Medicare Program; Prospective Payment System and Consolidated Billing for Skilled Nursing Facilities for FY 2018, SNF Value-Based Purchasing Program, SNF Quality Reporting Program, Survey Team Composition, and Correction of the Performance Period for the NHSN HCP Influenza Vaccination Immunization Reporting Measure in the ESRD QIP for PY 2020, 36530-36636 [2017-16256]
Download as PDF
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Medicare Program; Prospective
Payment System and Consolidated
Billing for Skilled Nursing Facilities for
FY 2018, SNF Value-Based Purchasing
Program, SNF Quality Reporting
Program, Survey Team Composition,
and Correction of the Performance
Period for the NHSN HCP Influenza
Vaccination Immunization Reporting
Measure in the ESRD QIP for PY 2020
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.
Michelle King, (410) 786–3667, for
information related to skilled nursing
facility quality reporting program.
James Poyer, (410) 786–2261, for
information related to the skilled
nursing facility value-based purchasing
program.
Delia Houseal, (410) 786–2724, for
information related to the end-stage
renal disease quality incentive program.
Rebecca Ward, (410) 786–1732 and
Caecilia Blondiaux, (410) 786–2190, for
survey type definitions.
SUPPLEMENTARY INFORMATION:
Centers for Medicare &
Medicaid Services (CMS), HHS.
ACTION: Final rule.
Availability of Certain Tables
Exclusively Through the Internet on the
CMS Web site
DEPARTMENT OF HEALTH AND
HUMAN SERVICES
Centers for Medicare & Medicaid
Services
42 CFR Parts 409, 411, 413, 424, and
488
[CMS–1679–F]
RIN 0938–AS96
AGENCY:
This final rule updates the
payment rates used under the
prospective payment system (PPS) for
skilled nursing facilities (SNFs) for
fiscal year (FY) 2018. It also revises and
rebases the market basket index by
updating the base year from 2010 to
2014, and by adding a new cost category
for Installation, Maintenance, and
Repair Services. The rule also finalizes
revisions to the SNF Quality Reporting
Program (QRP), including measure and
standardized resident assessment data
policies and policies related to public
display. In addition, it finalizes policies
for the Skilled Nursing Facility ValueBased Purchasing Program that will
affect Medicare payment to SNFs
beginning in FY 2019. The final rule
also clarifies the regulatory
requirements for team composition for
surveys conducted for investigating a
complaint and aligns regulatory
provisions for investigation of
complaints with the statutory
requirements. The final rule also
finalizes the performance period for the
National Healthcare Safety Network
(NHSN) Healthcare Personnel (HCP)
Influenza Vaccination Reporting
Measure included in the End-Stage
Renal Disease (ESRD) Quality Incentive
Program (QIP) for Payment Year 2020.
DATES: These regulations are effective
on October 1, 2017.
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
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SUMMARY:
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As discussed in the FY 2014 SNF PPS
final rule (78 FR 47936), 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 final 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
II. Background on SNF PPS
A. Statutory Basis and Scope
B. Initial Transition for the SNF PPS
C. Required Annual Rate Updates
III. Analysis and Responses to Public
Comments on the FY 2018 SNF PPS
Proposed Rule
A. General Comments on the FY 2018 SNF
PPS Proposed Rule
B. SNF PPS Rate Setting Methodology and
FY 2018 Update
1. Federal Base Rates
2. SNF Market Basket Update
3. Case-Mix Adjustment
4. Wage Index Adjustment
5. Adjusted Rate Computation Example
C. Additional Aspects of the SNF PPS
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1. SNF Level of Care—Administrative
Presumption
2. Consolidated Billing
3. Payment for SNF-Level Swing-Bed
Services
D. Other Issues
1. Revising and Rebasing the SNF Market
Basket Index
2. Skilled Nursing Facility (SNF) Quality
Reporting Program (QRP)
3. Skilled Nursing Facility Value-Based
Purchasing Program (SNF VBP)
4. Survey Team Composition
5. Correction of the Performance Period for
the National Healthcare Safety Network
(NHSN) Healthcare Personnel (HCP)
Influenza Vaccination Immunization
Reporting Measure in the End-Stage
Renal Disease (ESRD) Quality Incentive
Program (QIP) for Payment Year (PY)
2020
IV. Collection of Information Requirements
V. Economic Analyses
Regulation Text
Acronyms
In addition, because of the many
terms to which we refer by acronym in
this final rule, we are listing these
abbreviations and their corresponding
terms in alphabetical order below:
AIDS Acquired Immune Deficiency
Syndrome
ALJ Administrative Law Judge
ARD Assessment reference date
BBA Balanced Budget Act of 1997, Public
Law 105–33
BBRA Medicare, Medicaid, and SCHIP
Balanced Budget Refinement Act of 1999,
Public Law 106–113
BIPA Medicare, Medicaid, and SCHIP
Benefits Improvement and Protection Act
of 2000, Public Law 106–554
CAH Critical access hospital
CARE Continuity Assessment Record and
Evaluation
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
DTI Deep tissue injuries
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
ICD–10–CM International Classification of
Diseases, 10th Revision, Clinical
Modification
IGI IHS Global Inc.
