performance period
score was equal to or lower than its
improvement threshold, the SNF would
receive 0 points for improvement.
• If the SNF’s performance period
score was equal to or higher than the
benchmark, the SNF would receive 90
points for improvement.
• If the SNF’s performance period
score was greater than its improvement
threshold, but less than the benchmark,
we would award between 0 and 90
points for improvement according to the
following formula:
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national SNF performance on the
quality measure during the baseline
period is preferable to the Hospital VBP
Program’s achievement threshold of the
50th percentile of national facility
performance for this Program because it
accounts for the statutory requirement
that the SNF VBP Program include only
one quality measure at a time. Unlike
the Hospital VBP Program, which
contains many measures across multiple
domains, the SNF VBP Program is
limited by statute to a single quality
measure at a time. As a result, a hospital
participating in the Hospital VBP
Program could perform below the 50th
percentile of national performance on
one or more measures without
experiencing a dramatic drop in its
Total Performance Score because the
hospital’s performance on other
measures would contribute to its total
performance score. By contrast, if the
SNF VBP Program used an achievement
threshold of the 50th percentile of
national SNF performance,
approximately one-half of all SNFs
nationwide would automatically receive
0 achievement points assuming no
national improvement trends between
baseline and performance periods.
While these SNFs could still receive
improvement points, we believe it is
preferable to set a lower achievement
threshold that would award the majority
of SNFs at least some achievement
points, thereby enabling us to
differentiate performance among the
lower-performing half of SNFs, and
enabling SNFs to continually increase
their achievement score based on higher
levels of performance. As stated above,
as more data becomes available, we will
continue to assess the appropriateness
of this achievement threshold for the
SNF VBP program and, if necessary,
propose to refine these standards’
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(4) Establishing SNF Performance
Scores
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Consistent with sections 1888(h)(3)(B)
and 1888(h)(4)(A) of the Act, we
propose to use the higher of a SNF’s
achievement and improvement scores to
serve as the SNF’s performance score for
a given year of the SNF VBP Program.
The resulting SNF performance score
would be used as the basis for ranking
SNF performance on the quality
measures specified under the SNF VBP
Program and establishing the valuebased incentive payment percentage for
each SNF for a given FY.
Figure BB shows the scoring for SNF
B. As can be seen below, SNF B’s
performance on the SNFRM went from
0.21244, for a SNFRM inverted rate of
0.78756 (below the achievement
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(5) Examples of the Proposed FY 2019
SNF VBP Program Scoring Methodology
In this section, we provide two
examples to illustrate the proposed
scoring methodology for the FY 2019
SNF VBP Program using hypothetical
SNFs A, B, and C. The benchmark
calculated for the SNFRM for all of
these hypotheticals is 0.83915 (the mean
of the top decile of SNF performance on
the SNFRM in 2014), and the
achievement threshold is 0.79551 (the
25th percentile of national SNF
performance on the SNFRM in 2014).
We note that, as discussed previously,
our proposal for scoring SNF
performance on the SNFRM inverts the
measure rates so that a higher rate
represents better performance.
Figure AA shows the scoring for SNF
A. SNF A’s SNFRM rate of 0.15025
means that approximately 15 percent of
qualifying patients discharged from SNF
A were readmitted during the 30-day
risk window. Under the proposed
SNFRM scoring methodology, SNF A’s
SNFRM inverted rate would be
calculated as follows:
threshold) in the baseline period to
0.18322, for a SNFRM inverted rate of
0.81668 (above the achievement
threshold) in the performance period.
Applying the achievement scoring
methodology proposed above, SNF B
would earn [49] achievement points for
this measure, calculated as follows:
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Facility A SNFRM Inverted Rate = 1 ¥
0.15025
As a result of this calculation, Facility
A’s SNFRM inverted rate would be
0.84975 on the SNFRM for the
performance period. This result
indicates that approximately 85 percent
of SNF A’s qualifying patients were not
readmitted during the 30-day risk
window. Because SNF A’s SNFRM
inverted rate of 0.84975 exceeds the
benchmark (that is, the mean of the top
decile of facility performance, or
0.83915), SNF A would receive 100
points for achievement. Because SNF A
has earned the maximum number of
points possible for the SNFRM, its
improvement score would not be
calculated.
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The results of this formula would be
rounded to the nearest whole number.
We welcome public comment on this
proposal.
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0.78756 to 0.81668, SNF B would
receive 51 improvement points,
calculated as follows:
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the benchmark, we would calculate an
improvement score as well. According
to the improvement scale, based on SNF
B’s improved SNFRM inverted rate from
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However, because SNF B’s
performance during the performance
period is greater than its performance
during the baseline period, but below
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In Figure CC, SNF C’s performance on
the SNFRM drops from 0.19487, for a
SNFRM inverted rate of 0.80513, in the
baseline period to 0.21148, for a SNFRM
inverted rate 0.78852, in the
performance period (a decline of
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0.01661). Because this SNF’s
performance during the performance
period is lower than the achievement
threshold of 0.79551, it receives 0 points
based on achievement. It would also
receive 0 points for improvement,
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because its performance during the
performance period is lower than its
performance period during the baseline
period. In this example, SNF C would
receive 0 points for its SNF performance
score.
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6. SNF Value-Based Incentive Payments
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a. Background
Paragraphs (5), (6), (7), and (8) of
section 1888(h) outline several
requirements for value-based incentive
payments under the SNF VBP Program.
Section 1888(h)(5)(A) of the Act requires
that the Secretary increase the adjusted
Federal per diem rate for skilled nursing
facilities by the value-based incentive
payment amount determined under
subsection (h)(5)(B). That amount is to
be determined by the product of the
adjusted Federal per diem rate and the
value-based incentive payment
percentage specified under subsection
(h)(5)(C) of such section for each SNF
for a FY.
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Section 1888(h)(5)(C) requires that the
value-based incentive payment
percentage be based on the SNF
performance score and must be
appropriately distributed so that the
highest-ranked SNFs receive the highest
payments, the lowest-ranked SNFs
receive the lowest payments, and that
the payment rate for services furnished
by SNFs in the lowest 40 percent of the
rankings be less than would otherwise
apply. Finally, the total amount of
value-based incentive payments must 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 FY specified under section
1888(h)(6) of the Act, as estimated by
the Secretary. As discussed further
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24253
below, we will propose to adopt in
future rulemaking an exchange function
to ensure that the total amount of valuebased incentive payments made under
the program each year meets those
criteria.
Section 1888(h)(7) of the Act requires
the Secretary, not later than 60 days
prior to the fiscal year involved, to
inform each SNF of the adjustments to
its Medicare payments for services
furnished by the SNF during the FY.
Section 1888(h)(8) of the Act requires
that the value-based incentive payment
and payment reduction only apply for
the FY involved, and not be taken into
account in making payments to a SNF
in a subsequent year.
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the hospital during the applicable FY.
We intend to adopt a similar
methodology to translate SNF
performance scores into value-based
incentive payment percentages under
the SNF VBP Program. When
considering that methodology, we
sought public comments on 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
DD, we considered the following four
mathematical exchange function
options: Straight line (linear); concave
curve (cube root function); convex curve
(cube function); and S-shape (logistic
function).
We received numerous public
comments on the FY 2016 SNF PPS
proposed rule, and we seek further
public comments to inform our policies
on this topic. For example, one
commenter suggested that a linear
exchange function would be the most
transparent option for SNFs, which
would assist in their quality
improvement efforts. We request
additional public comments on the
specific form of the exchange function
that we should propose in the future,
including any additional forms beyond
the four examples that we have
illustrated above, and any
considerations we should take into
account when selecting an exchange
function form that would best support
quality improvement in SNFs.
Additionally, we will determine the
precise slope of the exchange function
after the performance period has
concluded, because the distribution of
SNFs’ performance scores will form the
basis for value-based incentive
payments under the program. However,
two additional considerations will affect
the exchange function’s slope. As
required in section
1888(h)(5)(C)(ii)(II)(cc) of the Act, SNFs
in the lowest 40 percent of the ranking
determined under paragraph (4)(B) must
receive a payment that is less than the
payment rate for such services that
would otherwise apply. Additionally, as
described in this section, section
1888(h)(5)(C)(ii)(III) of the Act requires
that the total amount of value-based
incentive payments under the Program
be greater than or equal to 50 percent,
but not greater than 70 percent, of the
total amount of reductions to SNFs’
payments for the FY, as estimated by the
Secretary. We intend to ensure that both
of these requirements, as well as all
other statutory requirements under the
Program, are fulfilled when we specify
the exchange function’s slope.
We welcome public comments on this
topic.
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7. SNF VBP Reporting
a. Confidential Feedback Reports
Section 1888(g)(5) of the Act requires
that we provide quarterly confidential
feedback reports to SNFs on their
performance on the measures specified
under sections 1888(g)(1) and (2) of the
Act. Section 1888(g)(5) of the Act also
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b. Request for Comment on Exchange
Function
As we discussed in the FY 2016 SNF
PPS final rule (80 FR 46424 through
46425), we use a linear exchange
function to translate a hospital’s Total
Performance Score under the Hospital
VBP Program into the percentage
multiplier to be applied to each
Medicare discharge claim submitted by
Federal Register / Vol. 81, No. 79 / Monday, April 25, 2016 / Proposed Rules
requires that we begin providing those
reports on October 1, 2016.
In order to meet the statutory
deadline, we are developing the
feedback reports, operational systems,
and implementation guidance related to
those reports. We intend to provide
these reports to SNFs via the QIES
system CASPER files currently used by
SNFs to report quality performance. We
welcome public comments on the
appropriateness of the QIES system, and
any considerations we should take into
account when designing and providing
these feedback reports.
b. Proposed Two-Phase SNF VBP Data
Review and Correction Process
(1) Background
Section 1888(g)(6) of the Act requires
the Secretary to establish procedures to
make public performance information
on the measures specified under
paragraphs (1) and (2) of such section.
The procedures must ensure that a SNF
has the opportunity to review and
submit corrections to the information
that will be made public for the facility
prior to its being made public. This
public reporting is also required by
statute to begin no later than October 1,
2017. Additionally, section 1888(h)(9) of
the Act requires the Secretary to make
available to the public information
regarding SNFs’ performance under the
SNF VBP Program, specifically
including each SNF’s performance score
and the ranking of SNFs for each fiscal
year.
Accordingly, we are proposing to
adopt a two-phase review and
correction process for (1) SNFs’ measure
data that will be made public under
section 1888(g)(6) of the Act, which will
consist of each SNFs’ performance on
the measures specified under sections
1888(g)(1) and (2) of the Act, and (2)
SNFs’ performance information that will
be made public under section
1888(h)(9).
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(2) Phase One: Review and Correction of
SNFs’ Quality Measure Information
We view the quarterly confidential
feedback reports described above as one
possible means to provide SNFs an
opportunity to review and provide
corrections to their performance
information. However, collecting SNF
measure data and calculating measure
performance scores takes a number of
months following the end of a
measurement period. Because it is not
feasible to provide SNFs with an
updated measure rate for each quarterly
report or engage in review and
corrections on a quarterly basis, we
propose to use one of the four reports
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each year to provide SNFs an
opportunity to review their data slated
for public reporting. In this specific
quarterly report, we intend to provide
SNFs: (1) A count of readmissions; (2)
the number of eligible stays at the SNF;
(3) the SNF’s risk-standardized
readmissions ratio; and (4) the national
SNF measure performance rate. In
addition, we intend to provide the
patient-level information used in
calculating the measure rate. However,
we seek comment on what patient-level
information would be most useful to
SNFs, and how we should make this
information available if requested. We
intend to address the topic of what
specific information will be provided if
requested in this specific quarterly
report in future rulemaking, where we
intend to propose a process for SNFs’
requests for patient-level data. We
intend to notify SNFs of this report’s
release via listserv email and posting on
the QualityNet News portion of the Web
site.
Therefore, we propose to fulfill the
statutory requirement that SNFs have an
opportunity to review and correct
information that is to be made public
under section 1888(g)(6) of the Act by
providing SNFs with an annual
confidential feedback report that we
intend to provide via the QIES system
CASPER files. We further propose that
SNFs must, if they believe the report’s
contents to be in error, submit a
correction request to SNFVBPinquiries@
cms.hhs.gov with the following
information:
• SNF’s CMS Certification Number
(CCN).
• SNF Name.
• The correction requested and the
SNF’s basis for requesting the
correction. More specifically, the SNF
must identify the error for which it is
requesting correction, and explain its
reason for requesting the correction. The
SNF must also submit documentation or
other evidence, if available, supporting
the request. Additionally, any requests
made during phase one of the proposed
process will be limited to the quality
measure information at issue.
We further propose that SNFs must
make any correction requests within 30
days of posting the feedback report via
the QIES system CASPER files, not
counting the posting date itself. For
example, if we provide reports on
October 1, 2017, SNFs must review
those reports and submit any correction
requests by October 31, 2017. We will
not consider any requests for correction
to quality measure data that are received
after the close of the first phase of the
proposed review and correction process.
As discussed further below, any
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24255
corrections sought during phase two of
the proposed process will be limited to
the SNF performance score calculation
and the ranking.
We will review all timely phase one
correction requests that we receive and
will provide responses to SNFs that
have requested corrections as soon as
practicable.
(3) Phase Two: Review and Correction
of SNF Performance Scores and Ranking
As required by section 1888(h)(7) of
the Act, we intend to inform each SNF
of its payment adjustments as a result of
the SNF VBP Program not later than 60
days prior to the fiscal year involved.
For the FY 2019 SNF VBP Program, we
intend to notify SNFs of those payment
adjustments via a SNF performance
score report not later than 60 days prior
to October 1, 2018. We intend to address
the specific contents of that report in
future rulemaking.
In that report, however, we also
intend to provide SNFs with their SNF
performance scores and ranking. By
doing so, we intend to use the
performance score report’s provision to
SNFs as the beginning of the second
phase of the proposed review and
correction process. By completing phase
one, SNFs will have an opportunity to
verify that their quality measure data are
fully accurate and complete, and as a
result, phase two will be limited only to
corrections to the SNF performance
score’s calculation and the SNF’s
ranking. Any requests to correct quality
measure data that are received during
phase two will be denied.
We intend to set out specific
requirements for phase two of the
proposed review and correction process
in future rulemaking. To inform those
proposals, we seek comments on what
information would be most useful for us
to provide to SNFs to facilitate their
review of their SNF performance scores
and ranking. As with the phase one
process, we intend to adopt a 30-day
time period for phase two review and
corrections, beginning with the date on
which we provide SNF performance
score reports.
We welcome public comments on this
proposed two-phase review and
correction process.
c. SNF VBP Public Reporting
Section 1888(h)(9)(A) of the Act
requires that we make available to the
public on the Nursing Home Compare
Web site or its successor information
regarding the performance of individual
SNFs with respect to a FY, including the
performance score for each SNF for the
FY, and each SNF’s ranking, as
determined under paragraph (4)(B) of
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such section. Additionally, section
1888(h)(9)(B) of the Act requires that we
periodically post aggregate information
on the SNF VBP Program on the Nursing
Home Compare Web site or its
successor, 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.
We intend to address this topic in
future rulemaking. However, we
welcome public comments on the best
means by which to display the SNFspecific and aggregate performance
information for public consumption.
d. Ranking SNF Performance
Section 1888(h)(4)(B) of the Act
requires ranking the SNF performance
scores determined under paragraph (A)
of such section from low to high.
Additionally, and as discussed in this
section, we are required to publish the
ranking of SNF performance scores for
a FY on Nursing Home Compare or a
successor Web site.
To meet these requirements, we
propose to order SNF performance
scores from low to high and publish
those rankings on both the Nursing
Home Compare and QualityNet Web
sites. However, because SNF
performance scores will not be
calculated until after the performance
period concludes after CY 2017 (that is,
during CY 2018), and because SNFs
must be provided their value-based
incentive payment adjustments not later
than 60 days prior to the FY involved,
we intend to publish the ranking for FY
2019 SNF VBP payment implications
after August 1, 2018.
We welcome public comments on the
most appropriate format and Web site
for the ranking’s publication.
B. Skilled Nursing Facility (SNF)
Quality Reporting Program (QRP)
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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 QRPs coupled with
public reporting of that information.
The Improving Medicare Post-Acute
Care Transformation Act of 2014
(IMPACT Act) added section 1899B to
the Act that imposed new data reporting
requirements for certain PAC providers,
including SNFs, and required that the
Secretary implement a SNF quality
reporting program (SNF QRP). Section
1888(e)(6)(B)(i)(II) of the Act requires
that each SNF submit, for FYs beginning
on or after the specified application date
(as defined in section 1899B(a)(2)(E) of
the Act), data on quality measures
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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 time frames 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 submit
standardized patient assessment data
required under section 1899B(b)(1) of
the Act in a manner and within the time
frames 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
on standardized patient assessment in
accordance with section
1888(e)(6)(B)(i)(III) of the Act for such
FY, the Secretary must reduce the
market basket percentage described in
section 1888(e)(5)(B)(ii) of the Act by 2
percentage points. The SNF QRP applies
to freestanding SNFs, SNFs affiliated
with acute care facilities, and all nonCAH swing-bed rural hospitals.
We refer readers to the FY 2016 SNF
PPS final rule (80 FR 46427 through
46429) for information on the and
requirements of the IMPACT Act
In the FY 2016 SNF PPS final rule, we
finalized the general timeline and
sequencing of activities under the SNF
QRP. Please refer to the FY 2016 SNF
PPS final rule (80 FR 46427 through
46429) for more information on these
topics.
In addition, in implementing the SNF
QRP and IMPACT Act requirements in
the FY 2016 SNF PPS final rule, we
established our approach for identifying
cross-setting measures and processes for
the adoption of measures including the
application and purpose of the
Measures Application Partnership
(MAP) and the notice and comment
rulemaking process. For more
information on these topics, please refer
to the FY 2016 SNF PPS final rule (80
FR 46427 through 46429).
2. General Considerations Used for
Selection of Measures for the SNF QRP
We refer readers to the FY 2016 SNF
PPS final rule (80 FR 46429 through
46431) for a detailed discussion of the
considerations we apply in measure
selection for the SNF QRP, such as
alignment with the CMS Quality
Strategy,23 which incorporates the three
broad aims of the National Quality
23 https://www.cms.gov/Medicare/QualityInitiatives-Patient-Assessment-Instruments/
QualityInitiativesGenInfo/CMS-QualityStrategy.html.
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Strategy: 24 Overall, 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. QRPs, coupled with public
reporting of quality information, are
critical to the advancement of health
care quality improvement efforts. Valid,
reliable, and relevant quality measures
are fundamental to the effectiveness of
our QRPs. Therefore, selection of quality
measures is a priority for CMS in all of
its QRPs.
In this proposed rule, we propose to
adopt for the SNF QRP one measure that
we are specifying under section
1899B(c)(1)(C) of the Act to meet the
Medication Reconciliation domain: (1)
Drug Regimen Review Conducted with
Follow-Up for Identified Issues-PostAcute Care Skilled Nursing Facility
Quality Reporting Program. Further, we
are proposing to adopt for the SNF QRP
three measures to meet the resource use
and other measure domains identified
in section 1899B(d)(1) of the Act: (1)
Medicare Spending per Beneficiary—
Post-Acute Care Skilled Nursing Facility
Quality Reporting Program; (2)
Discharge to Community—Post Acute
Care Skilled Nursing Facility Quality
Reporting Program; and (3) Potentially
Preventable 30-Day Post-Discharge
Readmission Measure for Skilled
Nursing Facility Quality Reporting
Program.
In our selection and specification of
measures, we employ a transparent
process in which we seek input from
stakeholders and national experts and
engage in a process that allows for prerulemaking input on each measure, as
required by section 1890A of the Act.
To meet this requirement, we
provided the following opportunities for
stakeholder input. Our measure
development contractor convened
technical expert panels (TEPs) that
included stakeholder experts and
patient representatives on July 29, 2015
for the Drug Regimen Review
Conducted with Follow-Up for
Identified Issues—PAC SNF QRP, on
August 25, 2015, September 25, 2015,
and October 5, 2015 for the Discharge to
Community—PAC SNF QRP, on August
12 and 13, 2015 and October 14, 2015
for the Potentially Preventable 30-Day
Post-Discharge Readmission Measure for
SNF QRP, and on October 29 and 30,
24 https://www.ahrq.gov/workingforquality/nqs/
nqs2011annlrpt.htm.
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2015 for the Medicare Spending per
Beneficiary measures. In addition, we
released draft quality measure
specifications for public comment on
the Drug Regimen Review Conducted
with Follow-Up for Identified Issues—
PAC SNF QRP from September 18, 2015
to October 6, 2015, for the Discharge to
Community—PAC SNF QRP from
November 9, 2015 to December 8, 2015,
for the Potentially Preventable 30-Day
Post-Discharge Readmission Measure for
SNF QRP from November 2, 2015 to
December 1, 2015, and for the Medicare
Spending per Beneficiary measures from
January 13, 2016 to February 5, 2016.
Further, we implemented a public
mailbox, PACQualityInitiative@
cms.hhs.gov, for the submission of
public comments. This PAC mailbox is
accessible on our post-acute care quality
initiatives Web site at https://
www.cms.gov/Medicare/QualityInitiatives-Patient-AssessmentInstruments/Post-Acute-Care-QualityInitiatives/IMPACT-Act-of-2014/
IMPACT-Act-of-2014-DataStandardization-and-Cross-SettingMeasuresMeasures.html.
Additionally, we sought public input
from the MAP PAC, Long-Term Care
Workgroup during the annual in-person
meeting held December 14 and 15, 2015.
The final map report is available at
https://www.qualityforum.org/
Publications/2016/02/MAP_2016_
Considerations_for_Implementing_
Measures_in_Federal_Programs_-_PAC–
LTC.aspx. The MAP is composed of
multi-stakeholder groups convened by
the NQF, our current contractor under
section 1890(a) of the Act, tasked to
provide input on the selection of quality
and efficiency measures described in
section 1890(b)(7)(B) of the Act.
The MAP reviewed each measure
proposed in this rule for use in the SNF
QRP. For more information on the MAP,
we refer readers to the FY 2016 SNF
PPS final rule (80 FR 46430 through
46431). Further, for more information
on the MAP’s recommendations, we
refer readers to the MAP 2015–2016
Considerations for Implementing
Measures in Federal Programs public
report at https://www.qualityforum.org/
Publications/2016/02/MAP_2016_
Considerations_for_Implementing_
Measures_in_Federal_Programs_-_PAC–
LTC.aspx.
3. Policy for Retaining SNF QRP
Measures Adopted for Future Payment
Determinations
In the FY 2016 SNF PPS final rule (80
FR 46431 through 46432), we finalized
our policy for measure removal and also
finalized that when we adopt a measure
for the SNF QRP for a payment
determination, this measure will be
automatically retained in the SNF QRP
for all subsequent payment
24257
determinations unless we propose to
remove, suspend, or replace the
measure. We are not proposing any new
policies related to measure retention or
removal. For further information on
how measures are considered for
removal, suspension, or replacement,
please refer to the FY 2016 SNF PPS
Final Rule (80 FR 46431 through 46432).
4. Process for Adoption of Changes to
SNF QRP Measures
In the FY 2016 SNF PPS final rule (80
FR 46432), we finalized our policy
pertaining to the process for adoption of
non-substantive and substantive
changes to SNF QRP measures. We are
not proposing in this proposed rule to
make any changes to this policy.
5. Quality Measures Previously
Finalized for Use in the SNF QRP
The SNF QRP quality measures for
the FY 2018 payment determinations
and subsequent years are presented in
Table 12. Measure specifications for the
previously adopted measures adapted
from non-SNF settings are available at
https://www.cms.gov/Medicare/QualityInitiatives-Patient-AssessmentInstruments/NursingHomeQualityInits/
SNF-Quality-Reporting-ProgramMeasures-and-TechnicalInformation.html under the downloads
section at the bottom of the page.
TABLE 12—QUALITY MEASURES PREVIOUSLY FINALIZED FOR USE IN THE SNF QRP
Annual payment determination:
Initial and subsequent APU years
SNF PPS Final rule
Data collection start date
Percent of Residents or Patients
with Pressure Ulcers That Are
New or Worsened (Short Stay)
(NQF #0678).
Application of the NQF-endorsed
Percent of Residents Experiencing One or More Falls with
Major Injury (Long Stay) (NQF
#0674).
Application of Percent of LongTerm Care Hospital Patients
with an Admission and Discharge Functional Assessment
and a Care Plan That Addresses
Function (NQF #2631).
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Measure title and NQF #
Adopted in the FY 2016 SNF PPS
Final Rule (80 FR 46433
through 46440).
October 1, 2016 ............................
FY 2018 and subsequent years.
Adopted in the FY 2016 SNF PPS
Final Rule (80 FR 46440
through 46444).
October 1, 2016 ............................
FY 2018 and subsequent years.
Adopted in the FY 2016 SNF PPS
Final Rule (80 FR 46444
through 46453).
October 1, 2016 ............................
FY 2018 and subsequent years.
6. SNF QRP Quality, Resource Use and
Other Measures for FY 2018 Payment
Determinations and Subsequent Years
For the FY 2018 payment
determination and subsequent years, in
addition to the quality measures
identified in Table 12 that we are
retaining under our policy described in
section V.B.3., we are proposing three
new measures for the SNF QRP. These
three proposed measures were
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developed to meet the requirements of
the IMPACT Act. They are: (1) Medicare
Spending per Beneficiary-PAC SNF
QRP; (2) Discharge to Community—PAC
SNF QRP; and (3) Potentially
Preventable 30-Day Post-Discharge
Readmission Measure for SNF QRP. The
measures are described in more detail
below.
For the risk adjustment of the
resource use and other measures, we
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understand the important role that
sociodemographic status plays in the
care of patients. However, we continue
to have concerns about holding
providers to different standards for the
outcomes of their patients of diverse
sociodemographic status because we do
not want to mask potential disparities or
minimize incentives to improve the
outcomes of disadvantaged populations.
We routinely monitor the impact of
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sociodemographic status on providers’
results on our measures.
The NQF is currently undertaking a 2year trial period in which new measures
and measures undergoing maintenance
review will be assessed to determine if
risk-adjusting for sociodemographic
factors is appropriate. For 2 years, NQF
will conduct a trial of temporarily
allowing inclusion of sociodemographic
factors in the risk-adjustment approach
for some performance measures. At the
conclusion of the trial, NQF will issue
recommendations on future permanent
inclusion of sociodemographic factors.
During the trial, measure developers are
expected to submit information such as
analyses and interpretations as well as
performance scores with and without
sociodemographic factors in the risk
adjustment model.
Furthermore, the Office of the
Assistant Secretary for Planning and
Evaluation (ASPE) is conducting
research to examine the impact of
sociodemographic status on quality
measures, resource use, and other
measures under the Medicare program
as directed by the IMPACT Act. We will
closely examine the findings of the
ASPE reports and related Secretarial
recommendations and consider how
they apply to our quality programs at
such time as they are available.
We are inviting public comment on
how socioeconomic and demographic
factors should be used in risk
adjustment for the resource use and
other measures.
a. Proposal To Address the IMPACT Act
Domain of Resource Use and Other
Measures: Total Estimated MSPB–PAC
SNF QRP
We are proposing an MSPB–PAC SNF
QRP measure for inclusion in the SNF
QRP for the FY 2018 payment
determination and subsequent years.
Section 1899B(d)(1)(A) of the Act
requires the Secretary to specify
resource use measures, including total
estimated Medicare spending per
beneficiary, on which PAC providers
consisting of SNFs, Inpatient
Rehabilitation Facilities (IRFs), LongTerm Care Hospitals (LTCHs), and
Home Health Agencies (HHAs) are
required to submit necessary data
specified by the Secretary.
Rising Medicare expenditures for
post-acute care as well as wide variation
in spending for these services
underlines the importance of measuring
resource use for providers rendering
these services. Between 2001 and 2013,
Medicare PAC spending grew at an
annual rate of 6.1 percent and doubled
to $59.4 billion, while payments to
inpatient hospitals grew at an annual
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rate of 1.7 percent over this same
period.25 A study commissioned by the
Institute of Medicine found that
variation in PAC spending explains 73
percent of variation in total Medicare
spending across the United States.26
We reviewed the NQF’s consensusendorsed measures and were unable to
identify any NQF-endorsed resource use
measures for PAC settings. As such, we
are proposing this MSPB–PAC SNF
measure under the Secretary’s authority
to specify non-NQF-endorsed measures
under section 1899B(e)(2)(B) of the Act.
Given the current lack of resource use
measures for PAC settings, our proposed
MSPB–PAC SNF measure has the
potential to provide valuable
information to SNF providers on their
relative Medicare spending in delivering
services to approximately 1.7 million
Medicare beneficiaries.27
The proposed MSPB–PAC SNF
episode-based measure will provide
actionable and transparent information
to support SNF providers’ efforts to
promote care coordination and deliver
high quality care at a lower cost to
Medicare. The MSPB–PAC SNF
measure holds SNF providers
accountable for the Medicare payments
within an ‘‘episode of care’’ (episode),
which includes the period during which
a patient is directly under the SNF’s
care, as well as a defined period after
the end of the SNF treatment, which
may be reflective of and influenced by
the services furnished by the SNF.
MSPB–PAC SNF episodes, constructed
according to the methodology described
below, have high levels of Medicare
spending with substantial variation. In
FY 2014, Medicare FFS beneficiaries
experienced 1,534,773 MSPB–PAC
episodes triggered by admission to a
SNF. The mean payment-standardized,
risk-adjusted episode spending for these
episodes is $26,279. There is substantial
variation in the Medicare payments for
these MSPB–PAC SNF episodes—
ranging from approximately $6,090 at
the 5th percentile to approximately
$60,050 at the 95th percentile. This
variation is partially driven by variation
in payments occurring following SNF
treatment.
Evaluating Medicare payments during
an episode creates a continuum of
accountability between providers and
has the potential to improve posttreatment care planning and
25 MedPAC, ‘‘A Data Book: Health Care Spending
and the Medicare Program,’’ (2015). 114.
26 Institute of Medicine, ‘‘Variation in Health Care
Spending: Target Decision Making, Not
Geography,’’ (Washington, DC: National Academies
2013). 2.
27 2013 figures. MedPAC, ‘‘Medicare Payment
Policy,’’ Report to the Congress (2015). xvii–xviii.
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coordination. While some stakeholders
throughout the measure development
process supported the measures and felt
that measuring Medicare spending was
critical for improving efficiency, others
believed that resource use measures did
not reflect quality of care in that they do
not take into account patient outcomes
or experience beyond those observable
in claims data. However, SNFs involved
in the provision of high-quality PAC
care as well as appropriate discharge
planning and post-discharge care
coordination would be expected to
perform well on this measure since
beneficiaries would likely experience
fewer costly adverse events (for
example, avoidable hospitalizations,
infections, and emergency room usage).
Further, it is important that the cost of
care be explicitly measured so that, in
conjunction with other quality
measures, we can recognize providers
that are involved in the provision of
high quality care at lower cost.
We have undertaken development of
MSPB–PAC measures for each of the
four PAC settings. We are proposing an
LTCH-specific MSPB–PAC measure in
the FY 2017 IPPS/LTCH proposed rule
published elsewhere in this issue of the
Federal Register and an IRF-specific
MSBP–PAC measure in the FY 2017 IRF
PPS proposed rule published elsewhere
in this issue of the Federal Register. We
intend to propose a HHA-specific
MSBP–PAC measure through future
notice-and-comment rulemaking. The
four setting-specific MSPB–PAC
measures are closely aligned in terms of
episode construction and measure
calculation. Each of the MSPB–PAC
measures assess Medicare Part A and
Part B spending within an episode, and
the numerator and denominator are
defined similarly for each of the MSPB–
PAC measures. However, developing
setting-specific measures allows us to
account for differences between settings
in payment policy, the types of data
available, and the underlying health
characteristics of beneficiaries.
The MSPB–PAC measures mirror the
general construction of the inpatient
prospective payment system (IPPS)
hospital MSPB measure that was
finalized in the FY 2012 IPPS/LTCH
PPS final rule (76 FR 51618 through
51627). It was endorsed by the NQF on
December 6, 2013 and has been used in
the Hospital Value-Based Purchasing
(VBP) Program (NQF #2158) since FY
2015.28 The hospital MSPB measure was
28 QualityNet, ‘‘Measure Methodology Reports:
Medicare Spending Per Beneficiary (MSPB)
Measure,’’ (2015). https://www.qualitynet.org/dcs/
ContentServer?pagename=
QnetPublic%2FPage%2FQnetTier3&
cid=1228772053996.
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originally established under the
authority of section 1886(o)(2)(B)(ii) of
the Act. The hospital MSPB measure
evaluates hospitals’ Medicare spending
relative to the Medicare spending for the
national median hospital within a
hospital MSPB episode. It assesses
Medicare Part A and Part B payments
for services performed by hospitals and
other healthcare providers within a
hospital MSPB episode, which is
comprised of the periods immediately
prior to, during, and following a
patient’s hospital stay.29 30 Similarly, the
MSPB–PAC measures assess all
Medicare Part A and Part B payments
for fee-for-service (FFS) claims with a
start date during the episode window
(which, as discussed in this section, is
the time period during which Medicare
FFS Part A and Part B services are
counted towards the MSPB–PAC SNF
episode). There are however differences
between the MSPB–PAC measures, as
proposed, and the hospital MSPB
measure to reflect differences in
payment policies and the nature of care
provided in each PAC setting. For
example, the MSPB–PAC measures
exclude a limited set of services (for
example, for clinically unrelated
services) provided to a beneficiary
during the episode window while the
hospital MSPB measure does not
exclude any services.
MSPB–PAC episodes may begin
within 30 days of discharge from an
inpatient hospital as part of a patient’s
trajectory from an acute to a PAC
setting. A SNF stay beginning within 30
days of discharge from an inpatient
hospital will therefore be included once
in the hospital’s MSPB measure, and
once in the SNF provider’s MSPB–PAC
measure. Aligning the hospital MSPB
and MSPB–PAC measures in this way
creates continuous accountability and
aligns incentives to improve care
planning and coordination across
inpatient and PAC settings.
We have sought and considered the
input of stakeholders throughout the
measure development process for the
MSPB–PAC measures. We convened a
TEP consisting of 12 panelists with
combined expertise in all of the PAC
settings on October 29 and 30, 2015 in
Baltimore, Maryland. A follow-up email
survey was sent to TEP members on
November 18, 2015 to which seven
responses were received by December 8,
29 QualityNet, ‘‘Measure Methodology Reports:
Medicare Spending Per Beneficiary (MSPB)
Measure,’’ (2015). https://www.qualitynet.org/dcs/
ContentServer?pagename=
QnetPublic%2FPage%2FQnetTier3&
cid=1228772053996.
30 FY 2012 IPPS/LTCH PPS Final Rule (76 FR
51619).
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2015. The MSPB–PAC TEP Summary
Report is available at https://
www.cms.gov/Medicare/QualityInitiatives-Patient-AssessmentInstruments/Post-Acute-Care-QualityInitiatives/IMPACT-Act-of-2014/
IMPACT-Act-Downloads-andVideos.html. The measures were also
presented to the MAP Post-Acute Care/
Long-Term Care (PAC/LTC) Workgroup
on December 15, 2015. As the MSPB–
PAC measures were under development,
there were three voting options for
members: Encourage continued
development, do not encourage further
consideration, and insufficient
information.31 The MAP PAC/LTC
workgroup voted to ‘‘encourage
continued development’’ for each of the
MSPB–PAC measures.32 The MAP PAC/
LTC workgroup’s vote of ‘‘encourage
continued development’’ was affirmed
by the MAP Coordinating Committee on
January 26, 2016.33 The MAP’s concerns
about the MSPB–PAC measures, as
outlined in their final report ‘‘MAP 2016
Considerations for Implementing
Measures in Federal Programs: PostAcute Care and Long-Term Care’’ and
Spreadsheet of Final Recommendations,
were taken into consideration during
the measure development process and
are discussed as part of our responses to
public comments, described below.34 35
Since the MAP’s review and
recommendation of continued
development, CMS has continued to
refine risk adjustment models and
conduct measure testing for the
IMPACT Act measures in compliance
with the MAP’s recommendations. The
proposed IMPACT Act measures are
both consistent with the information
submitted to the MAP and support the
31 National Quality Forum, Measure Applications
Partnership, ‘‘Process and Approach for MAP PreRulemaking Deliberations, 2015–2016’’ (February
2016) https://www.qualityforum.org/WorkArea/
linkit.aspx?LinkIdentifier=id&ItemID=81693.
32 National Quality Forum, Measure Applications
Partnership Post-Acute Care/Long-Term Care
Workgroup, ‘‘Meeting Transcript—Day 2 of 2’’
(December 15, 2015) 104–106 https://
www.qualityforum.org/WorkArea/
linkit.aspx?LinkIdentifier=id&ItemID=81470.
33 National Quality Forum, Measure Applications
Partnership, ‘‘Meeting Transcript—Day 1 of 2’’
(January 26, 2016) 231–232 https://
www.qualityforum.org/WorkArea/
linkit.aspx?LinkIdentifier=id&ItemID=81637.
34 National Quality Forum, Measure Applications
Partnership, ‘‘MAP 2016 Considerations for
Implementing Measures in Federal Programs: PostAcute Care and Long-Term Care’’ Final Report,
(February 2016) https://www.qualityforum.org/
Publications/2016/02/MAP_2016_Considerations_
for_Implementing_Measures_in_Federal_Programs_
-_PAC–LTC.aspx.
35 National Quality Forum, Measure Applications
Partnership, ‘‘Spreadsheet of MAP 2016 Final
Recommendations’’ (February 1, 2016) https://
www.qualityforum.org/WorkArea/
linkit.aspx?LinkIdentifier=id&ItemID=81593.
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scientific acceptability of these
measures for use in quality reporting
programs.
In addition, a public comment period,
accompanied by draft measures
specifications, was originally open from
January 13 to 27, 2016 and twice
extended to January 29 and February 5.
A total of 45 comments on the MSPB–
PAC measures were received during this
3.5 week period. The comments
received also covered each of the MAP’s
concerns as outlined in their Final
Recommendations.36 The MSPB–PAC
Public Comment Summary Report is
available at https://www.cms.gov/
Medicare/Quality-Initiatives-PatientAssessment-Instruments/Post-AcuteCare-Quality-Initiatives/IMPACT-Act-of2014/IMPACT-Act-Downloads-andVideos.html and contains the public
comments (summarized and verbatim),
along with our responses including
statistical analyses. If finalized, the
MSPB–PAC SNF measure, along with
the other MSPB–PAC measures, as
applicable, would be submitted for NQF
endorsement.
To calculate the MSPB–PAC SNF
measure for each SNF provider, we first
define the construction of the MSPB–
PAC SNF episode, including the length
of the episode window as well as the
services included in the episode. Next,
we apply the methodology for the
measure calculation. The specifications
are discussed further in this section.
More detailed specifications for the
proposed MSPB–PAC measures,
including the MSPB–PAC SNF measure
that we are proposing in this proposed
rule, is available at https://
www.cms.gov/Medicare/QualityInitiatives-Patient-AssessmentInstruments/Post-Acute-Care-QualityInitiatives/IMPACT-Act-of-2014/
IMPACT-Act-Downloads-andVideos.html.
(1) Episode Construction
An MSPB–PAC SNF episode begins at
the episode trigger, which is defined as
the patient’s admission to a SNF. This
admitting facility is the attributed
provider, for whom the MSPB–PAC SNF
measure is calculated. The episode
window is the time period during which
Medicare FFS Part A and Part B services
are counted towards the MSPB–PAC
SNF episode. Because Medicare FFS
claims are already reported to the
Medicare program for payment
purposes, SNF providers will not be
required to report any additional data to
36 National Quality Forum, Measure Applications
Partnership, ‘‘Spreadsheet of MAP 2016 Final
Recommendations’’ (February 1, 2016) https://
www.qualityforum.org/WorkArea/
linkit.aspx?LinkIdentifier=id&ItemID=81593.
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CMS for calculation of this measure.
Thus, there will be no additional data
collection burden from the
implementation of this measure.
The episode window is comprised of
a treatment period and an associated
services period. The treatment period
begins at the trigger (that is, on the day
of admission to the SNF) and ends on
the day of discharge from that SNF.
Readmissions to the same facility
occurring within 7 or fewer days do not
trigger a new episode, and instead are
included in the treatment period of the
original episode. When two sequential
stays at the same SNF occur within 7 or
fewer days of one another, the treatment
period ends on the day of discharge for
the latest SNF stay. The treatment
period includes those services that are
provided directly or reasonably
managed by the SNF provider that are
directly related to the beneficiary’s care
plan. The associated services period is
the time during which Medicare Part A
and Part B services (with certain
exclusions) are counted towards the
episode. The associated services period
begins at the episode trigger and ends 30
days after the end of the treatment
period. The distinction between the
treatment period and the associated
services period is important because
clinical exclusions of services may
differ for each period. Certain services
are excluded from the MSPB–PAC SNF
episodes because they are clinically
unrelated to SNF care, and/or because
SNF providers may have limited
influence over certain Medicare services
delivered by other providers during the
episode window. These limited servicelevel exclusions are not counted
towards a given SNF provider’s
Medicare spending to ensure that
beneficiaries with certain conditions
and complex care needs receive the
necessary care. Certain services that
have been determined by clinicians to
be outside of the control of a SNF
provider include planned hospital
admissions, management of certain
preexisting chronic conditions (for
example, dialysis for end-stage renal
disease (ESRD), and enzyme treatments
for genetic conditions), treatment for
preexisting cancers, organ transplants,
and preventive screenings (for example,
colonoscopy and mammograms).
Exclusion of such services from the
MSPB–PAC SNF episode ensures that
facilities do not have disincentives to
treat patients with certain conditions or
complex care needs.
An MSPB–PAC episode may begin
during the associated services period of
an MSPB–PAC SNF episode in the 30
days post-treatment. One possible
scenario occurs where a SNF provider
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discharges a beneficiary who is then
admitted to a HHA within 30 days. The
HHA claim would be included once as
an associated service for the attributed
provider of the first MSPB–PAC SNF
episode and once as a treatment service
for the attributed provider of the second
MSPB–PAC HHA episode. As in the
case of overlap between hospital and
PAC episodes discussed earlier, this
overlap is necessary to ensure
continuous accountability between
providers throughout a beneficiary’s
trajectory of care, as both providers
share incentives to deliver high quality
care at a lower cost to Medicare. Even
within the SNF setting, one MSPB–PAC
SNF episode may begin in the
associated services period of another
MSPB–PAC SNF episode in the 30 days
post-treatment. The second SNF claim
would be included once as an
associated service for the attributed SNF
provider of the first MSPB–PAC SNF
episode and once as a treatment service
for the attributed SNF provider of the
second MSPB–PAC SNF episode. Again,
this ensures that SNF providers have the
same incentives throughout both
MSPB–PAC SNF episodes to deliver
quality care and engage in patientfocused care planning and coordination.
If the second MSPB–PAC SNF episode
were excluded from the second SNF
provider’s MSPB–PAC SNF measure,
that provider would not share the same
incentives as the first SNF provider of
first MSPB–PAC SNF episode. The
MSPB–PAC SNF measure is designed to
benchmark the resource use of each
attributed provider against what their
spending is expected to be as predicted
through risk adjustment. As discussed
further in this section, the measure takes
the ratio of observed spending to
expected spending for each episode and
then takes the average of those ratios
across all of the attributed provider’s
episodes. The measure is not a simple
sum of all costs across a provider’s
episodes, thus mitigating concerns
about double counting.
(2) Measure Calculation
Medicare payments for Part A and
Part B claims for services included in
MSPB–PAC SNF episodes, defined
according to the methodology above, are
used to calculate the MSPB–PAC SNF
measure. Measure calculation involves
determination of the episode exclusions,
the approach for standardizing
payments for geographic payment
differences, the methodology for risk
adjustment of episode spending to
account for differences in patient case
mix, and the specifications for the
measure numerator and denominator.
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(a) Exclusion Criteria
In addition to service-level exclusions
that remove some payments from
individual episodes, we exclude certain
episodes in their entirety from the
MSPB–PAC SNF measure to ensure that
the MSPB–PAC SNF measure accurately
reflects resource use and facilitates fair
and meaningful comparisons between
SNF providers. The proposed episodelevel exclusions are as follows:
• Any episode that is triggered by a
SNF claim outside the 50 states, DC,
Puerto Rico, and U.S. Territories.
• Any episode where the claim(s)
constituting the attributed SNF
provider’s treatment have a standard
allowed amount of zero or where the
standard allowed amount cannot be
calculated.
• Any episode in which a beneficiary
is not enrolled in Medicare FFS for the
entirety of a 90-day lookback period
(that is, a 90-day period prior to the
episode trigger) plus episode window
(including where the beneficiary dies),
or is enrolled in Part C for any part of
the lookback period plus episode
window.
• Any episode in which a beneficiary
has a primary payer other than Medicare
for any part of the 90-day lookback
period plus episode window.
• Any episode where the claim(s)
constituting the attributed SNF
provider’s treatment include at least one
related condition code indicating that it
is not a prospective payment system
bill.
(b) Standardization and Risk
Adjustment
Section 1899B(d)(2)(C) of the Act
requires that the MSPB–PAC measures
are adjusted for the factors described
under section 1886(o)(2)(B)(ii) of the
Act, which include adjustment for
factors such as age, sex, race, severity of
illness, and other factors that the
Secretary determines appropriate.
Medicare payments included in the
MSPB–PAC SNF QRP measure are
payment standardized and riskadjusted. Payment standardization
removes sources of payment variation
not directly related to clinical decisions
and facilitates comparisons of resource
use across geographic areas. We propose
to use the same payment
standardization methodology as that
used in the NQF-endorsed hospital
MSPB measure. This methodology
removes geographic payment
differences, such as wage index and
geographic practice cost index (GPCI),
incentive payment adjustments, and
other add-on payments that support
broader Medicare program goals
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24261
We understand the important role that
sociodemographic factors, beyond age,
play in the care of patients. However,
we continue to have concerns about
holding providers to different standards
for the outcomes of their patients of
diverse sociodemographic status
because we do not want to mask
potential disparities or minimize
incentives to improve the outcomes of
disadvantaged populations. We
routinely monitor the impact of
sociodemographic status on providers’
results on our measures.
The NQF is currently undertaking a 2year trial period in which new measures
and measures undergoing maintenance
review will be assessed to determine if
risk-adjusting for sociodemographic
factors is appropriate. For 2 years, NQF
will conduct a trial of temporarily
allowing inclusion of sociodemographic
factors in the risk-adjustment approach
for some performance measures. At the
conclusion of the trial, NQF will issue
recommendations on future permanent
inclusion of sociodemographic factors.
During the trial, measure developers are
expected to submit information such as
analyses and interpretations as well as
performance scores with and without
sociodemographic factors in the risk
adjustment model.
Furthermore, the Office of the
Assistant Secretary for Planning and
Evaluation (ASPE) is conducting
research to examine the impact of
sociodemographic status on quality
measures, resource use, and other
measures under the Medicare program
as required by the IMPACT Act. We will
closely examine the findings of the
ASPE reports and related Secretarial
recommendations and consider how
they apply to our quality programs at
such time as they are available.