IMPACT Improving Medicare Post-Acute
Care Transformation Act of 2014, Public
Law 113–185
IPPS Inpatient prospective payment system
IRF Inpatient Rehabilitation Facility
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IRF–PAI Inpatient Rehabilitation Facility
Patient Assessment Instrument
LTC Long-term care
LTCH Long-term care hospital
MACRA Medicare Access and CHIP
Reauthorization Act of 2015, Public Law
114–10
MAP Measures Application Partnership
MDS Minimum data set
MFP Multifactor productivity
MMA Medicare Prescription Drug,
Improvement, and Modernization Act of
2003, Public Law 108–173
MSA Metropolitan statistical area
NF Nursing facility
NQF National Quality Forum
OASIS Outcome and Assessment
Information Set
OBRA 87 Omnibus Budget Reconciliation
Act of 1987, Public Law 100–203
OMB Office of Management and Budget
PAC Post-acute care
PAMA Protecting Access to Medicare Act of
2014, Public Law 113–93
PPS Prospective Payment System
PQRS Physician Quality Reporting System
QIES Quality Improvement and 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, Public Law
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
SNF Skilled nursing facility
SNF PMR Skilled Nursing Facility Payment
Models Research
SNF QRP Skilled Nursing Facility Quality
Reporting Program
SNF VBP Skilled Nursing Facility ValueBased Purchasing Program
SNFPPR Skilled Nursing Facility
Potentially Preventable Readmission
Measure
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,
Public Law 104–4
VBP Value-based purchasing
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I. Executive Summary
A. Purpose
This final rule updates the SNF
prospective payment rates for FY 2018
as required under section 1888(e)(4)(E)
of the Social Security Act (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
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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. of this final rule). This final
rule also finalizes updates to the
requirements for the Skilled Nursing
Facility Quality Reporting Program
(SNF QRP), additional policies for the
Skilled Nursing Facility Value-Based
Purchasing Program (SNF VBP), and
clarification of requirements related to
survey team composition and
investigation of complaints under
§§ 488.30, 488.301, 488.308, and
488.314. The final rule also finalizes one
proposal related to the performance
period for the National Healthcare
Safety Network (NHSN) Healthcare
Personnel (HCP) Influenza Vaccination
Reporting Measure included in the EndStage Renal Disease (ESRD) Quality
Incentive Program (QIP).
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 final
rule reflect an update to the rates that
we published in the SNF PPS final rule
for FY 2017 (81 FR 51970), which
reflects the SNF market basket update,
as required by section 1888(e)(5)(B)(iii)
of the Act for FY 2018. Additionally, in
section III.B.1. of this final rule, we are
finalizing our proposal to revise and
rebase the market basket index for FY
2018 and subsequent FYs by updating
the base year from 2010 to 2014, and by
adding a new cost category for
Installation, Maintenance, and Repair
Services. We are also finalizing
additional polices, measures and data
reporting requirements for the Skilled
Nursing Facility Quality Reporting
Program (SNF QRP) and requirements
for the SNF VBP Program, including an
exchange function to translate SNF
performance scores calculated using the
program’s scoring methodology into
value-based incentive payments.
We are also clarifying the regulatory
requirements for team composition for
surveys conducted for the purposes of
investigating a complaint and on-site
monitoring of compliance, and to align
the regulatory provisions for special
surveys and investigation of complaints
with the statute. The changes clarify
that the requirement for an
interdisciplinary team that must include
a registered nurse is applicable to
surveys conducted under sections
1819(g)(2) and 1919(g)(2) of the Act, and
not to those surveys conducted to
investigate complaints or to monitor
compliance on-site under sections
1819(g)(4) and 1919(g)(4) of the Act.
Revising the regulatory language under
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§§ 488.30, 488.301, 488.308, and
488.314 to correspond to the statutory
requirements found in sections 1819(g)
and 1919(g) of the Act will add clarity
to these requirements by making them
more explicit. We are also revising the
performance period for the National
Healthcare Safety Network (NHSN)
Healthcare Personnel (HCP) Influenza
Vaccination Reporting Measure
included in the End-Stage Renal Disease
(ESRD) Quality Incentive Program (QIP)
for PY 2020.
C. Summary of Cost and Benefits
Provision
Description
Total transfers
FY 2018 SNF
PPS payment rate
update.
FY 2018 Cost
to Updating
the SNF
Quality Reporting Program.
The overall economic impact
of this final rule is an estimated increase of $370
million in aggregate.
The overall cost for SNFs to
submit data for the SNF
Quality Reporting Program
for the provisions in this
final rule is ($29 million).
II. Background on SNF PPS
A. Statutory Basis and Scope
As amended by section 4432 of the
Balanced Budget Act of 1997 (BBA, Pub.
L. 105–33, enacted on August 5, 1997),
section 1888(e) of the Act provides for
the implementation of a PPS for SNFs.
This methodology uses prospective,
case-mix adjusted per diem payment
rates applicable to all covered SNF
services defined in section 1888(e)(2)(A)
of the Act. The SNF PPS is effective for
cost reporting periods beginning on or
after July 1, 1998, and covers all costs
of furnishing covered SNF services
(routine, ancillary, and capital-related
costs) other than costs associated with
approved educational activities and bad
debts. Under section 1888(e)(2)(A)(i) of
the Act, covered SNF services include
post-hospital extended care services for
which benefits are provided under Part
A, as well as those items and services
(other than a small number of excluded
services, such as physicians’ 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_04152015.pdf.
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Section 215(a) of the Protecting
Access to Medicare Act of 2014 (PAMA,
Pub. L. 113–93, enacted on April 1,
2014) added a new section 1888(g) to
the Act, which requires the Secretary to
specify an all-cause all-condition
hospital readmission measure and an
all-condition risk-adjusted potentially
preventable hospital readmission
measure for the SNF setting.
Additionally, section 215(b) of PAMA
added a new section 1888(h) to the Act,
which requires the Secretary to
implement a VBP program for SNFs.
Finally, section 2(a) of the Improving
Medicare Post-Acute Care
Transformation Act of 2014 (IMPACT
Act, Pub. L. 113–185, enacted on
October 6, 2014) added a new section
1899B to the Act that, among other
things, requires SNFs to report
standardized resident assessment data,
data on quality measures, and data on
resource use and other measures. In
addition, section 2(c)(4) of the IMPACT
Act added a new section 1888(e)(6) to
the Act, which requires the Secretary to
implement a quality reporting program
for SNFs.
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 2017 (81 FR
51970, August 5, 2016). 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.
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• 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 final rule
provides the required annual updates to
the per diem payment rates for SNFs for
FY 2018.
III. Analysis and Responses to Public
Comments on the FY 2018 SNF PPS
Proposed Rule
In response to the publication of the
FY 2018 SNF PPS proposed rule, we
received 247 public comments from
individuals, providers, corporations,
government agencies, private citizens,
trade associations, and major
organizations. The following are brief
summaries of each proposed provision,
a summary of the public comments that
we received related to that proposal,
and our responses to the comments.
A. General Comments on the FY 2018
SNF PPS Proposed Rule
In addition to the comments we
received on specific proposals
contained within the proposed rule
(which we address later in this final
rule), commenters also submitted the
following, more general, observations on
the SNF PPS and SNF care generally. A
discussion of these comments, along
with our responses, appears below.
Comment: One commenter requested
that we instruct the Medicare
Administrative Contractors to refrain
from denying coverage and payment for
SNF Part B claims for physiatrists
visiting residents in SNFs. The
commenter goes on to state their
concerns regarding the potential for
variability in coverage across
contractors.
Response: With regard to our
instructing the contractors to refrain
from denying coverage or payment for
SNF claims related to physiatrists visits
under Part B, this comment is outside
the scope of this final rule. However, we
will forward these comments to the
appropriate division within CMS for
consideration. With regard to the
potential for variability among
contractors, we will continue to educate
the contractors to ensure compliance
with all federal guidance and
regulations.
Comment: One commenter requested
that we consider including recreational
therapy time provided to SNF residents
by recreational therapists as part of the
calculation of the resident’s RUG–IV
therapy classification or as part of
determining the number of restorative
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Sfmt 4700
nursing services provided to the
resident.