While we conducted analyses on the
impact of age by sex on the performance
of the MSPB–PAC SNF risk-adjustment
model, we are not proposing to adjust
the MSPB–PAC SNF measure for
socioeconomic and demographic factors
at this time. As this MSPB–PAC SNF
measure will be submitted for NQF
endorsement, we prefer to await the
results of this trial and study before
deciding whether to risk adjust for
socioeconomic and demographic
factors. We will monitor the results of
the trial, studies, and recommendations.
We are inviting public comment on how
socioeconomic and demographic factors
should be used in risk adjustment for
the MSPB–PAC SNF measure.
Where:
• Yij = attributed standardized spending for
episode i and provider j
ˆ
• Yij = expected standardized spending for
episode i and provider j, as predicted
from risk adjustment
• nj = number of episodes for provider j
• n = total number of episodes nationally
• i e {Ij} = all episodes i in the set of episodes
attributed to provider j.
2015) https://qualitynet.org/dcs/ContentServer?c=
Page&pagename=QnetPublic%2FPage
%2FQnetTier4&cid=1228772057350.
37 QualityNet, ‘‘CMS Price (Payment)
Standardization—Detailed Methods’’ (Revised May
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(c) Measure Numerator and
Denominator
The MPSB–PAC SNF measure is a
payment-standardized, risk-adjusted
ratio that compares a given SNF
provider’s Medicare spending against
the Medicare spending of other SNF
providers within a performance period.
Similar to the hospital MSPB measure,
the ratio allows for ease of comparison
over time as it obviates the need to
adjust for inflation or policy changes.
The MSPB–PAC SNF measure is
calculated as the ratio of the MSPB–PAC
Amount for each SNF provider divided
by the episode-weighted median MSPB–
PAC Amount across all SNF providers.
To calculate the MSPB–PAC Amount for
each SNF provider, one calculates the
average of the ratio of the standardized
episode spending over the expected
episode spending (as predicted in risk
adjustment), and then multiplies this
quantity by the average episode
spending level across all SNF providers
nationally. The denominator for a SNF
provider’s MSPB–PAC SNF measure is
the episode-weighted national median
of the MSPB–PAC Amounts across all
SNF providers. An MSPB–PAC SNF
measure of less than 1 indicates that a
given SNF provider’s resource use is
less than that of the national median
SNF provider during a performance
period. Mathematically, this is
represented in equation (A) below:
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EP25AP16.009</GPH>
asabaliauskas on DSK3SPTVN1PROD with PROPOSALS
including indirect graduate medical
education (IME) and hospitals serving a
disproportionate share of uninsured
patients (DSH).37
Risk adjustment uses patient claims
history to account for case-mix variation
and other factors that affect resource use
but are beyond the influence of the
attributed SNF provider. To assist with
risk adjustment, we create mutually
exclusive and exhaustive clinical case
mix categories using the most recent
institutional claim in the 60 days prior
to the start of the MSPB–PAC SNF
episode. The beneficiaries in these
clinical case mix categories have a
greater degree of clinical similarity than
the overall SNF patient population, and
allow us to more accurately estimate
Medicare spending. Our proposed
MSPB–PAC SNF model, adapted for the
SNF setting from the NQF-endorsed
hospital MSPB measure uses a
regression framework with a 90-day
hierarchical condition category (HCC)
lookback period and covariates
including the clinical case mix
categories, HCC indicators, age brackets,
indicators for originally disabled, ESRD
enrollment, and long-term care status,
and selected interactions of these
covariates where sample size and
predictive ability make them
appropriate. We sought and considered
public comment regarding the treatment
of hospice services occurring within the
MSPB–PAC SNF episode window.
Given the comments received, we
propose to include the Medicare
spending for hospice services but risk
adjust for them, such that MSPB–PAC
SNF episodes with hospice are
compared to a benchmark reflecting
other MSPB–PAC SNF episodes with
hospice. We believe that this strikes a
balance between the measure’s intent of
evaluating Medicare spending and
ensuring that providers do not have
incentives against the appropriate use of
hospice services in a patient-centered
continuum of care.
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(3) Data Sources
The MSPB–PAC SNF resource use
measure is an administrative claimsbased measure. It uses Medicare Part A
and Part B claims from FFS
beneficiaries and Medicare eligibility
files.
(4) Cohort
The measure cohort includes
Medicare FFS beneficiaries with a SNF
treatment period ending during the data
collection period.
asabaliauskas on DSK3SPTVN1PROD with PROPOSALS
(5) Reporting
If this proposed measure is finalized,
we intend to provide initial confidential
feedback to providers, prior to public
reporting of this measure, based on
Medicare FFS claims data from
discharges in CY 2016. We intend to
publicly report this measure using
claims data from discharges in CY 2017.
We propose a minimum of 20
episodes for reporting and inclusion in
the SNF QRP. For the reliability
calculation, as described in the measure
specifications identified at https://
www.cms.gov/Medicare/QualityInitiatives-Patient-AssessmentInstruments/Post-Acute-Care-QualityInitiatives/IMPACT-Act-of-2014/
IMPACT-Act-Downloads-andVideos.html, we used data from FY
2014. The reliability results support the
20 episode case minimum, and 100.00
percent of SNF providers had moderate
or high reliability (above 0.4).
We invite public comment on our
proposal to adopt the measure, MSPB–
PAC SNF Measure for the SNF QRP.
b. Proposal To Address the IMPACT Act
Domain of Resource Use and Other
Measures: Discharge to Community-Post
Acute Care (PAC) Skilled Nursing
Facility Quality Reporting Program
Sections 1899B(d)(1)(B) and
1899B(a)(2)(E)(ii) of the Act require the
Secretary to specify a measure to
address the domain of discharge to
community by SNFs, LTCHs, and IRFs
by October 1, 2016, and HHAs by
January 1, 2017. We are proposing to
adopt the measure, Discharge to
Community—PAC SNF QRP, for the
SNF QRP for the FY 2018 payment
determination and subsequent years as
a Medicare FFS claims-based measure to
meet this requirement.
This proposed measure assesses
successful discharge to the community
from a SNF setting, with successful
discharge to the community including
no unplanned rehospitalizations and no
death in the 31 days following discharge
from the SNF. Specifically, this
proposed measure reports a SNF’s riskstandardized rate of Medicare FFS
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residents who are discharged to the
community following a SNF stay, and
do not have an unplanned readmission
to an acute care hospital or LTCH in the
31 days following discharge to
community, and who remain alive
during the 31 days following discharge
to community. The term ‘‘community’’,
for this measure, is defined as home/
self-care, with or without home health
services, based on Patient Discharge
Status Codes 01, 06, 81, and 86 on the
Medicare FFS claim.38 39 This measure
is conceptualized uniformly across the
PAC settings, in terms of the definition
of the discharge to community outcome,
the approach to risk adjustment, and the
measure calculation.
Discharge to a community setting is
an important health care outcome for
many residents for whom the overall
goals of post-acute care include
optimizing functional improvement,
returning to a previous level of
independence, and avoiding
institutionalization. Returning to the
community is also an important
outcome for many residents who are not
expected to make functional
improvement during their SNF stay, and
for residents who may be expected to
decline functionally due to their
medical condition. The discharge to
community outcome offers a multidimensional view of preparation for
community life, including the cognitive,
physical, and psychosocial elements
involved in a discharge to the
community.40 41
In addition to being an important
outcome from a resident and family
perspective, patients and residents
discharged to community settings, on
average, incur lower costs over the
recovery episode, compared with those
discharged to institutional settings.42 43
38 Further description of patient discharge status
codes can be found, for example, at the following
Web page: https://med.noridianmedicare.com/web/
jea/topics/claim-submission/patient-status-codes.
39 This definition is not intended to suggest that
board and care homes, assisted living facilities, or
other settings included in the definition of
‘‘community’’ for the purpose of this measure are
the most integrated setting for any particular
individual or group of individuals under the
Americans with Disabilities Act (ADA) and Section
504.
40 El-Solh A.A., Saltzman S.K., Ramadan F.H.,
Naughton B.J. Validity of an artificial neural
network in predicting discharge destination from a
postacute geriatric rehabilitation unit. Archives of
physical medicine and rehabilitation.
2000;81(10):1388–1393.
41 Tanwir S, Montgomery K, Chari V, Nesathurai
S. Stroke rehabilitation: Availability of a family
member as caregiver and discharge destination.
European journal of physical and rehabilitation
medicine. 2014;50(3):355–362.
42 Dobrez D, Heinemann A.W., Deutsch A,
Manheim L, Mallinson T. Impact of Medicare’s
prospective payment system for inpatient
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Given the high costs of care in
institutional settings, encouraging SNFs
to prepare residents for discharge to
community, when clinically
appropriate, may have cost-saving
implications for the Medicare
program.44 Also, providers have
discovered that successful discharge to
community was a major driver of their
ability to achieve savings, where
capitated payments for post-acute care
were in place.45 For residents who
require long-term care due to persistent
disability, discharge to community
could result in lower long-term care
costs for Medicaid and for residents’
out-of-pocket expenditures.46
Analyses conducted for ASPE on PAC
episodes, using a 5 percent sample of
2006 Medicare claims, revealed that
relatively high average, unadjusted
Medicare payments are associated with
discharge to institutional settings from
IRFs, SNFs, LTCHs or HHAs, as
compared with payments associated
with discharge to community settings.47
Average, unadjusted Medicare payments
associated with discharge to community
settings ranged from $0 to $4,017 for IRF
discharges, $0 to $3,544 for SNF
discharges, $0 to $4,706 for LTCH
discharges, and $0 to $992 for HHA
discharges. In contrast, payments
associated with discharge to noncommunity settings were considerably
higher, ranging from $11,847 to $25,364
for IRF discharges, $9,305 to $29,118 for
SNF discharges, $12,465 to $18,205 for
LTCH discharges, and $7,981 to $35,192
for HHA discharges.48
Measuring and comparing facilitylevel discharge to community rates is
expected to help differentiate among
facilities with varying performance in
this important domain, and to help
avoid disparities in care across resident
groups. Variation in discharge to
community rates has been reported
rehabilitation facilities on stroke patient outcomes.
American journal of physical medicine &
rehabilitation/Association of Academic Physiatrists.
2010;89(3):198–204.
43 Gage B., Morley M., Spain P., Ingber M.
Examining Post Acute Care Relationships in an
Integrated Hospital System. Final Report. RTI
International;2009.
44 Ibid.
45 Doran J.P., Zabinski S.J. Bundled payment
initiatives for Medicare and non-Medicare total
joint arthroplasty patients at a community hospital:
Bundles in the real world. The journal of
arthroplasty. 2015;30(3):353–355.
46 Newcomer R.J., Ko M., Kang T., Harrington C.,
Hulett D., Bindman A.B. Health Care Expenditures
After Initiating Long-term Services and Supports in
the Community Versus in a Nursing Facility.
Medical Care. 2016;54(3):221–228.
47 Gage B., Morley M., Spain P., Ingber M.
Examining Post Acute Care Relationships in an
Integrated Hospital System. Final Report. RTI
International; 2009.
48 Ibid.
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within and across post-acute settings;
across a variety of facility-level
characteristics, such as geographic
location (for example, regional location,
urban or rural location), ownership (for
example, for-profit or nonprofit), and
freestanding or hospital-based units;
and across patient-level characteristics,
such as race and gender.49 50 51 52 53 54
Discharge to community rates in the IRF
setting have been reported to range from
about 60 to 80 percent.55 56 57 58 59 60
Longer-term studies show that rates of
discharge to community from IRFs have
decreased over time as IRF length of
49 Reistetter T.A., Karmarkar A.M., Graham J.E., et
al. Regional variation in stroke rehabilitation
outcomes. Archives of physical medicine and
rehabilitation. 2014;95(1):29–38.
50 El-Solh A.A., Saltzman S.K., Ramadan F.H.,
Naughton B.J. Validity of an artificial neural
network in predicting discharge destination from a
postacute geriatric rehabilitation unit. Archives of
physical medicine and rehabilitation.
2000;81(10):1388–1393.
51 March 2015 Report to the Congress: Medicare
Payment Policy. Medicare Payment Advisory
Commission;2015.
52 Bhandari V.K., Kushel M., Price L., Schillinger
D. Racial disparities in outcomes of inpatient stroke
rehabilitation. Archives of physical medicine and
rehabilitation. 2005;86(11):2081–2086.
53 Chang P.F., Ostir G.V., Kuo Y.F., Granger C.V.,
Ottenbacher K.J. Ethnic differences in discharge
destination among older patients with traumatic
brain injury. Archives of physical medicine and
rehabilitation. 2008;89(2):231–236.
54 Berges I.M., Kuo Y.F., Ostir G.V., Granger C.V.,
Graham J.E., Ottenbacher K.J. Gender and ethnic
differences in rehabilitation outcomes after hipreplacement surgery. American journal of physical
medicine & rehabilitation/Association of Academic
Physiatrists. 2008;87(7):567–572.
55 Galloway R.V., Granger C.V., Karmarkar A.M.,
et al. The Uniform Data System for Medical
Rehabilitation: Report of patients with debility
discharged from inpatient rehabilitation programs
in 2000–2010. American journal of physical
medicine & rehabilitation/Association of Academic
Physiatrists. 2013;92(1):14–27.
56 Morley M.A., Coots L.A., Forgues A.L., Gage
B.J. Inpatient rehabilitation utilization for Medicare
beneficiaries with multiple sclerosis. Archives of
physical medicine and rehabilitation.
2012;93(8):1377–1383.
57 Reistetter T.A., Graham J.E., Deutsch A.,
Granger C.V., Markello S., Ottenbacher K.J. Utility
of functional status for classifying community
versus institutional discharges after inpatient
rehabilitation for stroke. Archives of physical
medicine and rehabilitation. 2010;91(3):345–350.
58 Gagnon D., Nadeau S., Tam V. Clinical and
administrative outcomes during publicly-funded
inpatient stroke rehabilitation based on a case-mix
group classification model. Journal of rehabilitation
medicine. 2005;37(1):45–52.
59 DaVanzo J., El-Gamil A., Li J., Shimer M.,
Manolov N., Dobson A. Assessment of patient
outcomes of rehabilitative care provided in
inpatient rehabilitation facilities (IRFs) and after
discharge. Vienna, VA: Dobson DaVanzo &
Associates, LLC;2014.
60 Kushner D.S., Peters K.M., Johnson-Greene D.
Evaluating Siebens Domain Management Model for
Inpatient Rehabilitation to Increase Functional
Independence and Discharge Rate to Home in
Geriatric Patients. Archives of physical medicine
and rehabilitation. 2015;96(7):1310–1318.
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stay has decreased.61 62 Greater variation
in discharge to community rates is seen
in the SNF setting, with rates ranging
from 31 to 65 percent.63 64 65 66 In the
SNF Medicare FFS population, using
CY 2013 national claims data, we found
that approximately 44 percent of
residents were discharged to the
community. A multi-center study of 23
LTCHs demonstrated that 28.8 percent
of 1,061 patients who were ventilatordependent on admission were
discharged to home.67 A single-center
study revealed that 31 percent of LTCH
hemodialysis patients were discharged
to home.68 One study noted that 64
percent of beneficiaries who were
discharged from the home health
episode did not use any other acute or
post-acute services paid by Medicare in
the 30 days after discharge.69 However,
significant numbers of patients were
admitted to hospitals (29 percent) and
lesser numbers to SNFs (7.6 percent),
IRFs (1.5 percent), home health (7.2
percent) or hospice (3.3 percent).70
Discharge to community is an
actionable health care outcome, as
61 Galloway R.V., Granger C.V., Karmarkar A.M.,
et al. The Uniform Data System for Medical
Rehabilitation: Report of patients with debility
discharged from inpatient rehabilitation programs
in 2000–2010. American journal of physical
medicine & rehabilitation/Association of Academic
Physiatrists. 2013;92(1):14–27.
62 Mallinson T., Deutsch A., Bateman J., et al.
Comparison of discharge functional status after
rehabilitation in skilled nursing, home health, and
medical rehabilitation settings for patients after hip
fracture repair. Archives of physical medicine and
rehabilitation. 2014;95(2):209–217.
63 El-Solh A.A., Saltzman S.K., Ramadan F.H.,
Naughton B.J. Validity of an artificial neural
network in predicting discharge destination from a
postacute geriatric rehabilitation unit. Archives of
physical medicine and rehabilitation.
2000;81(10):1388–1393.
64 Hall R.K., Toles M., Massing M., et al.
Utilization of acute care among patients with ESRD
discharged home from skilled nursing facilities.
Clinical journal of the American Society of
Nephrology: CJASN. 2015;10(3):428–434.
65 Stearns S.C., Dalton K., Holmes G.M., Seagrave
S.M. Using propensity stratification to compare
patient outcomes in hospital-based versus
freestanding skilled-nursing facilities. Medical care
research and review: MCRR. 2006;63(5):599–622.
66 Wodchis W.P., Teare G.F., Naglie G., et al.
Skilled nursing facility rehabilitation and discharge
to home after stroke. Archives of physical medicine
and rehabilitation. 2005;86(3):442–448.
67 Scheinhorn D.J., Hassenpflug M.S., Votto J.J., et
al. Post-ICU mechanical ventilation at 23 long-term
care hospitals: A multicenter outcomes study.
Chest. 2007;131(1):85–93.
68 Thakar C.V., Quate-Operacz M., Leonard A.C.,
Eckman M.H. Outcomes of hemodialysis patients in
a long-term care hospital setting: A single-center
study. American journal of kidney diseases: The
official journal of the National Kidney Foundation.
2010;55(2):300–306.
69 Wolff J.L., Meadow A., Weiss C.O., Boyd C.M.,
Leff B. Medicare home health patients’ transitions
through acute and post-acute care settings. Medical
care. 2008;46(11):1188–1193.
70 Ibid.
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24263
targeted interventions have been shown
to successfully increase discharge to
community rates in a variety of postacute settings.71 72 73 74 Many of these
interventions involve discharge
planning or specific rehabilitation
strategies, such as addressing discharge
barriers and improving medical and
functional status.75 76 77 78 The
effectiveness of these interventions
suggests that improvement in discharge
to community rates among post-acute
care residents is possible through
modifying provider-led processes and
interventions.
A TEP convened by our measure
development contractor was strongly
supportive of the importance of
measuring discharge to community
outcomes, and implementing the
proposed measure, Discharge to
Community—PAC SNF QRP in the SNF
QRP. The panel provided input on the
technical specifications of this proposed
measure, including the feasibility of
implementing the measure, as well as
the overall measure reliability and
validity. A summary of the TEP
proceedings is available on the PAC
Quality Initiatives Downloads and
Videos Web site at https://
www.cms.gov/Medicare/QualityInitiatives-Patient-Assessment71 Kushner D.S., Peters K.M., Johnson-Greene D.
Evaluating Siebens Domain Management Model for
Inpatient Rehabilitation to Increase Functional
Independence and Discharge Rate to Home in
Geriatric Patients. Archives of physical medicine
and rehabilitation. 2015;96(7):1310–1318.
72 Wodchis W.P., Teare G.F., Naglie G., et al.
Skilled nursing facility rehabilitation and discharge
to home after stroke. Archives of physical medicine
and rehabilitation. 2005;86(3):442–448.
73 Berkowitz R.E., Jones R.N., Rieder R., et al.
Improving disposition outcomes for patients in a
geriatric skilled nursing facility. Journal of the
American Geriatrics Society. 2011;59(6):1130–1136.
74 Kushner D.S., Peters K.M., Johnson-Greene D.
Evaluating use of the Siebens Domain Management
Model during inpatient rehabilitation to increase
functional independence and discharge rate to
home in stroke patients. PM & R: The journal of
injury, function, and rehabilitation. 2015;7(4):354–
364.
75 Kushner D.S., Peters K.M., Johnson-Greene D.
Evaluating Siebens Domain Management Model for
Inpatient Rehabilitation to Increase Functional
Independence and Discharge Rate to Home in
Geriatric Patients. Archives of physical medicine
and rehabilitation. 2015;96(7):1310–1318.
76 Wodchis W.P., Teare G.F., Naglie G., et al.
Skilled nursing facility rehabilitation and discharge
to home after stroke. Archives of physical medicine
and rehabilitation. 2005;86(3):442–448.
77 Berkowitz R..E, Jones R.N., Rieder R., et al.
Improving disposition outcomes for patients in a
geriatric skilled nursing facility. Journal of the
American Geriatrics Society. 2011;59(6):1130–1136.
78 Kushner D.S., Peters K.M., Johnson-Greene D.
Evaluating use of the Siebens Domain Management
Model during inpatient rehabilitation to increase
functional independence and discharge rate to
home in stroke patients. PM & R: The journal of
injury, function, and rehabilitation. 2015;7(4):354–
364.
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Instruments/Post-Acute-Care-QualityInitiatives/IMPACT-Act-of-2014/
IMPACT-Act-Downloads-andVideos.html.
We also solicited stakeholder
feedback on the development of this
measure through a public comment
period held from November 9, 2015,
through December 8, 2015. Several
stakeholders and organizations,
including the MedPAC, among others,
supported this measure for
implementation. The public comment
summary report for the proposed
measure is available on the CMS Web
site at https://www.cms.gov/Medicare/
Quality-Initiatives-Patient-AssessmentInstruments/Post-Acute-Care-QualityInitiatives/IMPACT-Act-of-2014/
IMPACT-Act-Downloads-andVideos.html.
The NQF-convened MAP met on
December 14 and 15, 2015, and
provided input on the use of this
proposed Discharge to Community—
PAC SNF QRP measure in the SNF QRP.
The MAP encouraged continued
development of the proposed measure
to meet the mandate of the IMPACT Act.
The MAP supported the alignment of
this proposed measure across PAC
settings, using standardized claims data.
More information about the MAP’s
recommendations for this measure is
available at https://
www.qualityforum.org/Publications/
2016/02/MAP_2016_Considerations_
for_Implementing_Measures_in_
Federal_Programs_-_PAC-LTC.aspx.
Since the MAP’s review and
recommendation of continued
development, we have continued to
refine risk-adjustment models and
conduct measure testing for this
measure, as recommended by the MAP.
This proposed measure is consistent
with the information submitted to the
MAP and is scientifically acceptable for
current specification in the SNF QRP.
As discussed with the MAP, we fully
anticipate that additional analyses will
continue as we submit this measure to
the ongoing measure maintenance
process.
We reviewed the NQF’s consensusendorsed measures and were unable to
identify any NQF-endorsed resource use
or other measures for post-acute care
focused on discharge to community. In
addition, we are unaware of any other
post-acute care measures for discharge
to community that have been endorsed
or adopted by other consensus
organizations. Therefore, we are
proposing the measure, Discharge to
Community—PAC SNF QRP, under the
Secretary’s authority to specify nonNQF-endorsed measures under section
1899B(e)(2)(B) of the Act.
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We are proposing to use data from the
Medicare FFS claims and Medicare
eligibility files to calculate this
proposed measure. We are proposing to
use data from the ‘‘Patient Discharge
Status Code’’ on Medicare FFS claims to
determine whether a resident was
discharged to a community setting for
calculation of this proposed measure. In
all PAC settings, we tested the accuracy
of determining discharge to a
community setting using the ‘‘Patient
Discharge Status Code’’ on the PAC
claim by examining whether discharge
to community coding based on PAC
claim data agreed with discharge to
community coding based on PAC
assessment data. We found excellent
agreement between the two data sources
in all PAC settings, ranging from 94.6
percent to 98.8 percent. Specifically, in
the SNF setting, using 2013 data, we
found 94.6 percent agreement in
discharge to community codes when
comparing discharge status codes on
claims and the Discharge Status (A2100)
on the Minimum Data Set (MDS) 3.0
discharge assessment, when the claims
and MDS assessment had the same
discharge date. We further examined the
accuracy of the ‘‘Patient Discharge
Status Code’’ on the PAC claim by
assessing how frequently discharges to
an acute care hospital were confirmed
by follow-up acute care claims. We
discovered that 88 percent to 91 percent
of IRF, LTCH, and SNF claims with
acute care discharge status codes were
followed by an acute care claim on the
day of, or day after, PAC discharge. We
believe these data support the use of the
claims ‘‘Patient Discharge Status Code’’
for determining discharge to a
community setting for this measure. In
addition, this measure can feasibly be
implemented in the SNF QRP because
all data used for measure calculation are
derived from Medicare FFS claims and
eligibility files, which are already
available to CMS.
Based on the evidence discussed
above, we are proposing to adopt the
measure, Discharge to Community—
PAC SNF QRP, for the SNF QRP for FY
2018 payment determination and
subsequent years. This proposed
measure is calculated using one year of
data. We are proposing a minimum of
25 eligible stays in a given SNF for
public reporting of the proposed
measure for that SNF. Since Medicare
FFS claims data are already reported to
the Medicare program for payment
purposes, and Medicare eligibility files
are also available, SNFs will not be
required to report any additional data to
CMS for calculation of this measure.
The proposed measure denominator is
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the risk-adjusted expected number of
discharges to community. The proposed
measure numerator is the risk-adjusted
estimate of the number of residents who
are discharged to the community, do not
have an unplanned readmission to an
acute care hospital or LTCH in the 31day post-discharge observation window,
and who remain alive during the postdischarge observation window. The
measure is risk-adjusted for variables
such as age and sex, principal diagnosis,
comorbidities, ventilator status, ESRD
status, and dialysis, among other
variables. For technical information
about this proposed measure, including
information about the measure
calculation, risk adjustment, and
denominator exclusions, refer to the
document titled, Proposed Measure
Specifications for Measures Proposed in
the FY 2017 SNF QRP NPRM available
at https://www.cms.gov/Medicare/
Quality-Initiatives-Patient-AssessmentInstruments/NursingHomeQualityInits/
SNF-Quality-Reporting-ProgramMeasures-and-TechnicalInformation.html.
If this proposed measure is finalized,
we intend to provide initial confidential
feedback to SNFs, prior to public
reporting of this measure, based on
Medicare FFS claims data from
discharges in CY 2016. We intend to
publicly report this measure using
claims data from discharges in CY 2017.
We plan to submit this proposed
measure to the NQF for consideration
for endorsement.
We are inviting public comment on
our proposal to adopt the measure,
Discharge to Community—PAC SNF
QRP, for the SNF QRP.
c. Proposal To Address the IMPACT Act
Domain of Resource Use and Other
Measures: Potentially Preventable 30Day Post-Discharge Readmission
Measure for Skilled Nursing Facility
Quality Reporting Program
Sections 1899B(a)(2)(E)(ii) and
1899B(d)(1)(C) of the Act require the
Secretary to specify measures to address
the domain of all-condition riskadjusted potentially preventable
hospital readmission rates by SNFs,
LTCHs, and IRFs by October 1, 2016,
and HHAs by January 1, 2017. We are
proposing the measure Potentially
Preventable 30-Day Post-Discharge
Readmission Measure for SNF QRP as a
Medicare FFS claims-based measure to
meet this requirement for the FY 2018
payment determination and subsequent
years.
The proposed measure assesses the
facility-level risk-standardized rate of
unplanned, potentially preventable
hospital readmissions for Medicare FFS
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beneficiaries in the 30 days post-SNF
discharge. The SNF admission must
have occurred within up to 30 days of
discharge from a prior proximal hospital
stay which is defined as an inpatient
admission to an acute care hospital
(including IPPS, CAH, or a psychiatric
hospital). Hospital readmissions include
readmissions to a short-stay acute care
hospitals or an LTCH, with a diagnosis
considered to be unplanned and
potentially preventable. This proposed
measure is claims-based, requiring no
additional data collection or submission
burden for SNFs. Because the measure
denominator is based on SNF
admissions, each Medicare beneficiary
may be included in the measure
multiple times within the measurement
period. Readmissions counted in this
measure are identified by examining
Medicare FFS claims data for
readmissions to either acute care
hospitals (IPPS or CAH) or LTCHs that
occur during a 30-day window
beginning two days after SNF discharge.
This measure is conceptualized
uniformly across the PAC settings, in
terms of the measure definition, the
approach to risk adjustment, and the
measure calculation. Our approach for
defining potentially preventable
hospital readmissions is described in
more detail below.
Hospital readmissions among the
Medicare population, including
beneficiaries that utilize PAC, are
common, costly, and often
preventable.79 80 MedPAC and a study
by Jencks et al. estimated that 17 to 20
percent of Medicare beneficiaries
discharged from the hospital were
readmitted within 30 days. MedPAC
found that more than 75 percent of 30day and 15-day readmissions and 84
percent of 7-day readmissions were
considered ‘‘potentially preventable.’’ 81
In addition, MedPAC calculated that
annual Medicare spending on
potentially preventable readmissions
would be $12 billion for 30-day, $8
billion for 15-day, and $5 billion for 7day readmissions.82 For hospital
readmissions from SNFs, MedPAC
79 Friedman, B., and Basu, J.: The rate and cost
of hospital readmissions for preventable conditions.
Med. Care Res. Rev. 61(2):225–240, 2004.
doi:10.1177/1077558704263799.
80 Jencks, S.F., Williams, M.V., and Coleman,
E.A.: Rehospitalizations among patients in the
Medicare Fee-for-Service Program. N. Engl. J. Med.
360(14):1418–1428, 2009. doi:10.1016/
j.jvs.2009.05.045.
81 MedPAC: Payment policy for inpatient
readmissions, in Report to the Congress: Promoting
Greater Efficiency in Medicare. Washington, DC, pp.
103–120, 2007. Available from https://
www.medpac.gov/documents/reports/Jun07_
EntireReport.pdf.
82 Ibid.
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deemed 76 percent of readmissions as
‘‘potentially avoidable’’—associated
with $12 billion in Medicare
expenditures.83 Mor et al. analyzed 2006
Medicare claims and SNF assessment
data (Minimum Data Set), and reported
a 23.5 percent readmission rate from
SNFs, associated with $4.3 billion in
expenditures.84 Fewer studies have
investigated potentially preventable
readmission rates from the remaining
post-acute care settings.
We have addressed the high rates of
hospital readmissions in the acute care
setting, as well as in PAC. For example,
we developed the following measure:
Skilled Nursing Facility 30-Day AllCause Readmission Measure (SNFRM)
(NQF #2510), as well as similar
measures for other PAC providers (NQF
#2502 for IRFs and NQF #2512 for
LTCHs).85 These measures are endorsed
by the NQF, and the NQF-endorsed SNF
measure (NQF #2510) was adopted into
the SNF VBP Program in the FY 2016
SNF final rule (80 FR 46411 through
46419). Note that these NQF-endorsed
measures assess all-cause unplanned
readmissions.
Several general methods and
algorithms have been developed to
assess potentially avoidable or
preventable hospitalizations and
readmissions for the Medicare
population. These include the Agency
for Healthcare Research and Quality’s
(AHRQ’s) Prevention Quality Indicators,
approaches developed by MedPAC, and
proprietary approaches, such as the
3MTM algorithm for Potentially
Preventable Readmissions.86 87 88 Recent
work led by Kramer et al. for MedPAC
identified 13 conditions for which
readmissions were deemed as
potentially preventable among SNF and
IRF populations.89 90 Although much of
83 Ibid.
84 Mor, V., Intrator, O., Feng, Z., et al.: The
revolving door of rehospitalization from skilled
nursing facilities. Health Aff. 29(1):57–64, 2010.
doi:10.1377/hlthaff.2009.0629.
85 National Quality Forum: All-Cause Admissions
and Readmissions Measures. pp. 1–319, April 2015.
Available from https://www.qualityforum.org/
Publications/2015/04/All-Cause_Admissions_and_
Readmissions_Measures_-_Final_Report.aspx.
86 Goldfield, N.I., McCullough, E.C., Hughes, J.S.,
et al.: Identifying potentially preventable
readmissions. Health Care Finan. Rev. 30(1):75–91,
2008. Available from https://www.ncbi.nlm.nih.gov/
pmc/articles/PMC4195042/.
87 National Quality Forum: Prevention Quality
Indicators Overview. 2008.
88 MedPAC: Online Appendix C: Medicare
Ambulatory Care Indicators for the Elderly. pp. 1–
12, prepared for Chapter 4, 2011. Available from
https://www.medpac.gov/documents/reports/Mar11_
Ch04_APPENDIX.pdf?sfvrsn=0.
89 Kramer, A., Lin, M., Fish, R., et al.:
Development of Inpatient Rehabilitation Facility
Quality Measures: Potentially Avoidable
Readmissions, Community Discharge, and
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the existing literature addresses hospital
readmissions more broadly and
potentially avoidable hospitalizations
for specific settings like long-term care,
these findings are relevant to the
development of potentially preventable
readmission measures for PAC.91 92 93
Potentially Preventable Readmission
Measure Definition: We conducted a
comprehensive environmental scan,
analyzed claims data, and obtained
input from a TEP to develop a definition
and list of conditions for which hospital
readmissions are potentially
preventable. The Ambulatory Care
Sensitive Conditions and Prevention
Quality Indicators, developed by AHRQ,
served as the starting point in this work.
For patients in the 30-day post-PAC
discharge period, a potentially
preventable readmission (PRR) refers to
a readmission for which the probability
of occurrence could be minimized with
adequately planned, explained, and
implemented post discharge
instructions, including the
establishment of appropriate follow-up
ambulatory care. Our list of PPR
conditions is categorized by 3 clinical
rationale groupings:
• Inadequate management of chronic
conditions;
• Inadequate management of
infections; and
• Inadequate management of other
unplanned events.
Additional details regarding the
definition for potentially preventable
readmissions are available in the
document titled, Proposed Measure
Specifications for Measures Proposed in
the FY 2017 SNF QRP NPRM, available
at https://www.cms.gov/Medicare/
Quality-Initiatives-Patient-AssessmentInstruments/NursingHomeQualityInits/
Functional Improvement. pp. 1–42, 2015. Available
from https://www.medpac.gov/documents/
contractor-reports/development-of-inpatientrehabilitation-facility-quality-measures-potentiallyavoidable-readmissions-community-discharge-andfunctional-improvement.pdf?sfvrsn=0.
90 Kramer, A., Lin, M., Fish, R., et al.:
Development of Potentially Avoidable Readmission
and Functional Outcome SNF Quality Measures.
pp. 1–75, 2014. Available from https://
www.medpac.gov/documents/contractor-reports/
mar14_snfqualitymeasures_
contractor.pdf?sfvrsn=0.
91 Allaudeen, N., Vidyarthi, A., Maselli, J., et al.:
Redefining readmission risk factors for general
medicine patients. J. Hosp. Med. 6(2):54–60, 2011.
doi:10.1002/jhm.805.
92 Gao, J., Moran, E., Li, Y.-F., et al.: Predicting
potentially avoidable hospitalizations. Med. Care
52(2):164–171, 2014. doi:10.1097/
MLR.0000000000000041.
93 Walsh, E.G., Wiener, J.M., Haber, S., et al.:
Potentially avoidable hospitalizations of dually
eligible Medicare and Medicaid beneficiaries from
nursing facility and home- and community-based
services waiver programs. J. Am. Geriatr. Soc.
60(5):821–829, 2012. doi:10.1111/j.1532–
5415.2012.03920.x.
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SNF-Quality-Reporting-ProgramMeasures-and-TechnicalInformation.html.
This proposed measure focuses on
readmissions that are potentially
preventable and also unplanned.
Similar to the SNF 30-Day All-Cause
Readmission Measure (NQF #2510), this
proposed measure uses the current
version of the CMS Planned
Readmission Algorithm as the main
component for identifying planned
readmissions. A complete description of
the CMS Planned Readmission
Algorithm, which includes lists of
planned diagnoses and procedures, can
be found on the CMS Web site at https://
www.cms.gov/Medicare/QualityInitiatives-Patient-AssessmentInstruments/HospitalQualityInits/
Measure-Methodology.html. In addition
to the CMS Planned Readmission
Algorithm, this proposed measure
incorporates procedures that are
considered planned in post-acute care
settings, as identified in consultation
with TEPs. Full details on the planned
readmissions criteria used, including
the CMS Planned Readmission
Algorithm and additional procedures
considered planned for post-acute care,
can be found in the document titled,
Proposed Measure Specifications for
Measures Proposed in the FY 2017 SNF
QRP NPRM at https://www.cms.gov/
Medicare/Quality-Initiatives-PatientAssessment-Instruments/
NursingHomeQualityInits/SNF-QualityReporting-Program-Measures-andTechnical-Information.html.
The proposed measure, Potentially
Preventable 30-Day Post-Discharge
Readmission Measure for Skilled
Nursing Facility Quality Reporting
Program, assesses potentially
preventable readmission rates while
accounting for patient demographics,
principal diagnosis in the prior hospital
stay, 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 in
each facility. This proposed measure is
calculated for each SNF based on the
ratio of the predicted number of riskadjusted, unplanned, potentially
preventable hospital readmissions that
occur within 30 days after a SNF
discharge, including the estimated
facility effect, to the estimated predicted
number of risk-adjusted, 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
(worse) while a ratio below 1.0 indicates
a lower than expected readmission rate
(better). This ratio is referred to as the
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standardized risk ratio (SRR). The SRR
is then multiplied by the overall
national raw rate of potentially
preventable readmissions for all SNF
stays. The resulting rate is the riskstandardized readmission rate (RSRR) of
potentially preventable readmissions.
The full methodology of this proposed
measure is detailed in the document
titled, Proposed Measure Specifications
for Measures Proposed in the FY 2017
SNF QRP NPRM at https://
www.cms.gov/Medicare/QualityInitiatives-Patient-AssessmentInstruments/NursingHomeQualityInits/
SNF-Quality-Reporting-ProgramMeasures-and-TechnicalInformation.html.
An eligible SNF stay is followed until:
(1) The 30-day post-discharge period
ends; or (2) the patient is readmitted to
an acute care hospital (IPPS or CAH) or
LTCH. If the readmission is unplanned
and potentially preventable, it is
counted as a readmission in the measure
calculation. If the readmission is
planned, the readmission is not counted
in the measure rate. This measure is risk
adjusted. The risk adjustment modeling
estimates the effects of patient
characteristics, comorbidities, and select
health care variables on the probability
of readmission. More specifically, the
risk-adjustment model for SNFs
accounts for demographic
characteristics (age, sex, original reason
for Medicare entitlement), principal
diagnosis during the prior proximal
hospital stay, body system specific
surgical indicators, comorbidities,
length of stay during the patient’s prior
proximal hospital stay, intensive care
unit (ICU) utilization, end-stage renal
disease status, and number of acute care
hospitalizations in the preceding 365
days.
The proposed measure is calculated
using 1 calendar year of FFS claims
data, to ensure the statistical reliability
of this measure for facilities. In
addition, we are proposing a minimum
of 25 eligible stays for public reporting
of the proposed measure. For technical
information about this proposed
measure including information about
the measure calculation, risk
adjustment, and exclusions, refer to the
document titled, Proposed Measure
Specifications for Measures Proposed in
the FY 2017 SNF QRP NPRM at
https://www.cms.gov/Medicare/QualityInitiatives-Patient-AssessmentInstruments/NursingHomeQualityInits/
SNF-Quality-Reporting-ProgramMeasures-and-TechnicalInformation.html.
A TEP convened by our measure
development contractor provided
recommendations on the technical
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specifications of this proposed measure,
including the development of an
approach to define potentially
preventable hospital readmission for
PAC. Details from the TEP meetings,
including TEP members’ ratings of
conditions proposed as being
potentially preventable, are available in
the TEP Summary Report available on
the CMS Web site at https://
www.cms.gov/Medicare/QualityInitiatives-Patient-AssessmentInstruments/Post-Acute-Care-QualityInitiatives/IMPACT-Act-of-2014/
IMPACT-Act-Downloads-andVideos.html. We also solicited
stakeholder feedback on the
development of this measure through a
public comment period held from
November 2 through December 1, 2015.
Comments on the measure varied, with
some commenters supportive of the
proposed measure, while others either
were not in favor of the measure, or
suggested potential modifications to the
measure specifications, such as
including standardized function data. A
summary of the public comments is also
available on the CMS Web site at
https://www.cms.gov/Medicare/QualityInitiatives-Patient-AssessmentInstruments/Post-Acute-Care-QualityInitiatives/IMPACT-Act-of-2014/
IMPACT-Act-Downloads-andVideos.html.
The MAP encouraged continued
development of the proposed measure.
Specifically, the MAP stressed the need
to promote shared accountability and
ensure effective care transitions. More
information about the MAP’s
recommendations for this measure is
available at https://
www.qualityforum.org/Publications/
2016/02/MAP_2016_Considerations_
for_Implementing_Measures_in_
Federal_Programs_-_PAC–LTC.aspx. At
the time, the risk-adjustment model was
still under development. Following
completion of that development work,
we were able to test for measure validity
and reliability as identified in the
measure specifications document
provided above. Testing results are
within range for similar outcome
measures finalized in public reporting
and value-based purchasing programs,
including the SNFRM (NQF #2510)
adopted into the SNF VBP Program in
the FY 2016 SNF final rule (80 FR 46411
through 46419).
We reviewed the NQF’s consensus
endorsed measures and were unable to
identify any NQF-endorsed measures
focused on potentially preventable
hospital readmissions. We are unaware
of any other measures for this IMPACT
Act domain that have been endorsed or
adopted by other consensus
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organizations. Therefore, we are
proposing the Potentially Preventable
30-Day Post-Discharge Readmission
Measure for SNF QRP, under the
Secretary’s authority to specify nonNQF-endorsed measures under section
1899B(e)(2)(B) of the Act, for the SNF
QRP for the FY 2018 payment
determination and subsequent years
given the evidence previously discussed
above.
We plan to submit the proposed
measure to the NQF for consideration of
endorsement. If this proposed measure
is finalized, we intend to provide initial
confidential feedback to SNFs, prior to
public reporting of this proposed
measure, based on 1 calendar year of
claims data from discharges in CY 2016.
We intend to publicly report this
proposed measure using claims data
from CY 2017.
We are inviting public comment on
our proposal to adopt the measure,
Potentially Preventable 30-Day PostDischarge Readmission Measure for the
SNF QRP.
asabaliauskas on DSK3SPTVN1PROD with PROPOSALS
7. Skilled Nursing Facility Quality
Measure Proposed for the FY 2020
Payment Determination and Subsequent
Years
In addition to the measures we are
retaining as described in section V.B.5.
of this proposed rule under our policy
described in section V.B.3. of this
proposed rule and the new quality
measures proposed in section V.B.6. of
this proposed rule for the FY 2018
payment determinations and subsequent
years, we are also proposing one new
quality measure to meet the
requirements of the IMPACT Act for the
FY 2020 payment determination and
subsequent years. The proposed
measure, Drug Regimen Review
Conducted with Follow-Up for
Identified Issues—PAC SNF QRP,
addresses the IMPACT Act quality
domain of Medication Reconciliation.
a. Quality Measure Addressing the
IMPACT Act Domain of Medication
Reconciliation: Drug Regimen Review
Conducted With Follow-Up for
Identified Issues-Post Acute Care (PAC)
Skilled Nursing Facility Quality
Reporting Program
Sections 1899B (a)(2)(E)(i)(III) and
1899B(c)(1)(C) of the Act require the
Secretary to specify a quality measure to
address the domain of medication
reconciliation by October 1, 2018 for
IRFs, LTCHs and SNFs; and by January
1, 2017 for HHAs. We are proposing to
adopt the quality measure, Drug
Regimen Review Conducted with
Follow-Up for Identified Issues—PPAC
SNF QRP, for the SNF QRP as a
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resident-assessment based, cross-setting
quality measure to meet the IMPACT
Act requirements with data collection
beginning October 1, 2018 for the FY
2020 payment determinations and
subsequent years.
This proposed measure assesses
whether PAC providers were responsive
to potential or actual clinically
significant medication issue(s) when
such issues were identified.
Specifically, the proposed quality
measure reports the percentage of
resident stays in which a drug regimen
review was conducted at the time of
admission and timely follow-up with a
physician occurred each time potential
clinically significant medication issues
were identified throughout that stay. For
this proposed quality measure, a drug
regimen review is defined as the review
of all medications or drugs the patient
is taking to identify any potential
clinically significant medication issues.
This proposed quality measure utilizes
both the processes of medication
reconciliation and a drug regimen
review, in the event an actual or
potential medication issue occurred.
The proposed measure informs whether
the PAC facility identified and
addressed each clinically significant
medication issue and if the facility
responded or addressed the medication
issue in a timely manner. Of note, drug
regimen review in PAC settings is
generally considered to include
medication reconciliation and review of
the patient’s drug regimen to identify
potential clinically significant
medication issues.94 This measure is
applied uniformly across the PAC
settings.
Medication reconciliation is a process
of reviewing an individual’s complete
and current medication list. Medication
reconciliation is a recognized process
for reducing the occurrence of
medication discrepancies that may lead
to Adverse Drug Events (ADEs).95
Medication discrepancies occur when
there is conflicting information
documented in the medical records. The
World Health Organization regards
medication reconciliation as a standard
operating protocol necessary to reduce
the potential for ADEs that cause harm
to patients. Medication reconciliation is
an important patient safety process that
addresses medication accuracy during
transitions in resident care and in
identifying preventable ADEs.96 The
Joint Commission added medication
94 Ibid.
95 Ibid.
96 Leotsakos A., et al. Standardization in patient
safety: The WHO High 5s project. Int J Qual Health
Care. 2014:26(2):109–116.
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reconciliation to its list of National
Patient Safety Goals (2005), suggesting
that medication reconciliation is an
integral component of medication
safety.97 The Society of Hospital
Medicine published a statement in
agreement of the Joint Commission’s
emphasis and value of medication
reconciliation as a patient safety goal.98
There is universal agreement that
medication reconciliation directly
addresses resident safety issues that can
result from medication
miscommunication and unavailable or
incorrect information.99 100 101
The performance of timely medication
reconciliation is valuable to the process
of drug regimen review. Preventing and
responding to ADEs is of critical
importance as ADEs account for
significant increases in health services
utilization and costs 102 103 104 including
subsequent emergency room visits and
re-hospitalizations.105 Annual health
care costs in the United States are
estimated at $3.5 billion, resulting in
7,000 deaths annually.106
Medication errors include the
duplication of medications, delivery of
an incorrect drug, inappropriate drug
omissions, or errors in the dosage, route,
frequency, and duration of medications.
Medication errors are one of the most
common types of medical error and can
occur at any point in the process of
97 The Joint Commission. 2016 Long Term Care:
National Patient Safety Goals Medicare/Medicaid
Certification-based Option. (NPSG.03.06.01).
98 Greenwald, J.L., Halasyamani, L., Greene, J.,
LaCivita, C., et al. (2010). Making inpatient
medication reconciliation patient centered,
clinically relevant and implementable: A consensus
statement on key principles and necessary first
steps. Journal of Hospital Medicine, 5(8), 477–485.
99 Leotsakos A., et al. Standardization in patient
safety: The WHO High 5s project. Int J Qual Health
Care. 2014:26(2):109–116.