Response: We appreciate the
commenter raising this issue, but we do
not believe there is sufficient evidence
at this time regarding the efficacy of
recreational therapy interventions or,
more notably, data which would
substantiate a determination of the
effect on payment of such interventions,
as such services were not considered
separately, as were physical,
occupational and speech-language
pathology services, when RUG–IV was
being developed. That being said, we
would note that Medicare Part A
originally paid for institutional care in
various provider settings, including
SNF, on a reasonable cost basis, but now
makes payment using PPS
methodologies, such as the SNF PPS. To
the extent that one of these SNFs
furnished recreational therapy to its
inpatients under the previous,
reasonable cost methodology, the cost of
the services would have been included
in the base payments when SNF PPS
payment rates were derived. Under the
PPS methodology, Part A makes a
comprehensive payment for the bundled
package of items and services that the
facility furnishes during the course of a
Medicare-covered stay. This package
encompasses nearly all services that the
beneficiary receives during the course of
the stay—including any medically
necessary recreational therapy—and
payment for such services is included
within the facility’s comprehensive SNF
PPS payment for the covered Part A stay
itself.
B. SNF PPS Rate Setting Methodology
and FY 2018 Update
1. 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
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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.
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2. SNF Market Basket Update
a. 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. In the SNF PPS
final rule for FY 2014 (78 FR 47939
through 47946), we revised and rebased
the market basket index, which
included updating the base year from
FY 2004 to FY 2010. For FY 2018, as
discussed in section III.D.1. of this final
rule, we are rebasing and revising the
SNF market basket, updating the base
year from FY 2010 to 2014.
The SNF market basket index is used
to compute the market basket
percentage change that is used to update
the SNF federal rates on an annual
basis, as required by section
1888(e)(4)(E)(ii)(IV) of the Act. This
market basket percentage update is
adjusted by a forecast error correction,
if applicable, and then further adjusted
by the application of a productivity
adjustment as required by section
1888(e)(5)(B)(ii) of the Act and
described in section III.B.2.d. of this
final rule. For FY 2018, the growth rate
of the 2014-based SNF market basket is
estimated to be 2.6 percent, which is
based on the IHS Global Inc. (IGI)
second quarter 2017 forecast with
historical data through first quarter
2017.
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However, we note that section 411(a)
of the Medicare Access and CHIP
Reauthorization Act of 2015 (MACRA,
Pub. L. 114–10, enacted on April 16,
2015) amended section 1888(e) of the
Act to add section 1888(e)(5)(B)(iii) of
the Act. Section 1888(e)(5)(B)(iii) of the
Act establishes a special rule for FY
2018 that requires the market basket
percentage, after the application of the
productivity adjustment, to be 1.0
percent. In accordance with section
1888(e)(5)(B)(iii) of the Act, we will use
a market basket percentage of 1.0
percent to update the federal rates set
forth in this final rule. In section
III.B.2.e. of this final rule, we discuss
the specific application of the MACRAspecified market basket adjustment to
the forthcoming annual update of the
SNF PPS payment rates. In addition, in
section III.D.2. of this final rule, we
discuss the 2 percent reduction applied
to the market basket update for those
SNFs that fail to submit measures data
as required by section 1888(e)(6)(A) of
the Act.
b. 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. Absent the
addition of section 1888(e)(5)(B)(iii) of
the Act, added by section 411(a) of
MACRA, we would have used the
percentage change in the SNF market
basket index to compute the update
factor for FY 2018. Based on the
revision and rebasing of the SNF market
basket discussed in section III.D.1. of
this final rule, this factor is based on the
IGI second quarter 2017 forecast (with
historical data through the first quarter
2017) of the FY 2018 percentage
increase in the 2014-based SNF market
basket index reflecting routine,
ancillary, and capital-related expenses.
As discussed in sections III.B.2.c. and
III.B.2.d. of this final rule, this market
basket percentage change would have
been reduced by the applicable forecast
error correction (as described in
§ 413.337(d)(2)) and by the MFP
adjustment as required by section
1888(e)(5)(B)(ii) of the Act. As noted
previously, section 1888(e)(5)(B)(iii) of
the Act, added by section 411(a) of the
MACRA, requires us to use a 1.0 percent
market basket percentage instead of the
estimated 2.6 percent market basket
percentage, adjusted as described below,
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36533
to adjust the SNF PPS federal rates for
FY 2018. Additionally, as discussed in
section II.B. of this final rule, we no
longer compute update factors to adjust
a facility-specific portion of the SNF
PPS rates, because the initial threephase transition period from facilityspecific to full federal rates that started
with cost reporting periods beginning in
July 1998 has expired.
c. 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
4, 2003), the adjustment will reflect both
upward and downward adjustments, as
appropriate.
For FY 2016 (the most recently
available FY for which there is final
data), the estimated increase in the
market basket index was 2.3 percentage
points, while the actual increase for FY
2016 was 2.3 percentage points,
resulting in the actual increase being the
same as 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 2018 market basket
percentage change of 2.6 percent would
not have been adjusted to account for
the forecast error correction. Table 1
shows the forecasted and actual market
basket amounts for FY 2016.
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TABLE 1—DIFFERENCE BETWEEN THE FORECASTED AND ACTUAL MARKET BASKET INCREASES FOR FY 2016
Index
Forecasted
FY 2016
Increase *
Actual FY
2016
Increase **
FY 2016
difference
SNF ..............................................................................................................................................
2.3
2.3
0.0
* Published in Federal Register; based on second quarter 2015 IGI forecast (2010-based index).
** Based on the second quarter 2017 IGI forecast, with historical data through the first quarter 2017 (2010-based index).
asabaliauskas on DSKBBXCHB2PROD with RULES
d. Multifactor Productivity Adjustment
Section 1888(e)(5)(B)(ii) of the Act, as
added by section 3401(b) of the Patient
Protection and Affordable Care Act
(Affordable Care Act, Pub. L. 111–148,
enacted on March 23, 2010) requires
that, in FY 2012 and in subsequent FYs,
the market basket percentage under the
SNF PPS (as described in section
1888(e)(5)(B)(i) of the Act) is to be
reduced annually by the multifactor
productivity (MFP) adjustment
described in section 1886(b)(3)(B)(xi)(II)
of the Act. Section 1886(b)(3)(B)(xi)(II)
of the Act, in turn, defines the MFP
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 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.
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(1) 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) of the Act
(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 being less than such payment
rates for the preceding fiscal year.
If not for the enactment of section
411(a) of the MACRA, the FY 2018
update would include a calculation of
the MFP adjustment as the 10-year
moving average of changes in MFP for
the period ending September 30, 2018,
which is estimated to be 0.6 percent.
Also, if not for the enactment of section
411(a) of the MACRA, consistent with
section 1888(e)(5)(B)(i) of the Act and
§ 413.337(d)(2), the market basket
percentage for FY 2018 for the SNF PPS
would be based on IGI’s second quarter
2017 forecast of the SNF market basket
update, which is estimated to be 2.6
percent. In accordance with section
1888(e)(5)(B)(ii) of the Act (as added by
section 3401(b) of the Affordable Care
Act) and § 413.337(d)(3), this market
basket percentage would then be
reduced by the MFP adjustment (the 10year moving average of changes in MFP
for the period ending September 30,
2018) of 0.6 percent, which would be
calculated as described above and based
on IGI’s second quarter 2017 forecast.
Absent the enactment of section 411(a)
of MACRA, the resulting MFP-adjusted
SNF market basket update would have
been equal to 2.0 percent, or 2.6 percent
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Frm 00006
Fmt 4701
Sfmt 4700
less 0.6 percentage point. However, as
discussed above, section
1888(e)(5)(B)(iii) of the Act, added by
section 411(a) of the MACRA, requires
us to apply a 1.0 percent positive market
basket adjustment in determining the
FY 2018 SNF payment rates set forth in
this final rule, without regard to the
market basket update as adjusted by the
MFP adjustment described above.
e. Market Basket Update Factor for FY
2018
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
2018 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, 2016, through
September 30, 2017 to the average
market basket level for the period of
October 1, 2017, through September 30,
2018. This process yields a percentage
change in the 2014-based SNF market
basket of 2.6 percent.
As further explained in section
III.B.2.c. of this final 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 2016 SNF market
basket percentage change and the actual
FY 2016 SNF market basket percentage
change (FY 2016 is the most recently
available FY for which there is
historical data) did not exceed the 0.5
percentage point threshold, the FY 2018
market basket percentage change of 2.6
percent would not have been adjusted
by the forecast error correction.