100 The Joint Commission. 2016 Long Term Care:
National Patient Safety Goals Medicare/Medicaid
Certification-based Option. (NPSG.03.06.01).
101 IHI. Medication Reconciliation to Prevent
Adverse Drug Events [Internet]. Cambridge, MA:
Institute for Healthcare Improvement; [cited 2016
Jan 11]. Available from: https://www.ihi.org/topics/
adesmedicationreconciliation/Pages/default.aspx.
102 Institute of Medicine. Preventing Medication
Errors. Washington DC: National Academies Press;
2006.
103 Jha A.K., Kuperman G.J., Rittenberg E., et al.
Identifying hospital admissions due to adverse drug
events using a computer-based monitor.
Pharmacoepidemiol Drug Saf. 2001;10(2):113–119.
104 Hohl C.M., Nosyk B., Kuramoto L., et al.
Outcomes of emergency department patients
presenting with adverse drug events. Ann Emerg
Med. 2011;58:270–279.
105 Kohn L.T., Corrigan J.M., Donaldson M.S. To
Err Is Human: Building a Safer Health System
Washington, DC: National Academies Press; 1999.
106 Greenwald, J.L., Halasyamani, L., Greene, J.,
LaCivita, C., et al. (2010). Making inpatient
medication reconciliation patient centered,
clinically relevant and implementable: A consensus
statement on key principles and necessary first
steps. Journal of Hospital Medicine, 5(8), 477–485.
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ordering and delivering a medication.
Medication errors have the potential to
result in an ADE.107 108 109 110 111 112
Inappropriately prescribed medications
are also considered a major healthcare
concern in the United States for the
elderly population, with costs of
roughly $7.2 billion annually.113
There is strong evidence that
medication discrepancies occur during
transfers from acute care facilities to
post-acute care facilities. Discrepancies
occur when there is conflicting
information documented in the medical
records. Almost one-third of medication
discrepancies have the potential to
cause patient harm.114 Medication
discrepancies upon admission to SNFs
have been reported as occurring at a rate
of over 21 percent. It has been found
that at least one medication discrepancy
occurred in over 71 percent of all the
SNF admissions.115 An estimated fifty
percent of patients experienced a
clinically important medication error
after hospital discharge in an analysis of
two tertiary care academic hospitals.116
Medication reconciliation has been
identified as an area for improvement
during transfer from the acute care
facility to the receiving post-acute care
facility. Post-acute care facilities report
gaps in medication information between
the acute care hospital and the receiving
107 Institute of Medicine. To err is human:
Building a safer health system. Washington, DC:
National Academies Press; 2000.
108 Lesar T.S., Briceland L., Stein D.S. Factors
related to errors in medication prescribing. JAMA.
1997:277(4): 312–317.
109 Bond C.A., Raehl C.L., & Franke T. Clinical
pharmacy services, hospital pharmacy staffing, and
medication errors in United States hospitals.
Pharmacotherapy. 2002:22(2): 134–147.
110 Bates D.W., Cullen D.J., Laird N., Petersen
L.A., Small S.D., et al. Incidence of adverse drug
events and potential adverse drug events.
Implications for prevention. JAMA. 1995:274(1):
29–34.
111 Barker K.N., Flynn E.A., Pepper G.A., Bates
D.W., & Mikeal R.L. Medication errors observed in
36 health care facilities. JAMA. 2002: 162(16):1897–
1903.
112 Bates D.W., Boyle D.L., Vander Vliet M.B.,
Schneider J., & Leape L. Relationship between
medication errors and adverse drug events. J Gen
Intern Med. 1995:10(4): 199–205.
113 Fu, Alex Z., et al. ‘‘Potentially inappropriate
medication use and healthcare expenditures in the
U.S. community-dwelling elderly.’’ Medical care
45.5 (2007): 472–476.
114 Wong, Jacqueline D., et al. ‘‘Medication
reconciliation at hospital discharge: Evaluating
discrepancies.’’ Annals of Pharmacotherapy 42.10
(2008): 1373–1379.
115 Tjia, J., Bonner, A., Briesacher, B.A., McGee,
S., Terrill, E., & Miller, K. (2009). Medication
discrepancies upon hospital to skilled nursing
facility transitions. Journal of general internal
medicine, 24(5), 630–635.
116 Kripalani S., Roumie C.L., Dalal A.K., et al.
Effect of a pharmacist intervention on clinically
important medication errors after hospital
discharge: A randomized controlled trial. Ann
Intern Med. 2012:157(1):1–10.
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post-acute care setting when performing
medication reconciliation.117 118
Hospital discharge has been identified
as a particularly high risk point in time,
with evidence that medication
reconciliation identifies high levels of
discrepancy.119 120 121 122 123 124 Also,
there is evidence that medication
reconciliation discrepancies occur
throughout the patient stay.125 126 For
older patients who may have multiple
comorbid conditions and thus multiple
medications, transitions between acute
and post-acute care settings can be
further complicated,127 and medication
reconciliation and patient knowledge
(medication literacy) can be inadequate
post-discharge.128 The proposed quality
measure, Drug Regimen Review
117 Gandara, Esteban, et al. ‘‘Communication and
information deficits in patients discharged to
rehabilitation facilities: An evaluation of five acute
care hospitals.’’ Journal of Hospital Medicine 4.8
(2009): E28–E33.
118 Gandara, Esteban, et al. ‘‘Deficits in discharge
documentation in patients transferred to
rehabilitation facilities on anticoagulation: Results
of a system wide evaluation.’’ Joint Commission
Journal on Quality and Patient Safety 34.8 (2008):
460–463.
119 Coleman E.A., Smith J.D., Raha D., Min S.J.
Post hospital medication discrepancies: Prevalence
and contributing factors. Arch Intern Med. 2005
165(16):1842–1847.
120 Wong J.D., Bajcar J.M., Wong G.G., et al.
Medication reconciliation at hospital discharge:
Evaluating discrepancies. Ann Pharmacother. 2008
42(10):1373–1379.
121 Hawes E.M., Maxwell W.D., White S.F.,
Mangun J., Lin F.C. Impact of an outpatient
pharmacist intervention on medication
discrepancies and health care resource utilization
in post hospitalization care transitions. Journal of
Primary Care & Community Health. 2014; 5(1):14–
18.
122 Foust J.B., Naylor M.D., Bixby M.B., Ratcliffe
S.J. Medication problems occurring at hospital
discharge among older adults with heart failure.
Research in Gerontological Nursing. 2012, 5(1): 25–
33.
123 Pherson E.C., Shermock K.M., Efird L.E., et al.
Development and implementation of a post
discharge home-based medication management
service. Am J Health Syst Pharm. 2014; 71(18):
1576–1583.
124 Pronovosta P., Weasta B., Scwarza M., et al.
Medication reconciliation: A practical tool to
reduce the risk of medication errors. J Crit Care.
2003; 18(4): 201–205.
125 Bates D.W., Cullen D.J., Laird N., Petersen
L.A., Small S.D., et al. Incidence of adverse drug
events and potential adverse drug events.
Implications for prevention. JAMA. 1995:274(1):
29–34.
126 Himmel, W., M. Tabache, and M.M. Kochen.
‘‘What happens to long-term medication when
general practice patients are referred to hospital?.’’
European Journal of Clinical Pharmacology 50.4
(1996): 253–257.
127 Chhabra, P.T., et al. (2012). ‘‘Medication
reconciliation during the transition to and from LTC
settings: A systematic review.’’ Res Social Adm
Pharm 8(1): 60–75.
128 Kripalani S., Roumie C.L., Dalal A.K., et al.
Effect of a pharmacist intervention on clinically
important medication errors after hospital
discharge: A randomized controlled trial. Ann
Intern Med. 2012:157(1):1–10.
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Conducted with Follow-Up for
Identified Issues—PAC SNF QRP,
provides an important component of
care coordination for PAC settings and
would affect a large proportion of the
Medicare population who transfer from
hospitals into PAC services each year.
For example, in 2013, 1.7 million
Medicare FFS beneficiaries had SNF
stays, 338,000 beneficiaries had IRF
stays, and 122,000 beneficiaries had
LTCH stays.129
A TEP convened by our measure
development contractor provided input
on the technical specifications of this
proposed quality measure, Drug
Regimen Review Conducted with
Follow-Up for Identified Issues—PAC
SNF QRP, including components of
reliability, validity and the feasibility of
implementing the measure across PAC
settings. The TEP supported the
measure’s implementation across PAC
settings and was supportive of our plans
to standardize this measure for crosssetting development. A summary of the
TEP proceedings is available on the PAC
Quality Initiatives Downloads and
Video Web site at https://www.cms.gov/
Medicare/Quality-Initiatives-PatientAssessment-Instruments/Post-AcuteCare-Quality-Initiatives/IMPACT-Act-of2014/IMPACT-Act-Downloads-andVideos.html.
We solicited stakeholder feedback on
the development of this measure by
means of a public comment period held
from September 18 through October 6,
2015. Through public comments
submitted by several stakeholders and
organizations, we received support for
implementation of this proposed
measure. The public comment summary
report for the proposed measure is
available on the CMS Public Comment
Web site at https://www.cms.gov/
Medicare/Quality-Initiatives-PatientAssessment-Instruments/Post-AcuteCare-Quality-Initiatives/IMPACT-Act-of2014/IMPACT-Act-Downloads-andVideos.html.
The NQF-convened MAP met on
December 14 and 15, 2015 and provided
input on the use of this proposed
quality measure, Drug Regimen Review
Conducted with Follow-Up for
Identified Issues—PAC SNF QRP. The
MAP encouraged continued
development of the proposed quality
measure to meet the mandate added by
the IMPACT Act. The MAP agreed with
the measure gaps identified by CMS
including medication reconciliation,
and stressed that medication
reconciliation be present as an ongoing
129 March 2015 Report to the Congress: Medicare
Payment Policy. Medicare Payment Advisory
Commission; 2015.
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process. More information about the
MAPs recommendations for this
measure is available at https://
www.qualityforum.org/Publications/
2016/02/MAP_2016_Considerations_
for_Implementing_Measures_in_
Federal_Programs_-_PAC-LTC.aspx.
Since the MAP’s review and
recommendation of continued
development, we have continued to
refine this proposed measure in
compliance with the MAP’s
recommendations. The proposed
measure is both consistent with the
information submitted to the MAP and
support its scientific acceptability for
use in quality reporting programs.
Therefore, we are proposing this
measure for implementation in the SNF
QRP as required by the IMPACT Act.
We reviewed the NQF’s endorsed
measures and identified one NQFendorsed cross-setting quality measure
related to medication reconciliation,
which applies to the SNF, LTCH, IRF,
and HHA settings of care: Care for Older
Adults (COA) (NQF #0553). The quality
measure, Care for Older Adults (COA)
(NQF #0553) assesses the percentage of
adults 66 years and older who had a
medication review. The Care for Older
Adults (COA) (NQF #0553) measure
requires at least one medication review
conducted by a prescribing practitioner
or clinical pharmacist during the
measurement year and the presence of
a medication list in the medical record.
This is in contrast to the proposed
quality measure, Drug Regimen Review
Conducted with Follow-Up for
Identified Issues—PAC SNF QRP, which
reports the percentage of resident stays
in which a drug regimen review was
conducted at the time of admission and
that timely follow-up with a physician
occurred each time one or more
potential clinically significant
medication issues were identified
throughout that stay.
After careful review of both quality
measures, we have decided to propose
the quality measure, Drug Regimen
Review Conducted with Follow-Up for
Identified Issues—PAC SNF QRP for the
following reasons:
• The IMPACT Act requires the
implementation of quality measures,
using patient assessment data that are
standardized and interoperable across
PAC settings. The proposed quality
measure, Drug Regimen Review
Conducted with Follow-Up for
Identified Issues—PAC SNF QRP,
employs three standardized residentassessment data elements for each of the
four PAC settings so that data are
standardized, interoperable, and
comparable; whereas, the Care for Older
Adults (COA), (NQF #0553) quality
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measure does not contain data elements
that are standardized across all four
PAC settings.
• The proposed quality measure,
Drug Regimen Review Conducted with
Follow-Up for Identified Issues—PAC
SNF QRP, requires the identification of
potential clinically significant
medication issues at the beginning,
during and at the end of the resident’s
stay to capture data on each resident’s
complete PAC stay; whereas, the Care
for Older Adults (COA), (NQF #0553)
quality measure only requires annual
documentation in the form of a
medication list in the medical record of
the target population.
• The proposed quality measure,
Drug Regimen Review Conducted with
Follow-Up for Identified Issues—PAC
SNF QRP, includes identification of the
potential clinically significant
medication issues and communication
with the physician (or physician
designee), as well as resolution of the
issue(s) within a rapid timeframe (by
midnight of the next calendar day);
whereas, the Care for Older Adults
(COA), (NQF #0553) quality measure
does not include any follow-up or
timeframe in which the follow-up
would need to occur.
• The proposed quality measure,
Drug Regimen Review Conducted with
Follow-Up for Identified Issues—PAC
SNF QRP, does not have age exclusions;
whereas, the Care for Older Adults
(COA), (NQF #0553) quality measure
limits the measure’s population to
patients aged 66 and older.
• The proposed quality measure,
Drug Regimen Review Conducted with
Follow-Up for Identified Issues—PAC
SNF QRP, will be reported to SNFs
quarterly to facilitate internal quality
monitoring and quality improvement in
areas such as resident safety, care
coordination and resident satisfaction;
whereas, the Care for Older Adults
(COA), (NQF #0553) quality measure
would not enable quarterly quality
updates, and thus data comparisons
within and across PAC providers would
be difficult due to the limited data and
scope of the data collected.
Therefore, based on the evidence
discussed above, we are proposing to
adopt the quality measure entitled, Drug
Regimen Review Conducted with
Follow-Up for Identified Issues—PAC
SNF QRP, for the SNF QRP for FY 2020
payment determination and subsequent
years. We plan to submit the quality
measure to the NQF for consideration
for endorsement.
The calculation of the proposed
quality measure would be based on the
data collection of three standardized
items to be included in the MDS. The
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collection of data by means of the
standardized items would be obtained at
admission and discharge. For more
information about the data submission
required for this proposed measure,
please see section V.B.9. of this
proposed rule.
The standardized items used to
calculate this proposed quality measure
do not duplicate existing items
currently used for data collection within
the MDS. The proposed measure
denominator is the number of resident
stays with a discharge or expired
assessment during the reporting period.
The proposed measure numerator is the
number of stays in the denominator
where the medical record contains
documentation of a drug regimen review
conducted at: (1) Admission; and (2)
discharge with a look back through the
entire resident stay, with all potential
clinically significant medication issues
identified during the course of care and
followed-up with a physician or
physician designee by midnight of the
next calendar day. This measure is not
risk adjusted. For technical information
about this proposed measure including
information about the measure
calculation and discussion pertaining to
the standardized items used to calculate
this measure, refer to the document
titled, Proposed Measure Specifications
for Measures Proposed in the FY 2017
SNF QRP NPRM available at https://
www.cms.gov/Medicare/QualityInitiatives-Patient-AssessmentInstruments/NursingHomeQualityInits/
SNF-Quality-Reporting-ProgramMeasures-and-TechnicalInformation.html.
Data for the proposed quality
measure, Drug Regimen Review
Conducted with Follow-Up for
Identified Issues—PAC SNF QRP,
would be collected using the MDS with
submission through the Quality
Improvement Evaluation System (QIES)
Assessment Submission and Processing
(ASAP) system.
We invite public comment on our
proposal to adopt the quality measure,
Drug Regimen Review Conducted with
Follow-Up for Identified Issues—PAC
SNF QRP, for the SNF QRP.
8. SNF QRP Quality Measures and
Measure Concepts Under Consideration
for Future Years
We are inviting comment on the
importance, relevance, appropriateness,
and applicability for each of the quality
measures in Table 13 for future years in
the SNF QRP. We are developing a
measure related to the IMPACT Act
domain, accurately communicating the
existence of and providing for the
transfer of health information and care
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preferences of an individual to the
individual, family caregiver of the
individual, and providers of services
furnishing items and services to the
individual, when the individual
transitions. We are considering the
possibility of adding quality measures
that rely on the patient’s perspective;
that is, measures that include patientreported experience of care and health
status data. For this purpose, we are
considering a measure focused on pain
and four measures focused on function
that rely on the collection of patientreported data. Finally, we are
considering a measure related to health
and well-being, Percent of Residents or
Patients Who Were Assessed and
Appropriately Given the Seasonal
Influenza Vaccine, and a measure
related to patient safety, Percent of SNF
Residents Who Newly Received an
Antipsychotic Medication.
TABLE 13—SNF QRP QUALITY MEASURES UNDER CONSIDERATION FOR FUTURE YEARS
IMPACT Act Domain ...................
IMPACT Act Measure .................
NQS Priority ................................
Measures .....................................
NQS Priority ................................
Measure .......................................
NQS Priority ................................
Measure .......................................
Accurately communicating the existence of and providing for the transfer of health information and care preferences of an individual to the individual, family caregiver of the individual, and providers of services furnishing items and services to the individual, when the individual transitions.
• Transfer of health information and care preferences when an individual transitions.
Patient- and Caregiver-Centered Care.
• Percent of Residents Who Self-Report Moderate to Severe Pain.
• Application of the Change in Self-Care Score for Medical Rehabilitation Patients (NQF #2633).
• Application of the Change in Mobility Score for Medical Rehabilitation Patients (NQF #2634).
• Application of the Discharge Self-Care Score for Medical Rehabilitation Patients (NQF #2635).
• Application of the Discharge Mobility Score for Medical Rehabilitation Patients (NQF #2636).
Health and Well-Being.
• Percent of Residents or Patients Who Were Assessed and Appropriately Given the Seasonal Influenza Vaccine.
Patient Safety.
• Percent of SNF Residents Who Newly Received an Antipsychotic Medication.
9. Form, Manner, and Timing of Quality
Data Submission
a. Participation/Timing for New SNFs
In the FY 2016 SNF PPS final rule (80
FR 46455), we established the
requirements associated with the timing
of data submission, beginning with the
submission of data required for the FY
2018 payment determination, for new
SNFs. We finalized 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 (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 are not proposing any new
policies related to the participation and
timing for new SNFs.
b. Finalized Data Collection Timelines
and Requirements for the FY 2018
Payment Determination and Subsequent
Years
In the FY 2016 SNF PPS final rule (80
FR 46457) for the FY 2018 payment
determination, we finalized that SNFs
submit data on the three finalized
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
method and schedule that we proposed
in this section. We also finalized that we
would collect that 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 QRPs, including the
LTCH, IRF, and Hospice QRPs.
We also finalized 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 5.5
months to correct and/or submit their
quality data and we finalized that the
final deadline for submitting data for the
FY 2018 payment determination would
be May 15, 2017. (80 FR 46457). The
statement that SNFs would have an
additional 5.5 months was incorrect in
that the time between the close of the
quarter on December 31, 2016 and May
15, 2017 is 4.5 months, not 5.5 months.
Therefore, we propose that SNFs will
have 4.5 months, from January 1, 2017
through May 15, 2017, following the
data submission period of October 1,
2016 through December 31, 2016, in
which to complete their data
submissions and make corrections to
their data where necessary.
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TABLE 14—FINALIZED MEASURES, DATA COLLECTION SOURCE, DATA COLLECTION PERIOD AND DATA SUBMISSION
DEADLINES AFFECTING THE FY 2018 PAYMENT DETERMINATION
Data
collection
source
Quality measure
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).
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Data submission
deadline for
FY 2018 payment
determination
Data collection
period
MDS
10/01/16–12/31/16
May 15, 2017.
MDS
10/01/16–12/31/16
May 15, 2017.
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TABLE 14—FINALIZED MEASURES, DATA COLLECTION SOURCE, DATA COLLECTION PERIOD AND DATA SUBMISSION
DEADLINES AFFECTING THE FY 2018 PAYMENT DETERMINATION—Continued
Data
collection
source
Quality measure
NQF #2631: Application of Percent of LongTerm Care Hospital Patients with an Admission and Discharge Functional Assessment
and a Care Plan that Addresses Function.
c. Data Collection Timelines and
Requirements for the FY 2019 Payment
Determinations and Subsequent Years
In the FY 2016 SNF PPS final rule (80
FR 46457), we finalized 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 for that FY. In
the FY 2016 SNF PPS final rule we also
finalized that beginning with the FY
2020 payment determination, we would
move to a full year of fiscal year (FY)
data collection. We intended to propose
the FY 2019 payment determination
quality reporting data submission
deadlines in future rulemaking.
In the FY 2016 SNF PPS final rule (80
FR 46457), we also finalized that we
would collect FY 2018 data in a manner
that would remain consistent with the
usual October release schedule for the
MDS. However, to align with the data
reporting cycles in other quality
reporting programs, in contrast to fiscal
year data collection that we finalized
last year, we are now proposing to move
to calendar year (CY) reporting
Data submission
deadline for
FY 2018 payment
determination
Data collection
period
MDS
10/01/16–12/31/16
following the initial reporting of data
from October 1, 2016, through December
31, 2016, as finalized in the FY 2016
SNF PPS final rule (80 FR 46457), for
the FY 2018 payment determination.
More specifically, we are proposing to
follow a CY schedule for measure and
data submission requirements that
includes quarterly deadlines following
each quarter of data submission,
beginning with data reporting for the FY
2019 payment determinations. Each
quarterly deadline will occur
approximately 4.5 months after the end
of a given calendar quarter as outlined
below in Table 15. This timeframe will
give SNFs enough time to submit
corrections to the assessment data, as
discussed below. Thus, if finalized, the
FY 2019 payment determination would
be based on 12 calendar months of data
reporting beginning on January 1, 2017,
and ending on December 31, 2017 (that
is, data from January 1, 2017, up to and
including December 31, 2017.) This
approach would enable CMS to move to
a full 12 months of data reporting
immediately following the first 3
months of reporting (October 1, 2016
through December 31, 2016 for the FY
2018 payment determination) rather
than an interim year which uses only 9
May 15, 2017.
months of data, and a subsequent 12
months of FY data reporting following
the initial reporting for the FY 2018
payment determination.
We invite public comments on our
proposal to adopt calendar year data
collection time frames, following the
initial 3-month reporting period from
October 1, 2016, to December 31, 2016,
for all measures finalized for adoption
into the SNF QRP.
Our proposal to implement, for the FY
2019 payment determination and all
subsequent years for assessment-based
data submitted via the MDS, calendar
year, quarterly data collection periods
followed by data submission deadlines
is consistent with the approach taken by
the LTCH QRP and the IRF QRP, which
are based on CY data and for which
each data collection quarterly period is
followed by a 4.5 month time frame that
allows for the continued submission
and correction of data until a deadline
has been reached for that quarter of
data. At that point, the data submitted
becomes a frozen ‘‘snapshot’’ of data for
both public reporting purposes and for
the purposes of determining compliance
in meeting the data reporting
thresholds.
TABLE 15—PROPOSED DATA COLLECTION PERIOD AND DATA SUBMISSION DEADLINES AFFECTING THE FY 2019 PAYMENT
DETERMINATION AND SUBSEQUENT YEARS
Data
collection
source
asabaliauskas on DSK3SPTVN1PROD with PROPOSALS
Quality measure
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
Proposed data collection/
submission quarterly
reporting period *
CY 17 Q1—1/1/2017–3/31/
2017.
CY 17 Q2—4/1/2017–6/30/17
CY 17 Q3—7/1/2017–9/30/
2017.
CY 17 Q4—10/1/2017–12/31/
2017.
Proposed quarterly review and
correction periods and data
submission quarterly deadlines
for FY 2019 payment
determination **
CY 2017 Q1 Deadline:
15, 2017.
CY 2017 Q2 Deadline:
vember 15, 2017.
CY 2017 Q3 Deadline:
ruary 15, 2018.
CY 2017 Q4 Deadline:
15, 2018.
August
NoFebMay
* Data collection/submission will follow a similar quarterly reporting period schedule for subsequent CYs.
** Data review and correction periods and data submission deadlines will follow a similar quarterly schedule for subsequent CYs.
Further, we propose that beginning
with FY 2019 payment determination,
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assessment-based measures finalized for
adoption into the SNF QRP will follow
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quarterly review and correction periods
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and data submission deadlines as
provided in Table 16 for all subsequent
payment determination years unless
otherwise specified:
TABLE 16—PROPOSED DATA COLLECTION PERIOD AND DATA SUBMISSION DEADLINES AFFECTING THE FY 19 PAYMENT
DETERMINATION AND SUBSEQUENT YEARS
Proposed CY data collection
quarter
Quarter
Quarter
Quarter
Quarter
1
2
3
4
...................................
...................................
...................................
...................................
Proposed data collection/submission quarterly
reporting period
January 1–March 31 ........................................
April 1–June 30 ................................................
July 1–September 30 .......................................
October 1–December 31 ..................................
We invite public comment on the
proposed data collection period and
data submission deadlines affecting the
FY 2019 payment determination and
subsequent years and on our use of CY
reporting with quarterly deadlines
following a period of approximately 4.5
months of time to enable the correction
of such data.
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d. Proposed Timeline and Data
Submission Mechanisms for ClaimsBased Measures Proposed for the FY
2018 Payment Determination and
Subsequent Years
The Medicare Spending per
Beneficiary—PAC SNF QRP, Discharge
to Community—PAC SNF QRP, and
Potentially Preventable Potentially
Preventable 30-Day Post-Discharge
Readmission Measure for SNF QRP
measures, which we have proposed in
this proposed rule, are Medicare FFS
claims-based measures. Because claimsbased measures can be calculated based
on data that are already reported to the
Medicare program for payment
purposes, no additional information
collection will be required from SNFs.
As previously discussed in V.B.6., for
the Medicare Spending per
Beneficiary—PAC SNF QRP Measure,
the Discharge to Community—PAC SNF
QRP measure and the Potentially
Preventable 30-Day Post-Discharge
Readmission Measure for SNF QRP, we
propose to use 1 year of claims data
beginning with CY 2016 claims data to
inform confidential feedback reports for
SNFs, and CY 2017 claims data for
public reporting.
We invite public comments on this
proposal.
Proposed quarterly review and correction periods and data
submission deadlines for payment determination
April 1–August 15.
July 1–November 15.
October 1–February 15.
January 1–May 15.
e. Proposed Timeline and Data
Submission Mechanisms for the FY
2020 Payment Determination and
Subsequent Years for New SNF QRP
Assessment-Based Quality Measure
As discussed in section V.B.7. of this
proposed rule, for the proposed
measure, Drug Regimen Review
Conducted with Follow-Up for
Identified Issues—PAC SNF QRP,
affecting FY 2020 payment
determination and subsequent years, we
are proposing that SNFs would submit
data by completing data elements to be
included in the MDS and then
submitting the MDS to CMS through the
Quality Improvement and Evaluation
System (QIES), Assessment Submission
and Processing System (ASAP) system
beginning October 1, 2018. For more
information on SNF QRP reporting
through the QIES ASAP system, refer to
the ‘‘Related Links’’ section at the
bottom of: https://www.cms.gov/
Medicare/Quality-Initiatives-PatientAssessment-Instruments/
NursingHomeQualityInits/
index.html?redirect=/
NursingHomeQualityInits/30_
NHQIMDS30TechnicalInformation.
asp#TopOfPage.
We invite public comments on our
proposed SNF QRP data collection
requirements for the proposed measure
affecting the FY 2020 payment
determination and subsequent years.
For the FY 2020 payment
determination, we propose that SNFs
submit data on the proposed
assessment-based quality measure for
residents who are admitted to the SNF
on and after October 1, 2018, and
discharged from SNF Part A covered
stays (that is, both residents discharged
from Part A covered stays and
physically discharged) up to and
including December 31, 2018, using the
data submission schedule that we
propose in this section.
We propose to collect a single quarter
of data for the FY 2020 payment
determination 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 2020
program. The proposed use of one
quarter of data for the initial year of
assessment data reporting in the SNF
QRP is consistent with the approach we
used previously for the SNF QRP and in
other QRPs, including the LTCH, IRF,
and Hospice QRPs in which we have
finalized the use of fewer than 12
months of data.
We also propose that following the
close of the reporting quarter, October 1,
2018, through December 31, 2018, for
the FY 2020 payment determination,
SNFs would have an additional 4.5
months to correct and/or submit their
quality data and that the final deadline
for submitting data for the FY 2020
payment determination would be May
15, 2019. We further propose that for the
FY 2021 payment determination and
subsequent years, we will collect data
using the CY reporting cycle as
previously proposed in section V.B.9.c
of this proposed rule.
TABLE 17—PROPOSED NEW SNF QRP ASSESSMENT-BASED QUALITY MEASURES—DATA COLLECTION PERIOD AND DATA
SUBMISSION DEADLINES AFFECTING THE FY 2020 PAYMENT DETERMINATION
Data
collection
source
Quality measure
Drug Regimen Review Conducted with Follow-Up for Identified Issues—
PAC SNF QRP.
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Proposed data
collection/
submission
reporting period
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submission
deadline for
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We invite public comment on the
proposed new SNF QRP assessmentbased quality measure data collection
period and data submission deadline
affecting the FY 2020 payment
determination.
For this measure, we also propose to
follow a CY schedule for measure and
data submission requirements that
includes quarterly deadlines following
each quarter of data submission,
beginning with data reporting for the FY
2021 payment determinations. As
previously discussed, each quarterly
deadline will occur approximately 4.5
months after the end of a given calendar
quarter as outlined in Table 18. Thus, if
finalized, the FY 2021 payment
determination would be based on 12
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calendar months of data reporting
beginning January 1, 2019, and ending
December 31, 2019. Table 18 provides
the data submission and collection
method, data collection period and data
submission timelines for the
assessment-based quality measure
affecting the FY 2021 payment
determination and subsequent years.
TABLE 18—NEW SNF QRP ASSESSMENT-BASED QUALITY MEASURE DATA COLLECTION PERIOD AND DATA SUBMISSION
DEADLINE AFFECTING FY 2021 PAYMENT DETERMINATION AND SUBSEQUENT YEARS
Data
collection
source
Quality measure
Drug Regimen Review Conducted with Follow-Up for Identified
Issues—PAC SNF QRP.
MDS
Proposed data collection/
submission quarterly
reporting period *
CY 19 Q1—1/1/2019–3/31/
2019.
CY 19 Q2—4/1/2019–6/30/19
CY 19 Q3—7/1/2019–9/30/
2019.
CY 19 Q4—10/1/2019–12/31/
2019.
Proposed data submission
quarterly deadlines for FY
2021 payment determination **
CY 2019 Q1 Deadline: August
15, 2019.
CY 2019 Q2 Deadline: November 15, 2019.
CY 2019 Q3 Deadline: February 15, 2020.
CY 2019 Q4 Deadline May 15,
2020.
* Data collection/submission will follow a similar quarterly reporting period schedule for subsequent CYs.
** Data review and correction periods and data submission deadlines will follow a similar quarterly schedule for subsequent CYs.
We invite public comment on the SNF
QRP assessment-based quality measure
data collection period and data
submission deadline affecting the FY
2021 payment determination and
subsequent years for the new
assessment-based measure.
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10. SNF QRP Data Completion
Thresholds for the FY 2018 Payment
Determination and Subsequent Years
We refer readers to the FY 2016 SNF
PPS final rule (80 FR 46458) for our
finalized policies regarding data
completion thresholds for the FY 2018
payment determination and subsequent
years. We finalized 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 80 percent
of the MDS assessments that they
submit. We also finalized 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
finalized 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
wish to clarify that the provision we
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finalized will affect FY 2018 payment
determinations and subsequent years
and is dependent upon the successful
achievement of the completion
threshold of the data used to calculate
the measures we finalize. At this time,
we are not proposing any changes to
these policies.
11. SNF QRP Data Validation
Requirements for the FY 2018 Payment
Determination and Subsequent Years
We refer readers to the FY 2016 SNF
PPS final rule (80 FR 46458 through
46459) for a summary of our approach
to the development of data validation
process for the SNF QRP. At this time,
we are continuing to explore data
validation methodology that will limit
the amount of burden and cost to SNFs,
while allowing us to establish
estimations of the accuracy of SNF QRP
data. Hence, we are not proposing any
further details pertaining to the data
validation process for the SNF QRP, but
we plan to do so in future rulemaking
cycles.
12. SNF QRP Submission Exception and
Extension Requirements for the FY 2018
Payment Determination and Subsequent
Years
We refer readers to the FY 2016 SNF
PPS final rule (80 FR 46459 through
46460) for our finalized policies
regarding submission exception and
extension requirements for the FY 2018
payment determination and subsequent
years. At this time, we are not proposing
any changes to these policies.
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13. SNF QRP Reconsideration and
Appeals Procedures for the FY 2018
Payment Determination and Subsequent
Years
We refer the reader to the FY 2016
SNF PPS final rule (80 FR 46460
through 46461) for a summary of our
finalized reconsideration and appeals
procedures for the SNF QRP for FY 2018
payment determination and subsequent
years. At this time, we are not proposing
any changes to these procedures.
14. Public Display of Quality Measure
Data for the SNF QRP & Procedures for
the Opportunity To Review and Correct
Data and Information
Section 1899B(g) of the Act requires
the Secretary to establish procedures for
public reporting of SNFs’ performance,
including the performance of individual
SNFs, on quality measures specified
under paragraph (c)(1) and resource use
and other measures specified under
paragraph (d)(1) of the Act (collectively,
IMPACT Act measures) beginning not
later than 2 years after the applicable
specified application date under section
1899B(a)(2)(E) of the Act. Under section
1899B(g)(2) of the Act, the procedures
must ensure, including through a
process consistent with the process
applied under section
1886(b)(3)(B)(viii)(VII) of the Act, which
refers to public display and review
requirements in the Hospital Inpatient
Quality Reporting Program (HIQR), that
each SNF has the opportunity to review
and submit corrections to its data and
information that are to be made public
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prior to the information being made
public. In future rulemaking, we intend
to propose a policy to publicly display
performance information for individual
SNFs on IMPACT Act measures, as
required under the Act.
In this proposed rule, we are
proposing procedures that would allow
individual SNFs to review and correct
their data and information on IMPACT
Act measures that are to be made public
before those measure data are made
public.
For assessment-based measures, we
propose a process by which we would
provide each SNF with a confidential
feedback report that would allow the
SNF to review its performance on such
measures and, during a review and
correction period, to review and correct
the data the SNF submitted to CMS via
the CMS Quality Improvement and
Evaluation System (QIES) Assessment
Submission and Processing (ASAP)
system for each such measure. In
addition, during the review and
correction period, the SNF would be
able to request correction of any errors
in the assessment-based measure rate
calculations.
We propose that these confidential
feedback reports would be available to
each SNF using the Certification and
Survey Provider Enhanced Reporting
(CASPER) System. We refer to these
reports as the SNF Quality Measure
(QM) Reports. We propose to provide
monthly updates to the data contained
in these reports that pertain to
assessment-based data, as the data
become available. We propose to
provide the reports so that providers
would be able to view their data and
information at both the facility- and
resident-level for quality measures. The
CASPER facility-level QM Reports may
contain information such as the
numerator, denominator, facility rate,
and national rate. The CASPER patientlevel QM Reports may contain
individual patient information which
will provide information related to
which patients were included in the
quality measures to identify any
potential errors. In addition, we would
make other reports available in the
CASPER System, such as MDS data
submission reports and provider
validation reports, which would
disclose SNFs’ data submission status,
providing details on all items submitted
for a selected assessment and the status
of records submitted. Additional
information regarding the content and
availability of these confidential
feedback reports would be provided on
an ongoing basis at https://
www.cms.gov/Medicare/QualityInitiatives-Patient-Assessment-
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Instruments/NursingHomeQualityInits/
SNF-Quality-Reporting.html.
As previously proposed in section
V.B.9.b, SNFs would have
approximately 4.5 months after the
reporting quarter to correct any errors
that appear on the CASPER-generated
QM reports pertaining to their
assessment-based data used to calculate
the assessment-based measures. During
the time of data submission for a given
quarterly reporting period and up until
the quarterly submission deadline, SNFs
could review and perform corrections to
errors in the assessment data used to
calculate the measures and could
request correction of measure
calculations. However, once the
quarterly submission deadline occurs,
the data is ‘‘frozen’’ and calculated for
public reporting and providers can no
longer submit any corrections. We
would encourage SNFs to submit timely
assessment data during a given quarterly
reporting period and review their data
and information early during the review
and correction period so that they can
identify errors and resubmit data before
the data submission deadline.
As noted in this section, the data
would be populated into the
confidential feedback reports and we
intend to update the reports monthly
with all data that have been submitted
and are available. We believe that a
proposed data submission and review
period consisting of the reporting
quarter plus approximately 4.5 months,
is sufficient time for SNFs to submit,
review and, where necessary, correct
their data and information. These
proposed time frames and deadlines for
review and correction of assessmentbased measures and data satisfy the
statutory requirement that SNFs be
provided the opportunity to review and
correct their data and information that
is to be made public and are consistent
with the informal process hospitals
follow in the HIQR Program.
We propose that, in addition to the
data collection/submission quarterly
reporting periods that are followed by
data review and correction periods and
submission deadlines, we afford SNFs a
30-day preview period prior to public
display during which SNFs may
preview the performance information on
their measures that will be made public.
We propose to provide a preview report
also using the CASPER System with
which SNFs are familiar. The CASPER
preview reports would inform providers
of their performance on each measure
which will be publicly reported. The
CASPER preview reports for the
reporting quarter will be available after
the 4.5-month review and correction
period and its data submission deadline,
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and are refreshed on a quarterly basis
for those measures publicly reported
quarterly, and annually for those
measures publicly reported annually.
We propose to give SNFs 30 days to
review this information, beginning from
the date on which they can access the
preview report. Corrections to the
underlying data would not be permitted
during this time; however, SNFs may
contest incorrect measure calculations
during the 30-day preview period. We
propose that if CMS determines that the
measure, as it is displayed in the
preview report, contains a calculation
error, CMS could suppress the data on
the public reporting Web site,
recalculate the measure and publish it at
the time of the next scheduled public
display date. This process would be
consistent with that followed in the
HIQR Program. If finalized, we intend to
utilize a subregulatory mechanism, such
as our SNF QRP Web site, to explain the
process for how and when providers
may ask for a correction to their
measure calculations.
We invite public comment on these
proposals.
In addition to assessment-based
measures, we have also proposed
claims-based measures for the SNF QRP.
As noted in this section, section
1899B(g)(2) of the Act requires
prepublication provider review and
correction procedures that are
consistent with those followed in the
HIQR Program. For claims-based
measures used in the HIQR Program, we
provide hospitals 30 days to preview
their claims-based measures and data in
a preview report containing aggregate
hospital-level data. We propose to adopt
a similar process for the SNF QRP.
Prior to the public display of our
claims-based measures, in alignment
with the HIQR, HAC and HVBP
Programs, we propose to make available
through the CASPER system a
confidential preview report that will
contain information pertaining to
claims-based measure rate calculations,
for example, facility and national rates.
Such data and information would be for
feedback purposes only and could not
be corrected. This information would be
accompanied by additional confidential
information based on the most recent
administrative data available at the time
we extract the claims data for purposes
of calculating the rates. Because the
claims-based measures are calculated on
an annual basis, these confidential
CASPER QM reports for claims-based
measures will be refreshed annually.
SNFs would have 30 days from the date
the preview report is made available in
which to review this information. The
30-day preview period is the only time
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when SNFs would be able to see claimsbased measures before they are publicly
displayed. SNFs will not be able to
make corrections to underlying claims
data during this preview period, nor
will they be able to add new claims to
the data extract. However, SNFs may
request that we correct our measure
calculation if the SNF believes it is
incorrect during the 30 day preview
period. We propose that if we agree that
the measure, as it is displayed in the
preview report, contains a calculation
error, we would suppress the data on
the public reporting Web site,
recalculate the measure, and publish it
at the time of the next scheduled public
display date. This process would be
consistent with that followed in the
HIQR Program. If finalized, we intend to
utilize a subregulatory mechanism, such
as our SNF QRP Web site, to explain the
process for how and when providers
may contest their measure calculations.
The proposed claims-based
measures—Medicare Spending per
Beneficiary—PAC SNF QRP Measure;
Discharge to Community—PAC SNF
QRP and Potentially Preventable 30 Day
Post-Discharge Readmission Measure for
SNF QRP—use Medicare administrative
data from hospitalizations for Medicare
FFS beneficiaries. Public reporting of
data will be based on one CY of data.
We propose to create data extracts using
claims data for these claims based
measures, at least 90 days after the last
discharge date in the applicable period
(12 calendar months preceding), which
we will use for the calculations. For
example, if the last discharge date in the
applicable period for a measure is
December 31, 2017, for data collection
January 1, 2017, through December 31,
2017, we would create the data extract
on approximately March 31, 2018, at the
earliest, and use that data to calculate
the claims-based measures for that
applicable period. Since SNFs would
not be able to submit corrections to the
underlying claims snapshot nor add
claims (for those measures that use SNF
claims) to this data set at the conclusion
of the at least 90-day period following
the last date of discharge used in the
applicable period, at that time we would
consider SNF claims data to be
complete for purposes of calculating the
claims-based measures.
We propose that beginning with data
that will be publicly displayed in 2018,
claims-based measures will be
calculated using claims data with at
least a 90 day run off period after the
last discharge date in the applicable
period, at which time we would create
a data extract or snapshot of the
available claims data to use for the
measure calculations. This timeframe
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allows us to balance the need to provide
timely program information to SNFs
with the need to calculate the claimsbased measures using as complete a data
set as possible. As noted, under this
proposed procedure, during the 30-day
preview period, SNFs would not be able
to submit corrections to the underlying
claims data or add new claims to the
data extract. This is for two reasons.
First, for certain measures, the claims
data used to calculate the measure is
derived not from the SNF’s claims, but
from the claims of another provider. For
example, the proposed measure
Potentially Preventable 30-Day PostDischarge Readmission Measure for SNF
QRP uses claims data submitted by the
hospital to which the patient was
readmitted. The claims are not those of
the SNF, and therefore, the SNF could
not make corrections to them. Second,
even where the claims used to calculate
the measures are those of the SNF, it
would not be possible to correct the data
after it is extracted for the measures
calculation. This is because it is
necessary to take a static ‘‘snapshot’’ of
the claims to perform the necessary
measure calculations.
We seek to have as complete a data set
as possible. We recognize that the
proposed at least 90-day ‘‘run-out’’
period when we would take the data
extract to calculate the claims-based
measures is less than the Medicare
program’s current timely claims filing
policy under which providers have up
to one year from the date of discharge
to submit claims. We considered a
number of factors in determining that
the proposed at least 90-day run-out
period is appropriate to calculate the
claims-based measures. After the data
extract is created, it takes several
months to incorporate other data needed
for the calculations (particularly in the
case of risk-adjusted or episode-based
measures). We then need to generate
and check the calculations. Because
several months lead time is necessary
after acquiring the data to generate the
claims-based calculations, if we were to
delay our data extraction point to 12
months after the last date of the last
discharge in the applicable period, we
would not be able to deliver the
calculations to SNFs sooner than 18 to
24 months after the last discharge. We
believe this would create an
unacceptably long delay, both for SNFs
and for us to deliver timely calculations
to SNFs for quality improvement.
We invite public comment on these
proposals.
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15. 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 for the
measures specified under paragraphs
(c)(1) and (d)(1), beginning 1 year after
the specified application date that
applies to such measures and PAC
providers. As discussed earlier, the
reports we propose to provide to SNFs
to review their data and information
would be confidential feedback reports
that would enable SNFs to review their
performance on the measures required
under the SNF QRP. We propose that
these confidential feedback reports
would be available to each SNF using
the CASPER System. Data contained
within these CASPER reports would be
updated, as previously described, on a
monthly basis as the data become
available except for claims-based
measures which can only be previewed
on an annual basis.
We intend to provide detailed
procedures to SNFs on how to obtain
their confidential feedback CASPER
reports on the SNF QRP Web site at
https://www.cms.gov/Medicare/QualityInitiatives-Patient-AssessmentInstruments/NursingHomeQualityInits/
SNF-Quality-Reporting.html. We
propose to use the CMS Quality
Improvement and Evaluation System
(QIES) Assessment Submission and
Processing (ASAP) system to provide
quality measure reports in a manner
consistent with how providers obtain
such reports to date. The QIES ASAP
system is a confidential and secure
system with access granted to providers,
or their designees.
We seek public comment on this
proposal to satisfy the requirement to
provide confidential feedback reports to
SNFs.
C. SNF Payment Models Research
As discussed in the FY 2015 SNF PPS
proposed rule (79 FR 25786, May 6,
2014), we contracted with Acumen, LLC
to identify potential alternatives to the
existing methodology used to pay for
therapy services received under the SNF
PPS. Since that time, in an effort to
establish a comprehensive approach to
Medicare Part A SNF payment reform,
we subsequently expanded the scope of
the SNF Therapy Payment Research
project to examine potential
improvements and refinements to the
overall SNF PPS payment system. In
this proposed rule, we are taking the
opportunity to update the public on the
current state of the expanded SNF PMR
project.
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As has been stated previously, in
September 2013, we completed the first
phase of the SNF PMR, which included
a literature review, stakeholder
outreach, supplementary analyses, and a
comprehensive review of options for a
viable alternative to the current therapy
payment model. CMS produced a report
outlining the most promising and viable
options that we plan to pursue in the
second phase of the project. The report
is available at https://www.cms.gov/
Medicare/Medicare-Fee-for-ServicePayment/SNFPPS/
therapyresearch.html.
During the second, and current, phase
of the SNF PMR, which began in
September 2013, our team has focused
on developing the options outlined in
the aforementioned report and has
performed more comprehensive data
analyses to begin outlining a new SNF
payment model which could serve as a
potential replacement for the current
SNF PPS. To utilize the expertise of the
stakeholder community in identifying
the most viable alternative to the current
SNF payment model, Acumen has
hosted two TEPs. These TEPs brought
together experts from across the SNF
and post-acute care continuums to
examine Acumen’s research around a
given topic and provide their comments
and direction on where Acumen’s
research should continue.
The first TEP, which occurred in
February 2015, was focused on the
therapy component of SNF PPS. The
objectives of this TEP were to discuss
potential criteria for evaluating therapy
payment approaches, review and
discuss the key features of SNF therapy
payment approaches, and solicit
recommendations for the further
exploration and development of SNF
therapy payment approaches. The
presentation given by Acumen during
this TEP, as well as a report which
provides a summary of the discussion
and recommendations from the TEP
panelists, is available https://
www.cms.gov/Medicare/Medicare-Feefor-Service-Payment/SNFPPS/
therapyresearch.html.
The second TEP, which occurred in
November 2015, was focused on the
nursing component of the SNF PPS.
This TEP included discussion of both
the adequacy of nursing payments, as
well as discussion of non-therapy
ancillaries (NTAs), such as drugs. The
overall objectives of this TEP were to
review and discuss implications of
research on the nursing component of
SNF payments, evaluate alternative
approaches to payment for SNF nursing
and NTA services, and solicit
recommendations for the further
exploration and development of SNF
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nursing payment approaches. The
presentation given by Acumen during
this TEP, as well as a report which
provides a summary of the discussion
and recommendations from the TEP
panelists, is available at https://
www.cms.gov/Medicare/Medicare-Feefor-Service-Payment/SNFPPS/
therapyresearch.html.