If not for the enactment of section
411(a) of the MACRA, the SNF market
basket for FY 2018 would be determined
in accordance with section
1888(e)(5)(B)(ii) of the Act, which
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
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Federal Register / Vol. 82, No. 149 / Friday, August 4, 2017 / Rules and Regulations
September 30, 2018) of 0.6 percent, as
described in section III.B.2.d. of this
final rule. Thus, absent the enactment of
MACRA, the resulting net SNF market
basket update would equal 2.0 percent,
or 2.6 percent less the 0.6 percentage
point MFP adjustment. We note that our
policy has been that, if more recent data
become available (for example, a more
recent estimate of the SNF market
basket and/or MFP adjustment), we
would use such data, if appropriate, to
determine the SNF market basket
percentage change, labor-related share
relative importance, forecast error
adjustment, and MFP adjustment in the
SNF PPS final rule.
Commenters submitted the following
comments related to the proposed rule’s
discussion of the market basket update
factor for FY 2018. A discussion of these
comments, along with our responses,
appears below.
Comment: We received a number of
comments in relation to applying the FY
2018 market basket update factor in the
determination of the FY 2018
unadjusted federal per diem rates, with
some commenters supporting its
application in determining the FY 2018
unadjusted per diem rates, while others
opposed its application. In their March
2017 report (available at https://
medpac.gov/docs/default-source/
reports/mar17_medpac_ch8.pdf) and in
their comment on the FY 2018 SNF PPS
proposed rule, MedPAC recommended
that we eliminate the market basket
update for SNFs altogether for FY 2018
and FY 2019 and implement revisions
to the SNF PPS. A few commenters also
encouraged us to consider the ‘‘gap’’
between the customary market basket
update, as reflected in the MFP-adjusted
market basket update factor described
above and the MACRA-required 1.0
percentage point market basket update.
Response: We appreciate all of the
comments received on the proposed
market basket update for FY 2018. In
response to those comments opposing
the application of the FY 2018 market
basket update factor in determining the
FY 2018 unadjusted federal per diem
rates (specifically, MedPAC’s proposal
to eliminate the market basket update
for SNFs), we note that under sections
1888(e)(4)(E)(ii)(IV) and (e)(5)(B) of the
Act, we are required to update the
unadjusted federal per diem rates each
fiscal year by the SNF market basket
percentage change, as reduced by the
MFP adjustment, and that, under
section 1888(e)(5)(B)(iii) of the Act (as
added by section 411(a) of MACRA), for
FY 2018, that update must be 1.0
percentage point.
With regard to those comments on the
‘‘gap’’ between the standard market
basket update and the MACRA-required
update, we appreciate these
commenters’ concerns, but we are
required in section 1888(e)(5)(B)(iii) of
the Act, as added by section 411(a) of
MACRA, to apply the 1.0 percentage
point update factor for FY 2018.
Comment: One commenter requested
that we engage in an ongoing dialogue
with the commenter’s association on
their market basket research, which
would serve to inform us and support
any analogous CMS reform efforts.
Response: We appreciate the
commenter’s review of the market
basket and interest in continued
dialogue regarding their research. The
commenter is encouraged to submit any
research to CMSDNHS@cms.hhs.gov.
Comment: One commenter stated that
we have the statutory authority to
36535
implement geographically-specific
updates associated with state and/or
regional minimum wage laws. The
commenter requested that such updates
be made at the Core-Based Statistical
Area (CBSA) levels.
Response: We would note that any
increases in wages resulting from state
and/or regional minimum wage laws are
likely to be reflected in data used to
create the SNF PPS wage index.
Therefore, we believe such standards
are already taken into account in the
calculation of the SNF PPS wage index
to the extent that these laws have an
impact on wages.
Accordingly, after considering the
comments received, for the reasons
specified in this final rule and in the FY
2018 SNF PPS proposed rule (82 FR
21017 through 21019), we are finalizing
the FY 2018 market basket factor of 1.0
percent, as required by section 411(a) of
MACRA. Historically, we have 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 from one year to the next.
However, section 1888(e)(5)(B)(iii) of
the Act, as added by section 411(a) of
the MACRA, requires us to use a market
basket percentage of 1.0 percent, after
application of the MFP adjustment to
adjust the federal rates for FY 2018.
Under section 1888(e)(5)(B)(iii) of the
Act, the market basket percentage
increase used to determine the federal
rates set forth in this final rule will be
1.0 percent for FY 2018. Tables 2 and
3 reflect the updated components of the
unadjusted federal rates for FY 2018,
prior to adjustment for case-mix.
TABLE 2—FY 2018 UNADJUSTED FEDERAL RATE PER DIEM URBAN
Rate component
Nursing—
case-mix
Therapy—
case-mix
Therapy—noncase-mix
Non-case-mix
Per Diem Amount ............................................................................................
$177.26
$133.52
$17.59
$90.47
TABLE 3—FY 2018 UNADJUSTED FEDERAL RATE PER DIEM RURAL
Nursing—
case-mix
Therapy—
case-mix
Therapy—
non-case-mix
Non-case-mix
Per Diem Amount ............................................................................................
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Rate component
$169.34
$153.96
$18.79
$92.14
In addition, we note that section
1888(e)(6)(A)(i) of the Act provides that,
beginning in FY 2018, SNFs that fail to
submit data, as applicable, in
accordance with sections
1888(e)(6)(B)(i)(II) and (III) of the Act for
a fiscal year will receive a 2.0
percentage point reduction to their
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Jkt 241001
market basket update for the fiscal year
involved, after application of section
1888(e)(5)(B)(ii) of the Act (the MFP
adjustment) and section
1888(e)(5)(B)(iii) of the Act (the 1
percent market basket increase for FY
2018) (for additional information on the
SNF QRP, including the statutory
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Frm 00007
Fmt 4701
Sfmt 4700
authority and the selected measures, we
refer readers to section III.D.2. of this
final rule). In addition, section
1888(e)(6)(A)(ii) of the Act states that
application of the 2.0 percentage point
reduction (after application of section
1888(e)(5)(B)(ii) and (iii) of the Act) may
result in the market basket index
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asabaliauskas on DSKBBXCHB2PROD with RULES
percentage change being less than 0.0
for a fiscal year, and may result in
payment rates for a fiscal year being less
than such payment rates for the
preceding fiscal year. Section
1888(e)(6)(A)(iii) of the Act further
specifies that the 2.0 percentage point
reduction is applied in a noncumulative
manner, so that any reduction made
under section 1888(e)(6)(A)(i) of the Act
shall apply only for the fiscal year
involved, and the Secretary shall not
take into account such reduction in
computing the payment amount for a
subsequent fiscal year. We did not
receive any comments specifically on
the market basket reduction under the
SNF QRP and any comments on the
SNF QRP more broadly are discussed in
section III.D.2 of this final rule.
3. Case-Mix Adjustment
Under section 1888(e)(4)(G)(i) of the
Act, the federal rate also incorporates an
adjustment to account for facility casemix, using a classification system that
accounts for the relative resource
utilization of different patient types.
The statute specifies that the adjustment
is to reflect both a resident classification
system that the Secretary establishes to
account for the relative resource use of
different patient types, as well as
resident assessment data and other data
that the Secretary considers appropriate.
In the interim final rule with comment
period that initially implemented the
SNF PPS (63 FR 26252, May 12, 1998),
we developed the RUG–III case-mix
classification system, which tied the
amount of payment to resident resource
use in combination with resident
characteristic information. Staff time
measurement (STM) studies conducted
in 1990, 1995, and 1997 provided
information on resource use (time spent
by staff members on residents) and
resident characteristics that enabled us
not only to establish RUG–III, but also
to create case-mix indexes (CMIs). The
original RUG–III grouper logic was
based on clinical data collected in 1990,
1995, and 1997. As discussed in the
SNF PPS proposed rule for FY 2010 (74
FR 22208), we subsequently conducted
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
through 2007 during the STRIVE
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16:48 Aug 03, 2017
Jkt 241001
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 III.C.1. of this
final rule, the clinical orientation of the
case-mix classification system supports
the SNF PPS’s use of an administrative
presumption that considers a
beneficiary’s initial case-mix
classification to assist in making certain
SNF level of care determinations.
Further, because the MDS is used as a
basis for payment, as well as a clinical
assessment, we have provided extensive
training on proper coding and the time
frames for MDS completion in our
Resident Assessment Instrument (RAI)
Manual. For an MDS to be considered
valid for use in determining payment,
the MDS assessment must be completed
in compliance with the instructions in
the RAI Manual in effect at the time the
assessment is completed. For payment
and quality monitoring purposes, the
RAI Manual consists of both the Manual
instructions and the interpretive
guidance and policy clarifications
posted on the appropriate MDS Web site
at https://www.cms.gov/Medicare/
Quality-Initiatives-Patient-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, enacted
December 8, 2003) 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 only 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 addon for SNF residents with AIDS is also
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Frm 00008
Fmt 4701
Sfmt 4700
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 time being.