We expect that Acumen will host a
third TEP which will bring together the
recommendations from stakeholders on
the individual SNF payment elements,
as well as the extensive analytic work
conducted by Acumen, to outline what
could serve as a potential revised SNF
PPS payment model. As we have done
with the two previous TEPs, we expect
to post the presentation given by
Acumen during this TEP, as well as a
report which will provide a summary of
the discussion and recommendations
from the TEP panelists, after the TEP is
completed.
As before, comments may be included
as part of comments on this proposed
rule. We are also soliciting comments
outside the rulemaking process and
these comments should be sent via
email to SNFTherapyPayments@
cms.hhs.gov. Information regarding the
SNF PMR is available at https://
www.cms.gov/Medicare/Medicare-Feefor-Service-Payment/SNFPPS/
therapyresearch.html.
VI. Collection of Information
Requirements
Section V.B.6. of this preamble
proposes the following three claims
based measures for the FY 2018
payment determination and subsequent
years: (1) Medicare Spending per
Beneficiary—PAC SNF QRP; (2)
Discharge to Community—PAC SNF
QRP; and (3) Potentially Preventable 30Day Post-Discharge Readmission
Measure for SNF QRP. These three
measures are Medicare claims-based
measures; because claims-based
measures can be calculated based on
data that are already reported to the
Medicare program for payment
purposes, we believe there will be no
additional burden.
For the FY 2020 payment
determination and subsequent years, in
section V.B.6. we are also proposing one
measure: Drug Regimen Review
Conducted with Follow-Up for
Identified Issues—PAC SNF QRP.
Additionally, we propose that data for
this measure will be collected and
reported using the MDS (version
effective October 1, 2018). While the
reporting of data on quality measures is
an information collection, we believe
that the burden associated with
modifications to the MDS discussed in
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this proposed rule fall under the PRA
exceptions provided in section
1899B(m) of the Act because they are
required to achieve the standardization
of patient assessment data. Section
1899B(m) of the Act also provides that
the PRA does not apply to section
1899B and the sections referenced in
section 1899B(a)(2)(B) of the Act that
require modification to achieve the
standardization of patient assessment
data. The requirement and burden will,
however, be submitted to OMB for
review and approval when the
modifications to the MDS or other
applicable PAC assessment instruments
have achieved standardization and are
no longer exempt from the burden
submission requirements under section
1899B(m) of the Act.
We estimate the additional elements
for the four newly proposed measures
will take 7.5 minutes of nursing/clinical
staff time to report data on admission
and 2.5 minutes of nursing/clinical staff
time to report data on discharge, for a
total of 10 minutes. We estimate that the
additional MDS–RAI items we are
proposing will be completed by
Registered Nurses (RN) for
approximately 75 percent of the time
required and Pharmacists for
approximately 25 percent of the time
required. Individual providers
determine the staffing resources
necessary. We estimate 2,101,370
discharges from 16,484 SNFs annually,
with an additional burden of 10
minutes. This would equate to 350,228
total hours or 21.25 hours per SNF. We
believe this work will be completed by
RNs (75 percent) and Pharmacists (25
percent). We obtained mean hourly
wages for these staff from the U.S.
Bureau of Labor Statistics’ May 2014
National Occupational Employment and
Wage Estimates (https://www.bls.gov/
oes/current/oes_nat.htm), to account for
overhead and fringe benefits, we have
doubled the mean hourly wage. Per the
National Occupational Employment and
Wage Estimates, the mean hourly wage
for a RN (BLS occupation code: 29–
1141) is $33.55. However, to account for
overhead and fringe benefits, we have
double the mean hourly wage, making it
$67.10 for an RN. The mean hourly
wage for a pharmacist (BLS occupation
code: 29–1051) is $56.96. To account for
overhead and fringe benefits, we have
double the mean hourly wage, making it
$113.92 for a pharmacist. Given these
wages and time estimates, the total cost
related to the four newly proposed
measures is estimated at $1,674.34 per
SNF annually, or $27,599,743.81 for all
SNFs annually. While we are setting out
burden, the requirements and associated
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estimates will not be submitted to OMB
for approval under Paperwork
Reduction Act of 1995 (44 U.S.C. 3501
et seq.) since the burden estimates are
either claims-based or associated with
the exemption under section 1899B(m)
of the IMPACT Act of 2014. We are
setting out the burden as a courtesy to
advise interested parties of the proposed
actions’ time and costs.
As described in further detail in
section V.A.2.b. of this proposed rule,
we are proposing to specify the SNFPPR
measure for the SNF VBP Program. Like
the SNFRM (NQF #2510), which was
adopted for the SNF VBP Program in the
FY 2016 SNF PPS final rule (80 FR
46419), the proposed SNFPPR measure
is also claims-based. Because claimsbased measures are calculated based on
claims that are already submitted to the
Medicare program for payment
purposes, there is no additional burden
associated with data collection or
submission for these measures. Thus
there is no additional reporting burden
associated with the SNFPPR measure.
If you wish to comment on any of the
aforementioned claims, 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
asabaliauskas on DSK3SPTVN1PROD with PROPOSALS
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
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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
FY 2016 SNF prospective payment rates
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
FY, 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 2016 (80 FR 46390). Based on the
above, we estimate that the aggregate
impact would be an increase of $800
million in payments to SNFs, resulting
from the SNF market basket update to
the payment rates, as adjusted by the
MFP adjustment. The impact analysis of
this proposed rule represents the
projected effects of the changes in the
SNF PPS from FY 2016 to FY 2017.
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
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24277
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 would update the FY 2016 payment
rates by a factor equal to the market
basket index percentage change adjusted
by the MFP adjustment to determine the
payment rates for FY 2017. 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 19. In updating
the SNF PPS rates for FY 2017, 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 2017. 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.
4. Detailed Economic Analysis
The FY 2017 SNF PPS payment
impacts appear in Table 19. Using the
most recently available data, in this case
FY 2015, we apply the current FY 2016
wage index and labor-related share
value to the number of payment days to
simulate FY 2016 payments. Then,
using the same FY 2015 data, we apply
the proposed FY 2017 wage index and
labor-related share value to simulate FY
2017 payments. We tabulate the
resulting payments according to the
classifications in Table 19 (for example,
facility type, geographic region, facility
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ownership), and compare the simulated
FY 2016 payments to the simulated FY
2017 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 2017
payments. The update of 2.1 percent
(consisting of the market basket increase
of 2.6 percentage points, reduced by the
0.5 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 2.1
percent, assuming facilities do not
change their care delivery and billing
practices in response.
As illustrated in Table 19, 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 urban Outlying region would
experience a 2.3 percent increase in FY
2017 total payments.
TABLE 19—PROJECTED IMPACT TO THE SNF PPS FOR FY 2017
Number of
facilities
FY 2017
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
(%)
15,427
10,935
4,492
524
10,411
606
3,886
0.0
0.0
0.0
0.0
0.0
0.0
0.0
2.1
2.1
2.1
2.1
2.1
2.1
2.1
797
1,481
1,861
2,092
547
905
1,321
507
1,419
5
0.0
0.0
0.0
0.0
0.0
0.0
0.0
0.0
¥0.1
0.2
2.1
2.1
2.1
2.1
2.1
2.1
2.1
2.1
2.0
2.3
139
221
505
933
529
1,087
743
231
104
0.0
0.0
0.1
0.0
0.1
0.0
0.1
0.0
0.0
2.1
2.1
2.2
2.1
2.2
2.1
2.2
2.1
2.1
1,022
10,773
3,632
0.0
0.0
0.0
2.1
2.1
2.1
asabaliauskas on DSK3SPTVN1PROD with PROPOSALS
Note: The Total column includes the 2.6 percent market basket increase, reduced by the 0.5 percentage point MFP adjustment. Additionally,
we found no SNFs in rural outlying areas.
5. Alternatives Considered
As described in this section, we
estimate that the aggregate impact for
FY 2017 under the SNF PPS would be
an increase of $800 million in payments
to SNFs, resulting from the SNF market
basket update to the payment rates, as
adjusted by the MFP adjustment.
Section 1888(e) of the Act establishes
the SNF PPS for the payment of
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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
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(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
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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
asabaliauskas on DSK3SPTVN1PROD with PROPOSALS
As required by OMB Circular A–4
(available online at
www.whitehouse.gov/sites/default/files/
omb/assets/regulatory_matters_pdf/a4.pdf), in Table 20, we have prepared an
accounting statement showing the
classification of the expenditures
associated with the provisions of this
proposed rule. Table 20 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).
8. Effects of the Proposed Requirements
for the SNF VBP and SNF QRP Program
The proposed requirements set forth
for the SNF VBP and SNF QRP Program
in this proposed rule would not impact
SNFs in FY 2017; therefore, we are not
including a regulatory impact analysis
for the SNF VBP and SNF QRP Program
in this proposed rule.
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, nonprofit 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
TABLE 20—ACCOUNTING STATEMENT: a larger firm with which they may be
CLASSIFICATION OF ESTIMATED EX- affiliated. As a result, we estimate
PENDITURES, FROM THE 2016 SNF approximately 91 percent of SNFs are
PPS FISCAL YEAR TO THE 2017 considered small businesses according
to the Small Business Administration’s
SNF PPS FISCAL YEAR
latest size standards (NAICS 623110),
with total revenues of $27.5 million or
Category
Transfers
less in any 1 year. (For details, see the
Small Business Administration’s Web
Annualized Mon$800 million.*
site at https://www.sba.gov/category/
etized Transfers.
navigation-structure/contracting/
From Whom To
Federal Government to
contracting-officials/eligibility-sizeWhom?
SNF Medicare Prostandards). In addition, approximately
viders.
25 percent of SNFs classified as small
* The net increase of $800 million in transfer entities are non-profit organizations.
payments is a result of the MFP adjusted mar- Finally, individuals and states are not
ket basket increase of $800 million.
included in the definition of a small
entity.
7. Conclusion
This proposed rule sets forth updates
of the SNF PPS rates contained in the
This proposed rule sets forth updates
SNF PPS final rule for FY 2016 (80 FR
of the SNF PPS rates contained in the
46390). Based on the above, we estimate
SNF PPS final rule for FY 2016 (80 FR
46390). Based on the above, we estimate that the aggregate impact would be an
the overall estimated payments for SNFs increase of $800 million in payments to
SNFs, resulting from the SNF market
in FY 2017 are projected to increase by
basket update to the payment rates, as
$800 million, or 2.1 percent, compared
adjusted by the MFP adjustment. While
with those in FY 2016. We estimate that
it is projected in Table 19 that most
in FY 2017 under RUG–IV, SNFs in
providers would experience a net
urban and rural areas would experience, increase in payments, we note that some
on average, a 2.1 and 2.1 percent
individual providers within the same
increase, respectively, in estimated
region or group may experience
payments compared with FY 2016.
different impacts on payments than
Providers in the urban Outlying region
others due to the distributional impact
would experience the largest estimated
of the FY 2017 wage indexes and the
increase in payments of approximately
degree of Medicare utilization.
2.3 percent. Providers in the urban
Guidance issued by the Department of
Pacific region would experience the
Health and Human Services on the
smallest estimated increase in payments proper assessment of the impact on
small entities in rulemakings, utilizes a
of 2.0 percent.
cost or revenue impact of 3 to 5 percent
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24279
as a significance threshold under the
RFA. According to MedPAC, Medicare
covers approximately 12 percent of total
patient days in freestanding facilities
and 21 percent of facility revenue
(Report to the Congress: Medicare
Payment Policy, March 2016, available
at https://medpac.gov/documents/
reports/chapter-7-skilled-nursingfacility-services-(march-2016report).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 19. As indicated in
Table 19, the effect on facilities is
projected to be an aggregate positive
impact of 2.1 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
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
an MSA 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 2016 (80
FR 46476)), 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 19, the effect on
facilities is projected to be an aggregate
positive impact of 2.1 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
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million in 1995 dollars, updated
annually for inflation. In 2016, that
threshold is approximately $146
million. This proposed rule does not
include any mandate on state, local, or
tribal governments in the aggregate, or
by the private sector, of $146 million.
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.
D. Federalism Analysis
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
asabaliauskas on DSK3SPTVN1PROD with PROPOSALS
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,
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E. Congressional Review Act
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accordance with the provisions of
Executive Order 12866, this proposed
rule was reviewed by the Office of
Management and Budget.
Dated: April 6, 2016.
Andrew M. Slavitt,
Acting Administrator, Centers for Medicare
& Medicaid Services.
Dated: April 14, 2016.
Sylvia M. Burwell,
Secretary, Department of Health and Human
Services.
[FR Doc. 2016–09399 Filed 4–21–16; 4:15 pm]
BILLING CODE 4120–01–P
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]]>Agencies
[Federal Register Volume 81, Number 79 (Monday, April 25, 2016)]
[Proposed Rules]
[Pages 24229-24280]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2016-09399]
[[Page 24229]]
Vol. 81
Monday,
No. 79
April 25, 2016
Part III
Department of Health and Human Services
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Centers for Medicare & Medicaid Services
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42 CFR Part 412
Medicare Program; Prospective Payment System and Consolidated Billing
for Skilled Nursing Facilities Proposed Rule for FY 2017, SNF Value-
Based Purchasing Program, SNF Quality Reporting Program, and SNF
Payment Models Research; Proposed Rule
Federal Register / Vol. 81 , No. 79 / Monday, April 25, 2016 /
Proposed Rules
[[Page 24230]]
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DEPARTMENT OF HEALTH AND HUMAN SERVICES
Centers for Medicare & Medicaid Services
42 CFR Part 412
[CMS-1645-P]
RIN 0938-AS75
Medicare Program; Prospective Payment System and Consolidated
Billing for Skilled Nursing Facilities Proposed Rule for FY 2017, SNF
Value-Based Purchasing Program, SNF Quality Reporting Program, and SNF
Payment Models Research
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) 2017. In addition, it includes a proposal
to specify a potentially preventable readmission measure for the
Skilled Nursing Facility Value-Based Purchasing Program (SNF VBP), and
other proposals for that program aimed at implementing value-based
purchasing for SNFs. Additionally, this proposed rule proposes
additional polices and measures in the Skilled Nursing Facility Quality
Reporting Program (SNF QRP). This proposed rule also includes an update
on the SNF Payment Models Research (PMR) project.
DATES: To be assured consideration, comments must be received at one of
the addresses provided below, no later than 5 p.m. on June 20, 2016.
ADDRESSES: In commenting, please refer to file code CMS-1645-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-1645-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-1645-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.
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.
Stephanie Frilling, (410) 786-4507, for information related to
skilled nursing facility value-based purchasing.
Charlayne Van, (410) 786-8659, for information related to skilled
nursing facility quality reporting.
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 2016 SNF PPS final rule (80 FR 46390),
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.
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 2017 Update
A. Federal Base Rates
[[Page 24231]]
B. SNF Market Basket Update
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)
B. Skilled Nursing Facility (SNF) Quality Reporting Program
(QRP)
C. SNF Payment Models Research
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 Reporting
CBSA Core-based statistical area
CCN CMS Certification Number
CFR Code of Federal Regulations
CMI Case-mix index
CMS Centers for Medicare & Medicaid Services
FFS Fee-for-service
FR Federal Register
FY Fiscal year
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
IGI IHS (Information Handling Services) Global Insight, Inc.
IMPACT Improving Medicare Post-Acute Care Transformation Act of
2014, Pub. L. 113-185
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
NF Nursing facility
NQF National Quality Forum
OMB Office of Management and Budget
PAC Post-acute care
PAMA Protecting Access to Medicare Act of 2014, Pub. L 113-93
PMR Payment Models Research
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
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
SNF QRP Skill nursing facility quality reporting program
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 2017 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 (FY), certain specified information relating to the
payment update (see section II.C.). This proposed rule also includes an
update on the SNF PMR project. In addition, it proposes to specify a
potentially preventable readmission measure for the Skilled Nursing
Facility (SNF) Value-Based Purchasing (VBP) Program, and makes other
proposals related to that Program's implementation for FY 2019. We are
also proposing four new quality and resource use measures for the SNF
QRP and are proposing new SNF review and correction procedures for
performance data that is to be publicly reported.
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
2016 (80 FR 46390) which reflects the SNF market basket index, as
adjusted by the multifactor productivity (MFP) adjustment for FY 2017.
We also propose for the SNF VBP Program to specify a potentially
preventable readmission measure, define performance standards, and
adopt a scoring methodology, among other policies. We are also
proposing to adopt and implement four new quality and resource use
measures for the SNF QRP and are proposing new SNF review and
correction procedures for performance data that is to be publicly
reported as we continue to implement this program and meet the
requirements of the IMPACT Act.
C. Summary of Cost and Benefits
------------------------------------------------------------------------
Provision description Total transfers
------------------------------------------------------------------------
Proposed FY 2017 SNF PPS payment The overall economic impact of this
rate update. proposed rule would be an estimated
increase of $800 million in
aggregate payments to SNFs during
FY 2017.
------------------------------------------------------------------------
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
[[Page 24232]]
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 an all-cause all-condition hospital
readmission measure and a resource use measure, an all-condition risk-
adjusted potentially preventable hospital readmission measure, for the
SNF setting. Additionally, section 215(b) of PAMA added section 1888(h)
to the Act requiring the Secretary to implement a VBP program for SNFs.
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
transition extended through the facility's first 3 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
2016 (80 FR 46390, August 4, 2015).
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 2017.
III. SNF PPS Rate Setting Methodology and FY 2017 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 2017 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 2016 forecast with historical
data through fourth quarter 2015. 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 2017. This is based on the IGI first quarter 2016
forecast (with historical data through the fourth quarter 2015) of the
FY 2017 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 MFP
adjustment as required by
[[Page 24233]]
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), Sec. 413.337(d)(2) provides 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 FYs. 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 2015 (the most recently available FY for which there is
final data), the estimated increase in the market basket index was 2.5
percentage points, while the actual increase for FY 2015 was 2.3
percentage points, resulting in the actual increase being 0.2
percentage point lower than the estimated increase. Accordingly, as the
difference between the estimated and actual amount of change in the
market basket index does not exceed the 0.5 percentage point threshold,
the FY 2017 market basket percentage change of 2.6 percent would be not
adjusted to account for the forecast error correction. Table 1 shows
the forecasted and actual market basket amounts for FY 2015.
Table 1--Difference Between the Forecasted and Actual Market Basket Increases for FY 2015
----------------------------------------------------------------------------------------------------------------
Forecasted FY Actual FY 2015 FY 2015
Index 2015 increase * increase ** difference
----------------------------------------------------------------------------------------------------------------
SNF.......................................................... 2.5 2.3 0.2
----------------------------------------------------------------------------------------------------------------
* Published in Federal Register; based on second quarter 2014 IGI forecast (2010-based index).
** Based on the first quarter 2016 IGI forecast, with historical data through the fourth quarter 2015 (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 FY, 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 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. For a
discussion of the MFP projection methodology, we refer readers to the
FY 2012 SNF PPS final rule (76 FR 48527 through 48529) and the FY 2016
SNF PPS final rule (80 FR 46395). 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.
a. Incorporating the MFP Adjustment Into the Market Basket Update
Per section 1888(e)(5)(A) of the Act, the Secretary shall 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. 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 2017 update, the MFP adjustment is calculated as the 10-
year moving average of changes in MFP for the period ending September
30, 2017, which is 0.5 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 2017 for the SNF PPS is based on
IGI's first quarter 2016 forecast of the SNF market basket update,
which is estimated to be 2.6 percent. In accordance with section
[[Page 24234]]
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, 2017) of
0.5 percent, which is calculated as described above and based on IGI's
first quarter 2016 forecast. The resulting MFP-adjusted SNF market
basket update is equal to 2.1 percent, or 2.6 percent less 0.5
percentage point.
5. Market Basket Update Factor for FY 2017
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 2017 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, 2015 through September 30,
2016 to the average market basket level for the period of October 1,
2016 through September 30, 2017. 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 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 difference between
the forecasted FY 2015 SNF market basket percentage change and the
actual FY 2015 SNF market basket percentage change (FY 2015 is the most
recently available FY for which there is historical data) did not
exceed the 0.5 percentage point threshold, the FY 2017 market basket
percentage change of 2.6 percent would not be adjusted by the forecast
error correction.
For FY 2017, 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, 2017) of 0.5 percent, as described in section III.B.4. of
this proposed rule. The resulting net SNF market basket update would
equal 2.1 percent, or 2.6 percent less the 0.5 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 2017 SNF market basket percentage change, labor-
related share relative importance, forecast error adjustment, and MFP
adjustment in the FY 2017 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 2017 from average prices for FY
2016. 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
2017, prior to adjustment for case-mix.
Table 2--FY 2017 Unadjusted Federal Rate per Diem Urban
----------------------------------------------------------------------------------------------------------------
Nursing--Case- Therapy--Case- Therapy--Non-
Rate component mix mix case-mix Non-case-mix
----------------------------------------------------------------------------------------------------------------
Per Diem Amount............................. $174.71 $131.61 $17.33 $89.16
----------------------------------------------------------------------------------------------------------------
Table 3--FY 2017 Unadjusted Federal Rate per Diem Rural
----------------------------------------------------------------------------------------------------------------
Nursing--Case- Therapy--Case- Therapy--Non-
Rate component mix mix case-mix Non-case-mix
----------------------------------------------------------------------------------------------------------------
Per Diem Amount............................. $166.91 $151.74 $18.52 $90.82
----------------------------------------------------------------------------------------------------------------
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
[[Page 24235]]
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
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 this certification 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 2014 data
(which still used ICD-9-CM coding), we identified fewer than 4,800 SNF
residents with a diagnosis code of 042 (Human Immunodeficiency Virus
(HIV) Infection). As explained in the FY 2016 SNF PPS final rule (80 FR
46397 through 46398), on October 1, 2015 (consistent with section 212
of PAMA), we converted to using ICD-10-CM code B20 to identify those
residents for whom it is appropriate to apply the AIDS add-on
established by section 511 of the MMA. For FY 2017, an urban facility
with a resident with AIDS in RUG-IV group ``HC2'' would have a case-mix
adjusted per diem payment of $436.69 (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 $995.65.
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,
2016, through September 30, 2017. 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. Tables 4 and 5 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 Therapy Non-case mix Non-case mix
RUG-IV category Nursing index Therapy index component component therapy comp component Total rate
--------------------------------------------------------------------------------------------------------------------------------------------------------
RUX..................................... 2.67 1.87 $466.48 $246.11 .............. $89.16 $801.75
RUL..................................... 2.57 1.87 449.00 246.11 .............. 89.16 784.27
RVX..................................... 2.61 1.28 455.99 168.46 .............. 89.16 713.61
RVL..................................... 2.19 1.28 382.61 168.46 .............. 89.16 640.23
RHX..................................... 2.55 0.85 445.51 111.87 .............. 89.16 646.54
RHL..................................... 2.15 0.85 375.63 111.87 .............. 89.16 576.66
RMX..................................... 2.47 0.55 431.53 72.39 .............. 89.16 593.08
RML..................................... 2.19 0.55 382.61 72.39 .............. 89.16 544.16
RLX..................................... 2.26 0.28 394.84 36.85 .............. 89.16 520.85
RUC..................................... 1.56 1.87 272.55 246.11 .............. 89.16 607.82
RUB..................................... 1.56 1.87 272.55 246.11 .............. 89.16 607.82
RUA..................................... 0.99 1.87 172.96 246.11 .............. 89.16 508.23
RVC..................................... 1.51 1.28 263.81 168.46 .............. 89.16 521.43
RVB..................................... 1.11 1.28 193.93 168.46 .............. 89.16 451.55
RVA..................................... 1.10 1.28 192.18 168.46 .............. 89.16 449.80
RHC..................................... 1.45 0.85 253.33 111.87 .............. 89.16 454.36
RHB..................................... 1.19 0.85 207.90 111.87 .............. 89.16 408.93
RHA..................................... 0.91 0.85 158.99 111.87 .............. 89.16 360.02
RMC..................................... 1.36 0.55 237.61 72.39 .............. 89.16 399.16
RMB..................................... 1.22 0.55 213.15 72.39 .............. 89.16 374.70
RMA..................................... 0.84 0.55 146.76 72.39 .............. 89.16 308.31
RLB..................................... 1.50 0.28 262.07 36.85 .............. 89.16 388.08
RLA..................................... 0.71 0.28 124.04 36.85 .............. 89.16 250.05
ES3..................................... 3.58 .............. 625.46 .............. $17.33 89.16 731.95
ES2..................................... 2.67 .............. 466.48 .............. 17.33 89.16 572.97
ES1..................................... 2.32 .............. 405.33 .............. 17.33 89.16 511.82
HE2..................................... 2.22 .............. 387.86 .............. 17.33 89.16 494.35
HE1..................................... 1.74 .............. 304.00 .............. 17.33 89.16 410.49
HD2..................................... 2.04 .............. 356.41 .............. 17.33 89.16 462.90
HD1..................................... 1.60 .............. 279.54 .............. 17.33 89.16 386.03
HC2..................................... 1.89 .............. 330.20 .............. 17.33 89.16 436.69
HC1..................................... 1.48 .............. 258.57 .............. 17.33 89.16 365.06
HB2..................................... 1.86 .............. 324.96 .............. 17.33 89.16 431.45
HB1..................................... 1.46 .............. 255.08 .............. 17.33 89.16 361.57
[[Page 24236]]
LE2..................................... 1.96 .............. 342.43 .............. 17.33 89.16 448.92
LE1..................................... 1.54 .............. 269.05 .............. 17.33 89.16 375.54
LD2..................................... 1.86 .............. 324.96 .............. 17.33 89.16 431.45
LD1..................................... 1.46 .............. 255.08 .............. 17.33 89.16 361.57
LC2..................................... 1.56 .............. 272.55 .............. 17.33 89.16 379.04
LC1..................................... 1.22 .............. 213.15 .............. 17.33 89.16 319.64
LB2..................................... 1.45 .............. 253.33 .............. 17.33 89.16 359.82
LB1..................................... 1.14 .............. 199.17 .............. 17.33 89.16 305.66
CE2..................................... 1.68 .............. 293.51 .............. 17.33 89.16 400.00
CE1..................................... 1.50 .............. 262.07 .............. 17.33 89.16 368.56
CD2..................................... 1.56 .............. 272.55 .............. 17.33 89.16 379.04
CD1..................................... 1.38 .............. 241.10 .............. 17.33 89.16 347.59
CC2..................................... 1.29 .............. 225.38 .............. 17.33 89.16 331.87
CC1..................................... 1.15 .............. 200.92 .............. 17.33 89.16 307.41
CB2..................................... 1.15 .............. 200.92 .............. 17.33 89.16 307.41
CB1..................................... 1.02 .............. 178.20 .............. 17.33 89.16 284.69
CA2..................................... 0.88 .............. 153.74 .............. 17.33 89.16 260.23
CA1..................................... 0.78 .............. 136.27 .............. 17.33 89.16 242.76
BB2..................................... 0.97 .............. 169.47 .............. 17.33 89.16 275.96
BB1..................................... 0.90 .............. 157.24 .............. 17.33 89.16 263.73
BA2..................................... 0.70 .............. 122.30 .............. 17.33 89.16 228.79
BA1..................................... 0.64 .............. 111.81 .............. 17.33 89.16 218.30
PE2..................................... 1.50 .............. 262.07 .............. 17.33 89.16 368.56
PE1..................................... 1.40 .............. 244.59 .............. 17.33 89.16 351.08
PD2..................................... 1.38 .............. 241.10 .............. 17.33 89.16 347.59
PD1..................................... 1.28 .............. 223.63 .............. 17.33 89.16 330.12
PC2..................................... 1.10 .............. 192.18 .............. 17.33 89.16 298.67
PC1..................................... 1.02 .............. 178.20 .............. 17.33 89.16 284.69
PB2..................................... 0.84 .............. 146.76 .............. 17.33 89.16 253.25
PB1..................................... 0.78 .............. 136.27 .............. 17.33 89.16 242.76
PA2..................................... 0.59 .............. 103.08 .............. 17.33 89.16 209.57
PA1..................................... 0.54 .............. 94.34 .............. 17.33 89.16 200.83
--------------------------------------------------------------------------------------------------------------------------------------------------------
Table 5--RUG-IV Case-Mix Adjusted Federal Rates and Associated Indexes RURAL
--------------------------------------------------------------------------------------------------------------------------------------------------------
Nursing Therapy Non-case mix Non-case mix
RUG-IV category Nursing index Therapy index component component therapy comp component Total rate
--------------------------------------------------------------------------------------------------------------------------------------------------------
RUX..................................... 2.67 1.87 $445.65 $283.75 .............. $90.82 $820.22
RUL..................................... 2.57 1.87 428.96 283.75 .............. 90.82 803.53
RVX..................................... 2.61 1.28 435.64 194.23 .............. 90.82 720.69
RVL..................................... 2.19 1.28 365.53 194.23 .............. 90.82 650.58
RHX..................................... 2.55 0.85 425.62 128.98 .............. 90.82 645.42
RHL..................................... 2.15 0.85 358.86 128.98 .............. 90.82 578.66
RMX..................................... 2.47 0.55 412.27 83.46 .............. 90.82 586.55
RML..................................... 2.19 0.55 365.53 83.46 .............. 90.82 539.81
RLX..................................... 2.26 0.28 377.22 42.49 .............. 90.82 510.53
RUC..................................... 1.56 1.87 260.38 283.75 .............. 90.82 634.95
RUB..................................... 1.56 1.87 260.38 283.75 .............. 90.82 634.95
RUA..................................... 0.99 1.87 165.24 283.75 .............. 90.82 539.81
RVC..................................... 1.51 1.28 252.03 194.23 .............. 90.82 537.08
RVB..................................... 1.11 1.28 185.27 194.23 .............. 90.82 470.32
RVA..................................... 1.10 1.28 183.60 194.23 .............. 90.82 468.65
RHC..................................... 1.45 0.85 242.02 128.98 .............. 90.82 461.82
RHB..................................... 1.19 0.85 198.62 128.98 .............. 90.82 418.42
RHA..................................... 0.91 0.85 151.89 128.98 .............. 90.82 371.69
RMC..................................... 1.36 0.55 227.00 83.46 .............. 90.82 401.28
RMB..................................... 1.22 0.55 203.63 83.46 .............. 90.82 377.91
RMA..................................... 0.84 0.55 140.20 83.46 .............. 90.82 314.48
RLB..................................... 1.50 0.28 250.37 42.49 .............. 90.82 383.68
RLA..................................... 0.71 0.28 118.51 42.49 .............. 90.82 251.82
ES3..................................... 3.58 .............. 597.54 .............. $18.52 90.82 706.88
ES2..................................... 2.67 .............. 445.65 .............. 18.52 90.82 554.99
ES1..................................... 2.32 .............. 387.23 .............. 18.52 90.82 496.57
HE2..................................... 2.22 .............. 370.54 .............. 18.52 90.82 479.88
HE1..................................... 1.74 .............. 290.42 .............. 18.52 90.82 399.76
HD2..................................... 2.04 .............. 340.50 .............. 18.52 90.82 449.84
HD1..................................... 1.60 .............. 267.06 .............. 18.52 90.82 376.40
HC2..................................... 1.89 .............. 315.46 .............. 18.52 90.82 424.80
HC1..................................... 1.48 .............. 247.03 .............. 18.52 90.82 356.37
[[Page 24237]]
HB2..................................... 1.86 .............. 310.45 .............. 18.52 90.82 419.79
HB1..................................... 1.46 .............. 243.69 .............. 18.52 90.82 353.03
LE2..................................... 1.96 .............. 327.14 .............. 18.52 90.82 436.48
LE1..................................... 1.54 .............. 257.04 .............. 18.52 90.82 366.38
LD2..................................... 1.86 .............. 310.45 .............. 18.52 90.82 419.79
LD1..................................... 1.46 .............. 243.69 .............. 18.52 90.82 353.03
LC2..................................... 1.56 .............. 260.38 .............. 18.52 90.82 369.72
LC1..................................... 1.22 .............. 203.63 .............. 18.52 90.82 312.97
LB2..................................... 1.45 .............. 242.02 .............. 18.52 90.82 351.36
LB1..................................... 1.14 .............. 190.28 .............. 18.52 90.82 299.62
CE2..................................... 1.68 .............. 280.41 .............. 18.52 90.82 389.75
CE1..................................... 1.50 .............. 250.37 .............. 18.52 90.82 359.71
CD2..................................... 1.56 .............. 260.38 .............. 18.52 90.82 369.72
CD1..................................... 1.38 .............. 230.34 .............. 18.52 90.82 339.68
CC2..................................... 1.29 .............. 215.31 .............. 18.52 90.82 324.65
CC1..................................... 1.15 .............. 191.95 .............. 18.52 90.82 301.29
CB2..................................... 1.15 .............. 191.95 .............. 18.52 90.82 301.29
CB1..................................... 1.02 .............. 170.25 .............. 18.52 90.82 279.59
CA2..................................... 0.88 .............. 146.88 .............. 18.52 90.82 256.22
CA1..................................... 0.78 .............. 130.19 .............. 18.52 90.82 239.53
BB2..................................... 0.97 .............. 161.90 .............. 18.52 90.82 271.24
BB1..................................... 0.90 .............. 150.22 .............. 18.52 90.82 259.56
BA2..................................... 0.70 .............. 116.84 .............. 18.52 90.82 226.18
BA1..................................... 0.64 .............. 106.82 .............. 18.52 90.82 216.16
PE2..................................... 1.50 .............. 250.37 .............. 18.52 90.82 359.71
PE1..................................... 1.40 .............. 233.67 .............. 18.52 90.82 343.01
PD2..................................... 1.38 .............. 230.34 .............. 18.52 90.82 339.68
PD1..................................... 1.28 .............. 213.64 .............. 18.52 90.82 322.98
PC2..................................... 1.10 .............. 183.60 .............. 18.52 90.82 292.94
PC1..................................... 1.02 .............. 170.25 .............. 18.52 90.82 279.59
PB2..................................... 0.84 .............. 140.20 .............. 18.52 90.82 249.54
PB1..................................... 0.78 .............. 130.19 .............. 18.52 90.82 239.53
PA2..................................... 0.59 .............. 98.48 .............. 18.52 90.82 207.82
PA1..................................... 0.54 .............. 90.13 .............. 18.52 90.82 199.47
--------------------------------------------------------------------------------------------------------------------------------------------------------
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 2017, 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 2017, the updated wage data are for hospital cost
reporting periods beginning on or after October 1, 2012 and before
October 1, 2013 (FY 2013 cost report data).
We note that section 315 of the Medicare, Medicaid, and SCHIP
Benefits Improvement and Protection 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 2017 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 2017, 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 2017, the only urban area without wage
index data available is CBSA 25980, Hinesville-Fort Stewart, GA. The
proposed wage index applicable to FY 2017 is set forth in Tables A and
B available on the CMS Web site at https://www.cms.gov/
[[Page 24238]]
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 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 2017. 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 2017 than the base year weights
from the SNF market basket.
We calculate the labor-related relative importance for FY 2017 in
four steps. First, we compute the FY 2017 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
2017 price index level for that cost category by the total market
basket price index level. Third, we determine the FY 2017 relative
importance for each cost category by multiplying this ratio by the base
year (FY 2010) weight. Finally, we add the FY 2017 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 2017 labor-related relative importance.
Table 6 summarizes the proposed updated labor-related share for FY
2017, compared to the labor-related share that was used for the FY 2016
SNF PPS final rule.
Table 6--Labor-Related Relative Importance, FY 2016 and FY 2017
----------------------------------------------------------------------------------------------------------------
Relative importance, Relative importance,
labor-related, FY labor-related, FY
2016 15:2 forecast 2017 16:1 forecast
\1\ \2\
----------------------------------------------------------------------------------------------------------------
Wages and salaries................................................ 48.8 48.8
Employee benefits................................................. 11.3 11.2
Nonmedical Professional fees: Labor-related....................... 3.5 3.4
Administrative and facilities support services.................... 0.5 0.5
All Other: Labor-related services................................. 2.3 2.3
Capital-related (.391)............................................ 2.7 2.7
---------------------------------------------
Total......................................................... 69.1 68.9
----------------------------------------------------------------------------------------------------------------
\1\ Published in the Federal Register; based on second quarter 2015 IGI forecast.
\2\ Based on first quarter 2016 IGI forecast, with historical data through fourth quarter 2015.
Tables 7 and 8 show the RUG-IV case-mix adjusted federal rates by
labor-related and non-labor-related components.
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................................................... 801.75 $552.41 $249.34
RUL................................................... 784.27 540.36 243.91
RVX................................................... 713.61 491.68 221.93
RVL................................................... 640.23 441.12 199.11
RHX................................................... 646.54 445.47 201.07
RHL................................................... 576.66 397.32 179.34
RMX................................................... 593.08 408.63 184.45
RML................................................... 544.16 374.93 169.23
RLX................................................... 520.85 358.87 161.98
RUC................................................... 607.82 418.79 189.03
RUB................................................... 607.82 418.79 189.03
RUA................................................... 508.23 350.17 158.06
RVC................................................... 521.43 359.27 162.16
RVB................................................... 451.55 311.12 140.43
RVA................................................... 449.80 309.91 139.89
RHC................................................... 454.36 313.05 141.31
RHB................................................... 408.93 281.75 127.18
RHA................................................... 360.02 248.05 111.97
RMC................................................... 399.16 275.02 124.14
RMB................................................... 374.70 258.17 116.53
RMA................................................... 308.31 212.43 95.88
RLB................................................... 388.08 267.39 120.69
RLA................................................... 250.05 172.28 77.77
[[Page 24239]]
ES3................................................... 731.95 504.31 227.64
ES2................................................... 572.97 394.78 178.19
ES1................................................... 511.82 352.64 159.18
HE2................................................... 494.35 340.61 153.74
HE1................................................... 410.49 282.83 127.66
HD2................................................... 462.90 318.94 143.96
HD1................................................... 386.03 265.97 120.06
HC2................................................... 436.69 300.88 135.81
HC1................................................... 365.06 251.53 113.53
HB2................................................... 431.45 297.27 134.18
HB1................................................... 361.57 249.12 112.45
LE2................................................... 448.92 309.31 139.61
LE1................................................... 375.54 258.75 116.79
LD2................................................... 431.45 297.27 134.18
LD1................................................... 361.57 249.12 112.45
LC2................................................... 379.04 261.16 117.88
LC1................................................... 319.64 220.23 99.41
LB2................................................... 359.82 247.92 111.90
LB1................................................... 305.66 210.60 95.06
CE2................................................... 400.00 275.60 124.40
CE1................................................... 368.56 253.94 114.62
CD2................................................... 379.04 261.16 117.88
CD1................................................... 347.59 239.49 108.10
CC2................................................... 331.87 228.66 103.21
CC1................................................... 307.41 211.81 95.60
CB2................................................... 307.41 211.81 95.60
CB1................................................... 284.69 196.15 88.54
CA2................................................... 260.23 179.30 80.93
CA1................................................... 242.76 167.26 75.50
BB2................................................... 275.96 190.14 85.82
BB1................................................... 263.73 181.71 82.02
BA2................................................... 228.79 157.64 71.15
BA1................................................... 218.30 150.41 67.89
PE2................................................... 368.56 253.94 114.62
PE1................................................... 351.08 241.89 109.19
PD2................................................... 347.59 239.49 108.10
PD1................................................... 330.12 227.45 102.67
PC2................................................... 298.67 205.78 92.89
PC1................................................... 284.69 196.15 88.54
PB2................................................... 253.25 174.49 78.76
PB1................................................... 242.76 167.26 75.50
PA2................................................... 209.57 144.39 65.18
PA1................................................... 200.83 138.37 62.46
----------------------------------------------------------------------------------------------------------------
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................................................... 820.22 $565.13 $255.09
RUL................................................... 803.53 553.63 249.90
RVX................................................... 720.69 496.56 224.13
RVL................................................... 650.58 448.25 202.33
RHX................................................... 645.42 444.69 200.73
RHL................................................... 578.66 398.70 179.96
RMX................................................... 586.55 404.13 182.42
RML................................................... 539.81 371.93 167.88
RLX................................................... 510.53 351.76 158.77
RUC................................................... 634.95 437.48 197.47
RUB................................................... 634.95 437.48 197.47
RUA................................................... 539.81 371.93 167.88
RVC................................................... 537.08 370.05 167.03
RVB................................................... 470.32 324.05 146.27
RVA................................................... 468.65 322.90 145.75
RHC................................................... 461.82 318.19 143.63
RHB................................................... 418.42 288.29 130.13
RHA................................................... 371.69 256.09 115.60
RMC................................................... 401.28 276.48 124.80
RMB................................................... 377.91 260.38 117.53
RMA................................................... 314.48 216.68 97.80
RLB................................................... 383.68 264.36 119.32
[[Page 24240]]
RLA................................................... 251.82 173.50 78.32
ES3................................................... 706.88 487.04 219.84
ES2................................................... 554.99 382.39 172.60
ES1................................................... 496.57 342.14 154.43
HE2................................................... 479.88 330.64 149.24
HE1................................................... 399.76 275.43 124.33
HD2................................................... 449.84 309.94 139.90
HD1................................................... 376.40 259.34 117.06
HC2................................................... 424.80 292.69 132.11
HC1................................................... 356.37 245.54 110.83
HB2................................................... 419.79 289.24 130.55
HB1................................................... 353.03 243.24 109.79
LE2................................................... 436.48 300.73 135.75
LE1................................................... 366.38 252.44 113.94
LD2................................................... 419.79 289.24 130.55
LD1................................................... 353.03 243.24 109.79
LC2................................................... 369.72 254.74 114.98
LC1................................................... 312.97 215.64 97.33
LB2................................................... 351.36 242.09 109.27
LB1................................................... 299.62 206.44 93.18
CE2................................................... 389.75 268.54 121.21
CE1................................................... 359.71 247.84 111.87
CD2................................................... 369.72 254.74 114.98
CD1................................................... 339.68 234.04 105.64
CC2................................................... 324.65 223.68 100.97
CC1................................................... 301.29 207.59 93.70
CB2................................................... 301.29 207.59 93.70
CB1................................................... 279.59 192.64 86.95
CA2................................................... 256.22 176.54 79.68
CA1................................................... 239.53 165.04 74.49
BB2................................................... 271.24 186.88 84.36
BB1................................................... 259.56 178.84 80.72
BA2................................................... 226.18 155.84 70.34
BA1................................................... 216.16 148.93 67.23
PE2................................................... 359.71 247.84 111.87
PE1................................................... 343.01 236.33 106.68
PD2................................................... 339.68 234.04 105.64
PD1................................................... 322.98 222.53 100.45
PC2................................................... 292.94 201.84 91.10
PC1................................................... 279.59 192.64 86.95
PB2................................................... 249.54 171.93 77.61
PB1................................................... 239.53 165.04 74.49
PA2................................................... 207.82 143.19 64.63
PA1................................................... 199.47 137.43 62.04
----------------------------------------------------------------------------------------------------------------
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 adjustment had not been made. For FY 2017 (federal rates
effective October 1, 2016), 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 2016 to the weighted average wage
adjustment factor for FY 2017. For this calculation, we would use the
same FY 2015 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 2017 would be 1.0000.
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.
Generally, OMB issues major revisions to statistical areas every 10
years, based on the results of the decennial census. 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
[[Page 24241]]
2015, including a 1-year transition with a blended wage index for FY
2015. OMB Bulletin No. 13-01 established revised delineations for
Metropolitan Statistical Areas, Micropolitan Statistical Areas, and
Combined Statistical Areas in the United States and Puerto Rico based
on the 2010 Census, and provided guidance on the use of the
delineations of these statistical areas using standards published on
June 28, 2010 in the Federal Register (75 FR 37246 through 37252). In
addition, OMB occasionally issues minor updates and revisions to
statistical areas in the years between the decennial censuses. On July
15, 2015, OMB issued OMB Bulletin No. 15-01, which provides minor
updates to and supersedes OMB Bulletin No. 13-01 that was issued on
February 28, 2013. The attachment to OMB Bulletin No. 15-01 provides
detailed information on the update to statistical areas since February
28, 2013. The updates provided in OMB Bulletin No. 15-01 are based on
the application of the 2010 Standards for Delineating Metropolitan and
Micropolitan Statistical Areas to Census Bureau population estimates
for July 1, 2012 and July 1, 2013. A copy of this bulletin may be
obtained on the Web site at https://www.whitehouse.gov/sites/default/files/omb/bulletins/2015/15-01.pdf. As we previously stated in the FY
2008 SNF PPS proposed and final rules (72 FR 25538 through 25539, and
72 FR 43423), we again wish to clarify that this and all subsequent SNF
PPS rules and notices are considered to incorporate any such updates
and revisions set forth in the most recent OMB bulletin that applies to
the hospital wage data used to determine the current SNF PPS wage
index. As noted above, the proposed wage index applicable to FY 2017 is
set forth in Tables A and B available on the CMS Web site at https://www.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 $46,782.60.
Table 9--Adjusted Rate Computation Example SNF XYZ: Located in Frederick, MD (Urban CBSA 43524) Wage Index: 0.9820
[See Proposed Wage Index in Table A] \1\
------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
Percent
RUG-IV group Labor Wage index Adjusted labor Non-labor Adjusted rate adjustment Medicare days Payment
------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
RVX............................................................. $491.68 0.982 $482.83 $221.93 $704.76 $704.76 14 $9,866.64
ES2............................................................. 394.78 0.982 387.67 178.19 565.86 565.86 30 16,975.80
RHA............................................................. 248.05 0.982 243.59 111.97 355.56 355.56 16 5,688.96
CC2 *........................................................... 228.66 0.982 224.54 103.21 327.75 747.27 10 7,472.70
BA2............................................................. 157.64 0.982 154.80 71.15 225.95 225.95 30 6,778.50
100 46,782.60
------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
* 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 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 (ARD) on the 5-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
[[Page 24242]]
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 ARD 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) of the Act 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 PPS.
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
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, 2016). 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
[[Page 24243]]
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 through 40357), 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)
1. Background
Section 215 of the Protecting Access to Medicare Act of 2014 (PAMA)
authorizes the SNF VBP Program by adding sections 1888(g) and (h) to
the Act. These sections provide structure for the development of the
SNF VBP Program, including, among other things, the requirements of
only two measures--an all-cause, all-condition hospital readmission
measure, which is to be replaced as soon as practicable by an all-
condition risk-adjusted potentially preventable hospital readmission
measure--and confidential and public reporting requirements for the SNF
VBP Program. We began development of the SNF VBP Program in the FY 2016
SNF PPS final rule with, among other things, the adoption of an all-
cause, all-condition hospital readmission measure, as required under
section 1888(g)(1) of the Act. We will continue the process in this
proposed rule with our proposal for an all-condition risk-adjusted
potentially preventable hospital readmission measure for SNFs, which
the Secretary is required to specify no later than October 1, 2016
under section 1888(g)(2) of the Act. The Act requires that the SNF VBP
apply to payments for services furnished on or after October 1, 2018.
The SNF VBP Program applies to freestanding SNFs, SNFs affiliated with
acute care facilities, and all non-CAH swing-bed rural hospitals. We
believe the implementation of the SNF VBP Program is an important step
toward transforming how care is paid for, moving increasingly toward
rewarding better value, outcomes, and innovations instead of merely
volume.
For additional background information on the SNF VBP Program,
including an overview of the SNF VBP Report to Congress and a summary
of the Program's statutory requirements, we refer readers to the FY
2016 SNF PPS final rule (80 FR 46409 through 46410).
2. Measures
a. SNF 30-Day All-Cause Readmission Measure (SNFRM) (NQF #2510)
Per the requirement at section 1888(g)(1) of the Act, in the FY
2016 SNF PPS final rule (80 FR 46419), we finalized our proposal to
specify the SNF 30-Day All-Cause Readmission Measure (SNFRM) (NQF
#2510) as the SNF all-cause, all-condition hospital readmission measure
for the SNF VBP Program. The SNFRM 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, CAH, or psychiatric hospital. The measure is claims-
based, requiring no additional data collection or submission burden for
SNFs. For additional details on the SNFRM, including our responses to
public comments, we refer readers to the FY 2016 SNF PPS final rule (80
FR 46411 through 46419).
b. Skilled Nursing Facility 30-Day Potentially Preventable Readmission
Measure (SNFPPR)
We are proposing to specify the SNF 30-Day Potentially Preventable
Readmission Measure (SNFPPR) as the SNF all-condition risk-adjusted
potentially preventable hospital readmission measure to meet the
requirements of section 1888(g)(2) of the Act. This proposed measure
assesses the facility-level risk-standardized rate of unplanned,
potentially preventable hospital readmissions for SNF patients within
30 days of discharge from a prior admission to an IPPS hospital, CAH,
or psychiatric hospital. Hospital readmissions include readmissions to
a short-stay acute-care hospital or CAH, with a diagnosis considered to
be unplanned and potentially preventable. This proposed measure is
claims-based, requiring no additional data collection or submission
burden for SNFs.
Hospital readmissions among the Medicare population, including
beneficiaries that utilize post-acute care, are common, costly, and
often preventable.1 2 The Medicare Payment Advisory
Commission (MedPAC) and a study by Jencks et al. estimated that 17 to
20 percent of Medicare beneficiaries discharged from the hospital were
readmitted within 30 days. MedPAC found that more than 75 percent of
30-day and 15-day readmissions and 84 percent of 7-day readmissions
were considered potentially preventable.\3\ In addition, MedPAC
calculated that annual Medicare spending on potentially preventable
readmissions would be $12B for 30-day, $8B for 15-day, and $5B for 7-
day readmissions.\4\ For hospital readmissions from SNFs, MedPAC deemed
76 percent of readmissions as potentially avoidable--associated with
$12B in Medicare expenditures.\5\ Mor et al. analyzed 2006 Medicare
claims and SNF assessment data (Minimum Data Set), and reported a 23.5
percent readmission rate from SNFs, associated with $4.3B in
expenditures.\6\
---------------------------------------------------------------------------
\1\ Friedman, B., and Basu, J.: The rate and cost of hospital
readmissions for preventable conditions. Med. Care Res. Rev.
61(2):225-240, 2004. doi:10.1177/1077558704263799.
\2\ Jencks, S.F., Williams, M.V., and Coleman, E.A.:
Rehospitalizations among patients in the Medicare Fee-for-Service
Program. N. Engl. J. Med. 360(14):1418-1428, 2009. doi:10.1016/
j.jvs.2009.05.045.
\3\ MedPAC: Payment policy for inpatient readmissions, in Report
to the Congress: Promoting Greater Efficiency in Medicare.
Washington, DC, pp. 103-120, 2007. Available from https://www.medpac.gov/documents/reports/Jun07_EntireReport.pdf.
\4\ Ibid.
\5\ Ibid.
\6\ Mor, V., Intrator, O., Feng, Z., et al.: The revolving door
of rehospitalization from SNFs. Health Aff. 29(1):57-64, 2010.
doi:10.1377/hlthaff.2009.0629.
---------------------------------------------------------------------------
We have addressed the high rates of hospital readmissions in the
acute care setting, as well as in PAC by developing the SNF 30-Day All-
Cause Readmission Measure (NQF #2510), as well as similar measures for
other PAC providers (NQF #2502 for IRFs and NQF #2512 for LTCHs).\7\
These measures are endorsed by the National Quality Forum (NQF), and
the NQF-endorsed measure (NQF
[[Page 24244]]
#2510) was adopted for the SNF VBP program in the FY 2016 SNF PPS final
rule (80 FR 46411 through 46419). These NQF-endorsed measures assess
all-cause unplanned readmissions.
---------------------------------------------------------------------------
\7\ National Quality Forum: All-Cause Admissions and
Readmissions Measures. pp. 1-319, April 2015. Available from https://www.qualityforum.org/Publications/2015/04/All-Cause_Admissions_and_Readmissions_Measures_-_Final_Report.aspx.
---------------------------------------------------------------------------
Several general methods and algorithms have been developed to
assess potentially avoidable or preventable hospitalizations and
readmissions for the Medicare population. These include the Agency for
Healthcare Research and Quality's (AHRQ) Prevention Quality Indicators,
approaches developed by MedPAC, and proprietary approaches, such as the
3M\TM\ algorithm for Potentially Preventable Readmissions
(PPR).8 9 10 Recent work led by Kramer et al. for MedPAC
identified 13 conditions for which readmissions were deemed as
potentially preventable among SNF and IRF populations; 11 12
however, these conditions did not differ by PAC setting or readmission
window (that is, readmissions during the PAC stay or post-PAC
discharge). Although much of the existing literature addresses hospital
readmissions more broadly and potentially avoidable hospitalizations
for specific settings like skilled nursing facilities, these findings
are relevant to the development of potentially preventable readmission
measures for PAC.13 14 15
---------------------------------------------------------------------------
\8\ Goldfield, N.I., McCullough, E.C., Hughes, J.S., et al.:
Identifying potentially preventable readmissions. Health Care Finan.
Rev. 30(1):75-91, 2008. Available from https://www.ncbi.nlm.nih.gov/pmc/articles/PMC4195042/.
\9\ National Quality Forum: Prevention Quality Indicators
Overview. 2008.
\10\ MedPAC: Online Appendix C: Medicare Ambulatory Care
Indicators for the Elderly. pp. 1-12, prepared for Chapter 4, 2011.
Available from https://www.medpac.gov/documents/reports/Mar11_Ch04_APPENDIX.pdf?sfvrsn=0.
\11\ Kramer, A., Lin, M., Fish, R., et al.: Development of
Inpatient Rehabilitation Facility Quality Measures: Potentially
Avoidable Readmissions, Community Discharge, and Functional
Improvement. pp. 1-42, 2015. Available from https://www.medpac.gov/documents/contractor-reports/development-of-inpatient-rehabilitation-facility-quality-measures-potentially-avoidable-readmissions-community-discharge-and-functional-improvement.pdf?sfvrsn=0.
\12\ Kramer, A., Lin, M., Fish, R., et al.: Development of
Potentially Avoidable Readmission and Functional Outcome SNF Quality
Measures. pp. 1-75, 2014. Available from https://www.medpac.gov/documents/contractor-reports/mar14_snfqualitymeasures_contractor.pdf?sfvrsn=0.
\13\ Allaudeen, N., Vidyarthi, A., Maselli, J., et al.:
Redefining readmission risk factors for general medicine patients.
J. Hosp. Med. 6(2):54-60, 2011. doi:10.1002/jhm.805.
\14\ \4\ Gao, J., Moran, E., Li, Y.-F., et al.: Predicting
potentially avoidable hospitalizations. Med. Care 52(2):164-171,
2014. doi:10.1097/MLR.0000000000000041.
\15\ Walsh, E.G., Wiener, J.M., Haber, S., et al.: Potentially
avoidable hospitalizations of dually eligible Medicare and Medicaid
beneficiaries from nursing facility and home-and community-based
services waiver programs. J. Am. Geriatr. Soc. 60(5):821-829, 2012.
doi:10.1111/j.1532-5415.2012.03920.x.
---------------------------------------------------------------------------
Based on the evidence discussed above and to meet PAMA
requirements, we are proposing to specify this measure, entitled, SNF
30-Day Potentially Preventable Readmission Measure (SNFPPR), for the
SNF VBP Program. The SNFPPR measure was developed by CMS to harmonize
with the NQF-endorsed SNF 30-Day All-Cause Readmission Measure (NQF
#2510) \16\ adopted in the FY 2016 SNF final rule (80 FR 46411 through
46419) and the Hospital-Wide Risk-Adjusted All-Cause Unplanned
Readmission Measure (NQF #1789) (Hospital-Wide Readmission or HWR
measure \17\), finalized for the Hospital IQR Program in the FY 2013
IPPS/LTCH PPS final rule (77 FR 53521 through 53528). Although these
existing measures focus on all-cause unplanned readmissions and the
proposed SNFPPR measure assesses potentially preventable hospital
readmissions, the SNFPPR will use the same statistical approach, the
same time window as NQF measure #2510 (that is, 30 days post-hospital
discharge), and a similar set of patient characteristics for risk
adjustment. As appropriate, the proposed potentially preventable
hospital readmission measure for SNFs is being harmonized with similar
measures being proposed for LTCHs, IRFs, and HHAs to meet the
requirements of the Improving Medicare Post-Acute Care Transformation
Act of 2014 (IMPACT Act) (Pub. L. 113-185).
---------------------------------------------------------------------------
\16\ National Quality Forum: All-Cause Admissions and
Readmissions Measures. pp. 1-319, April 2015. National Quality
Forum: All-Cause Admissions and Readmissions Measures. pp. 1-319,
April 2015. Available from https://www.qualityforum.org/Publications/2015/04/All-Cause_Admissions_and_Readmissions_Measures_-_Final_Report.aspx.
\17\ Available by searching for ``1789'' at https://www.qualityforum.org/QPS/QPSTool.aspx.
---------------------------------------------------------------------------
The SNFPPR measure estimates the risk-standardized rate of
unplanned, potentially preventable hospital readmissions for Medicare
FFS beneficiaries that occur within 30 days of discharge from the prior
proximal hospitalization. This is a departure from readmission measures
in other PAC settings, such as the two measures proposed in the
Inpatient Rehabilitation Facility (IRF) Quality Reporting Program, one
of which assesses readmissions that take place during the IRF stay and
the other that assesses readmissions within 30 days following discharge
from the IRF. The proposed measure here is distinct because section
1888(h)(2) of the Act requires that only a single quality measure be
implemented in the SNF VBP program at one time. A purely within-stay
measure (that is, a measure that assesses readmission rates only when
those readmissions occurred during a SNF stay) would perversely
incentivize the premature discharge of residents from SNFs to avoid
penalty. Conversely, limiting the measure to readmissions that occur
within 30-days post-discharge from the SNF would not capture
readmissions that occur during the SNF stay. In order to qualify for
this proposed measure, the SNF admission must take place within 1 day
of discharge from a prior proximal hospital stay. The prior proximal
hospital stay is defined as an inpatient admission to an acute care
hospital (including IPPS, CAH, or a psychiatric hospital). Because the
measure denominator is based on SNF admissions, a single Medicare
beneficiary could be included in the measure multiple times within a
given year. Readmissions counted in this measure are identified by
examining Medicare FFS claims data for readmissions to either acute
care hospitals (IPPS or CAH) that occur within 30 days of discharge
from the prior proximal hospitalization, regardless of whether the
readmission occurs during the SNF stay or takes place after the patient
is discharged from the SNF. Because patients differ in complexity and
morbidity, the measure is risk-adjusted for case-mix. Our approach for
defining potentially preventable readmissions is described below.
Potentially Preventable Readmission Measure Definition: We
conducted a comprehensive environmental scan, analyzed claims data, and
obtained input from a technical expert panel (TEP) to develop a working
conceptual definition and list of conditions for which hospital
readmissions may be considered potentially preventable. The Ambulatory
Care Sensitive Conditions (ACSC)/Prevention Quality Indicators (PQI),
developed by AHRQ, served as the starting point in this work. For the
purposes of the SNFPPR measure, the definition of potentially
preventable readmissions differs based on whether the resident is
admitted to the SNF (referred to as ``within-stay'') or in the post-SNF
discharge period; however, there is considerable overlap of the
definitions. For patients readmitted to a hospital during within the
SNF stay, potentially preventable readmissions (PPR) should be
avoidable with sufficient medical monitoring and appropriate treatment.
The within-stay list of PPR conditions includes the following, which
are categorized by 4 clinical rationale groupings: (1) Inadequate
management of chronic
[[Page 24245]]
conditions; (2) Inadequate management of infections; (3) Inadequate
management of other unplanned events; and (4) Inadequate injury
prevention. For individuals in the post the post-SNF discharge period,
a potentially preventable readmission refers to a readmission in which
the probability of occurrence could be minimized with adequately
planned, explained, and implemented post discharge instructions,
including the establishment of appropriate follow-up ambulatory care.
Our list of PPR conditions in the post-SNF discharge period includes
the following, categorized by 3 clinical rationale groupings: (1)
Inadequate management of chronic conditions; (2) Inadequate management
of infections; and (3) Inadequate management of other unplanned events.
Additional details regarding the definitions of potentially preventable
readmissions are available in our Measure Specification (available at
https://www.cms.gov/Medicare/Quality-Initiatives-Patient-Assessment-Instruments/Value-Based-Programs/Other-VBPs/SNF-VBP.html).
This proposed measure focuses on readmissions that are potentially
preventable and also unplanned. Similar to the SNF 30-Day All-Cause
Readmission Measure (SNFRM) (NQF #2510), this measure uses the CMS
Planned Readmission Algorithm to define planned readmissions. In
addition to the CMS Planned Readmission Algorithm, this measure
incorporates procedures that are considered planned in post-acute care
settings, as identified in consultation with TEPs. Full details on the
planned readmissions criteria used, including the additional procedures
considered planned for post-acute care, can be found in the Measure
Specifications (available at https://www.cms.gov/Medicare/Quality-Initiatives-Patient-Assessment-Instruments/Value-Based-Programs/Other-VBPs/SNF-VBP.html).
This proposed measure assesses potentially preventable readmission
rates while accounting for patient or resident demographics, principal
diagnosis in the prior hospital stay, comorbidities, and other patient
factors. The model also estimates a facility-specific effect, common to
patients or residents treated in each facility. This proposed measure
is calculated for each SNF based on the ratio of the predicted number
of risk-adjusted, unplanned, potentially preventable hospital
readmissions that occurred within 30 days of discharge from the prior
proximal hospitalization, including the estimated facility effect, to
the estimated predicted number of risk-adjusted, unplanned hospital
readmissions for the same individuals receiving care at the average
SNF. A ratio above 1.0 indicates a higher than expected readmission
rate (worse), while a ratio below 1.0 indicates a lower than expected
readmission rate (better). This ratio is referred to as the
standardized risk ratio or SRR. The SRR is then multiplied by the
overall national raw rate of potentially preventable readmissions for
all SNF stays. The resulting rate is the risk-standardized readmission
rate (RSRR) of potentially preventable readmissions. The full
methodology is detailed in the Measure Specifications (available at
https://www.cms.gov/Medicare/Quality-Initiatives-Patient-Assessment-Instruments/Value-Based-Programs/Other-VBPs/SNF-VBP.html).\18\
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\18\ Note to reviewers: The specifications will be posted at
this link by the time the proposed rule is displayed.
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Eligible SNF stays in the measure are assessed until: (1) The 30-
day period ends; or (2) the patient is readmitted to an acute care
hospital (IPPS or CAH). If the readmission is classified as unplanned
and potentially preventable, it is counted as a readmission in the
measure calculation. If the readmission is planned or not preventable,
the readmission is not counted in the measure rate.
Readmission rates are risk-adjusted for case-mix characteristics.
The risk adjustment modeling estimates the effects of patient/resident
characteristics, comorbidities, and select health care variables on the
probability of readmission. More specifically, the risk-adjustment
model for SNFs accounts for sociodemographic characteristics (age, sex,
original reason for entitlement), principal diagnosis during the prior
proximal hospital stay, body system specific surgical indicators,
comorbidities, length of stay during the resident's prior proximal
hospital stay, intensive care utilization, end-stage renal disease
status, and number of prior acute care hospitalizations in the
preceding 365 days. This measure is calculated using one full calendar
year of data. The full measure specifications and results of the
reliability testing can be found in the Measure Specifications
(available at https://www.cms.gov/Medicare/Quality-Initiatives-Patient-Assessment-Instruments/Value-Based-Programs/Other-VBPs/SNF-VBP.html).\19\
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\19\ Note to reviewers: The specifications will be posted at
this link by the time the proposed rule is displayed.
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Our measure development contractor convened a TEP, which provided
input on the technical specifications of this measure, including the
development of an approach to define potentially preventable hospital
readmissions for a number of PAC settings, including SNFs. Details from
the TEP meetings, including TEP members' ratings of conditions proposed
as being potentially preventable, are available in the TEP Summary
Report available on the CMS Web site (https://www.cms.gov/Medicare/Quality-Initiatives-Patient-Assessment-Instruments/Post-Acute-Care-Quality-Initiatives/IMPACT-Act-of-2014/IMPACT-Act-Downloads-and-Videos.html). We also solicited stakeholder feedback on the development
of this measure through a public comment period held from November 2
through December 1, 2015. A summary of the public comments we received
is also available on the CMS Web site (https://www.cms.gov/Medicare/Quality-Initiatives-Patient-Assessment-Instruments/Post-Acute-Care-Quality-Initiatives/IMPACT-Act-of-2014/IMPACT-Act-Downloads-and-Videos.html).
In addition to our TEP and public comment feedback, we also
considered input from the Measures Application Partnership (MAP) on the
SNFPPR. The MAP is composed of multi-stakeholder groups convened by the
NQF. The MAP provides input on the measures we are considering for
implementation in certain quality reporting and pay-for-performance
programs. In general, the MAP has noted the need for care transition
measures in PAC/LTC performance measurement programs and stated that
setting-specific admission and readmission measures would address this
need.\20\ We included the SNFPPR measure being proposed for the SNF VBP
Program in this proposed rule in the List of Measures under
Consideration (MUC List) for December 1, 2015.\21\
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\20\ National Quality Forum: Measure Applications Partnership
Pre-Rulemaking Report: 2013 Recommendations of Measures Under
Consideration by HHS. pp. 1-394, February 2013. Available from
https://www.qualityforum.org/Publications/2013/02/MAP_Pre-Rulemaking_Report_-_February_2013.aspx.
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The MAP encouraged continued development of the proposed measure in
the SNF VBP Program to meet the mandate of PAMA. Specifically, the MAP
stressed the need to promote shared accountability and ensure effective
care transitions. More information about the MAP's recommendations for
this measure is available at https://www.qualityforum.org/Publications/
2016/02/MAP_2016_Considerations_for_Implementing_Measures_
[[Page 24246]]
in_Federal_Programs_-_PAC-LTC.aspx. At the time, the risk-adjustment
model was still under development. Following completion of that
development work, we were able to test for measure validity and
reliability as available in the measure specifications document
provided above. Testing results are within range for similar outcome
measures finalized in public reporting and value-based purchasing
programs, including the SNFRM finalized for this this program.
We invite public comment on our proposal to adopt this measure, the
SNF 30-Day Potentially Preventable Readmission Measure (SNFPPR).
Section 1888(h)(2)(B) of the Act requires the Secretary to apply
the all-condition risk-adjusted potentially preventable hospital
readmission measure specified under paragraph (g)(2) instead of the
measure specified under paragraph (g)(1) as soon as practicable. We
intend to propose the timing for the change to the paragraph (g)(2)
measure in future rulemaking. We seek comment on when we should propose
this change for the SNF VBP Program.
3. Performance Standards
a. Background
Sections 1888(h)(3)(A) of the Act requires the Secretary to
establish performance standards for the SNF VBP Program. Under
paragraph (h)(3)(B), the performance standards must include levels of
achievement and improvement, and under paragraph (h)(3)(C), must be
established and announced not later than 60 days prior to the beginning
of the performance period for the FY involved.
In the FY 2016 SNF PPS final rule (80 FR 46419 through 46422), we
summarized public comments we received on possible approaches to
calculating performance standards under the SNF VBP Program. We
specifically sought comment on the approaches that we have adopted for
other Medicare VBP programs such as the Hospital VBP Program (Hospital
VBP Program), the Hospital-Acquired Conditions Reduction Program (HAC
Reduction Program), the Hospital Readmissions Reduction Program (HRRP),
and the End-Stage Renal Disease Quality Incentive Program (ESRD QIP).
We also sought comment on the best possible approach to measuring
improvement, particularly given the SNF VBP Program's limitation to one
measure for each program year.
b. Proposed Performance Standards Calculation Methodology
We believe that an essential goal of the SNF VBP program is to
provide incentives for all SNFs to improve the quality of care that
they furnish to their residents. In determining what level of SNF
performance would be appropriate to select as the performance standard
for the quality measures specified under the SNF VBP program, we
focused on selecting levels that would challenge SNFs to improve
continuously or to maintain high levels of performance. To achieve this
aim, we analyzed SNFRM data and examined how different achievement
performance standards would impact SNFs' scores under the proposed
scoring methodology described further below. As more data becomes
available, we will continue to assess the appropriateness of these
performance standards for the SNF VBP program and, if necessary,
propose to refine these standards' definitions and calculation
methodologies to better incentivize the provision of high-quality care.
(1) Proposed Achievement Performance Standard and Benchmark
Beginning with the FY 2019 SNF VBP program, we propose to define
the achievement performance standard (which we will refer to as the
``achievement threshold'') for quality measures specified under the SNF
VBP program as the 25th percentile of national SNF performance on the
quality measure during the applicable baseline period. We believe this
achievement threshold definition represents an achievable standard of
excellence and will reward SNFs appropriately for their performance on
the quality measures specified for the SNF VBP program. We further
believe this achievement threshold definition will provide strong
incentives for SNFs to improve their performance on the measures
specified for the SNF VBP Program continuously, and will result in a
wide range of SNF measure scores that can be used in public reporting.
We also seek comment on whether we should consider adopting either the
50th or 15th percentiles of national SNFs' performance on the quality
measure during the applicable baseline period. We seek comment on data
or other analysis that we should consider regarding the impact on SNFs'
financial viability and service delivery to beneficiaries at either the
higher or lower alternative standard. For example, while the 50th
percentile would represent a more challenging threshold for care
quality improvement, that standard would align with the Hospital VBP
Program and would likely result in higher value-based incentive
payments to top-performing SNFs than other definitions, though the
actual distribution of value-based incentive payments would depend on
all SNFs' performance and on the statutory rules governing their
distribution. Such a standard would likely result in lower value-based
incentive payments to lower-performing SNFs, which could create
substantial payment disparities among participating SNFs. Conversely,
the 15th percentile would likely result in higher value-based incentive
payments for lower-performing SNFs than other thresholds, with the
corresponding result of lower value-based incentive-payments for top-
performing SNFs compared to other thresholds.
We further propose to define the ``benchmark'' for quality measures
specified under the SNF VBP program as the mean of the top decile of
SNF performance on the quality measure during the applicable baseline
period. We believe this definition represents demonstrably high but
achievable standards of excellence; in other words, the benchmark will
reflect observed scores for the group of highest-performing SNFs on a
given measure. This proposed benchmark policy aligns with that used by
the Hospital VBP Program. As stated in the FY 2016 SNF PPS final rule
(80 FR 46419 through 46420), we believe 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. We therefore believe it is appropriate to align with the
Hospital VBP Program in setting benchmarks for the SNF VBP Program.
We also propose that SNFs would receive points along an achievement
range, which is the scale between the achievement threshold and the
benchmark. Under this proposal, SNFs would receive achievement points
if they meet or exceed the achievement threshold for the specified
measure, and could increase their achievement score based on higher
levels of performance. (We describe the proposed scoring methodology,
including how we propose to award points for both achievement and
improvement, in the scoring methodology section of this proposed rule).
This proposed achievement range policy aligns with that used by the
Hospital VBP Program. We refer readers to the FY 2016 SNF PPS final
rule (80 FR 46419 through
[[Page 24247]]
46420) for a discussion of the rationale behind aligning SNF VBP
Program policies with the Hospital VBP Program. As stated in that rule,
we believe that the Hospital VBP Program's performance standards
methodology is well-understood and would allow us to reward SNFs both
for providing high-quality care and for improving their performance
over time. We therefore believe it is appropriate to align with the
Hospital VBP Program in setting benchmarks for the SNF VBP Program.
At this time, we do not have the complete CY 2015 data set
necessary to calculate a numerical value for the proposed achievement
threshold for the SNFRM. However, we are able to estimate this
numerical value based on the most recent four quarters of SNFRM data
available and have provided this estimate in Table 10. We intend to
publish the final performance standards using complete data from CY
2015 in the FY 2017 SNF PPS final rule. For clarity, and as discussed
further below, we have inverted the SNFRM rate so that a higher rate
represents better performance.
Table 10--Interim FY 2019 SNF VBP Program Performance Standards
----------------------------------------------------------------------------------------------------------------
Achievement
Measure ID Measure description threshold Benchmark
----------------------------------------------------------------------------------------------------------------
SNFRM........................................ SNF 30-Day All-Cause 0.79551 0.83915
Readmission Measure (NQF
#2510).
----------------------------------------------------------------------------------------------------------------
We welcome public comment on the proposed definitions for
achievement performance standards, as well as our intention to publish
the final achievement threshold and benchmark for the FY 2019 Program
year in the FY 2017 SNF PPS final rule.
(2) Proposed Improvement Performance Standard
Beginning with the FY 2019 SNF VBP program, we propose to define
the improvement performance standard (which we will refer to as the
``improvement threshold'') for quality measures specified under the SNF
VBP program as each specific SNF's performance on the specified measure
during the applicable baseline period. As discussed further below, we
will measure SNFs' performance during both the proposed performance and
baseline periods, and will award improvement points by comparing SNFs'
performance to the improvement threshold. We believe this improvement
performance standard ensures that SNFs will be adequately incentivized
to improve continuously their performance on the quality measures
specified under the SNF VBP Program, and appropriately balances our
view that we should both reward SNFs for high performance and encourage
improved performance over time.
We welcome public comment on this proposal.
(3) Publication of Performance Standard Values
Section 1888(h)(3)(C) of the Act requires the Secretary to
establish and announce the performance standards for a given SNF VBP
program year not later than 60 days prior to the beginning of the
performance period for the FY involved. Based on the proposed
performance period of CY 2017 for the FY 2019 SNF VBP Program, we
believe that we must establish and announce performance standards for
the FY 2019 Program not later than November 1, 2016. We intend to
establish and announce performance standards for the Program in the
annual SNF PPS rule, which is effective on October 1 of each year.
However, finalizing numerical values of these performance standards
is often logistically difficult because it requires the collection and
analysis of large amounts of quality measure data in a short period of
time. For example, the data file for a full year of SNF claims data is
typically completed around May of the following year. To calculate a
numerical value for a performance standard, we must perform multiple
levels of analyses on the data to ensure that all appropriate SNFs and
patients are included in measure calculations; perform the measure
calculations themselves; and then use those calculations to determine
the numerical value for the performance standards. If any individual
step of this process is delayed, it may preclude us from publishing
finalized numerical values for the finalized performance standards in
the applicable SNF PPS final rule, which is typically displayed
publicly by August 1 of each year.
To retain the flexibility needed to ensure that numerical values
published for the finalized performance standards are accurate, we are
proposing to publish these numerical values no later than 60 days prior
to the beginning of the performance period but, if necessary, outside
of notice-and-comment rulemaking. As noted, we intend to publish
numerical values for those performance standards in the final rule when
practicable. However, in instances in which we cannot complete the
necessary analyses in time to include them in the SNF PPS final rule,
we propose to publish the numerical values for the performance
standards on the QualityNet Web site used by SNFs to receive VBP
information as soon as practicable but in no event later than the
statutorily required 60 days prior to the beginning of the performance
period for the fiscal year involved. In this instance, we would notify
SNFs and the public of the publication of the performance standards
using a listserv email and posting on the QualityNet News portion of
the Web site.
We welcome public comment on this proposal.
4. FY 2019 Performance Period and Baseline Period
a. Background
We refer readers to the FY 2016 SNF PPS final rule (80 FR 46422)
for discussion of the considerations that we intended to take into
account when specifying a performance period under the SNF VBP Program.
We also explained our view that the SNF VBP Program necessitates
adoption of a baseline period, similar to those adopted under the
Hospital VBP Program and ESRD QIP, which we would use to establish
performance standards and measure improvement.
We received public comments on this topic, and we refer readers to
the FY 2016 SNF PPS final rule for a summary of those comments and our
responses. We considered those comments when developing our performance
and baseline period proposals for this proposed rule.
b. Proposed FY 2019 Performance Period
In considering various performance periods that could apply for the
FY 2019 SNF VBP Program, we recognized that we must balance the length
of the performance period used to collect quality measure data and the
amount of data needed to calculate reliable, valid measure rates with
the need to finalize a performance period through notice and comment
rulemaking. We are
[[Page 24248]]
therefore proposing to adopt CY 2017 (January 1, 2017 through December
31, 2017) as the performance period for the FY 2019 SNF VBP Program,
with a 90-day run out period immediately thereafter for claims
processing, based on the following considerations.
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. Based on past experience with claims processing
in other quality reporting and value-based purchasing programs, this
time lag between care delivered to patients who are included in
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 the
delay between data collection and payment impacts, including: The
processing time needed to calculate measure rates using multiple
sources of claims needed for statistical modeling; time for determining
achievement and improvement scores; time for providers to review their
measure rates and included patients; and processing time needed to
determine whether a payment adjustment needs to be made to a provider's
reimbursement rate under the applicable PPS based on its performance.
Further, our preference is to adopt at least a 12-month period as the
performance period, consistent with our view that using a full year's
performance period provides sufficient levels of data accuracy and
reliability for scoring SNF performance on the SNFRM and SNFPPR. We
also believe that adopting a 12-month period for the performance period
supports the direction provided of section 1888(g)(3) of the Act that
the quality measures specified under the SNF VBP Program shall be
designed to achieve a high level of reliability and validity.
Specifically, we believe using a full year of claims data better
ensures that the variation found among SNF performance on the measures
is due to real differences between SNFs, and not within-facility
variation due to issues such as seasonality. Additionally, we believe
that adopting 12-month performance and baseline periods enables us to
measure SNFs' performance on the specified measures in sequence, which
we believe is necessary in order to measure SNFs on both achievement
and improvement, as required by section 1888(h)(3)(B) of the Act.
Finally, we also considered the time necessary to calculate SNF-
specific performance on the SNFRM after the conclusion of the
performance period and to develop and provide SNF VBP scoring reports,
including the requirement under section 1888(h)(7) of the Act that we
inform each SNF of the adjustments to the SNF's payments as a result of
the program not later than 60 days prior to the FY involved. Based on
the requirements and concerns discussed above, we believe a 12-month
time period is the only operationally feasible performance period for
the SNF VBP Program.
We welcome public comment on this proposal.
c. Proposed FY 2019 Baseline Period
As we have done in the Hospital VBP Program and the ESRD QIP, we
are proposing to adopt a baseline period for use in the SNF VBP
Program.
We propose to adopt calendar year 2015 claims (January 1, 2015
through December 31, 2015) as the baseline period for the FY 2019 SNF
VBP Program and to use that baseline period as the basis for
calculating performance standards. We will allow for a 90-day claims
run out following the last date of discharge (December 31, 2015) before
incorporating the 2015 claims in our database into the measure
calculation.
We welcome public comment on this proposal.
5. Proposed SNF VBP Performance Scoring
a. Background
We refer readers to the FY 2016 SNF PPS final rule (80 FR 46422
through 46425) for a discussion of other Medicare VBP scoring
methodologies, including the methodologies used by the Hospital VBP
Program and HAC Reduction Program. We also discussed policy
considerations related to the Hospital Readmission Reduction Program
and the ESRD QIP in the performance standards section of that final
rule (80 FR 46420 through 46421). We also discussed the potential
application of an exchange function (80 FR 46424 through 46425) to
translate SNF performance scores into value-based incentive payments
under the SNF VBP Program.
We considered those issues, as well as comments we received on
these issues, when developing our performance scoring policy below.
b. Proposed SNF VBP Program Scoring Methodology
Section 1888(h)(4)(A) of the Act requires the Secretary develop a
methodology for assessing the total performance of each SNF based on
the performance standards established under section 1888(h)(3) of the
Act for the measure applied under section 1888(h)(2) of the Act.
Section 1888(h)(3)(B) of the Act further requires that these
performance standards include levels of achievement and improvement and
that, in calculating a facility's SNF performance score, the Secretary
use the higher of either improvement or achievement.
After carefully reviewing and evaluating a number of scoring
methodologies for the SNF VBP Program, we propose to adopt a scoring
model for the SNF VBP Program similar conceptually to that used by the
Hospital VBP Program and the ESRD QIP, with certain modifications to
allow us to better differentiate between SNFs' performance on the
quality measures specified under the SNF VBP Program.\22\ We believe
this hybrid appropriately accounts for the SNF VBP Program's statutory
limitation to a single measure, will maintain consistency and alignment
with other VBP programs already in place, and in doing so, better
enable SNFs to understand the SNF VBP Program. Specifically, we propose
to implement a 0 to 100 point scale for achievement scoring and a 0 to
90 point scale for improvement scoring. In addition, as discussed
above, we are proposing to set the achievement threshold for the SNF
VBP Program at the 25th percentile of SNF national performance on the
quality measure during the baseline period rather than the 50th
percentile achievement threshold used in the Hospital VBP Program,
though as noted above, we are also seeking comment on whether or not we
should consider adopting the 50th percentile or the 15th percentile.
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\22\ We refer readers to the FY 2013 IPPS final rule for a
discussion of the Hospital VBP Program scoring methodology (76 FR
2466 through 2470).
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We believe using wider scales of 0 to 100 points and 0 to 90 points
instead of the 0 to 10 and 0 to 9 scales used in the Hospital VBP
Program and ESRD QIP will allow us to calculate more granular
performance scores for individual SNFs and provide greater
differentiation between facilities' performance. We further believe
that setting the achievement threshold for the SNF VBP Program at the
25th percentile of
[[Page 24249]]
national SNF performance on the quality measure during the baseline
period is preferable to the Hospital VBP Program's achievement
threshold of the 50th percentile of national facility performance for
this Program because it accounts for the statutory requirement that the
SNF VBP Program include only one quality measure at a time. Unlike the
Hospital VBP Program, which contains many measures across multiple
domains, the SNF VBP Program is limited by statute to a single quality
measure at a time. As a result, a hospital participating in the
Hospital VBP Program could perform below the 50th percentile of
national performance on one or more measures without experiencing a
dramatic drop in its Total Performance Score because the hospital's
performance on other measures would contribute to its total performance
score. By contrast, if the SNF VBP Program used an achievement
threshold of the 50th percentile of national SNF performance,
approximately one-half of all SNFs nationwide would automatically
receive 0 achievement points assuming no national improvement trends
between baseline and performance periods. While these SNFs could still
receive improvement points, we believe it is preferable to set a lower
achievement threshold that would award the majority of SNFs at least
some achievement points, thereby enabling us to differentiate
performance among the lower-performing half of SNFs, and enabling SNFs
to continually increase their achievement score based on higher levels
of performance. As stated above, as more data becomes available, we
will continue to assess the appropriateness of this achievement
threshold for the SNF VBP program and, if necessary, propose to refine
these standards' definitions and calculation methodologies to better
incentivize the provision of high-quality care.
For these reasons, we propose to adopt the following scoring
methodology beginning with the FY 2019 SNF VBP Program.
(1) Proposed Scoring of SNF Performance on the SNFRM
Because the SNF VBP Program uses only one measure to incentivize
and assess facility performance and improvement, we believe it is
important to ensure that SNFs and the public are able to understand
these measure scores easily. SNFRM rates represent the percentage of
qualifying patients at a facility that were readmitted within the risk
window for the measure. As a result, lower SNFRM rates indicate lower
rates of readmission, and are therefore an indicator of higher quality
care. For example, a SNFRM rate of 0.14159 means that approximately
14.2 percent of qualifying patients discharged from that SNF were
readmitted during the risk window.
We understand that the use of a ``lower is better'' rate could
cause confusion among SNFs and the public. Therefore, we propose to
calculate scores under the Program by first inverting SNFRM rates using
the following calculation:
SNFRM Inverted Rate = 1 - Facility's SNFRM Rate
This calculation inverts SNFs' SNFRM rates such that higher SNFRM
performance reflects better performance on the SNFRM. As a result, the
same SNFRM rate presented above (0.14159) would result in a SNFRM
inverted rate of 0.85841, which means that approximately 86 percent of
qualifying patients discharged from that SNF were not readmitted during
the risk window. We believe this inversion is important to incentivize
improvement in a clear and understandable manner, and will also
simplify public reporting of SNF performance for use in consumer,
family, and caregiver decision-making. Further, under this proposal,
all SNFRM inverted rates would be rounded to the fifth significant
digit.
We welcome public comment on this proposal.
(2) Scoring SNFs' Performance Based on Achievement
We propose that a SNF would earn an achievement score of 0 to 100
points based on where its performance on the specified measure fell
relative to the achievement threshold (which we propose above to define
for the quality measures specified under the SNF VBP program as the
25th percentile of SNF performance on the quality measure during the
applicable baseline period) and the benchmark (which we propose to
define as the mean of the top decile of SNF performance on the measure
during the baseline period). As with the Hospital VBP Program, we
propose to award points to SNFs based on their performance as follows:
If a SNF's SNFRM inverted rate was equal to or greater
than the benchmark, the SNF would receive 100 points for achievement;
If a SNF's SNFRM inverted rate was less than the
achievement threshold (that is, the lower bound of the achievement
range), the SNF would receive 0 points for achievement.
If a SNF's SNFRM inverted rate was equal to or greater
than the achievement threshold, but less than the benchmark, we would
award between 0 and 100 points to the SNF according to the following
formula:
[GRAPHIC] [TIFF OMITTED] TP25AP16.001
The results of this formula would be rounded to the nearest whole
number.
The SNF achievement score would therefore range between 0 and 100
points, with a higher achievement score indicating higher performance.
We welcome public comment on this proposal.
(3) Scoring SNF Performance Based on Improvement
We propose that a SNF would earn an improvement score of 0 to 90
points based on how much its performance on the specified measure
during the performance period improved from its performance on the
measure during the baseline period. Under this proposal, a unique
improvement range would be established for each SNF that defines the
distance between the SNF's baseline period score and the national
benchmark for the measure (which we propose to define as the mean of
the top decile of SNF performance on the measure during the baseline
period). We would then calculate a SNF improvement score for each SNF
depending on its performance period score:
If the SNF's performance period score was equal to or
lower than its improvement threshold, the SNF would receive 0 points
for improvement.
If the SNF's performance period score was equal to or
higher than the benchmark, the SNF would receive 90 points for
improvement.
If the SNF's performance period score was greater than its
improvement threshold, but less than the benchmark, we would award
between 0 and 90 points for improvement according to the following
formula:
[[Page 24250]]
[GRAPHIC] [TIFF OMITTED] TP25AP16.002
The results of this formula would be rounded to the nearest whole
number.
We welcome public comment on this proposal.
(4) Establishing SNF Performance Scores
Consistent with sections 1888(h)(3)(B) and 1888(h)(4)(A) of the
Act, we propose to use the higher of a SNF's achievement and
improvement scores to serve as the SNF's performance score for a given
year of the SNF VBP Program. The resulting SNF performance score would
be used as the basis for ranking SNF performance on the quality
measures specified under the SNF VBP Program and establishing the
value-based incentive payment percentage for each SNF for a given FY.
(5) Examples of the Proposed FY 2019 SNF VBP Program Scoring
Methodology
In this section, we provide two examples to illustrate the proposed
scoring methodology for the FY 2019 SNF VBP Program using hypothetical
SNFs A, B, and C. The benchmark calculated for the SNFRM for all of
these hypotheticals is 0.83915 (the mean of the top decile of SNF
performance on the SNFRM in 2014), and the achievement threshold is
0.79551 (the 25th percentile of national SNF performance on the SNFRM
in 2014). We note that, as discussed previously, our proposal for
scoring SNF performance on the SNFRM inverts the measure rates so that
a higher rate represents better performance.
Figure AA shows the scoring for SNF A. SNF A's SNFRM rate of
0.15025 means that approximately 15 percent of qualifying patients
discharged from SNF A were readmitted during the 30-day risk window.
Under the proposed SNFRM scoring methodology, SNF A's SNFRM inverted
rate would be calculated as follows:
Facility A SNFRM Inverted Rate = 1 - 0.15025
As a result of this calculation, Facility A's SNFRM inverted rate
would be 0.84975 on the SNFRM for the performance period. This result
indicates that approximately 85 percent of SNF A's qualifying patients
were not readmitted during the 30-day risk window. Because SNF A's
SNFRM inverted rate of 0.84975 exceeds the benchmark (that is, the mean
of the top decile of facility performance, or 0.83915), SNF A would
receive 100 points for achievement. Because SNF A has earned the
maximum number of points possible for the SNFRM, its improvement score
would not be calculated.
[GRAPHIC] [TIFF OMITTED] TP25AP16.003
Figure BB shows the scoring for SNF B. As can be seen below, SNF
B's performance on the SNFRM went from 0.21244, for a SNFRM inverted
rate of 0.78756 (below the achievement threshold) in the baseline
period to 0.18322, for a SNFRM inverted rate of 0.81668 (above the
achievement threshold) in the performance period. Applying the
achievement scoring methodology proposed above, SNF B would earn [49]
achievement points for this measure, calculated as follows:
[[Page 24251]]
[GRAPHIC] [TIFF OMITTED] TP25AP16.004
However, because SNF B's performance during the performance period
is greater than its performance during the baseline period, but below
the benchmark, we would calculate an improvement score as well.
According to the improvement scale, based on SNF B's improved SNFRM
inverted rate from 0.78756 to 0.81668, SNF B would receive 51
improvement points, calculated as follows:
[GRAPHIC] [TIFF OMITTED] TP25AP16.005
[[Page 24252]]
[GRAPHIC] [TIFF OMITTED] TP25AP16.006
In Figure CC, SNF C's performance on the SNFRM drops from 0.19487,
for a SNFRM inverted rate of 0.80513, in the baseline period to
0.21148, for a SNFRM inverted rate 0.78852, in the performance period
(a decline of 0.01661). Because this SNF's performance during the
performance period is lower than the achievement threshold of 0.79551,
it receives 0 points based on achievement. It would also receive 0
points for improvement, because its performance during the performance
period is lower than its performance period during the baseline period.
In this example, SNF C would receive 0 points for its SNF performance
score.
[[Page 24253]]
[GRAPHIC] [TIFF OMITTED] TP25AP16.007
6. SNF Value-Based Incentive Payments
a. Background
Paragraphs (5), (6), (7), and (8) of section 1888(h) outline
several requirements for value-based incentive payments under the SNF
VBP Program. Section 1888(h)(5)(A) of the Act requires that the
Secretary increase the adjusted Federal per diem rate for skilled
nursing facilities by the value-based incentive payment amount
determined under subsection (h)(5)(B). That amount is to be determined
by the product of the adjusted Federal per diem rate and the value-
based incentive payment percentage specified under subsection (h)(5)(C)
of such section for each SNF for a FY.
Section 1888(h)(5)(C) requires that the value-based incentive
payment percentage be based on the SNF performance score and must be
appropriately distributed so that the highest-ranked SNFs receive the
highest payments, the lowest-ranked SNFs receive the lowest payments,
and that the payment rate for services furnished by SNFs in the lowest
40 percent of the rankings be less than would otherwise apply. Finally,
the total amount of value-based incentive payments must 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 FY specified under section
1888(h)(6) of the Act, as estimated by the Secretary. As discussed
further below, we will propose to adopt in future rulemaking an
exchange function to ensure that the total amount of value-based
incentive payments made under the program each year meets those
criteria.
Section 1888(h)(7) of the Act requires the Secretary, not later
than 60 days prior to the fiscal year involved, to inform each SNF of
the adjustments to its Medicare payments for services furnished by the
SNF during the FY. Section 1888(h)(8) of the Act requires that the
value-based incentive payment and payment reduction only apply for the
FY involved, and not be taken into account in making payments to a SNF
in a subsequent year.
[[Page 24254]]
b. Request for Comment on Exchange Function
As we discussed in the FY 2016 SNF PPS final rule (80 FR 46424
through 46425), we use a linear exchange function to translate a
hospital's Total Performance Score under the Hospital VBP Program into
the percentage multiplier to be applied to each Medicare discharge
claim submitted by the hospital during the applicable FY. We intend to
adopt a similar methodology to translate SNF performance scores into
value-based incentive payment percentages under the SNF VBP Program.
When considering that methodology, we sought public comments on 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 DD, we considered the following four mathematical exchange
function options: Straight line (linear); concave curve (cube root
function); convex curve (cube function); and S-shape (logistic
function).
[GRAPHIC] [TIFF OMITTED] TP25AP16.008
We received numerous public comments on the FY 2016 SNF PPS
proposed rule, and we seek further public comments to inform our
policies on this topic. For example, one commenter suggested that a
linear exchange function would be the most transparent option for SNFs,
which would assist in their quality improvement efforts. We request
additional public comments on the specific form of the exchange
function that we should propose in the future, including any additional
forms beyond the four examples that we have illustrated above, and any
considerations we should take into account when selecting an exchange
function form that would best support quality improvement in SNFs.
Additionally, we will determine the precise slope of the exchange
function after the performance period has concluded, because the
distribution of SNFs' performance scores will form the basis for value-
based incentive payments under the program. However, two additional
considerations will affect the exchange function's slope. As required
in section 1888(h)(5)(C)(ii)(II)(cc) of the Act, SNFs in the lowest 40
percent of the ranking determined under paragraph (4)(B) must receive a
payment that is less than the payment rate for such services that would
otherwise apply. Additionally, as described in this section, section
1888(h)(5)(C)(ii)(III) of the Act requires that the total amount of
value-based incentive payments under the Program be greater than or
equal to 50 percent, but not greater than 70 percent, of the total
amount of reductions to SNFs' payments for the FY, as estimated by the
Secretary. We intend to ensure that both of these requirements, as well
as all other statutory requirements under the Program, are fulfilled
when we specify the exchange function's slope.
We welcome public comments on this topic.
7. SNF VBP Reporting
a. Confidential Feedback Reports
Section 1888(g)(5) of the Act requires that we provide quarterly
confidential feedback reports to SNFs on their performance on the
measures specified under sections 1888(g)(1) and (2) of the Act.
Section 1888(g)(5) of the Act also
[[Page 24255]]
requires that we begin providing those reports on October 1, 2016.
In order to meet the statutory deadline, we are developing the
feedback reports, operational systems, and implementation guidance
related to those reports. We intend to provide these reports to SNFs
via the QIES system CASPER files currently used by SNFs to report
quality performance. We welcome public comments on the appropriateness
of the QIES system, and any considerations we should take into account
when designing and providing these feedback reports.
b. Proposed Two-Phase SNF VBP Data Review and Correction Process
(1) Background
Section 1888(g)(6) of the Act requires the Secretary to establish
procedures to make public performance information on the measures
specified under paragraphs (1) and (2) of such section. The procedures
must ensure that a SNF has the opportunity to review and submit
corrections to the information that will be made public for the
facility prior to its being made public. This public reporting is also
required by statute to begin no later than October 1, 2017.
Additionally, section 1888(h)(9) of the Act requires the Secretary to
make available to the public information regarding SNFs' performance
under the SNF VBP Program, specifically including each SNF's
performance score and the ranking of SNFs for each fiscal year.
Accordingly, we are proposing to adopt a two-phase review and
correction process for (1) SNFs' measure data that will be made public
under section 1888(g)(6) of the Act, which will consist of each SNFs'
performance on the measures specified under sections 1888(g)(1) and (2)
of the Act, and (2) SNFs' performance information that will be made
public under section 1888(h)(9).
(2) Phase One: Review and Correction of SNFs' Quality Measure
Information
We view the quarterly confidential feedback reports described above
as one possible means to provide SNFs an opportunity to review and
provide corrections to their performance information. However,
collecting SNF measure data and calculating measure performance scores
takes a number of months following the end of a measurement period.
Because it is not feasible to provide SNFs with an updated measure rate
for each quarterly report or engage in review and corrections on a
quarterly basis, we propose to use one of the four reports each year to
provide SNFs an opportunity to review their data slated for public
reporting. In this specific quarterly report, we intend to provide
SNFs: (1) A count of readmissions; (2) the number of eligible stays at
the SNF; (3) the SNF's risk-standardized readmissions ratio; and (4)
the national SNF measure performance rate. In addition, we intend to
provide the patient-level information used in calculating the measure
rate. However, we seek comment on what patient-level information would
be most useful to SNFs, and how we should make this information
available if requested. We intend to address the topic of what specific
information will be provided if requested in this specific quarterly
report in future rulemaking, where we intend to propose a process for
SNFs' requests for patient-level data. We intend to notify SNFs of this
report's release via listserv email and posting on the QualityNet News
portion of the Web site.
Therefore, we propose to fulfill the statutory requirement that
SNFs have an opportunity to review and correct information that is to
be made public under section 1888(g)(6) of the Act by providing SNFs
with an annual confidential feedback report that we intend to provide
via the QIES system CASPER files. We further propose that SNFs must, if
they believe the report's contents to be in error, submit a correction
request to SNFVBPinquiries@cms.hhs.gov with the following information:
SNF's CMS Certification Number (CCN).
SNF Name.
The correction requested and the SNF's basis for
requesting the correction. More specifically, the SNF must identify the
error for which it is requesting correction, and explain its reason for
requesting the correction. The SNF must also submit documentation or
other evidence, if available, supporting the request. Additionally, any
requests made during phase one of the proposed process will be limited
to the quality measure information at issue.
We further propose that SNFs must make any correction requests
within 30 days of posting the feedback report via the QIES system
CASPER files, not counting the posting date itself. For example, if we
provide reports on October 1, 2017, SNFs must review those reports and
submit any correction requests by October 31, 2017. We will not
consider any requests for correction to quality measure data that are
received after the close of the first phase of the proposed review and
correction process. As discussed further below, any corrections sought
during phase two of the proposed process will be limited to the SNF
performance score calculation and the ranking.
We will review all timely phase one correction requests that we
receive and will provide responses to SNFs that have requested
corrections as soon as practicable.
(3) Phase Two: Review and Correction of SNF Performance Scores and
Ranking
As required by section 1888(h)(7) of the Act, we intend to inform
each SNF of its payment adjustments as a result of the SNF VBP Program
not later than 60 days prior to the fiscal year involved. For the FY
2019 SNF VBP Program, we intend to notify SNFs of those payment
adjustments via a SNF performance score report not later than 60 days
prior to October 1, 2018. We intend to address the specific contents of
that report in future rulemaking.
In that report, however, we also intend to provide SNFs with their
SNF performance scores and ranking. By doing so, we intend to use the
performance score report's provision to SNFs as the beginning of the
second phase of the proposed review and correction process. By
completing phase one, SNFs will have an opportunity to verify that
their quality measure data are fully accurate and complete, and as a
result, phase two will be limited only to corrections to the SNF
performance score's calculation and the SNF's ranking. Any requests to
correct quality measure data that are received during phase two will be
denied.
We intend to set out specific requirements for phase two of the
proposed review and correction process in future rulemaking. To inform
those proposals, we seek comments on what information would be most
useful for us to provide to SNFs to facilitate their review of their
SNF performance scores and ranking. As with the phase one process, we
intend to adopt a 30-day time period for phase two review and
corrections, beginning with the date on which we provide SNF
performance score reports.
We welcome public comments on this proposed two-phase review and
correction process.
c. SNF VBP Public Reporting
Section 1888(h)(9)(A) of the Act requires that we make available to
the public on the Nursing Home Compare Web site or its successor
information regarding the performance of individual SNFs with respect
to a FY, including the performance score for each SNF for the FY, and
each SNF's ranking, as determined under paragraph (4)(B) of
[[Page 24256]]
such section. Additionally, section 1888(h)(9)(B) of the Act requires
that we periodically post aggregate information on the SNF VBP Program
on the Nursing Home Compare Web site or its successor, 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.
We intend to address this topic in future rulemaking. However, we
welcome public comments on the best means by which to display the SNF-
specific and aggregate performance information for public consumption.
d. Ranking SNF Performance
Section 1888(h)(4)(B) of the Act requires ranking the SNF
performance scores determined under paragraph (A) of such section from
low to high. Additionally, and as discussed in this section, we are
required to publish the ranking of SNF performance scores for a FY on
Nursing Home Compare or a successor Web site.
To meet these requirements, we propose to order SNF performance
scores from low to high and publish those rankings on both the Nursing
Home Compare and QualityNet Web sites. However, because SNF performance
scores will not be calculated until after the performance period
concludes after CY 2017 (that is, during CY 2018), and because SNFs
must be provided their value-based incentive payment adjustments not
later than 60 days prior to the FY involved, we intend to publish the
ranking for FY 2019 SNF VBP payment implications after August 1, 2018.
We welcome public comments on the most appropriate format and Web
site for the ranking's publication.
B. 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 QRPs
coupled with public reporting of that information.
The Improving Medicare Post-Acute Care Transformation Act of 2014
(IMPACT Act) added section 1899B to the Act that imposed new data
reporting requirements for certain PAC providers, including SNFs, and
required that the Secretary implement a SNF quality reporting program
(SNF QRP). Section 1888(e)(6)(B)(i)(II) of the Act requires that each
SNF submit, for 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 time frames 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
submit standardized patient assessment data required under section
1899B(b)(1) of the Act in a manner and within the time frames 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 on
standardized patient assessment in accordance with section
1888(e)(6)(B)(i)(III) of the Act for such FY, the Secretary must reduce
the market basket percentage described in section 1888(e)(5)(B)(ii) of
the Act by 2 percentage points. The SNF QRP applies to freestanding
SNFs, SNFs affiliated with acute care facilities, and all non-CAH
swing-bed rural hospitals.
We refer readers to the FY 2016 SNF PPS final rule (80 FR 46427
through 46429) for information on the and requirements of the IMPACT
Act
In the FY 2016 SNF PPS final rule, we finalized the general
timeline and sequencing of activities under the SNF QRP. Please refer
to the FY 2016 SNF PPS final rule (80 FR 46427 through 46429) for more
information on these topics.
In addition, in implementing the SNF QRP and IMPACT Act
requirements in the FY 2016 SNF PPS final rule, we established our
approach for identifying cross-setting measures and processes for the
adoption of measures including the application and purpose of the
Measures Application Partnership (MAP) and the notice and comment
rulemaking process. For more information on these topics, please refer
to the FY 2016 SNF PPS final rule (80 FR 46427 through 46429).
2. General Considerations Used for Selection of Measures for the SNF
QRP
We refer readers to the FY 2016 SNF PPS final rule (80 FR 46429
through 46431) for a detailed discussion of the considerations we apply
in measure selection for the SNF QRP, such as alignment with the CMS
Quality Strategy,\23\ which incorporates the three broad aims of the
National Quality Strategy: \24\ Overall, 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. QRPs,
coupled with public reporting of quality information, are critical to
the advancement of health care quality improvement efforts. Valid,
reliable, and relevant quality measures are fundamental to the
effectiveness of our QRPs. Therefore, selection of quality measures is
a priority for CMS in all of its QRPs.
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\23\ https://www.cms.gov/Medicare/Quality-Initiatives-Patient-Assessment-Instruments/QualityInitiativesGenInfo/CMS-Quality-Strategy.html.
\24\ https://www.ahrq.gov/workingforquality/nqs/nqs2011annlrpt.htm.
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In this proposed rule, we propose to adopt for the SNF QRP one
measure that we are specifying under section 1899B(c)(1)(C) of the Act
to meet the Medication Reconciliation domain: (1) Drug Regimen Review
Conducted with Follow-Up for Identified Issues-Post-Acute Care Skilled
Nursing Facility Quality Reporting Program. Further, we are proposing
to adopt for the SNF QRP three measures to meet the resource use and
other measure domains identified in section 1899B(d)(1) of the Act: (1)
Medicare Spending per Beneficiary--Post-Acute Care Skilled Nursing
Facility Quality Reporting Program; (2) Discharge to Community--Post
Acute Care Skilled Nursing Facility Quality Reporting Program; and (3)
Potentially Preventable 30-Day Post-Discharge Readmission Measure for
Skilled Nursing Facility Quality Reporting Program.
In our selection and specification of measures, we employ a
transparent process in which we seek input from stakeholders and
national experts and engage in a process that allows for pre-rulemaking
input on each measure, as required by section 1890A of the Act.
To meet this requirement, we provided the following opportunities
for stakeholder input. Our measure development contractor convened
technical expert panels (TEPs) that included stakeholder experts and
patient representatives on July 29, 2015 for the Drug Regimen Review
Conducted with Follow-Up for Identified Issues--PAC SNF QRP, on August
25, 2015, September 25, 2015, and October 5, 2015 for the Discharge to
Community--PAC SNF QRP, on August 12 and 13, 2015 and October 14, 2015
for the Potentially Preventable 30-Day Post-Discharge Readmission
Measure for SNF QRP, and on October 29 and 30,
[[Page 24257]]
2015 for the Medicare Spending per Beneficiary measures. In addition,
we released draft quality measure specifications for public comment on
the Drug Regimen Review Conducted with Follow-Up for Identified
Issues--PAC SNF QRP from September 18, 2015 to October 6, 2015, for the
Discharge to Community--PAC SNF QRP from November 9, 2015 to December
8, 2015, for the Potentially Preventable 30-Day Post-Discharge
Readmission Measure for SNF QRP from November 2, 2015 to December 1,
2015, and for the Medicare Spending per Beneficiary measures from
January 13, 2016 to February 5, 2016. Further, we implemented a public
mailbox, PACQualityInitiative@cms.hhs.gov, for the submission of public
comments. This PAC mailbox is accessible 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/IMPACT-Act-of-2014-Data-Standardization-and-Cross-Setting-MeasuresMeasures.html.
Additionally, we sought public input from the MAP PAC, Long-Term
Care Workgroup during the annual in-person meeting held December 14 and
15, 2015. The final map report is available at https://www.qualityforum.org/Publications/2016/02/MAP_2016_Considerations_for_Implementing_Measures_in_Federal_Programs_-_PAC-LTC.aspx. The MAP is composed of multi-stakeholder groups convened
by the NQF, our current contractor under section 1890(a) of the Act,
tasked to provide input on the selection of quality and efficiency
measures described in section 1890(b)(7)(B) of the Act.
The MAP reviewed each measure proposed in this rule for use in the
SNF QRP. For more information on the MAP, we refer readers to the FY
2016 SNF PPS final rule (80 FR 46430 through 46431). Further, for more
information on the MAP's recommendations, we refer readers to the MAP
2015-2016 Considerations for Implementing Measures in Federal Programs
public report at https://www.qualityforum.org/Publications/2016/02/MAP_2016_Considerations_for_Implementing_Measures_in_Federal_Programs_-_PAC-LTC.aspx.
3. Policy for Retaining SNF QRP Measures Adopted for Future Payment
Determinations
In the FY 2016 SNF PPS final rule (80 FR 46431 through 46432), we
finalized our policy for measure removal and also finalized that when
we adopt a measure for the SNF QRP for a payment determination, this
measure will be automatically retained in the SNF QRP for all
subsequent payment determinations unless we propose to remove, suspend,
or replace the measure. We are not proposing any new policies related
to measure retention or removal. For further information on how
measures are considered for removal, suspension, or replacement, please
refer to the FY 2016 SNF PPS Final Rule (80 FR 46431 through 46432).
4. Process for Adoption of Changes to SNF QRP Measures
In the FY 2016 SNF PPS final rule (80 FR 46432), we finalized our
policy pertaining to the process for adoption of non-substantive and
substantive changes to SNF QRP measures. We are not proposing in this
proposed rule to make any changes to this policy.
5. Quality Measures Previously Finalized for Use in the SNF QRP
The SNF QRP quality measures for the FY 2018 payment determinations
and subsequent years are presented in Table 12. Measure specifications
for the previously adopted measures adapted from non-SNF settings are
available at https://www.cms.gov/Medicare/Quality-Initiatives-Patient-Assessment-Instruments/NursingHomeQualityInits/SNF-Quality-Reporting-Program-Measures-and-Technical-Information.html under the downloads
section at the bottom of the page.
Table 12--Quality Measures Previously Finalized for Use in the SNF QRP
----------------------------------------------------------------------------------------------------------------
Annual payment
Data collection start determination: Initial
Measure title and NQF # SNF PPS Final rule date and subsequent APU
years
----------------------------------------------------------------------------------------------------------------
Percent of Residents or Patients with Adopted in the FY 2016 October 1, 2016........ FY 2018 and subsequent
Pressure Ulcers That Are New or SNF PPS Final Rule (80 years.
Worsened (Short Stay) (NQF #0678). FR 46433 through
46440).
Application of the NQF-endorsed Adopted in the FY 2016 October 1, 2016........ FY 2018 and subsequent
Percent of Residents Experiencing SNF PPS Final Rule (80 years.
One or More Falls with Major Injury FR 46440 through
(Long Stay) (NQF #0674). 46444).
Application of Percent of Long-Term Adopted in the FY 2016 October 1, 2016........ FY 2018 and subsequent
Care Hospital Patients with an SNF PPS Final Rule (80 years.
Admission and Discharge Functional FR 46444 through
Assessment and a Care Plan That 46453).
Addresses Function (NQF #2631).
----------------------------------------------------------------------------------------------------------------
6. SNF QRP Quality, Resource Use and Other Measures for FY 2018 Payment
Determinations and Subsequent Years
For the FY 2018 payment determination and subsequent years, in
addition to the quality measures identified in Table 12 that we are
retaining under our policy described in section V.B.3., we are
proposing three new measures for the SNF QRP. These three proposed
measures were developed to meet the requirements of the IMPACT Act.
They are: (1) Medicare Spending per Beneficiary-PAC SNF QRP; (2)
Discharge to Community--PAC SNF QRP; and (3) Potentially Preventable
30-Day Post-Discharge Readmission Measure for SNF QRP. The measures are
described in more detail below.
For the risk adjustment of the resource use and other measures, we
understand the important role that sociodemographic status plays in the
care of patients. However, we continue to have concerns about holding
providers to different standards for the outcomes of their patients of
diverse sociodemographic status because we do not want to mask
potential disparities or minimize incentives to improve the outcomes of
disadvantaged populations. We routinely monitor the impact of
[[Page 24258]]
sociodemographic status on providers' results on our measures.
The NQF is currently undertaking a 2-year trial period in which new
measures and measures undergoing maintenance review will be assessed to
determine if risk-adjusting for sociodemographic factors is
appropriate. For 2 years, NQF will conduct a trial of temporarily
allowing inclusion of sociodemographic factors in the risk-adjustment
approach for some performance measures. At the conclusion of the trial,
NQF will issue recommendations on future permanent inclusion of
sociodemographic factors. During the trial, measure developers are
expected to submit information such as analyses and interpretations as
well as performance scores with and without sociodemographic factors in
the risk adjustment model.
Furthermore, the Office of the Assistant Secretary for Planning and
Evaluation (ASPE) is conducting research to examine the impact of
sociodemographic status on quality measures, resource use, and other
measures under the Medicare program as directed by the IMPACT Act. We
will closely examine the findings of the ASPE reports and related
Secretarial recommendations and consider how they apply to our quality
programs at such time as they are available.
We are inviting public comment on how socioeconomic and demographic
factors should be used in risk adjustment for the resource use and
other measures.
a. Proposal To Address the IMPACT Act Domain of Resource Use and Other
Measures: Total Estimated MSPB-PAC SNF QRP
We are proposing an MSPB-PAC SNF QRP measure for inclusion in the
SNF QRP for the FY 2018 payment determination and subsequent years.
Section 1899B(d)(1)(A) of the Act requires the Secretary to specify
resource use measures, including total estimated Medicare spending per
beneficiary, on which PAC providers consisting of SNFs, Inpatient
Rehabilitation Facilities (IRFs), Long-Term Care Hospitals (LTCHs), and
Home Health Agencies (HHAs) are required to submit necessary data
specified by the Secretary.
Rising Medicare expenditures for post-acute care as well as wide
variation in spending for these services underlines the importance of
measuring resource use for providers rendering these services. Between
2001 and 2013, Medicare PAC spending grew at an annual rate of 6.1
percent and doubled to $59.4 billion, while payments to inpatient
hospitals grew at an annual rate of 1.7 percent over this same
period.\25\ A study commissioned by the Institute of Medicine found
that variation in PAC spending explains 73 percent of variation in
total Medicare spending across the United States.\26\
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\25\ MedPAC, ``A Data Book: Health Care Spending and the
Medicare Program,'' (2015). 114.
\26\ Institute of Medicine, ``Variation in Health Care Spending:
Target Decision Making, Not Geography,'' (Washington, DC: National
Academies 2013). 2.
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We reviewed the NQF's consensus-endorsed measures and were unable
to identify any NQF-endorsed resource use measures for PAC settings. As
such, we are proposing this MSPB-PAC SNF measure under the Secretary's
authority to specify non-NQF-endorsed measures under section
1899B(e)(2)(B) of the Act. Given the current lack of resource use
measures for PAC settings, our proposed MSPB-PAC SNF measure has the
potential to provide valuable information to SNF providers on their
relative Medicare spending in delivering services to approximately 1.7
million Medicare beneficiaries.\27\
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\27\ 2013 figures. MedPAC, ``Medicare Payment Policy,'' Report
to the Congress (2015). xvii-xviii.
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The proposed MSPB-PAC SNF episode-based measure will provide
actionable and transparent information to support SNF providers'
efforts to promote care coordination and deliver high quality care at a
lower cost to Medicare. The MSPB-PAC SNF measure holds SNF providers
accountable for the Medicare payments within an ``episode of care''
(episode), which includes the period during which a patient is directly
under the SNF's care, as well as a defined period after the end of the
SNF treatment, which may be reflective of and influenced by the
services furnished by the SNF. MSPB-PAC SNF episodes, constructed
according to the methodology described below, have high levels of
Medicare spending with substantial variation. In FY 2014, Medicare FFS
beneficiaries experienced 1,534,773 MSPB-PAC episodes triggered by
admission to a SNF. The mean payment-standardized, risk-adjusted
episode spending for these episodes is $26,279. There is substantial
variation in the Medicare payments for these MSPB-PAC SNF episodes--
ranging from approximately $6,090 at the 5th percentile to
approximately $60,050 at the 95th percentile. This variation is
partially driven by variation in payments occurring following SNF
treatment.
Evaluating Medicare payments during an episode creates a continuum
of accountability between providers and has the potential to improve
post-treatment care planning and coordination. While some stakeholders
throughout the measure development process supported the measures and
felt that measuring Medicare spending was critical for improving
efficiency, others believed that resource use measures did not reflect
quality of care in that they do not take into account patient outcomes
or experience beyond those observable in claims data. However, SNFs
involved in the provision of high-quality PAC care as well as
appropriate discharge planning and post-discharge care coordination
would be expected to perform well on this measure since beneficiaries
would likely experience fewer costly adverse events (for example,
avoidable hospitalizations, infections, and emergency room usage).
Further, it is important that the cost of care be explicitly measured
so that, in conjunction with other quality measures, we can recognize
providers that are involved in the provision of high quality care at
lower cost.
We have undertaken development of MSPB-PAC measures for each of the
four PAC settings. We are proposing an LTCH-specific MSPB-PAC measure
in the FY 2017 IPPS/LTCH proposed rule published elsewhere in this
issue of the Federal Register and an IRF-specific MSBP-PAC measure in
the FY 2017 IRF PPS proposed rule published elsewhere in this issue of
the Federal Register. We intend to propose a HHA-specific MSBP-PAC
measure through future notice-and-comment rulemaking. The four setting-
specific MSPB-PAC measures are closely aligned in terms of episode
construction and measure calculation. Each of the MSPB-PAC measures
assess Medicare Part A and Part B spending within an episode, and the
numerator and denominator are defined similarly for each of the MSPB-
PAC measures. However, developing setting-specific measures allows us
to account for differences between settings in payment policy, the
types of data available, and the underlying health characteristics of
beneficiaries.
The MSPB-PAC measures mirror the general construction of the
inpatient prospective payment system (IPPS) hospital MSPB measure that
was finalized in the FY 2012 IPPS/LTCH PPS final rule (76 FR 51618
through 51627). It was endorsed by the NQF on December 6, 2013 and has
been used in the Hospital Value-Based Purchasing (VBP) Program (NQF
#2158) since FY 2015.\28\ The hospital MSPB measure was
[[Page 24259]]
originally established under the authority of section 1886(o)(2)(B)(ii)
of the Act. The hospital MSPB measure evaluates hospitals' Medicare
spending relative to the Medicare spending for the national median
hospital within a hospital MSPB episode. It assesses Medicare Part A
and Part B payments for services performed by hospitals and other
healthcare providers within a hospital MSPB episode, which is comprised
of the periods immediately prior to, during, and following a patient's
hospital stay.29 30 Similarly, the MSPB-PAC measures assess
all Medicare Part A and Part B payments for fee-for-service (FFS)
claims with a start date during the episode window (which, as discussed
in this section, is the time period during which Medicare FFS Part A
and Part B services are counted towards the MSPB-PAC SNF episode).
There are however differences between the MSPB-PAC measures, as
proposed, and the hospital MSPB measure to reflect differences in
payment policies and the nature of care provided in each PAC setting.
For example, the MSPB-PAC measures exclude a limited set of services
(for example, for clinically unrelated services) provided to a
beneficiary during the episode window while the hospital MSPB measure
does not exclude any services.
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\28\ QualityNet, ``Measure Methodology Reports: Medicare
Spending Per Beneficiary (MSPB) Measure,'' (2015). https://www.qualitynet.org/dcs/ContentServer?pagename=QnetPublic%2FPage%2FQnetTier3&cid=1228772053996.
\29\ QualityNet, ``Measure Methodology Reports: Medicare
Spending Per Beneficiary (MSPB) Measure,'' (2015). https://www.qualitynet.org/dcs/ContentServer?pagename=QnetPublic%2FPage%2FQnetTier3&cid=1228772053996.
\30\ FY 2012 IPPS/LTCH PPS Final Rule (76 FR 51619).
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MSPB-PAC episodes may begin within 30 days of discharge from an
inpatient hospital as part of a patient's trajectory from an acute to a
PAC setting. A SNF stay beginning within 30 days of discharge from an
inpatient hospital will therefore be included once in the hospital's
MSPB measure, and once in the SNF provider's MSPB-PAC measure. Aligning
the hospital MSPB and MSPB-PAC measures in this way creates continuous
accountability and aligns incentives to improve care planning and
coordination across inpatient and PAC settings.
We have sought and considered the input of stakeholders throughout
the measure development process for the MSPB-PAC measures. We convened
a TEP consisting of 12 panelists with combined expertise in all of the
PAC settings on October 29 and 30, 2015 in Baltimore, Maryland. A
follow-up email survey was sent to TEP members on November 18, 2015 to
which seven responses were received by December 8, 2015. The MSPB-PAC
TEP Summary Report is available at https://www.cms.gov/Medicare/Quality-Initiatives-Patient-Assessment-Instruments/Post-Acute-Care-Quality-Initiatives/IMPACT-Act-of-2014/IMPACT-Act-Downloads-and-Videos.html. The measures were also presented to the MAP Post-Acute
Care/Long-Term Care (PAC/LTC) Workgroup on December 15, 2015. As the
MSPB-PAC measures were under development, there were three voting
options for members: Encourage continued development, do not encourage
further consideration, and insufficient information.\31\ The MAP PAC/
LTC workgroup voted to ``encourage continued development'' for each of
the MSPB-PAC measures.\32\ The MAP PAC/LTC workgroup's vote of
``encourage continued development'' was affirmed by the MAP
Coordinating Committee on January 26, 2016.\33\ The MAP's concerns
about the MSPB-PAC measures, as outlined in their final report ``MAP
2016 Considerations for Implementing Measures in Federal Programs:
Post-Acute Care and Long-Term Care'' and Spreadsheet of Final
Recommendations, were taken into consideration during the measure
development process and are discussed as part of our responses to
public comments, described below.34 35
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\31\ National Quality Forum, Measure Applications Partnership,
``Process and Approach for MAP Pre-Rulemaking Deliberations, 2015-
2016'' (February 2016) https://www.qualityforum.org/WorkArea/linkit.aspx?LinkIdentifier=id&ItemID=81693.
\32\ National Quality Forum, Measure Applications Partnership
Post-Acute Care/Long-Term Care Workgroup, ``Meeting Transcript--Day
2 of 2'' (December 15, 2015) 104-106 https://www.qualityforum.org/WorkArea/linkit.aspx?LinkIdentifier=id&ItemID=81470.
\33\ National Quality Forum, Measure Applications Partnership,
``Meeting Transcript--Day 1 of 2'' (January 26, 2016) 231-232 https://www.qualityforum.org/WorkArea/linkit.aspx?LinkIdentifier=id&ItemID=81637.
\34\ National Quality Forum, Measure Applications Partnership,
``MAP 2016 Considerations for Implementing Measures in Federal
Programs: Post-Acute Care and Long-Term Care'' Final Report,
(February 2016) https://www.qualityforum.org/Publications/2016/02/MAP_2016_Considerations_for_Implementing_Measures_in_Federal_Programs_-_PAC-LTC.aspx.
\35\ National Quality Forum, Measure Applications Partnership,
``Spreadsheet of MAP 2016 Final Recommendations'' (February 1, 2016)
https://www.qualityforum.org/WorkArea/linkit.aspx?LinkIdentifier=id&ItemID=81593.
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Since the MAP's review and recommendation of continued development,
CMS has continued to refine risk adjustment models and conduct measure
testing for the IMPACT Act measures in compliance with the MAP's
recommendations. The proposed IMPACT Act measures are both consistent
with the information submitted to the MAP and support the scientific
acceptability of these measures for use in quality reporting programs.
In addition, a public comment period, accompanied by draft measures
specifications, was originally open from January 13 to 27, 2016 and
twice extended to January 29 and February 5. A total of 45 comments on
the MSPB-PAC measures were received during this 3.5 week period. The
comments received also covered each of the MAP's concerns as outlined
in their Final Recommendations.\36\ The MSPB-PAC Public Comment Summary
Report is available at https://www.cms.gov/Medicare/Quality-Initiatives-Patient-Assessment-Instruments/Post-Acute-Care-Quality-Initiatives/IMPACT-Act-of-2014/IMPACT-Act-Downloads-and-Videos.html and
contains the public comments (summarized and verbatim), along with our
responses including statistical analyses. If finalized, the MSPB-PAC
SNF measure, along with the other MSPB-PAC measures, as applicable,
would be submitted for NQF endorsement.
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\36\ National Quality Forum, Measure Applications Partnership,
``Spreadsheet of MAP 2016 Final Recommendations'' (February 1, 2016)
https://www.qualityforum.org/WorkArea/linkit.aspx?LinkIdentifier=id&ItemID=81593.
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To calculate the MSPB-PAC SNF measure for each SNF provider, we
first define the construction of the MSPB-PAC SNF episode, including
the length of the episode window as well as the services included in
the episode. Next, we apply the methodology for the measure
calculation. The specifications are discussed further in this section.
More detailed specifications for the proposed MSPB-PAC measures,
including the MSPB-PAC SNF measure that we are proposing in this
proposed rule, is available at https://www.cms.gov/Medicare/Quality-Initiatives-Patient-Assessment-Instruments/Post-Acute-Care-Quality-Initiatives/IMPACT-Act-of-2014/IMPACT-Act-Downloads-and-Videos.html.
(1) Episode Construction
An MSPB-PAC SNF episode begins at the episode trigger, which is
defined as the patient's admission to a SNF. This admitting facility is
the attributed provider, for whom the MSPB-PAC SNF measure is
calculated. The episode window is the time period during which Medicare
FFS Part A and Part B services are counted towards the MSPB-PAC SNF
episode. Because Medicare FFS claims are already reported to the
Medicare program for payment purposes, SNF providers will not be
required to report any additional data to
[[Page 24260]]
CMS for calculation of this measure. Thus, there will be no additional
data collection burden from the implementation of this measure.
The episode window is comprised of a treatment period and an
associated services period. The treatment period begins at the trigger
(that is, on the day of admission to the SNF) and ends on the day of
discharge from that SNF. Readmissions to the same facility occurring
within 7 or fewer days do not trigger a new episode, and instead are
included in the treatment period of the original episode. When two
sequential stays at the same SNF occur within 7 or fewer days of one
another, the treatment period ends on the day of discharge for the
latest SNF stay. The treatment period includes those services that are
provided directly or reasonably managed by the SNF provider that are
directly related to the beneficiary's care plan. The associated
services period is the time during which Medicare Part A and Part B
services (with certain exclusions) are counted towards the episode. The
associated services period begins at the episode trigger and ends 30
days after the end of the treatment period. The distinction between the
treatment period and the associated services period is important
because clinical exclusions of services may differ for each period.
Certain services are excluded from the MSPB-PAC SNF episodes because
they are clinically unrelated to SNF care, and/or because SNF providers
may have limited influence over certain Medicare services delivered by
other providers during the episode window. These limited service-level
exclusions are not counted towards a given SNF provider's Medicare
spending to ensure that beneficiaries with certain conditions and
complex care needs receive the necessary care. Certain services that
have been determined by clinicians to be outside of the control of a
SNF provider include planned hospital admissions, management of certain
preexisting chronic conditions (for example, dialysis for end-stage
renal disease (ESRD), and enzyme treatments for genetic conditions),
treatment for preexisting cancers, organ transplants, and preventive
screenings (for example, colonoscopy and mammograms). Exclusion of such
services from the MSPB-PAC SNF episode ensures that facilities do not
have disincentives to treat patients with certain conditions or complex
care needs.
An MSPB-PAC episode may begin during the associated services period
of an MSPB-PAC SNF episode in the 30 days post-treatment. One possible
scenario occurs where a SNF provider discharges a beneficiary who is
then admitted to a HHA within 30 days. The HHA claim would be included
once as an associated service for the attributed provider of the first
MSPB-PAC SNF episode and once as a treatment service for the attributed
provider of the second MSPB-PAC HHA episode. As in the case of overlap
between hospital and PAC episodes discussed earlier, this overlap is
necessary to ensure continuous accountability between providers
throughout a beneficiary's trajectory of care, as both providers share
incentives to deliver high quality care at a lower cost to Medicare.
Even within the SNF setting, one MSPB-PAC SNF episode may begin in the
associated services period of another MSPB-PAC SNF episode in the 30
days post-treatment. The second SNF claim would be included once as an
associated service for the attributed SNF provider of the first MSPB-
PAC SNF episode and once as a treatment service for the attributed SNF
provider of the second MSPB-PAC SNF episode. Again, this ensures that
SNF providers have the same incentives throughout both MSPB-PAC SNF
episodes to deliver quality care and engage in patient-focused care
planning and coordination. If the second MSPB-PAC SNF episode were
excluded from the second SNF provider's MSPB-PAC SNF measure, that
provider would not share the same incentives as the first SNF provider
of first MSPB-PAC SNF episode. The MSPB-PAC SNF measure is designed to
benchmark the resource use of each attributed provider against what
their spending is expected to be as predicted through risk adjustment.
As discussed further in this section, the measure takes the ratio of
observed spending to expected spending for each episode and then takes
the average of those ratios across all of the attributed provider's
episodes. The measure is not a simple sum of all costs across a
provider's episodes, thus mitigating concerns about double counting.
(2) Measure Calculation
Medicare payments for Part A and Part B claims for services
included in MSPB-PAC SNF episodes, defined according to the methodology
above, are used to calculate the MSPB-PAC SNF measure. Measure
calculation involves determination of the episode exclusions, the
approach for standardizing payments for geographic payment differences,
the methodology for risk adjustment of episode spending to account for
differences in patient case mix, and the specifications for the measure
numerator and denominator.
(a) Exclusion Criteria
In addition to service-level exclusions that remove some payments
from individual episodes, we exclude certain episodes in their entirety
from the MSPB-PAC SNF measure to ensure that the MSPB-PAC SNF measure
accurately reflects resource use and facilitates fair and meaningful
comparisons between SNF providers. The proposed episode-level
exclusions are as follows:
Any episode that is triggered by a SNF claim outside the
50 states, DC, Puerto Rico, and U.S. Territories.
Any episode where the claim(s) constituting the attributed
SNF provider's treatment have a standard allowed amount of zero or
where the standard allowed amount cannot be calculated.
Any episode in which a beneficiary is not enrolled in
Medicare FFS for the entirety of a 90-day lookback period (that is, a
90-day period prior to the episode trigger) plus episode window
(including where the beneficiary dies), or is enrolled in Part C for
any part of the lookback period plus episode window.
Any episode in which a beneficiary has a primary payer
other than Medicare for any part of the 90-day lookback period plus
episode window.
Any episode where the claim(s) constituting the attributed
SNF provider's treatment include at least one related condition code
indicating that it is not a prospective payment system bill.
(b) Standardization and Risk Adjustment
Section 1899B(d)(2)(C) of the Act requires that the MSPB-PAC
measures are adjusted for the factors described under section
1886(o)(2)(B)(ii) of the Act, which include adjustment for factors such
as age, sex, race, severity of illness, and other factors that the
Secretary determines appropriate. Medicare payments included in the
MSPB-PAC SNF QRP measure are payment standardized and risk-adjusted.
Payment standardization removes sources of payment variation not
directly related to clinical decisions and facilitates comparisons of
resource use across geographic areas. We propose to use the same
payment standardization methodology as that used in the NQF-endorsed
hospital MSPB measure. This methodology removes geographic payment
differences, such as wage index and geographic practice cost index
(GPCI), incentive payment adjustments, and other add-on payments that
support broader Medicare program goals
[[Page 24261]]
including indirect graduate medical education (IME) and hospitals
serving a disproportionate share of uninsured patients (DSH).\37\
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\37\ QualityNet, ``CMS Price (Payment) Standardization--Detailed
Methods'' (Revised May 2015) https://qualitynet.org/dcs/ContentServer?c=Page&pagename=QnetPublic%2FPage%2FQnetTier4&cid=1228772057350.
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Risk adjustment uses patient claims history to account for case-mix
variation and other factors that affect resource use but are beyond the
influence of the attributed SNF provider. To assist with risk
adjustment, we create mutually exclusive and exhaustive clinical case
mix categories using the most recent institutional claim in the 60 days
prior to the start of the MSPB-PAC SNF episode. The beneficiaries in
these clinical case mix categories have a greater degree of clinical
similarity than the overall SNF patient population, and allow us to
more accurately estimate Medicare spending. Our proposed MSPB-PAC SNF
model, adapted for the SNF setting from the NQF-endorsed hospital MSPB
measure uses a regression framework with a 90-day hierarchical
condition category (HCC) lookback period and covariates including the
clinical case mix categories, HCC indicators, age brackets, indicators
for originally disabled, ESRD enrollment, and long-term care status,
and selected interactions of these covariates where sample size and
predictive ability make them appropriate. We sought and considered
public comment regarding the treatment of hospice services occurring
within the MSPB-PAC SNF episode window. Given the comments received, we
propose to include the Medicare spending for hospice services but risk
adjust for them, such that MSPB-PAC SNF episodes with hospice are
compared to a benchmark reflecting other MSPB-PAC SNF episodes with
hospice. We believe that this strikes a balance between the measure's
intent of evaluating Medicare spending and ensuring that providers do
not have incentives against the appropriate use of hospice services in
a patient-centered continuum of care.
We understand the important role that sociodemographic factors,
beyond age, play in the care of patients. However, we continue to have
concerns about holding providers to different standards for the
outcomes of their patients of diverse sociodemographic status because
we do not want to mask potential disparities or minimize incentives to
improve the outcomes of disadvantaged populations. We routinely monitor
the impact of sociodemographic status on providers' results on our
measures.
The NQF is currently undertaking a 2-year trial period in which new
measures and measures undergoing maintenance review will be assessed to
determine if risk-adjusting for sociodemographic factors is
appropriate. For 2 years, NQF will conduct a trial of temporarily
allowing inclusion of sociodemographic factors in the risk-adjustment
approach for some performance measures. At the conclusion of the trial,
NQF will issue recommendations on future permanent inclusion of
sociodemographic factors. During the trial, measure developers are
expected to submit information such as analyses and interpretations as
well as performance scores with and without sociodemographic factors in
the risk adjustment model.
Furthermore, the Office of the Assistant Secretary for Planning and
Evaluation (ASPE) is conducting research to examine the impact of
sociodemographic status on quality measures, resource use, and other
measures under the Medicare program as required by the IMPACT Act. We
will closely examine the findings of the ASPE reports and related
Secretarial recommendations and consider how they apply to our quality
programs at such time as they are available.
While we conducted analyses on the impact of age by sex on the
performance of the MSPB-PAC SNF risk-adjustment model, we are not
proposing to adjust the MSPB-PAC SNF measure for socioeconomic and
demographic factors at this time. As this MSPB-PAC SNF measure will be
submitted for NQF endorsement, we prefer to await the results of this
trial and study before deciding whether to risk adjust for
socioeconomic and demographic factors. We will monitor the results of
the trial, studies, and recommendations. We are inviting public comment
on how socioeconomic and demographic factors should be used in risk
adjustment for the MSPB-PAC SNF measure.
(c) Measure Numerator and Denominator
The MPSB-PAC SNF measure is a payment-standardized, risk-adjusted
ratio that compares a given SNF provider's Medicare spending against
the Medicare spending of other SNF providers within a performance
period. Similar to the hospital MSPB measure, the ratio allows for ease
of comparison over time as it obviates the need to adjust for inflation
or policy changes.
The MSPB-PAC SNF measure is calculated as the ratio of the MSPB-PAC
Amount for each SNF provider divided by the episode-weighted median
MSPB-PAC Amount across all SNF providers. To calculate the MSPB-PAC
Amount for each SNF provider, one calculates the average of the ratio
of the standardized episode spending over the expected episode spending
(as predicted in risk adjustment), and then multiplies this quantity by
the average episode spending level across all SNF providers nationally.
The denominator for a SNF provider's MSPB-PAC SNF measure is the
episode-weighted national median of the MSPB-PAC Amounts across all SNF
providers. An MSPB-PAC SNF measure of less than 1 indicates that a
given SNF provider's resource use is less than that of the national
median SNF provider during a performance period. Mathematically, this
is represented in equation (A) below:
[GRAPHIC] [TIFF OMITTED] TP25AP16.009
Where:
Yij = attributed standardized spending for episode i and
provider j
[Ycirc]ij = expected standardized spending for episode i
and provider j, as predicted from risk adjustment
nj = number of episodes for provider j
n = total number of episodes nationally
i [egr] {Ij{time} = all episodes i in the set of episodes
attributed to provider j.
[[Page 24262]]
(3) Data Sources
The MSPB-PAC SNF resource use measure is an administrative claims-
based measure. It uses Medicare Part A and Part B claims from FFS
beneficiaries and Medicare eligibility files.
(4) Cohort
The measure cohort includes Medicare FFS beneficiaries with a SNF
treatment period ending during the data collection period.
(5) Reporting
If this proposed measure is finalized, we intend to provide initial
confidential feedback to providers, prior to public reporting of this
measure, based on Medicare FFS claims data from discharges in CY 2016.
We intend to publicly report this measure using claims data from
discharges in CY 2017.
We propose a minimum of 20 episodes for reporting and inclusion in
the SNF QRP. For the reliability calculation, as described in the
measure specifications identified at https://www.cms.gov/Medicare/Quality-Initiatives-Patient-Assessment-Instruments/Post-Acute-Care-Quality-Initiatives/IMPACT-Act-of-2014/IMPACT-Act-Downloads-and-Videos.html, we used data from FY 2014. The reliability results support
the 20 episode case minimum, and 100.00 percent of SNF providers had
moderate or high reliability (above 0.4).
We invite public comment on our proposal to adopt the measure,
MSPB-PAC SNF Measure for the SNF QRP.
b. Proposal To Address the IMPACT Act Domain of Resource Use and Other
Measures: Discharge to Community-Post Acute Care (PAC) Skilled Nursing
Facility Quality Reporting Program
Sections 1899B(d)(1)(B) and 1899B(a)(2)(E)(ii) of the Act require
the Secretary to specify a measure to address the domain of discharge
to community by SNFs, LTCHs, and IRFs by October 1, 2016, and HHAs by
January 1, 2017. We are proposing to adopt the measure, Discharge to
Community--PAC SNF QRP, for the SNF QRP for the FY 2018 payment
determination and subsequent years as a Medicare FFS claims-based
measure to meet this requirement.
This proposed measure assesses successful discharge to the
community from a SNF setting, with successful discharge to the
community including no unplanned rehospitalizations and no death in the
31 days following discharge from the SNF. Specifically, this proposed
measure reports a SNF's risk-standardized rate of Medicare FFS
residents who are discharged to the community following a SNF stay, and
do not have an unplanned readmission to an acute care hospital or LTCH
in the 31 days following discharge to community, and who remain alive
during the 31 days following discharge to community. The term
``community'', for this measure, is defined as home/self-care, with or
without home health services, based on Patient Discharge Status Codes
01, 06, 81, and 86 on the Medicare FFS claim.38 39 This
measure is conceptualized uniformly across the PAC settings, in terms
of the definition of the discharge to community outcome, the approach
to risk adjustment, and the measure calculation.
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\38\ Further description of patient discharge status codes can
be found, for example, at the following Web page: https://med.noridianmedicare.com/web/jea/topics/claim-submission/patient-status-codes.
\39\ This definition is not intended to suggest that board and
care homes, assisted living facilities, or other settings included
in the definition of ``community'' for the purpose of this measure
are the most integrated setting for any particular individual or
group of individuals under the Americans with Disabilities Act (ADA)
and Section 504.
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Discharge to a community setting is an important health care
outcome for many residents for whom the overall goals of post-acute
care include optimizing functional improvement, returning to a previous
level of independence, and avoiding institutionalization. Returning to
the community is also an important outcome for many residents who are
not expected to make functional improvement during their SNF stay, and
for residents who may be expected to decline functionally due to their
medical condition. The discharge to community outcome offers a multi-
dimensional view of preparation for community life, including the
cognitive, physical, and psychosocial elements involved in a discharge
to the community.40 41
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\40\ El-Solh A.A., Saltzman S.K., Ramadan F.H., Naughton B.J.
Validity of an artificial neural network in predicting discharge
destination from a postacute geriatric rehabilitation unit. Archives
of physical medicine and rehabilitation. 2000;81(10):1388-1393.
\41\ Tanwir S, Montgomery K, Chari V, Nesathurai S. Stroke
rehabilitation: Availability of a family member as caregiver and
discharge destination. European journal of physical and
rehabilitation medicine. 2014;50(3):355-362.
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In addition to being an important outcome from a resident and
family perspective, patients and residents discharged to community
settings, on average, incur lower costs over the recovery episode,
compared with those discharged to institutional
settings.42 43 Given the high costs of care in institutional
settings, encouraging SNFs to prepare residents for discharge to
community, when clinically appropriate, may have cost-saving
implications for the Medicare program.\44\ Also, providers have
discovered that successful discharge to community was a major driver of
their ability to achieve savings, where capitated payments for post-
acute care were in place.\45\ For residents who require long-term care
due to persistent disability, discharge to community could result in
lower long-term care costs for Medicaid and for residents' out-of-
pocket expenditures.\46\
---------------------------------------------------------------------------
\42\ Dobrez D, Heinemann A.W., Deutsch A, Manheim L, Mallinson
T. Impact of Medicare's prospective payment system for inpatient
rehabilitation facilities on stroke patient outcomes. American
journal of physical medicine & rehabilitation/Association of
Academic Physiatrists. 2010;89(3):198-204.
\43\ Gage B., Morley M., Spain P., Ingber M. Examining Post
Acute Care Relationships in an Integrated Hospital System. Final
Report. RTI International;2009.
\44\ Ibid.
\45\ Doran J.P., Zabinski S.J. Bundled payment initiatives for
Medicare and non-Medicare total joint arthroplasty patients at a
community hospital: Bundles in the real world. The journal of
arthroplasty. 2015;30(3):353-355.
\46\ Newcomer R.J., Ko M., Kang T., Harrington C., Hulett D.,
Bindman A.B. Health Care Expenditures After Initiating Long-term
Services and Supports in the Community Versus in a Nursing Facility.
Medical Care. 2016;54(3):221-228.
---------------------------------------------------------------------------
Analyses conducted for ASPE on PAC episodes, using a 5 percent
sample of 2006 Medicare claims, revealed that relatively high average,
unadjusted Medicare payments are associated with discharge to
institutional settings from IRFs, SNFs, LTCHs or HHAs, as compared with
payments associated with discharge to community settings.\47\ Average,
unadjusted Medicare payments associated with discharge to community
settings ranged from $0 to $4,017 for IRF discharges, $0 to $3,544 for
SNF discharges, $0 to $4,706 for LTCH discharges, and $0 to $992 for
HHA discharges. In contrast, payments associated with discharge to non-
community settings were considerably higher, ranging from $11,847 to
$25,364 for IRF discharges, $9,305 to $29,118 for SNF discharges,
$12,465 to $18,205 for LTCH discharges, and $7,981 to $35,192 for HHA
discharges.\48\
---------------------------------------------------------------------------
\47\ Gage B., Morley M., Spain P., Ingber M. Examining Post
Acute Care Relationships in an Integrated Hospital System. Final
Report. RTI International; 2009.
\48\ Ibid.
---------------------------------------------------------------------------
Measuring and comparing facility-level discharge to community rates
is expected to help differentiate among facilities with varying
performance in this important domain, and to help avoid disparities in
care across resident groups. Variation in discharge to community rates
has been reported
[[Page 24263]]
within and across post-acute settings; across a variety of facility-
level characteristics, such as geographic location (for example,
regional location, urban or rural location), ownership (for example,
for-profit or nonprofit), and freestanding or hospital-based units; and
across patient-level characteristics, such as race and
gender.49 50 51 52 53 54 Discharge to community rates in the
IRF setting have been reported to range from about 60 to 80
percent.55 56 57 58 59 60 Longer-term studies show that
rates of discharge to community from IRFs have decreased over time as
IRF length of stay has decreased.61 62 Greater variation in
discharge to community rates is seen in the SNF setting, with rates
ranging from 31 to 65 percent.63 64 65 66 In the SNF
Medicare FFS population, using CY 2013 national claims data, we found
that approximately 44 percent of residents were discharged to the
community. A multi-center study of 23 LTCHs demonstrated that 28.8
percent of 1,061 patients who were ventilator-dependent on admission
were discharged to home.\67\ A single-center study revealed that 31
percent of LTCH hemodialysis patients were discharged to home.\68\ One
study noted that 64 percent of beneficiaries who were discharged from
the home health episode did not use any other acute or post-acute
services paid by Medicare in the 30 days after discharge.\69\ However,
significant numbers of patients were admitted to hospitals (29 percent)
and lesser numbers to SNFs (7.6 percent), IRFs (1.5 percent), home
health (7.2 percent) or hospice (3.3 percent).\70\
---------------------------------------------------------------------------
\49\ Reistetter T.A., Karmarkar A.M., Graham J.E., et al.
Regional variation in stroke rehabilitation outcomes. Archives of
physical medicine and rehabilitation. 2014;95(1):29-38.
\50\ El-Solh A.A., Saltzman S.K., Ramadan F.H., Naughton B.J.
Validity of an artificial neural network in predicting discharge
destination from a postacute geriatric rehabilitation unit. Archives
of physical medicine and rehabilitation. 2000;81(10):1388-1393.
\51\ March 2015 Report to the Congress: Medicare Payment Policy.
Medicare Payment Advisory Commission;2015.
\52\ Bhandari V.K., Kushel M., Price L., Schillinger D. Racial
disparities in outcomes of inpatient stroke rehabilitation. Archives
of physical medicine and rehabilitation. 2005;86(11):2081-2086.
\53\ Chang P.F., Ostir G.V., Kuo Y.F., Granger C.V., Ottenbacher
K.J. Ethnic differences in discharge destination among older
patients with traumatic brain injury. Archives of physical medicine
and rehabilitation. 2008;89(2):231-236.
\54\ Berges I.M., Kuo Y.F., Ostir G.V., Granger C.V., Graham
J.E., Ottenbacher K.J. Gender and ethnic differences in
rehabilitation outcomes after hip-replacement surgery. American
journal of physical medicine & rehabilitation/Association of
Academic Physiatrists. 2008;87(7):567-572.
\55\ Galloway R.V., Granger C.V., Karmarkar A.M., et al. The
Uniform Data System for Medical Rehabilitation: Report of patients
with debility discharged from inpatient rehabilitation programs in
2000-2010. American journal of physical medicine & rehabilitation/
Association of Academic Physiatrists. 2013;92(1):14-27.
\56\ Morley M.A., Coots L.A., Forgues A.L., Gage B.J. Inpatient
rehabilitation utilization for Medicare beneficiaries with multiple
sclerosis. Archives of physical medicine and rehabilitation.
2012;93(8):1377-1383.
\57\ Reistetter T.A., Graham J.E., Deutsch A., Granger C.V.,
Markello S., Ottenbacher K.J. Utility of functional status for
classifying community versus institutional discharges after
inpatient rehabilitation for stroke. Archives of physical medicine
and rehabilitation. 2010;91(3):345-350.
\58\ Gagnon D., Nadeau S., Tam V. Clinical and administrative
outcomes during publicly-funded inpatient stroke rehabilitation
based on a case-mix group classification model. Journal of
rehabilitation medicine. 2005;37(1):45-52.
\59\ DaVanzo J., El-Gamil A., Li J., Shimer M., Manolov N.,
Dobson A. Assessment of patient outcomes of rehabilitative care
provided in inpatient rehabilitation facilities (IRFs) and after
discharge. Vienna, VA: Dobson DaVanzo & Associates, LLC;2014.
\60\ Kushner D.S., Peters K.M., Johnson-Greene D. Evaluating
Siebens Domain Management Model for Inpatient Rehabilitation to
Increase Functional Independence and Discharge Rate to Home in
Geriatric Patients. Archives of physical medicine and
rehabilitation. 2015;96(7):1310-1318.
\61\ Galloway R.V., Granger C.V., Karmarkar A.M., et al. The
Uniform Data System for Medical Rehabilitation: Report of patients
with debility discharged from inpatient rehabilitation programs in
2000-2010. American journal of physical medicine & rehabilitation/
Association of Academic Physiatrists. 2013;92(1):14-27.
\62\ Mallinson T., Deutsch A., Bateman J., et al. Comparison of
discharge functional status after rehabilitation in skilled nursing,
home health, and medical rehabilitation settings for patients after
hip fracture repair. Archives of physical medicine and
rehabilitation. 2014;95(2):209-217.
\63\ El-Solh A.A., Saltzman S.K., Ramadan F.H., Naughton B.J.
Validity of an artificial neural network in predicting discharge
destination from a postacute geriatric rehabilitation unit. Archives
of physical medicine and rehabilitation. 2000;81(10):1388-1393.
\64\ Hall R.K., Toles M., Massing M., et al. Utilization of
acute care among patients with ESRD discharged home from skilled
nursing facilities. Clinical journal of the American Society of
Nephrology: CJASN. 2015;10(3):428-434.
\65\ Stearns S.C., Dalton K., Holmes G.M., Seagrave S.M. Using
propensity stratification to compare patient outcomes in hospital-
based versus freestanding skilled-nursing facilities. Medical care
research and review: MCRR. 2006;63(5):599-622.
\66\ Wodchis W.P., Teare G.F., Naglie G., et al. Skilled nursing
facility rehabilitation and discharge to home after stroke. Archives
of physical medicine and rehabilitation. 2005;86(3):442-448.
\67\ Scheinhorn D.J., Hassenpflug M.S., Votto J.J., et al. Post-
ICU mechanical ventilation at 23 long-term care hospitals: A
multicenter outcomes study. Chest. 2007;131(1):85-93.
\68\ Thakar C.V., Quate-Operacz M., Leonard A.C., Eckman M.H.
Outcomes of hemodialysis patients in a long-term care hospital
setting: A single-center study. American journal of kidney diseases:
The official journal of the National Kidney Foundation.
2010;55(2):300-306.
\69\ Wolff J.L., Meadow A., Weiss C.O., Boyd C.M., Leff B.
Medicare home health patients' transitions through acute and post-
acute care settings. Medical care. 2008;46(11):1188-1193.
\70\ Ibid.
---------------------------------------------------------------------------
Discharge to community is an actionable health care outcome, as
targeted interventions have been shown to successfully increase
discharge to community rates in a variety of post-acute
settings.71 72 73 74 Many of these interventions involve
discharge planning or specific rehabilitation strategies, such as
addressing discharge barriers and improving medical and functional
status.75 76 77 78 The effectiveness of these interventions
suggests that improvement in discharge to community rates among post-
acute care residents is possible through modifying provider-led
processes and interventions.
---------------------------------------------------------------------------
\71\ Kushner D.S., Peters K.M., Johnson-Greene D. Evaluating
Siebens Domain Management Model for Inpatient Rehabilitation to
Increase Functional Independence and Discharge Rate to Home in
Geriatric Patients. Archives of physical medicine and
rehabilitation. 2015;96(7):1310-1318.
\72\ Wodchis W.P., Teare G.F., Naglie G., et al. Skilled nursing
facility rehabilitation and discharge to home after stroke. Archives
of physical medicine and rehabilitation. 2005;86(3):442-448.
\73\ Berkowitz R.E., Jones R.N., Rieder R., et al. Improving
disposition outcomes for patients in a geriatric skilled nursing
facility. Journal of the American Geriatrics Society.
2011;59(6):1130-1136.
\74\ Kushner D.S., Peters K.M., Johnson-Greene D. Evaluating use
of the Siebens Domain Management Model during inpatient
rehabilitation to increase functional independence and discharge
rate to home in stroke patients. PM & R: The journal of injury,
function, and rehabilitation. 2015;7(4):354-364.
\75\ Kushner D.S., Peters K.M., Johnson-Greene D. Evaluating
Siebens Domain Management Model for Inpatient Rehabilitation to
Increase Functional Independence and Discharge Rate to Home in
Geriatric Patients. Archives of physical medicine and
rehabilitation. 2015;96(7):1310-1318.
\76\ Wodchis W.P., Teare G.F., Naglie G., et al. Skilled nursing
facility rehabilitation and discharge to home after stroke. Archives
of physical medicine and rehabilitation. 2005;86(3):442-448.
\77\ Berkowitz R..E, Jones R.N., Rieder R., et al. Improving
disposition outcomes for patients in a geriatric skilled nursing
facility. Journal of the American Geriatrics Society.
2011;59(6):1130-1136.
\78\ Kushner D.S., Peters K.M., Johnson-Greene D. Evaluating use
of the Siebens Domain Management Model during inpatient
rehabilitation to increase functional independence and discharge
rate to home in stroke patients. PM & R: The journal of injury,
function, and rehabilitation. 2015;7(4):354-364.
---------------------------------------------------------------------------
A TEP convened by our measure development contractor was strongly
supportive of the importance of measuring discharge to community
outcomes, and implementing the proposed measure, Discharge to
Community--PAC SNF QRP in the SNF QRP. The panel provided input on the
technical specifications of this proposed measure, including the
feasibility of implementing the measure, as well as the overall measure
reliability and validity. A summary of the TEP proceedings is available
on the PAC Quality Initiatives Downloads and Videos Web site at https:/
/www.cms.gov/Medicare/Quality-Initiatives-Patient-Assessment-
[[Page 24264]]
Instruments/Post-Acute-Care-Quality-Initiatives/IMPACT-Act-of-2014/
IMPACT-Act-Downloads-and-Videos.html.
We also solicited stakeholder feedback on the development of this
measure through a public comment period held from November 9, 2015,
through December 8, 2015. Several stakeholders and organizations,
including the MedPAC, among others, supported this measure for
implementation. The public comment summary report for the proposed
measure is available on the CMS Web site at https://www.cms.gov/Medicare/Quality-Initiatives-Patient-Assessment-Instruments/Post-Acute-Care-Quality-Initiatives/IMPACT-Act-of-2014/IMPACT-Act-Downloads-and-Videos.html.
The NQF-convened MAP met on December 14 and 15, 2015, and provided
input on the use of this proposed Discharge to Community--PAC SNF QRP
measure in the SNF QRP. The MAP encouraged continued development of the
proposed measure to meet the mandate of the IMPACT Act. The MAP
supported the alignment of this proposed measure across PAC settings,
using standardized claims data. More information about the MAP's
recommendations for this measure is available at https://www.qualityforum.org/Publications/2016/02/MAP_2016_Considerations_for_Implementing_Measures_in_Federal_Programs_-_PAC-LTC.aspx.
Since the MAP's review and recommendation of continued development,
we have continued to refine risk-adjustment models and conduct measure
testing for this measure, as recommended by the MAP. This proposed
measure is consistent with the information submitted to the MAP and is
scientifically acceptable for current specification in the SNF QRP. As
discussed with the MAP, we fully anticipate that additional analyses
will continue as we submit this measure to the ongoing measure
maintenance process.
We reviewed the NQF's consensus-endorsed measures and were unable
to identify any NQF-endorsed resource use or other measures for post-
acute care focused on discharge to community. In addition, we are
unaware of any other post-acute care measures for discharge to
community that have been endorsed or adopted by other consensus
organizations. Therefore, we are proposing the measure, Discharge to
Community--PAC SNF QRP, under the Secretary's authority to specify non-
NQF-endorsed measures under section 1899B(e)(2)(B) of the Act.
We are proposing to use data from the Medicare FFS claims and
Medicare eligibility files to calculate this proposed measure. We are
proposing to use data from the ``Patient Discharge Status Code'' on
Medicare FFS claims to determine whether a resident was discharged to a
community setting for calculation of this proposed measure. In all PAC
settings, we tested the accuracy of determining discharge to a
community setting using the ``Patient Discharge Status Code'' on the
PAC claim by examining whether discharge to community coding based on
PAC claim data agreed with discharge to community coding based on PAC
assessment data. We found excellent agreement between the two data
sources in all PAC settings, ranging from 94.6 percent to 98.8 percent.
Specifically, in the SNF setting, using 2013 data, we found 94.6
percent agreement in discharge to community codes when comparing
discharge status codes on claims and the Discharge Status (A2100) on
the Minimum Data Set (MDS) 3.0 discharge assessment, when the claims
and MDS assessment had the same discharge date. We further examined the
accuracy of the ``Patient Discharge Status Code'' on the PAC claim by
assessing how frequently discharges to an acute care hospital were
confirmed by follow-up acute care claims. We discovered that 88 percent
to 91 percent of IRF, LTCH, and SNF claims with acute care discharge
status codes were followed by an acute care claim on the day of, or day
after, PAC discharge. We believe these data support the use of the
claims ``Patient Discharge Status Code'' for determining discharge to a
community setting for this measure. In addition, this measure can
feasibly be implemented in the SNF QRP because all data used for
measure calculation are derived from Medicare FFS claims and
eligibility files, which are already available to CMS.
Based on the evidence discussed above, we are proposing to adopt
the measure, Discharge to Community--PAC SNF QRP, for the SNF QRP for
FY 2018 payment determination and subsequent years. This proposed
measure is calculated using one year of data. We are proposing a
minimum of 25 eligible stays in a given SNF for public reporting of the
proposed measure for that SNF. Since Medicare FFS claims data are
already reported to the Medicare program for payment purposes, and
Medicare eligibility files are also available, SNFs will not be
required to report any additional data to CMS for calculation of this
measure. The proposed measure denominator is the risk-adjusted expected
number of discharges to community. The proposed measure numerator is
the risk-adjusted estimate of the number of residents who are
discharged to the community, do not have an unplanned readmission to an
acute care hospital or LTCH in the 31-day post-discharge observation
window, and who remain alive during the post-discharge observation
window. The measure is risk-adjusted for variables such as age and sex,
principal diagnosis, comorbidities, ventilator status, ESRD status, and
dialysis, among other variables. For technical information about this
proposed measure, including information about the measure calculation,
risk adjustment, and denominator exclusions, refer to the document
titled, Proposed Measure Specifications for Measures Proposed in the FY
2017 SNF QRP NPRM available at https://www.cms.gov/Medicare/Quality-Initiatives-Patient-Assessment-Instruments/NursingHomeQualityInits/SNF-Quality-Reporting-Program-Measures-and-Technical-Information.html.
If this proposed measure is finalized, we intend to provide initial
confidential feedback to SNFs, prior to public reporting of this
measure, based on Medicare FFS claims data from discharges in CY 2016.
We intend to publicly report this measure using claims data from
discharges in CY 2017. We plan to submit this proposed measure to the
NQF for consideration for endorsement.
We are inviting public comment on our proposal to adopt the
measure, Discharge to Community--PAC SNF QRP, for the SNF QRP.
c. Proposal To Address the IMPACT Act Domain of Resource Use and Other
Measures: Potentially Preventable 30-Day Post-Discharge Readmission
Measure for Skilled Nursing Facility Quality Reporting Program
Sections 1899B(a)(2)(E)(ii) and 1899B(d)(1)(C) of the Act require
the Secretary to specify measures to address the domain of all-
condition risk-adjusted potentially preventable hospital readmission
rates by SNFs, LTCHs, and IRFs by October 1, 2016, and HHAs by January
1, 2017. We are proposing the measure Potentially Preventable 30-Day
Post-Discharge Readmission Measure for SNF QRP as a Medicare FFS
claims-based measure to meet this requirement for the FY 2018 payment
determination and subsequent years.
The proposed measure assesses the facility-level risk-standardized
rate of unplanned, potentially preventable hospital readmissions for
Medicare FFS
[[Page 24265]]
beneficiaries in the 30 days post-SNF discharge. The SNF admission must
have occurred within up to 30 days of discharge from a prior proximal
hospital stay which is defined as an inpatient admission to an acute
care hospital (including IPPS, CAH, or a psychiatric hospital).
Hospital readmissions include readmissions to a short-stay acute care
hospitals or an LTCH, with a diagnosis considered to be unplanned and
potentially preventable. This proposed measure is claims-based,
requiring no additional data collection or submission burden for SNFs.
Because the measure denominator is based on SNF admissions, each
Medicare beneficiary may be included in the measure multiple times
within the measurement period. Readmissions counted in this measure are
identified by examining Medicare FFS claims data for readmissions to
either acute care hospitals (IPPS or CAH) or LTCHs that occur during a
30-day window beginning two days after SNF discharge. This measure is
conceptualized uniformly across the PAC settings, in terms of the
measure definition, the approach to risk adjustment, and the measure
calculation. Our approach for defining potentially preventable hospital
readmissions is described in more detail below.
Hospital readmissions among the Medicare population, including
beneficiaries that utilize PAC, are common, costly, and often
preventable.79 80 MedPAC and a study by Jencks et al.
estimated that 17 to 20 percent of Medicare beneficiaries discharged
from the hospital were readmitted within 30 days. MedPAC found that
more than 75 percent of 30-day and 15-day readmissions and 84 percent
of 7-day readmissions were considered ``potentially preventable.'' \81\
In addition, MedPAC calculated that annual Medicare spending on
potentially preventable readmissions would be $12 billion for 30-day,
$8 billion for 15-day, and $5 billion for 7-day readmissions.\82\ For
hospital readmissions from SNFs, MedPAC deemed 76 percent of
readmissions as ``potentially avoidable''--associated with $12 billion
in Medicare expenditures.\83\ Mor et al. analyzed 2006 Medicare claims
and SNF assessment data (Minimum Data Set), and reported a 23.5 percent
readmission rate from SNFs, associated with $4.3 billion in
expenditures.\84\ Fewer studies have investigated potentially
preventable readmission rates from the remaining post-acute care
settings.
---------------------------------------------------------------------------
\79\ Friedman, B., and Basu, J.: The rate and cost of hospital
readmissions for preventable conditions. Med. Care Res. Rev.
61(2):225-240, 2004. doi:10.1177/1077558704263799.
\80\ Jencks, S.F., Williams, M.V., and Coleman, E.A.:
Rehospitalizations among patients in the Medicare Fee-for-Service
Program. N. Engl. J. Med. 360(14):1418-1428, 2009. doi:10.1016/
j.jvs.2009.05.045.
\81\ MedPAC: Payment policy for inpatient readmissions, in
Report to the Congress: Promoting Greater Efficiency in Medicare.
Washington, DC, pp. 103-120, 2007. Available from https://www.medpac.gov/documents/reports/Jun07_EntireReport.pdf.
\82\ Ibid.
\83\ Ibid.
\84\ Mor, V., Intrator, O., Feng, Z., et al.: The revolving door
of rehospitalization from skilled nursing facilities. Health Aff.
29(1):57-64, 2010. doi:10.1377/hlthaff.2009.0629.
---------------------------------------------------------------------------
We have addressed the high rates of hospital readmissions in the
acute care setting, as well as in PAC. For example, we developed the
following measure: Skilled Nursing Facility 30-Day All-Cause
Readmission Measure (SNFRM) (NQF #2510), as well as similar measures
for other PAC providers (NQF #2502 for IRFs and NQF #2512 for
LTCHs).\85\ These measures are endorsed by the NQF, and the NQF-
endorsed SNF measure (NQF #2510) was adopted into the SNF VBP Program
in the FY 2016 SNF final rule (80 FR 46411 through 46419). Note that
these NQF-endorsed measures assess all-cause unplanned readmissions.
---------------------------------------------------------------------------
\85\ National Quality Forum: All-Cause Admissions and
Readmissions Measures. pp. 1-319, April 2015. Available from https://www.qualityforum.org/Publications/2015/04/All-Cause_Admissions_and_Readmissions_Measures_-_Final_Report.aspx.
---------------------------------------------------------------------------
Several general methods and algorithms have been developed to
assess potentially avoidable or preventable hospitalizations and
readmissions for the Medicare population. These include the Agency for
Healthcare Research and Quality's (AHRQ's) Prevention Quality
Indicators, approaches developed by MedPAC, and proprietary approaches,
such as the 3M\TM\ algorithm for Potentially Preventable
Readmissions.86 87 88 Recent work led by Kramer et al. for
MedPAC identified 13 conditions for which readmissions were deemed as
potentially preventable among SNF and IRF populations.89 90
Although much of the existing literature addresses hospital
readmissions more broadly and potentially avoidable hospitalizations
for specific settings like long-term care, these findings are relevant
to the development of potentially preventable readmission measures for
PAC.91 92 93
---------------------------------------------------------------------------
\86\ Goldfield, N.I., McCullough, E.C., Hughes, J.S., et al.:
Identifying potentially preventable readmissions. Health Care Finan.
Rev. 30(1):75-91, 2008. Available from https://www.ncbi.nlm.nih.gov/pmc/articles/PMC4195042/.
\87\ National Quality Forum: Prevention Quality Indicators
Overview. 2008.
\88\ MedPAC: Online Appendix C: Medicare Ambulatory Care
Indicators for the Elderly. pp. 1-12, prepared for Chapter 4, 2011.
Available from https://www.medpac.gov/documents/reports/Mar11_Ch04_APPENDIX.pdf?sfvrsn=0.
\89\ Kramer, A., Lin, M., Fish, R., et al.: Development of
Inpatient Rehabilitation Facility Quality Measures: Potentially
Avoidable Readmissions, Community Discharge, and Functional
Improvement. pp. 1-42, 2015. Available from https://www.medpac.gov/documents/contractor-reports/development-of-inpatient-rehabilitation-facility-quality-measures-potentially-avoidable-readmissions-community-discharge-and-functional-improvement.pdf?sfvrsn=0.
\90\ Kramer, A., Lin, M., Fish, R., et al.: Development of
Potentially Avoidable Readmission and Functional Outcome SNF Quality
Measures. pp. 1-75, 2014. Available from https://www.medpac.gov/documents/contractor-reports/mar14_snfqualitymeasures_contractor.pdf?sfvrsn=0.
\91\ Allaudeen, N., Vidyarthi, A., Maselli, J., et al.:
Redefining readmission risk factors for general medicine patients.
J. Hosp. Med. 6(2):54-60, 2011. doi:10.1002/jhm.805.
\92\ Gao, J., Moran, E., Li, Y.-F., et al.: Predicting
potentially avoidable hospitalizations. Med. Care 52(2):164-171,
2014. doi:10.1097/MLR.0000000000000041.
\93\ Walsh, E.G., Wiener, J.M., Haber, S., et al.: Potentially
avoidable hospitalizations of dually eligible Medicare and Medicaid
beneficiaries from nursing facility and home- and community-based
services waiver programs. J. Am. Geriatr. Soc. 60(5):821-829, 2012.
doi:10.1111/j.1532-5415.2012.03920.x.
---------------------------------------------------------------------------
Potentially Preventable Readmission Measure Definition: We
conducted a comprehensive environmental scan, analyzed claims data, and
obtained input from a TEP to develop a definition and list of
conditions for which hospital readmissions are potentially preventable.
The Ambulatory Care Sensitive Conditions and Prevention Quality
Indicators, developed by AHRQ, served as the starting point in this
work. For patients in the 30-day post-PAC discharge period, a
potentially preventable readmission (PRR) refers to a readmission for
which the probability of occurrence could be minimized with adequately
planned, explained, and implemented post discharge instructions,
including the establishment of appropriate follow-up ambulatory care.
Our list of PPR conditions is categorized by 3 clinical rationale
groupings:
Inadequate management of chronic conditions;
Inadequate management of infections; and
Inadequate management of other unplanned events.
Additional details regarding the definition for potentially
preventable readmissions are available in the document titled, Proposed
Measure Specifications for Measures Proposed in the FY 2017 SNF QRP
NPRM, available at https://www.cms.gov/Medicare/Quality-Initiatives-
Patient-Assessment-Instruments/NursingHomeQualityInits/
[[Page 24266]]
SNF-Quality-Reporting-Program-Measures-and-Technical-Information.html.
This proposed measure focuses on readmissions that are potentially
preventable and also unplanned. Similar to the SNF 30-Day All-Cause
Readmission Measure (NQF #2510), this proposed measure uses the current
version of the CMS Planned Readmission Algorithm as the main component
for identifying planned readmissions. A complete description of the CMS
Planned Readmission Algorithm, which includes lists of planned
diagnoses and procedures, can be found on the CMS Web site at https://www.cms.gov/Medicare/Quality-Initiatives-Patient-Assessment-Instruments/HospitalQualityInits/Measure-Methodology.html. In addition
to the CMS Planned Readmission Algorithm, this proposed measure
incorporates procedures that are considered planned in post-acute care
settings, as identified in consultation with TEPs. Full details on the
planned readmissions criteria used, including the CMS Planned
Readmission Algorithm and additional procedures considered planned for
post-acute care, can be found in the document titled, Proposed Measure
Specifications for Measures Proposed in the FY 2017 SNF QRP NPRM at
https://www.cms.gov/Medicare/Quality-Initiatives-Patient-Assessment-Instruments/NursingHomeQualityInits/SNF-Quality-Reporting-Program-Measures-and-Technical-Information.html.
The proposed measure, Potentially Preventable 30-Day Post-Discharge
Readmission Measure for Skilled Nursing Facility Quality Reporting
Program, assesses potentially preventable readmission rates while
accounting for patient demographics, principal diagnosis in the prior
hospital stay, 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
in each facility. This proposed measure is calculated for each SNF
based on the ratio of the predicted number of risk-adjusted, unplanned,
potentially preventable hospital readmissions that occur within 30 days
after a SNF discharge, including the estimated facility effect, to the
estimated predicted number of risk-adjusted, 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
(worse) while a ratio below 1.0 indicates a lower than expected
readmission rate (better). This ratio is referred to as the
standardized risk ratio (SRR). The SRR is then multiplied by the
overall national raw rate of potentially preventable readmissions for
all SNF stays. The resulting rate is the risk-standardized readmission
rate (RSRR) of potentially preventable readmissions. The full
methodology of this proposed measure is detailed in the document
titled, Proposed Measure Specifications for Measures Proposed in the FY
2017 SNF QRP NPRM at https://www.cms.gov/Medicare/Quality-Initiatives-Patient-Assessment-Instruments/NursingHomeQualityInits/SNF-Quality-Reporting-Program-Measures-and-Technical-Information.html.
An eligible SNF stay is followed until: (1) The 30-day post-
discharge period ends; or (2) the patient is readmitted to an acute
care hospital (IPPS or CAH) or LTCH. If the readmission is unplanned
and potentially preventable, it is counted as a readmission in the
measure calculation. If the readmission is planned, the readmission is
not counted in the measure rate. This measure is risk adjusted. The
risk adjustment modeling estimates the effects of patient
characteristics, comorbidities, and select health care variables on the
probability of readmission. More specifically, the risk-adjustment
model for SNFs accounts for demographic characteristics (age, sex,
original reason for Medicare entitlement), principal diagnosis during
the prior proximal hospital stay, body system specific surgical
indicators, comorbidities, length of stay during the patient's prior
proximal hospital stay, intensive care unit (ICU) utilization, end-
stage renal disease status, and number of acute care hospitalizations
in the preceding 365 days.
The proposed measure is calculated using 1 calendar year of FFS
claims data, to ensure the statistical reliability of this measure for
facilities. In addition, we are proposing a minimum of 25 eligible
stays for public reporting of the proposed measure. For technical
information about this proposed measure including information about the
measure calculation, risk adjustment, and exclusions, refer to the
document titled, Proposed Measure Specifications for Measures Proposed
in the FY 2017 SNF QRP NPRM at https://www.cms.gov/Medicare/Quality-Initiatives-Patient-Assessment-Instruments/NursingHomeQualityInits/SNF-Quality-Reporting-Program-Measures-and-Technical-Information.html.
A TEP convened by our measure development contractor provided
recommendations on the technical specifications of this proposed
measure, including the development of an approach to define potentially
preventable hospital readmission for PAC. Details from the TEP
meetings, including TEP members' ratings of conditions proposed as
being potentially preventable, are available in the TEP Summary Report
available on the CMS Web site at https://www.cms.gov/Medicare/Quality-Initiatives-Patient-Assessment-Instruments/Post-Acute-Care-Quality-Initiatives/IMPACT-Act-of-2014/IMPACT-Act-Downloads-and-Videos.html. We
also solicited stakeholder feedback on the development of this measure
through a public comment period held from November 2 through December
1, 2015. Comments on the measure varied, with some commenters
supportive of the proposed measure, while others either were not in
favor of the measure, or suggested potential modifications to the
measure specifications, such as including standardized function data. A
summary of the public comments is also available on the CMS Web site at
https://www.cms.gov/Medicare/Quality-Initiatives-Patient-Assessment-Instruments/Post-Acute-Care-Quality-Initiatives/IMPACT-Act-of-2014/IMPACT-Act-Downloads-and-Videos.html.
The MAP encouraged continued development of the proposed measure.
Specifically, the MAP stressed the need to promote shared
accountability and ensure effective care transitions. More information
about the MAP's recommendations for this measure is available at https://www.qualityforum.org/Publications/2016/02/MAP_2016_Considerations_for_Implementing_Measures_in_Federal_Programs_-_PAC-LTC.aspx. At the time, the risk-adjustment model was still under
development. Following completion of that development work, we were
able to test for measure validity and reliability as identified in the
measure specifications document provided above. Testing results are
within range for similar outcome measures finalized in public reporting
and value-based purchasing programs, including the SNFRM (NQF #2510)
adopted into the SNF VBP Program in the FY 2016 SNF final rule (80 FR
46411 through 46419).
We reviewed the NQF's consensus endorsed measures and were unable
to identify any NQF-endorsed measures focused on potentially
preventable hospital readmissions. We are unaware of any other measures
for this IMPACT Act domain that have been endorsed or adopted by other
consensus
[[Page 24267]]
organizations. Therefore, we are proposing the Potentially Preventable
30-Day Post-Discharge Readmission Measure for SNF QRP, under the
Secretary's authority to specify non-NQF-endorsed measures under
section 1899B(e)(2)(B) of the Act, for the SNF QRP for the FY 2018
payment determination and subsequent years given the evidence
previously discussed above.
We plan to submit the proposed measure to the NQF for consideration
of endorsement. If this proposed measure is finalized, we intend to
provide initial confidential feedback to SNFs, prior to public
reporting of this proposed measure, based on 1 calendar year of claims
data from discharges in CY 2016. We intend to publicly report this
proposed measure using claims data from CY 2017.
We are inviting public comment on our proposal to adopt the
measure, Potentially Preventable 30-Day Post-Discharge Readmission
Measure for the SNF QRP.
7. Skilled Nursing Facility Quality Measure Proposed for the FY 2020
Payment Determination and Subsequent Years
In addition to the measures we are retaining as described in
section V.B.5. of this proposed rule under our policy described in
section V.B.3. of this proposed rule and the new quality measures
proposed in section V.B.6. of this proposed rule for the FY 2018
payment determinations and subsequent years, we are also proposing one
new quality measure to meet the requirements of the IMPACT Act for the
FY 2020 payment determination and subsequent years. The proposed
measure, Drug Regimen Review Conducted with Follow-Up for Identified
Issues--PAC SNF QRP, addresses the IMPACT Act quality domain of
Medication Reconciliation.
a. Quality Measure Addressing the IMPACT Act Domain of Medication
Reconciliation: Drug Regimen Review Conducted With Follow-Up for
Identified Issues-Post Acute Care (PAC) Skilled Nursing Facility
Quality Reporting Program
Sections 1899B (a)(2)(E)(i)(III) and 1899B(c)(1)(C) of the Act
require the Secretary to specify a quality measure to address the
domain of medication reconciliation by October 1, 2018 for IRFs, LTCHs
and SNFs; and by January 1, 2017 for HHAs. We are proposing to adopt
the quality measure, Drug Regimen Review Conducted with Follow-Up for
Identified Issues--PPAC SNF QRP, for the SNF QRP as a resident-
assessment based, cross-setting quality measure to meet the IMPACT Act
requirements with data collection beginning October 1, 2018 for the FY
2020 payment determinations and subsequent years.
This proposed measure assesses whether PAC providers were
responsive to potential or actual clinically significant medication
issue(s) when such issues were identified. Specifically, the proposed
quality measure reports the percentage of resident stays in which a
drug regimen review was conducted at the time of admission and timely
follow-up with a physician occurred each time potential clinically
significant medication issues were identified throughout that stay. For
this proposed quality measure, a drug regimen review is defined as the
review of all medications or drugs the patient is taking to identify
any potential clinically significant medication issues. This proposed
quality measure utilizes both the processes of medication
reconciliation and a drug regimen review, in the event an actual or
potential medication issue occurred. The proposed measure informs
whether the PAC facility identified and addressed each clinically
significant medication issue and if the facility responded or addressed
the medication issue in a timely manner. Of note, drug regimen review
in PAC settings is generally considered to include medication
reconciliation and review of the patient's drug regimen to identify
potential clinically significant medication issues.\94\ This measure is
applied uniformly across the PAC settings.
---------------------------------------------------------------------------
\94\ Ibid.
---------------------------------------------------------------------------
Medication reconciliation is a process of reviewing an individual's
complete and current medication list. Medication reconciliation is a
recognized process for reducing the occurrence of medication
discrepancies that may lead to Adverse Drug Events (ADEs).\95\
Medication discrepancies occur when there is conflicting information
documented in the medical records. The World Health Organization
regards medication reconciliation as a standard operating protocol
necessary to reduce the potential for ADEs that cause harm to patients.
Medication reconciliation is an important patient safety process that
addresses medication accuracy during transitions in resident care and
in identifying preventable ADEs.\96\ The Joint Commission added
medication reconciliation to its list of National Patient Safety Goals
(2005), suggesting that medication reconciliation is an integral
component of medication safety.\97\ The Society of Hospital Medicine
published a statement in agreement of the Joint Commission's emphasis
and value of medication reconciliation as a patient safety goal.\98\
There is universal agreement that medication reconciliation directly
addresses resident safety issues that can result from medication
miscommunication and unavailable or incorrect
information.99 100 101
---------------------------------------------------------------------------
\95\ Ibid.
\96\ Leotsakos A., et al. Standardization in patient safety: The
WHO High 5s project. Int J Qual Health Care. 2014:26(2):109-116.
\97\ The Joint Commission. 2016 Long Term Care: National Patient
Safety Goals Medicare/Medicaid Certification-based Option.
(NPSG.03.06.01).
\98\ Greenwald, J.L., Halasyamani, L., Greene, J., LaCivita, C.,
et al. (2010). Making inpatient medication reconciliation patient
centered, clinically relevant and implementable: A consensus
statement on key principles and necessary first steps. Journal of
Hospital Medicine, 5(8), 477-485.
\99\ Leotsakos A., et al. Standardization in patient safety: The
WHO High 5s project. Int J Qual Health Care. 2014:26(2):109-116.
\100\ The Joint Commission. 2016 Long Term Care: National
Patient Safety Goals Medicare/Medicaid Certification-based Option.
(NPSG.03.06.01).
\101\ IHI. Medication Reconciliation to Prevent Adverse Drug
Events [Internet]. Cambridge, MA: Institute for Healthcare
Improvement; [cited 2016 Jan 11]. Available from: https://www.ihi.org/topics/adesmedicationreconciliation/Pages/default.aspx.
---------------------------------------------------------------------------
The performance of timely medication reconciliation is valuable to
the process of drug regimen review. Preventing and responding to ADEs
is of critical importance as ADEs account for significant increases in
health services utilization and costs 102 103 104 including
subsequent emergency room visits and re-hospitalizations.\105\ Annual
health care costs in the United States are estimated at $3.5 billion,
resulting in 7,000 deaths annually.\106\
---------------------------------------------------------------------------
\102\ Institute of Medicine. Preventing Medication Errors.
Washington DC: National Academies Press; 2006.
\103\ Jha A.K., Kuperman G.J., Rittenberg E., et al. Identifying
hospital admissions due to adverse drug events using a computer-
based monitor. Pharmacoepidemiol Drug Saf. 2001;10(2):113-119.
\104\ Hohl C.M., Nosyk B., Kuramoto L., et al. Outcomes of
emergency department patients presenting with adverse drug events.
Ann Emerg Med. 2011;58:270-279.
\105\ Kohn L.T., Corrigan J.M., Donaldson M.S. To Err Is Human:
Building a Safer Health System Washington, DC: National Academies
Press; 1999.
\106\ Greenwald, J.L., Halasyamani, L., Greene, J., LaCivita,
C., et al. (2010). Making inpatient medication reconciliation
patient centered, clinically relevant and implementable: A consensus
statement on key principles and necessary first steps. Journal of
Hospital Medicine, 5(8), 477-485.
---------------------------------------------------------------------------
Medication errors include the duplication of medications, delivery
of an incorrect drug, inappropriate drug omissions, or errors in the
dosage, route, frequency, and duration of medications. Medication
errors are one of the most common types of medical error and can occur
at any point in the process of
[[Page 24268]]
ordering and delivering a medication. Medication errors have the
potential to result in an ADE.107 108 109 110 111 112
Inappropriately prescribed medications are also considered a major
healthcare concern in the United States for the elderly population,
with costs of roughly $7.2 billion annually.\113\
---------------------------------------------------------------------------
\107\ Institute of Medicine. To err is human: Building a safer
health system. Washington, DC: National Academies Press; 2000.
\108\ Lesar T.S., Briceland L., Stein D.S. Factors related to
errors in medication prescribing. JAMA. 1997:277(4): 312-317.
\109\ Bond C.A., Raehl C.L., & Franke T. Clinical pharmacy
services, hospital pharmacy staffing, and medication errors in
United States hospitals. Pharmacotherapy. 2002:22(2): 134-147.
\110\ Bates D.W., Cullen D.J., Laird N., Petersen L.A., Small
S.D., et al. Incidence of adverse drug events and potential adverse
drug events. Implications for prevention. JAMA. 1995:274(1): 29-34.
\111\ Barker K.N., Flynn E.A., Pepper G.A., Bates D.W., & Mikeal
R.L. Medication errors observed in 36 health care facilities. JAMA.
2002: 162(16):1897-1903.
\112\ Bates D.W., Boyle D.L., Vander Vliet M.B., Schneider J., &
Leape L. Relationship between medication errors and adverse drug
events. J Gen Intern Med. 1995:10(4): 199-205.
\113\ Fu, Alex Z., et al. ``Potentially inappropriate medication
use and healthcare expenditures in the U.S. community-dwelling
elderly.'' Medical care 45.5 (2007): 472-476.
---------------------------------------------------------------------------
There is strong evidence that medication discrepancies occur during
transfers from acute care facilities to post-acute care facilities.
Discrepancies occur when there is conflicting information documented in
the medical records. Almost one-third of medication discrepancies have
the potential to cause patient harm.\114\ Medication discrepancies upon
admission to SNFs have been reported as occurring at a rate of over 21
percent. It has been found that at least one medication discrepancy
occurred in over 71 percent of all the SNF admissions.\115\ An
estimated fifty percent of patients experienced a clinically important
medication error after hospital discharge in an analysis of two
tertiary care academic hospitals.\116\
---------------------------------------------------------------------------
\114\ Wong, Jacqueline D., et al. ``Medication reconciliation at
hospital discharge: Evaluating discrepancies.'' Annals of
Pharmacotherapy 42.10 (2008): 1373-1379.
\115\ Tjia, J., Bonner, A., Briesacher, B.A., McGee, S.,
Terrill, E., & Miller, K. (2009). Medication discrepancies upon
hospital to skilled nursing facility transitions. Journal of general
internal medicine, 24(5), 630-635.
\116\ Kripalani S., Roumie C.L., Dalal A.K., et al. Effect of a
pharmacist intervention on clinically important medication errors
after hospital discharge: A randomized controlled trial. Ann Intern
Med. 2012:157(1):1-10.
---------------------------------------------------------------------------
Medication reconciliation has been identified as an area for
improvement during transfer from the acute care facility to the
receiving post-acute care facility. Post-acute care facilities report
gaps in medication information between the acute care hospital and the
receiving post-acute care setting when performing medication
reconciliation.117 118 Hospital discharge has been
identified as a particularly high risk point in time, with evidence
that medication reconciliation identifies high levels of
discrepancy.119 120 121 122 123 124 Also, there is evidence
that medication reconciliation discrepancies occur throughout the
patient stay.125 126 For older patients who may have
multiple comorbid conditions and thus multiple medications, transitions
between acute and post-acute care settings can be further
complicated,\127\ and medication reconciliation and patient knowledge
(medication literacy) can be inadequate post-discharge.\128\ The
proposed quality measure, Drug Regimen Review Conducted with Follow-Up
for Identified Issues--PAC SNF QRP, provides an important component of
care coordination for PAC settings and would affect a large proportion
of the Medicare population who transfer from hospitals into PAC
services each year. For example, in 2013, 1.7 million Medicare FFS
beneficiaries had SNF stays, 338,000 beneficiaries had IRF stays, and
122,000 beneficiaries had LTCH stays.\129\
---------------------------------------------------------------------------
\117\ Gandara, Esteban, et al. ``Communication and information
deficits in patients discharged to rehabilitation facilities: An
evaluation of five acute care hospitals.'' Journal of Hospital
Medicine 4.8 (2009): E28-E33.
\118\ Gandara, Esteban, et al. ``Deficits in discharge
documentation in patients transferred to rehabilitation facilities
on anticoagulation: Results of a system wide evaluation.'' Joint
Commission Journal on Quality and Patient Safety 34.8 (2008): 460-
463.
\119\ Coleman E.A., Smith J.D., Raha D., Min S.J. Post hospital
medication discrepancies: Prevalence and contributing factors. Arch
Intern Med. 2005 165(16):1842-1847.
\120\ Wong J.D., Bajcar J.M., Wong G.G., et al. Medication
reconciliation at hospital discharge: Evaluating discrepancies. Ann
Pharmacother. 2008 42(10):1373-1379.
\121\ Hawes E.M., Maxwell W.D., White S.F., Mangun J., Lin F.C.
Impact of an outpatient pharmacist intervention on medication
discrepancies and health care resource utilization in post
hospitalization care transitions. Journal of Primary Care &
Community Health. 2014; 5(1):14-18.
\122\ Foust J.B., Naylor M.D., Bixby M.B., Ratcliffe S.J.
Medication problems occurring at hospital discharge among older
adults with heart failure. Research in Gerontological Nursing. 2012,
5(1): 25-33.
\123\ Pherson E.C., Shermock K.M., Efird L.E., et al.
Development and implementation of a post discharge home-based
medication management service. Am J Health Syst Pharm. 2014; 71(18):
1576-1583.
\124\ Pronovosta P., Weasta B., Scwarza M., et al. Medication
reconciliation: A practical tool to reduce the risk of medication
errors. J Crit Care. 2003; 18(4): 201-205.
\125\ Bates D.W., Cullen D.J., Laird N., Petersen L.A., Small
S.D., et al. Incidence of adverse drug events and potential adverse
drug events. Implications for prevention. JAMA. 1995:274(1): 29-34.
\126\ Himmel, W., M. Tabache, and M.M. Kochen. ``What happens to
long-term medication when general practice patients are referred to
hospital?.'' European Journal of Clinical Pharmacology 50.4 (1996):
253-257.
\127\ Chhabra, P.T., et al. (2012). ``Medication reconciliation
during the transition to and from LTC settings: A systematic
review.'' Res Social Adm Pharm 8(1): 60-75.
\128\ Kripalani S., Roumie C.L., Dalal A.K., et al. Effect of a
pharmacist intervention on clinically important medication errors
after hospital discharge: A randomized controlled trial. Ann Intern
Med. 2012:157(1):1-10.
\129\ March 2015 Report to the Congress: Medicare Payment
Policy. Medicare Payment Advisory Commission; 2015.
---------------------------------------------------------------------------
A TEP convened by our measure development contractor provided input
on the technical specifications of this proposed quality measure, Drug
Regimen Review Conducted with Follow-Up for Identified Issues--PAC SNF
QRP, including components of reliability, validity and the feasibility
of implementing the measure across PAC settings. The TEP supported the
measure's implementation across PAC settings and was supportive of our
plans to standardize this measure for cross-setting development. A
summary of the TEP proceedings is available on the PAC Quality
Initiatives Downloads and Video Web site at https://www.cms.gov/Medicare/Quality-Initiatives-Patient-Assessment-Instruments/Post-Acute-Care-Quality-Initiatives/IMPACT-Act-of-2014/IMPACT-Act-Downloads-and-Videos.html.
We solicited stakeholder feedback on the development of this
measure by means of a public comment period held from September 18
through October 6, 2015. Through public comments submitted by several
stakeholders and organizations, we received support for implementation
of this proposed measure. The public comment summary report for the
proposed measure is available on the CMS Public Comment Web site at
https://www.cms.gov/Medicare/Quality-Initiatives-Patient-Assessment-Instruments/Post-Acute-Care-Quality-Initiatives/IMPACT-Act-of-2014/IMPACT-Act-Downloads-and-Videos.html.
The NQF-convened MAP met on December 14 and 15, 2015 and provided
input on the use of this proposed quality measure, Drug Regimen Review
Conducted with Follow-Up for Identified Issues--PAC SNF QRP. The MAP
encouraged continued development of the proposed quality measure to
meet the mandate added by the IMPACT Act. The MAP agreed with the
measure gaps identified by CMS including medication reconciliation, and
stressed that medication reconciliation be present as an ongoing
[[Page 24269]]
process. More information about the MAPs recommendations for this
measure is available at https://www.qualityforum.org/Publications/2016/02/MAP_2016_Considerations_for_Implementing_Measures_in_Federal_Programs_-_PAC-LTC.aspx.
Since the MAP's review and recommendation of continued development,
we have continued to refine this proposed measure in compliance with
the MAP's recommendations. The proposed measure is both consistent with
the information submitted to the MAP and support its scientific
acceptability for use in quality reporting programs. Therefore, we are
proposing this measure for implementation in the SNF QRP as required by
the IMPACT Act.
We reviewed the NQF's endorsed measures and identified one NQF-
endorsed cross-setting quality measure related to medication
reconciliation, which applies to the SNF, LTCH, IRF, and HHA settings
of care: Care for Older Adults (COA) (NQF #0553). The quality measure,
Care for Older Adults (COA) (NQF #0553) assesses the percentage of
adults 66 years and older who had a medication review. The Care for
Older Adults (COA) (NQF #0553) measure requires at least one medication
review conducted by a prescribing practitioner or clinical pharmacist
during the measurement year and the presence of a medication list in
the medical record. This is in contrast to the proposed quality
measure, Drug Regimen Review Conducted with Follow-Up for Identified
Issues--PAC SNF QRP, which reports the percentage of resident stays in
which a drug regimen review was conducted at the time of admission and
that timely follow-up with a physician occurred each time one or more
potential clinically significant medication issues were identified
throughout that stay.
After careful review of both quality measures, we have decided to
propose the quality measure, Drug Regimen Review Conducted with Follow-
Up for Identified Issues--PAC SNF QRP for the following reasons:
The IMPACT Act requires the implementation of quality
measures, using patient assessment data that are standardized and
interoperable across PAC settings. The proposed quality measure, Drug
Regimen Review Conducted with Follow-Up for Identified Issues--PAC SNF
QRP, employs three standardized resident-assessment data elements for
each of the four PAC settings so that data are standardized,
interoperable, and comparable; whereas, the Care for Older Adults
(COA), (NQF #0553) quality measure does not contain data elements that
are standardized across all four PAC settings.
The proposed quality measure, Drug Regimen Review
Conducted with Follow-Up for Identified Issues--PAC SNF QRP, requires
the identification of potential clinically significant medication
issues at the beginning, during and at the end of the resident's stay
to capture data on each resident's complete PAC stay; whereas, the Care
for Older Adults (COA), (NQF #0553) quality measure only requires
annual documentation in the form of a medication list in the medical
record of the target population.
The proposed quality measure, Drug Regimen Review
Conducted with Follow-Up for Identified Issues--PAC SNF QRP, includes
identification of the potential clinically significant medication
issues and communication with the physician (or physician designee), as
well as resolution of the issue(s) within a rapid timeframe (by
midnight of the next calendar day); whereas, the Care for Older Adults
(COA), (NQF #0553) quality measure does not include any follow-up or
timeframe in which the follow-up would need to occur.
The proposed quality measure, Drug Regimen Review
Conducted with Follow-Up for Identified Issues--PAC SNF QRP, does not
have age exclusions; whereas, the Care for Older Adults (COA), (NQF
#0553) quality measure limits the measure's population to patients aged
66 and older.
The proposed quality measure, Drug Regimen Review
Conducted with Follow-Up for Identified Issues--PAC SNF QRP, will be
reported to SNFs quarterly to facilitate internal quality monitoring
and quality improvement in areas such as resident safety, care
coordination and resident satisfaction; whereas, the Care for Older
Adults (COA), (NQF #0553) quality measure would not enable quarterly
quality updates, and thus data comparisons within and across PAC
providers would be difficult due to the limited data and scope of the
data collected.
Therefore, based on the evidence discussed above, we are proposing
to adopt the quality measure entitled, Drug Regimen Review Conducted
with Follow-Up for Identified Issues--PAC SNF QRP, for the SNF QRP for
FY 2020 payment determination and subsequent years. We plan to submit
the quality measure to the NQF for consideration for endorsement.
The calculation of the proposed quality measure would be based on
the data collection of three standardized items to be included in the
MDS. The collection of data by means of the standardized items would be
obtained at admission and discharge. For more information about the
data submission required for this proposed measure, please see section
V.B.9. of this proposed rule.
The standardized items used to calculate this proposed quality
measure do not duplicate existing items currently used for data
collection within the MDS. The proposed measure denominator is the
number of resident stays with a discharge or expired assessment during
the reporting period. The proposed measure numerator is the number of
stays in the denominator where the medical record contains
documentation of a drug regimen review conducted at: (1) Admission; and
(2) discharge with a look back through the entire resident stay, with
all potential clinically significant medication issues identified
during the course of care and followed-up with a physician or physician
designee by midnight of the next calendar day. This measure is not risk
adjusted. For technical information about this proposed measure
including information about the measure calculation and discussion
pertaining to the standardized items used to calculate this measure,
refer to the document titled, Proposed Measure Specifications for
Measures Proposed in the FY 2017 SNF QRP NPRM available at https://www.cms.gov/Medicare/Quality-Initiatives-Patient-Assessment-Instruments/NursingHomeQualityInits/SNF-Quality-Reporting-Program-Measures-and-Technical-Information.html.
Data for the proposed quality measure, Drug Regimen Review
Conducted with Follow-Up for Identified Issues--PAC SNF QRP, would be
collected using the MDS with submission through the Quality Improvement
Evaluation System (QIES) Assessment Submission and Processing (ASAP)
system.
We invite public comment on our proposal to adopt the quality
measure, Drug Regimen Review Conducted with Follow-Up for Identified
Issues--PAC SNF QRP, for the SNF QRP.
8. SNF QRP Quality Measures and Measure Concepts Under Consideration
for Future Years
We are inviting comment on the importance, relevance,
appropriateness, and applicability for each of the quality measures in
Table 13 for future years in the SNF QRP. We are developing a measure
related to the IMPACT Act domain, accurately communicating the
existence of and providing for the transfer of health information and
care
[[Page 24270]]
preferences of an individual to the individual, family caregiver of the
individual, and providers of services furnishing items and services to
the individual, when the individual transitions. We are considering the
possibility of adding quality measures that rely on the patient's
perspective; that is, measures that include patient-reported experience
of care and health status data. For this purpose, we are considering a
measure focused on pain and four measures focused on function that rely
on the collection of patient-reported data. Finally, we are considering
a measure related to health and well-being, Percent of Residents or
Patients Who Were Assessed and Appropriately Given the Seasonal
Influenza Vaccine, and a measure related to patient safety, Percent of
SNF Residents Who Newly Received an Antipsychotic Medication.
Table 13--SNF QRP Quality Measures Under Consideration for Future Years
------------------------------------------------------------------------
------------------------------------------------------------------------
IMPACT Act Domain............................ Accurately communicating
the existence of and
providing for the
transfer of health
information and care
preferences of an
individual to the
individual, family
caregiver of the
individual, and
providers of services
furnishing items and
services to the
individual, when the
individual transitions.
IMPACT Act Measure........................... Transfer of
health information
and care preferences
when an individual
transitions.
NQS Priority................................. Patient- and Caregiver-
Centered Care.
Measures..................................... Percent of
Residents Who Self-
Report Moderate to
Severe Pain.
Application
of the Change in Self-
Care Score for
Medical
Rehabilitation
Patients (NQF #2633).
Application
of the Change in
Mobility Score for
Medical
Rehabilitation
Patients (NQF #2634).
Application
of the Discharge Self-
Care Score for
Medical
Rehabilitation
Patients (NQF #2635).
Application
of the Discharge
Mobility Score for
Medical
Rehabilitation
Patients (NQF #2636).
NQS Priority................................. Health and Well-Being.
Measure...................................... Percent of
Residents or Patients
Who Were Assessed and
Appropriately Given
the Seasonal
Influenza Vaccine.
NQS Priority................................. Patient Safety.
Measure...................................... Percent of
SNF Residents Who
Newly Received an
Antipsychotic
Medication.
------------------------------------------------------------------------
9. Form, Manner, and Timing of Quality Data Submission
a. Participation/Timing for New SNFs
In the FY 2016 SNF PPS final rule (80 FR 46455), we established the
requirements associated with the timing of data submission, beginning
with the submission of data required for the FY 2018 payment
determination, for new SNFs. We finalized 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 (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 are not proposing any new policies related to the
participation and timing for new SNFs.
b. Finalized Data Collection Timelines and Requirements for the FY 2018
Payment Determination and Subsequent Years
In the FY 2016 SNF PPS final rule (80 FR 46457) for the FY 2018
payment determination, we finalized that SNFs submit data on the three
finalized 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 method and
schedule that we proposed in this section. We also finalized that we
would collect that 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 QRPs, including the LTCH, IRF, and Hospice
QRPs.
We also finalized 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 5.5 months to
correct and/or submit their quality data and we finalized that the
final deadline for submitting data for the FY 2018 payment
determination would be May 15, 2017. (80 FR 46457). The statement that
SNFs would have an additional 5.5 months was incorrect in that the time
between the close of the quarter on December 31, 2016 and May 15, 2017
is 4.5 months, not 5.5 months. Therefore, we propose that SNFs will
have 4.5 months, from January 1, 2017 through May 15, 2017, following
the data submission period of October 1, 2016 through December 31,
2016, in which to complete their data submissions and make corrections
to their data where necessary.
Table 14--Finalized Measures, Data Collection Source, Data Collection Period and Data Submission Deadlines
Affecting the FY 2018 Payment Determination
----------------------------------------------------------------------------------------------------------------
Data submission
Data collection deadline for FY
Quality measure source Data collection period 2018 payment
determination
----------------------------------------------------------------------------------------------------------------
NQF #0678: Percent of Patients MDS 10/01/16-12/31/16 May 15, 2017.
or Residents with Pressure
Ulcers that are New or Worsened.
NQF #0674: Application of MDS 10/01/16-12/31/16 May 15, 2017.
Percent of Residents
Experiencing One or More Falls
with Major Injury (Long Stay).
[[Page 24271]]
NQF #2631: Application of MDS 10/01/16-12/31/16 May 15, 2017.
Percent of Long-Term Care
Hospital Patients with an
Admission and Discharge
Functional Assessment and a
Care Plan that Addresses
Function.
----------------------------------------------------------------------------------------------------------------
c. Data Collection Timelines and Requirements for the FY 2019 Payment
Determinations and Subsequent Years
In the FY 2016 SNF PPS final rule (80 FR 46457), we finalized 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 for that FY. In the FY 2016 SNF PPS final rule
we also finalized that beginning with the FY 2020 payment
determination, we would move to a full year of fiscal year (FY) data
collection. We intended to propose the FY 2019 payment determination
quality reporting data submission deadlines in future rulemaking.
In the FY 2016 SNF PPS final rule (80 FR 46457), we also finalized
that we would collect FY 2018 data in a manner that would remain
consistent with the usual October release schedule for the MDS.
However, to align with the data reporting cycles in other quality
reporting programs, in contrast to fiscal year data collection that we
finalized last year, we are now proposing to move to calendar year (CY)
reporting following the initial reporting of data from October 1, 2016,
through December 31, 2016, as finalized in the FY 2016 SNF PPS final
rule (80 FR 46457), for the FY 2018 payment determination.
More specifically, we are proposing to follow a CY schedule for
measure and data submission requirements that includes quarterly
deadlines following each quarter of data submission, beginning with
data reporting for the FY 2019 payment determinations. Each quarterly
deadline will occur approximately 4.5 months after the end of a given
calendar quarter as outlined below in Table 15. This timeframe will
give SNFs enough time to submit corrections to the assessment data, as
discussed below. Thus, if finalized, the FY 2019 payment determination
would be based on 12 calendar months of data reporting beginning on
January 1, 2017, and ending on December 31, 2017 (that is, data from
January 1, 2017, up to and including December 31, 2017.) This approach
would enable CMS to move to a full 12 months of data reporting
immediately following the first 3 months of reporting (October 1, 2016
through December 31, 2016 for the FY 2018 payment determination) rather
than an interim year which uses only 9 months of data, and a subsequent
12 months of FY data reporting following the initial reporting for the
FY 2018 payment determination.
We invite public comments on our proposal to adopt calendar year
data collection time frames, following the initial 3-month reporting
period from October 1, 2016, to December 31, 2016, for all measures
finalized for adoption into the SNF QRP.
Our proposal to implement, for the FY 2019 payment determination
and all subsequent years for assessment-based data submitted via the
MDS, calendar year, quarterly data collection periods followed by data
submission deadlines is consistent with the approach taken by the LTCH
QRP and the IRF QRP, which are based on CY data and for which each data
collection quarterly period is followed by a 4.5 month time frame that
allows for the continued submission and correction of data until a
deadline has been reached for that quarter of data. At that point, the
data submitted becomes a frozen ``snapshot'' of data for both public
reporting purposes and for the purposes of determining compliance in
meeting the data reporting thresholds.
Table 15--Proposed Data Collection Period and Data Submission Deadlines Affecting the FY 2019 Payment
Determination and Subsequent Years
----------------------------------------------------------------------------------------------------------------
Proposed quarterly
review and correction
Proposed data periods and data
Quality measure Data collection source collection/ submission submission quarterly
quarterly reporting deadlines for FY 2019
period * payment determination
**
----------------------------------------------------------------------------------------------------------------
NQF #0678: Percent of Patients or MDS CY 17 Q1--1/1/2017-3/31/ CY 2017 Q1 Deadline:
Residents with Pressure Ulcers that 2017. August 15, 2017.
are New or Worsened. CY 17 Q2--4/1/2017-6/30/ CY 2017 Q2 Deadline:
NQF #0674: Application of Percent of 17. November 15, 2017.
Residents Experiencing One or More CY 17 Q3--7/1/2017-9/30/ CY 2017 Q3 Deadline:
Falls with Major Injury (Long Stay). 2017. February 15, 2018.
NQF #2631: Application of Percent of CY 17 Q4--10/1/2017-12/ CY 2017 Q4 Deadline:
Long-Term Care Hospital Patients 31/2017. May 15, 2018.
with an Admission and Discharge
Functional Assessment and a Care
Plan that Addresses Function.
----------------------------------------------------------------------------------------------------------------
* Data collection/submission will follow a similar quarterly reporting period schedule for subsequent CYs.
** Data review and correction periods and data submission deadlines will follow a similar quarterly schedule for
subsequent CYs.
Further, we propose that beginning with FY 2019 payment
determination, assessment-based measures finalized for adoption into
the SNF QRP will follow a CY schedule of data reporting and quarterly
review and correction periods
[[Page 24272]]
and data submission deadlines as provided in Table 16 for all
subsequent payment determination years unless otherwise specified:
Table 16--Proposed Data Collection Period and Data Submission Deadlines
Affecting the FY 19 Payment Determination and Subsequent Years
------------------------------------------------------------------------
Proposed quarterly
Proposed data review and correction
Proposed CY data collection collection/ periods and data
quarter submission submission deadlines
quarterly for payment
reporting period determination
------------------------------------------------------------------------
Quarter 1..................... January 1-March April 1-August 15.
31.
Quarter 2..................... April 1-June 30.. July 1-November 15.
Quarter 3..................... July 1-September October 1-February
30. 15.
Quarter 4..................... October 1- January 1-May 15.
December 31.
------------------------------------------------------------------------
We invite public comment on the proposed data collection period and
data submission deadlines affecting the FY 2019 payment determination
and subsequent years and on our use of CY reporting with quarterly
deadlines following a period of approximately 4.5 months of time to
enable the correction of such data.
d. Proposed Timeline and Data Submission Mechanisms for Claims-Based
Measures Proposed for the FY 2018 Payment Determination and Subsequent
Years
The Medicare Spending per Beneficiary--PAC SNF QRP, Discharge to
Community--PAC SNF QRP, and Potentially Preventable Potentially
Preventable 30-Day Post-Discharge Readmission Measure for SNF QRP
measures, which we have proposed in this proposed rule, are Medicare
FFS claims-based measures. Because claims-based measures can be
calculated based on data that are already reported to the Medicare
program for payment purposes, no additional information collection will
be required from SNFs. As previously discussed in V.B.6., for the
Medicare Spending per Beneficiary--PAC SNF QRP Measure, the Discharge
to Community--PAC SNF QRP measure and the Potentially Preventable 30-
Day Post-Discharge Readmission Measure for SNF QRP, we propose to use 1
year of claims data beginning with CY 2016 claims data to inform
confidential feedback reports for SNFs, and CY 2017 claims data for
public reporting.
We invite public comments on this proposal.
e. Proposed Timeline and Data Submission Mechanisms for the FY 2020
Payment Determination and Subsequent Years for New SNF QRP Assessment-
Based Quality Measure
As discussed in section V.B.7. of this proposed rule, for the
proposed measure, Drug Regimen Review Conducted with Follow-Up for
Identified Issues--PAC SNF QRP, affecting FY 2020 payment determination
and subsequent years, we are proposing that SNFs would submit data by
completing data elements to be included in the MDS and then submitting
the MDS to CMS through the Quality Improvement and Evaluation System
(QIES), Assessment Submission and Processing System (ASAP) system
beginning October 1, 2018. For more information on SNF QRP reporting
through the QIES ASAP system, refer to the ``Related Links'' section at
the bottom of: https://www.cms.gov/Medicare/Quality-Initiatives-Patient-Assessment-Instruments/NursingHomeQualityInits/?redirect=/NursingHomeQualityInits/30_NHQIMDS30TechnicalInformation.asp#TopOfPage.
We invite public comments on our proposed SNF QRP data collection
requirements for the proposed measure affecting the FY 2020 payment
determination and subsequent years.
For the FY 2020 payment determination, we propose that SNFs submit
data on the proposed assessment-based quality measure for residents who
are admitted to the SNF on and after October 1, 2018, and discharged
from SNF Part A covered stays (that is, both residents discharged from
Part A covered stays and physically discharged) up to and including
December 31, 2018, using the data submission schedule that we propose
in this section.
We propose to collect a single quarter of data for the FY 2020
payment determination 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 2020 program. The proposed use of one
quarter of data for the initial year of assessment data reporting in
the SNF QRP is consistent with the approach we used previously for the
SNF QRP and in other QRPs, including the LTCH, IRF, and Hospice QRPs in
which we have finalized the use of fewer than 12 months of data.
We also propose that following the close of the reporting quarter,
October 1, 2018, through December 31, 2018, for the FY 2020 payment
determination, SNFs would have an additional 4.5 months to correct and/
or submit their quality data and that the final deadline for submitting
data for the FY 2020 payment determination would be May 15, 2019. We
further propose that for the FY 2021 payment determination and
subsequent years, we will collect data using the CY reporting cycle as
previously proposed in section V.B.9.c of this proposed rule.
Table 17--Proposed New SNF QRP Assessment-Based Quality Measures--Data Collection Period and Data Submission
Deadlines Affecting the FY 2020 Payment Determination
----------------------------------------------------------------------------------------------------------------
Proposed data Proposed data
collection/ submission deadline for
Quality measure Data collection source submission FY 2020 payment
reporting period determination
----------------------------------------------------------------------------------------------------------------
Drug Regimen Review Conducted with MDS 10/01/18-12/31/18 May 15, 2019.
Follow-Up for Identified Issues--PAC
SNF QRP.
----------------------------------------------------------------------------------------------------------------
[[Page 24273]]
We invite public comment on the proposed new SNF QRP assessment-
based quality measure data collection period and data submission
deadline affecting the FY 2020 payment determination.
For this measure, we also propose to follow a CY schedule for
measure and data submission requirements that includes quarterly
deadlines following each quarter of data submission, beginning with
data reporting for the FY 2021 payment determinations. As previously
discussed, each quarterly deadline will occur approximately 4.5 months
after the end of a given calendar quarter as outlined in Table 18.
Thus, if finalized, the FY 2021 payment determination would be based on
12 calendar months of data reporting beginning January 1, 2019, and
ending December 31, 2019. Table 18 provides the data submission and
collection method, data collection period and data submission timelines
for the assessment-based quality measure affecting the FY 2021 payment
determination and subsequent years.
Table 18--New SNF QRP Assessment-Based Quality Measure Data Collection Period and Data Submission Deadline
Affecting FY 2021 Payment Determination and Subsequent Years
----------------------------------------------------------------------------------------------------------------
Proposed data
Proposed data submission quarterly
Quality measure Data collection source collection/ submission deadlines for FY 2021
quarterly reporting payment determination
period * **
----------------------------------------------------------------------------------------------------------------
Drug Regimen Review Conducted with MDS CY 19 Q1--1/1/2019-3/31/ CY 2019 Q1 Deadline:
Follow-Up for Identified Issues-- 2019. August 15, 2019.
PAC SNF QRP. CY 19 Q2--4/1/2019-6/30/ CY 2019 Q2 Deadline:
19. November 15, 2019.
CY 19 Q3--7/1/2019-9/30/ CY 2019 Q3 Deadline:
2019. February 15, 2020.
CY 19 Q4--10/1/2019-12/ CY 2019 Q4 Deadline May
31/2019. 15, 2020.
----------------------------------------------------------------------------------------------------------------
* Data collection/submission will follow a similar quarterly reporting period schedule for subsequent CYs.
** Data review and correction periods and data submission deadlines will follow a similar quarterly schedule for
subsequent CYs.
We invite public comment on the SNF QRP assessment-based quality
measure data collection period and data submission deadline affecting
the FY 2021 payment determination and subsequent years for the new
assessment-based measure.
10. SNF QRP Data Completion Thresholds for the FY 2018 Payment
Determination and Subsequent Years
We refer readers to the FY 2016 SNF PPS final rule (80 FR 46458)
for our finalized policies regarding data completion thresholds for the
FY 2018 payment determination and subsequent years. We finalized 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 80 percent of the MDS assessments that they submit. We also
finalized 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 finalized 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 wish to clarify that the provision we finalized will
affect FY 2018 payment determinations and subsequent years and is
dependent upon the successful achievement of the completion threshold
of the data used to calculate the measures we finalize. At this time,
we are not proposing any changes to these policies.
11. SNF QRP Data Validation Requirements for the FY 2018 Payment
Determination and Subsequent Years
We refer readers to the FY 2016 SNF PPS final rule (80 FR 46458
through 46459) for a summary of our approach to the development of data
validation process for the SNF QRP. At this time, we are continuing to
explore data validation methodology that will limit the amount of
burden and cost to SNFs, while allowing us to establish estimations of
the accuracy of SNF QRP data. Hence, we are not proposing any further
details pertaining to the data validation process for the SNF QRP, but
we plan to do so in future rulemaking cycles.
12. SNF QRP Submission Exception and Extension Requirements for the FY
2018 Payment Determination and Subsequent Years
We refer readers to the FY 2016 SNF PPS final rule (80 FR 46459
through 46460) for our finalized policies regarding submission
exception and extension requirements for the FY 2018 payment
determination and subsequent years. At this time, we are not proposing
any changes to these policies.
13. SNF QRP Reconsideration and Appeals Procedures for the FY 2018
Payment Determination and Subsequent Years
We refer the reader to the FY 2016 SNF PPS final rule (80 FR 46460
through 46461) for a summary of our finalized reconsideration and
appeals procedures for the SNF QRP for FY 2018 payment determination
and subsequent years. At this time, we are not proposing any changes to
these procedures.
14. Public Display of Quality Measure Data for the SNF QRP & Procedures
for the Opportunity To Review and Correct Data and Information
Section 1899B(g) of the Act requires the Secretary to establish
procedures for public reporting of SNFs' performance, including the
performance of individual SNFs, on quality measures specified under
paragraph (c)(1) and resource use and other measures specified under
paragraph (d)(1) of the Act (collectively, IMPACT Act measures)
beginning not later than 2 years after the applicable specified
application date under section 1899B(a)(2)(E) of the Act. Under section
1899B(g)(2) of the Act, the procedures must ensure, including through a
process consistent with the process applied under section
1886(b)(3)(B)(viii)(VII) of the Act, which refers to public display and
review requirements in the Hospital Inpatient Quality Reporting Program
(HIQR), that each SNF has the opportunity to review and submit
corrections to its data and information that are to be made public
[[Page 24274]]
prior to the information being made public. In future rulemaking, we
intend to propose a policy to publicly display performance information
for individual SNFs on IMPACT Act measures, as required under the Act.
In this proposed rule, we are proposing procedures that would allow
individual SNFs to review and correct their data and information on
IMPACT Act measures that are to be made public before those measure
data are made public.
For assessment-based measures, we propose a process by which we
would provide each SNF with a confidential feedback report that would
allow the SNF to review its performance on such measures and, during a
review and correction period, to review and correct the data the SNF
submitted to CMS via the CMS Quality Improvement and Evaluation System
(QIES) Assessment Submission and Processing (ASAP) system for each such
measure. In addition, during the review and correction period, the SNF
would be able to request correction of any errors in the assessment-
based measure rate calculations.
We propose that these confidential feedback reports would be
available to each SNF using the Certification and Survey Provider
Enhanced Reporting (CASPER) System. We refer to these reports as the
SNF Quality Measure (QM) Reports. We propose to provide monthly updates
to the data contained in these reports that pertain to assessment-based
data, as the data become available. We propose to provide the reports
so that providers would be able to view their data and information at
both the facility- and resident-level for quality measures. The CASPER
facility-level QM Reports may contain information such as the
numerator, denominator, facility rate, and national rate. The CASPER
patient-level QM Reports may contain individual patient information
which will provide information related to which patients were included
in the quality measures to identify any potential errors. In addition,
we would make other reports available in the CASPER System, such as MDS
data submission reports and provider validation reports, which would
disclose SNFs' data submission status, providing details on all items
submitted for a selected assessment and the status of records
submitted. Additional information regarding the content and
availability of these confidential feedback reports would be provided
on an ongoing basis at https://www.cms.gov/Medicare/Quality-Initiatives-Patient-Assessment-Instruments/NursingHomeQualityInits/SNF-Quality-Reporting.html.
As previously proposed in section V.B.9.b, SNFs would have
approximately 4.5 months after the reporting quarter to correct any
errors that appear on the CASPER-generated QM reports pertaining to
their assessment-based data used to calculate the assessment-based
measures. During the time of data submission for a given quarterly
reporting period and up until the quarterly submission deadline, SNFs
could review and perform corrections to errors in the assessment data
used to calculate the measures and could request correction of measure
calculations. However, once the quarterly submission deadline occurs,
the data is ``frozen'' and calculated for public reporting and
providers can no longer submit any corrections. We would encourage SNFs
to submit timely assessment data during a given quarterly reporting
period and review their data and information early during the review
and correction period so that they can identify errors and resubmit
data before the data submission deadline.
As noted in this section, the data would be populated into the
confidential feedback reports and we intend to update the reports
monthly with all data that have been submitted and are available. We
believe that a proposed data submission and review period consisting of
the reporting quarter plus approximately 4.5 months, is sufficient time
for SNFs to submit, review and, where necessary, correct their data and
information. These proposed time frames and deadlines for review and
correction of assessment-based measures and data satisfy the statutory
requirement that SNFs be provided the opportunity to review and correct
their data and information that is to be made public and are consistent
with the informal process hospitals follow in the HIQR Program.
We propose that, in addition to the data collection/submission
quarterly reporting periods that are followed by data review and
correction periods and submission deadlines, we afford SNFs a 30-day
preview period prior to public display during which SNFs may preview
the performance information on their measures that will be made public.
We propose to provide a preview report also using the CASPER System
with which SNFs are familiar. The CASPER preview reports would inform
providers of their performance on each measure which will be publicly
reported. The CASPER preview reports for the reporting quarter will be
available after the 4.5-month review and correction period and its data
submission deadline, and are refreshed on a quarterly basis for those
measures publicly reported quarterly, and annually for those measures
publicly reported annually. We propose to give SNFs 30 days to review
this information, beginning from the date on which they can access the
preview report. Corrections to the underlying data would not be
permitted during this time; however, SNFs may contest incorrect measure
calculations during the 30-day preview period. We propose that if CMS
determines that the measure, as it is displayed in the preview report,
contains a calculation error, CMS could suppress the data on the public
reporting Web site, recalculate the measure and publish it at the time
of the next scheduled public display date. This process would be
consistent with that followed in the HIQR Program. If finalized, we
intend to utilize a subregulatory mechanism, such as our SNF QRP Web
site, to explain the process for how and when providers may ask for a
correction to their measure calculations.
We invite public comment on these proposals.
In addition to assessment-based measures, we have also proposed
claims-based measures for the SNF QRP. As noted in this section,
section 1899B(g)(2) of the Act requires prepublication provider review
and correction procedures that are consistent with those followed in
the HIQR Program. For claims-based measures used in the HIQR Program,
we provide hospitals 30 days to preview their claims-based measures and
data in a preview report containing aggregate hospital-level data. We
propose to adopt a similar process for the SNF QRP.
Prior to the public display of our claims-based measures, in
alignment with the HIQR, HAC and HVBP Programs, we propose to make
available through the CASPER system a confidential preview report that
will contain information pertaining to claims-based measure rate
calculations, for example, facility and national rates. Such data and
information would be for feedback purposes only and could not be
corrected. This information would be accompanied by additional
confidential information based on the most recent administrative data
available at the time we extract the claims data for purposes of
calculating the rates. Because the claims-based measures are calculated
on an annual basis, these confidential CASPER QM reports for claims-
based measures will be refreshed annually. SNFs would have 30 days from
the date the preview report is made available in which to review this
information. The 30-day preview period is the only time
[[Page 24275]]
when SNFs would be able to see claims-based measures before they are
publicly displayed. SNFs will not be able to make corrections to
underlying claims data during this preview period, nor will they be
able to add new claims to the data extract. However, SNFs may request
that we correct our measure calculation if the SNF believes it is
incorrect during the 30 day preview period. We propose that if we agree
that the measure, as it is displayed in the preview report, contains a
calculation error, we would suppress the data on the public reporting
Web site, recalculate the measure, and publish it at the time of the
next scheduled public display date. This process would be consistent
with that followed in the HIQR Program. If finalized, we intend to
utilize a subregulatory mechanism, such as our SNF QRP Web site, to
explain the process for how and when providers may contest their
measure calculations.
The proposed claims-based measures--Medicare Spending per
Beneficiary--PAC SNF QRP Measure; Discharge to Community--PAC SNF QRP
and Potentially Preventable 30 Day Post-Discharge Readmission Measure
for SNF QRP--use Medicare administrative data from hospitalizations for
Medicare FFS beneficiaries. Public reporting of data will be based on
one CY of data. We propose to create data extracts using claims data
for these claims based measures, at least 90 days after the last
discharge date in the applicable period (12 calendar months preceding),
which we will use for the calculations. For example, if the last
discharge date in the applicable period for a measure is December 31,
2017, for data collection January 1, 2017, through December 31, 2017,
we would create the data extract on approximately March 31, 2018, at
the earliest, and use that data to calculate the claims-based measures
for that applicable period. Since SNFs would not be able to submit
corrections to the underlying claims snapshot nor add claims (for those
measures that use SNF claims) to this data set at the conclusion of the
at least 90-day period following the last date of discharge used in the
applicable period, at that time we would consider SNF claims data to be
complete for purposes of calculating the claims-based measures.
We propose that beginning with data that will be publicly displayed
in 2018, claims-based measures will be calculated using claims data
with at least a 90 day run off period after the last discharge date in
the applicable period, at which time we would create a data extract or
snapshot of the available claims data to use for the measure
calculations. This timeframe allows us to balance the need to provide
timely program information to SNFs with the need to calculate the
claims-based measures using as complete a data set as possible. As
noted, under this proposed procedure, during the 30-day preview period,
SNFs would not be able to submit corrections to the underlying claims
data or add new claims to the data extract. This is for two reasons.
First, for certain measures, the claims data used to calculate the
measure is derived not from the SNF's claims, but from the claims of
another provider. For example, the proposed measure Potentially
Preventable 30-Day Post-Discharge Readmission Measure for SNF QRP uses
claims data submitted by the hospital to which the patient was
readmitted. The claims are not those of the SNF, and therefore, the SNF
could not make corrections to them. Second, even where the claims used
to calculate the measures are those of the SNF, it would not be
possible to correct the data after it is extracted for the measures
calculation. This is because it is necessary to take a static
``snapshot'' of the claims to perform the necessary measure
calculations.
We seek to have as complete a data set as possible. We recognize
that the proposed at least 90-day ``run-out'' period when we would take
the data extract to calculate the claims-based measures is less than
the Medicare program's current timely claims filing policy under which
providers have up to one year from the date of discharge to submit
claims. We considered a number of factors in determining that the
proposed at least 90-day run-out period is appropriate to calculate the
claims-based measures. After the data extract is created, it takes
several months to incorporate other data needed for the calculations
(particularly in the case of risk-adjusted or episode-based measures).
We then need to generate and check the calculations. Because several
months lead time is necessary after acquiring the data to generate the
claims-based calculations, if we were to delay our data extraction
point to 12 months after the last date of the last discharge in the
applicable period, we would not be able to deliver the calculations to
SNFs sooner than 18 to 24 months after the last discharge. We believe
this would create an unacceptably long delay, both for SNFs and for us
to deliver timely calculations to SNFs for quality improvement.
We invite public comment on these proposals.
15. 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 for the measures specified under paragraphs (c)(1) and
(d)(1), beginning 1 year after the specified application date that
applies to such measures and PAC providers. As discussed earlier, the
reports we propose to provide to SNFs to review their data and
information would be confidential feedback reports that would enable
SNFs to review their performance on the measures required under the SNF
QRP. We propose that these confidential feedback reports would be
available to each SNF using the CASPER System. Data contained within
these CASPER reports would be updated, as previously described, on a
monthly basis as the data become available except for claims-based
measures which can only be previewed on an annual basis.
We intend to provide detailed procedures to SNFs on how to obtain
their confidential feedback CASPER reports on the SNF QRP Web site at
https://www.cms.gov/Medicare/Quality-Initiatives-Patient-Assessment-Instruments/NursingHomeQualityInits/SNF-Quality-Reporting.html. We
propose to use the CMS Quality Improvement and Evaluation System (QIES)
Assessment Submission and Processing (ASAP) system to provide quality
measure reports in a manner consistent with how providers obtain such
reports to date. The QIES ASAP system is a confidential and secure
system with access granted to providers, or their designees.
We seek public comment on this proposal to satisfy the requirement
to provide confidential feedback reports to SNFs.
C. SNF Payment Models Research
As discussed in the FY 2015 SNF PPS proposed rule (79 FR 25786, May
6, 2014), we contracted with Acumen, LLC to identify potential
alternatives to the existing methodology used to pay for therapy
services received under the SNF PPS. Since that time, in an effort to
establish a comprehensive approach to Medicare Part A SNF payment
reform, we subsequently expanded the scope of the SNF Therapy Payment
Research project to examine potential improvements and refinements to
the overall SNF PPS payment system. In this proposed rule, we are
taking the opportunity to update the public on the current state of the
expanded SNF PMR project.
[[Page 24276]]
As has been stated previously, in September 2013, we completed the
first phase of the SNF PMR, which included a literature review,
stakeholder outreach, supplementary analyses, and a comprehensive
review of options for a viable alternative to the current therapy
payment model. CMS produced a report outlining the most promising and
viable options that we plan to pursue in the second phase of the
project. The report is available at https://www.cms.gov/Medicare/Medicare-Fee-for-Service-Payment/SNFPPS/therapyresearch.html.
During the second, and current, phase of the SNF PMR, which began
in September 2013, our team has focused on developing the options
outlined in the aforementioned report and has performed more
comprehensive data analyses to begin outlining a new SNF payment model
which could serve as a potential replacement for the current SNF PPS.
To utilize the expertise of the stakeholder community in identifying
the most viable alternative to the current SNF payment model, Acumen
has hosted two TEPs. These TEPs brought together experts from across
the SNF and post-acute care continuums to examine Acumen's research
around a given topic and provide their comments and direction on where
Acumen's research should continue.
The first TEP, which occurred in February 2015, was focused on the
therapy component of SNF PPS. The objectives of this TEP were to
discuss potential criteria for evaluating therapy payment approaches,
review and discuss the key features of SNF therapy payment approaches,
and solicit recommendations for the further exploration and development
of SNF therapy payment approaches. The presentation given by Acumen
during this TEP, as well as a report which provides a summary of the
discussion and recommendations from the TEP panelists, is available
https://www.cms.gov/Medicare/Medicare-Fee-for-Service-Payment/SNFPPS/therapyresearch.html.
The second TEP, which occurred in November 2015, was focused on the
nursing component of the SNF PPS. This TEP included discussion of both
the adequacy of nursing payments, as well as discussion of non-therapy
ancillaries (NTAs), such as drugs. The overall objectives of this TEP
were to review and discuss implications of research on the nursing
component of SNF payments, evaluate alternative approaches to payment
for SNF nursing and NTA services, and solicit recommendations for the
further exploration and development of SNF nursing payment approaches.
The presentation given by Acumen during this TEP, as well as a report
which provides a summary of the discussion and recommendations from the
TEP panelists, is available at https://www.cms.gov/Medicare/Medicare-Fee-for-Service-Payment/SNFPPS/therapyresearch.html.
We expect that Acumen will host a third TEP which will bring
together the recommendations from stakeholders on the individual SNF
payment elements, as well as the extensive analytic work conducted by
Acumen, to outline what could serve as a potential revised SNF PPS
payment model. As we have done with the two previous TEPs, we expect to
post the presentation given by Acumen during this TEP, as well as a
report which will provide a summary of the discussion and
recommendations from the TEP panelists, after the TEP is completed.
As before, comments may be included as part of comments on this
proposed rule. We are also soliciting comments outside the rulemaking
process and these comments should be sent via email to
SNFTherapyPayments@cms.hhs.gov. Information regarding the SNF PMR is
available at https://www.cms.gov/Medicare/Medicare-Fee-for-Service-Payment/SNFPPS/therapyresearch.html.
VI. Collection of Information Requirements
Section V.B.6. of this preamble proposes the following three claims
based measures for the FY 2018 payment determination and subsequent
years: (1) Medicare Spending per Beneficiary--PAC SNF QRP; (2)
Discharge to Community--PAC SNF QRP; and (3) Potentially Preventable
30-Day Post-Discharge Readmission Measure for SNF QRP. These three
measures are Medicare claims-based measures; because claims-based
measures can be calculated based on data that are already reported to
the Medicare program for payment purposes, we believe there will be no
additional burden.
For the FY 2020 payment determination and subsequent years, in
section V.B.6. we are also proposing one measure: Drug Regimen Review
Conducted with Follow-Up for Identified Issues--PAC SNF QRP.
Additionally, we propose that data for this measure will be collected
and reported using the MDS (version effective October 1, 2018). While
the reporting of data on quality measures is an information collection,
we believe that the burden associated with modifications to the MDS
discussed in this proposed rule fall under the PRA exceptions provided
in section 1899B(m) of the Act because they are required to achieve the
standardization of patient assessment data. Section 1899B(m) of the Act
also provides that the PRA does not apply to section 1899B and the
sections referenced in section 1899B(a)(2)(B) of the Act that require
modification to achieve the standardization of patient assessment data.
The requirement and burden will, however, be submitted to OMB for
review and approval when the modifications to the MDS or other
applicable PAC assessment instruments have achieved standardization and
are no longer exempt from the burden submission requirements under
section 1899B(m) of the Act.
We estimate the additional elements for the four newly proposed
measures will take 7.5 minutes of nursing/clinical staff time to report
data on admission and 2.5 minutes of nursing/clinical staff time to
report data on discharge, for a total of 10 minutes. We estimate that
the additional MDS-RAI items we are proposing will be completed by
Registered Nurses (RN) for approximately 75 percent of the time
required and Pharmacists for approximately 25 percent of the time
required. Individual providers determine the staffing resources
necessary. We estimate 2,101,370 discharges from 16,484 SNFs annually,
with an additional burden of 10 minutes. This would equate to 350,228
total hours or 21.25 hours per SNF. We believe this work will be
completed by RNs (75 percent) and Pharmacists (25 percent). We obtained
mean hourly wages for these staff from the U.S. Bureau of Labor
Statistics' May 2014 National Occupational Employment and Wage
Estimates (https://www.bls.gov/oes/current/oes_nat.htm), to account for
overhead and fringe benefits, we have doubled the mean hourly wage. Per
the National Occupational Employment and Wage Estimates, the mean
hourly wage for a RN (BLS occupation code: 29-1141) is $33.55. However,
to account for overhead and fringe benefits, we have double the mean
hourly wage, making it $67.10 for an RN. The mean hourly wage for a
pharmacist (BLS occupation code: 29-1051) is $56.96. To account for
overhead and fringe benefits, we have double the mean hourly wage,
making it $113.92 for a pharmacist. Given these wages and time
estimates, the total cost related to the four newly proposed measures
is estimated at $1,674.34 per SNF annually, or $27,599,743.81 for all
SNFs annually. While we are setting out burden, the requirements and
associated
[[Page 24277]]
estimates will not be submitted to OMB for approval under Paperwork
Reduction Act of 1995 (44 U.S.C. 3501 et seq.) since the burden
estimates are either claims-based or associated with the exemption
under section 1899B(m) of the IMPACT Act of 2014. We are setting out
the burden as a courtesy to advise interested parties of the proposed
actions' time and costs.
As described in further detail in section V.A.2.b. of this proposed
rule, we are proposing to specify the SNFPPR measure for the SNF VBP
Program. Like the SNFRM (NQF #2510), which was adopted for the SNF VBP
Program in the FY 2016 SNF PPS final rule (80 FR 46419), the proposed
SNFPPR measure is also claims-based. Because claims-based measures are
calculated based on claims that are already submitted to the Medicare
program for payment purposes, there is no additional burden associated
with data collection or submission for these measures. Thus there is no
additional reporting burden associated with the SNFPPR measure.
If you wish to comment on any of the aforementioned claims, 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 FY 2016 SNF prospective payment
rates 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 FY, 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 2016 (80 FR 46390). Based on
the above, we estimate that the aggregate impact would be an increase
of $800 million in payments to SNFs, resulting from the SNF market
basket update to the payment rates, as adjusted by the MFP adjustment.
The impact analysis of this proposed rule represents the projected
effects of the changes in the SNF PPS from FY 2016 to FY 2017. 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 would update the FY 2016 payment rates by a factor equal to the
market basket index percentage change adjusted by the MFP adjustment to
determine the payment rates for FY 2017. 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 19. In updating the SNF PPS rates for FY
2017, 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 2017. 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.
4. Detailed Economic Analysis
The FY 2017 SNF PPS payment impacts appear in Table 19. Using the
most recently available data, in this case FY 2015, we apply the
current FY 2016 wage index and labor-related share value to the number
of payment days to simulate FY 2016 payments. Then, using the same FY
2015 data, we apply the proposed FY 2017 wage index and labor-related
share value to simulate FY 2017 payments. We tabulate the resulting
payments according to the classifications in Table 19 (for example,
facility type, geographic region, facility
[[Page 24278]]
ownership), and compare the simulated FY 2016 payments to the simulated
FY 2017 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 2017 payments. The update of 2.1 percent (consisting of the
market basket increase of 2.6 percentage points, reduced by the 0.5
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 2.1 percent,
assuming facilities do not change their care delivery and billing
practices in response.
As illustrated in Table 19, 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 urban
Outlying region would experience a 2.3 percent increase in FY 2017
total payments.
Table 19--Projected Impact to the SNF PPS for FY 2017
----------------------------------------------------------------------------------------------------------------
Number of
facilities FY Update wage Total change
2017 data (%) (%)
----------------------------------------------------------------------------------------------------------------
Group:
Total....................................................... 15,427 0.0 2.1
Urban....................................................... 10,935 0.0 2.1
Rural....................................................... 4,492 0.0 2.1
Hospital based urban........................................ 524 0.0 2.1
Freestanding urban.......................................... 10,411 0.0 2.1
Hospital based rural........................................ 606 0.0 2.1
Freestanding rural.......................................... 3,886 0.0 2.1
Urban by region:
New England................................................. 797 0.0 2.1
Middle Atlantic............................................. 1,481 0.0 2.1
South Atlantic.............................................. 1,861 0.0 2.1
East North Central.......................................... 2,092 0.0 2.1
East South Central.......................................... 547 0.0 2.1
West North Central.......................................... 905 0.0 2.1
West South Central.......................................... 1,321 0.0 2.1
Mountain.................................................... 507 0.0 2.1
Pacific..................................................... 1,419 -0.1 2.0
Outlying.................................................... 5 0.2 2.3
Rural by region:
New England................................................. 139 0.0 2.1
Middle Atlantic............................................. 221 0.0 2.1
South Atlantic.............................................. 505 0.1 2.2
East North Central.......................................... 933 0.0 2.1
East South Central.......................................... 529 0.1 2.2
West North Central.......................................... 1,087 0.0 2.1
West South Central.......................................... 743 0.1 2.2
Mountain.................................................... 231 0.0 2.1
Pacific..................................................... 104 0.0 2.1
Ownership:
Government.................................................. 1,022 0.0 2.1
Profit...................................................... 10,773 0.0 2.1
Non-profit.................................................. 3,632 0.0 2.1
----------------------------------------------------------------------------------------------------------------
Note: The Total column includes the 2.6 percent market basket increase, reduced by the 0.5 percentage point MFP
adjustment. Additionally, we found no SNFs in rural outlying areas.
5. Alternatives Considered
As described in this section, we estimate that the aggregate impact
for FY 2017 under the SNF PPS would be an increase of $800 million in
payments to SNFs, resulting from the SNF market basket update to the
payment rates, as adjusted 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
[[Page 24279]]
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 20, we have prepared an
accounting statement showing the classification of the expenditures
associated with the provisions of this proposed rule. Table 20 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 20--Accounting Statement: Classification of Estimated
Expenditures, From the 2016 SNF PPS Fiscal Year to the 2017 SNF PPS
Fiscal Year
------------------------------------------------------------------------
Category Transfers
------------------------------------------------------------------------
Annualized Monetized Transfers............ $800 million.*
From Whom To Whom? Federal Government to SNF
Medicare Providers.
------------------------------------------------------------------------
* The net increase of $800 million in transfer payments is a result of
the MFP adjusted market basket increase of $800 million.
7. Conclusion
This proposed rule sets forth updates of the SNF PPS rates
contained in the SNF PPS final rule for FY 2016 (80 FR 46390). Based on
the above, we estimate the overall estimated payments for SNFs in FY
2017 are projected to increase by $800 million, or 2.1 percent,
compared with those in FY 2016. We estimate that in FY 2017 under RUG-
IV, SNFs in urban and rural areas would experience, on average, a 2.1
and 2.1 percent increase, respectively, in estimated payments compared
with FY 2016. Providers in the urban Outlying region would experience
the largest estimated increase in payments of approximately 2.3
percent. Providers in the urban Pacific region would experience the
smallest estimated increase in payments of 2.0 percent.
8. Effects of the Proposed Requirements for the SNF VBP and SNF QRP
Program
The proposed requirements set forth for the SNF VBP and SNF QRP
Program in this proposed rule would not impact SNFs in FY 2017;
therefore, we are not including a regulatory impact analysis for the
SNF VBP and SNF QRP Program in this proposed rule.
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 2016 (80 FR 46390). Based on
the above, we estimate that the aggregate impact would be an increase
of $800 million in payments to SNFs, resulting from the SNF market
basket update to the payment rates, as adjusted by the MFP adjustment.
While it is projected in Table 19 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 2017
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 21 percent of facility revenue (Report to the Congress:
Medicare Payment Policy, March 2016, available at https://medpac.gov/documents/reports/chapter-7-skilled-nursing-facility-services-(march-
2016-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 19. As indicated in Table 19, the effect on facilities is
projected to be an aggregate positive impact of 2.1 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 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 an MSA 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 2016 (80 FR 46476)), 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 19, the effect
on facilities is projected to be an aggregate positive impact of 2.1
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
[[Page 24280]]
million in 1995 dollars, updated annually for inflation. In 2016, that
threshold is approximately $146 million. This proposed rule does not
include any mandate on state, local, or tribal governments in the
aggregate, or by the private sector, of $146 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.
Dated: April 6, 2016.
Andrew M. Slavitt,
Acting Administrator, Centers for Medicare & Medicaid Services.
Dated: April 14, 2016.
Sylvia M. Burwell,
Secretary, Department of Health and Human Services.
[FR Doc. 2016-09399 Filed 4-21-16; 4:15 pm]
BILLING CODE 4120-01-P