For the limited number of SNF
residents that qualify for this add-on,
there is a significant increase in
payments. For example, using FY 2015
data (which still used ICD–9–CM
coding), we identified fewer than 5085
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 2018, an urban
facility with a resident with AIDS in
RUG–IV group ‘‘HC2’’ would have a
case-mix adjusted per diem payment of
$443.08 (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 $1,010.22.
Under section 1888(e)(4)(H) of the
Act, each update of the payment rates
must include the case-mix classification
methodology applicable for the
upcoming FY. The FY 2018 payment
rates set forth in this final rule reflect
the use of the RUG–IV case-mix
classification system from October 1,
2017, through September 30, 2018. We
list the case-mix adjusted RUG–IV
payment rates for FY 2018, 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 applies 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).
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36537
TABLE 4—RUG–IV CASE-MIX ADJUSTED FEDERAL RATES AND ASSOCIATED INDEXES—URBAN
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RUG–IVcategory
Nursing index
Therapy index
$2.67
2.57
2.61
2.19
2.55
2.15
2.47
2.19
2.26
1.56
1.56
0.99
1.51
1.11
1.10
1.45
1.19
0.91
1.36
1.22
0.84
1.50
0.71
3.58
2.67
2.32
2.22
1.74
2.04
1.60
1.89
1.48
1.86
1.46
1.96
1.54
1.86
1.46
1.56
1.22
1.45
1.14
1.68
1.50
1.56
1.38
1.29
1.15
1.15
1.02
0.88
0.78
0.97
0.90
0.70
0.64
1.50
1.40
1.38
1.28
1.10
1.02
0.84
0.78
0.59
0.54
$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
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........................
........................
........................
........................
........................
........................
........................
........................
........................
........................
........................
........................
RUX ..............................
RUL ..............................
RVX ..............................
RVL ..............................
RHX ..............................
RHL ..............................
RMX .............................
RML ..............................
RLX ..............................
RUC .............................
RUB ..............................
RUA ..............................
RVC ..............................
RVB ..............................
RVA ..............................
RHC .............................
RHB ..............................
RHA ..............................
RMC .............................
RMB .............................
RMA .............................
RLB ..............................
RLA ..............................
ES3 ..............................
ES2 ..............................
ES1 ..............................
HE2 ..............................
HE1 ..............................
HD2 ..............................
HD1 ..............................
HC2 ..............................
HC1 ..............................
HB2 ..............................
HB1 ..............................
LE2 ...............................
LE1 ...............................
LD2 ...............................
LD1 ...............................
LC2 ...............................
LC1 ...............................
LB2 ...............................
LB1 ...............................
CE2 ..............................
CE1 ..............................
CD2 ..............................
CD1 ..............................
CC2 ..............................
CC1 ..............................
CB2 ..............................
CB1 ..............................
CA2 ..............................
CA1 ..............................
BB2 ..............................
BB1 ..............................
BA2 ..............................
BA1 ..............................
PE2 ..............................
PE1 ..............................
PD2 ..............................
PD1 ..............................
PC2 ..............................
PC1 ..............................
PB2 ..............................
PB1 ..............................
PA2 ..............................
PA1 ..............................
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Frm 00009
Nursing
component
Therapy
component
$473.28
455.56
462.65
388.20
452.01
381.11
437.83
388.20
400.61
276.53
276.53
175.49
267.66
196.76
194.99
257.03
210.94
161.31
241.07
216.26
148.90
265.89
125.85
634.59
473.28
411.24
393.52
308.43
361.61
283.62
335.02
262.34
329.70
258.80
347.43
272.98
329.70
258.80
276.53
216.26
257.03
202.08
297.80
265.89
276.53
244.62
228.67
203.85
203.85
180.81
155.99
138.26
171.94
159.53
124.08
113.45
265.89
248.16
244.62
226.89
194.99
180.81
148.90
138.26
104.58
95.72
Fmt 4701
Non-case mix
therapy comp
Non-case mix
component
$249.68
249.68
170.91
170.91
113.49
113.49
73.44
73.44
37.39
249.68
249.68
249.68
170.91
170.91
170.91
113.49
113.49
113.49
73.44
73.44
73.44
37.39
37.39
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........................
........................
........................
........................
........................
........................
........................
........................
........................
........................
........................
........................
........................
........................
........................
........................
........................
........................
........................
........................
........................
........................
........................
........................
........................
........................
........................
........................
........................
........................
$17.59
17.59
17.59
17.59
17.59
17.59
17.59
17.59
17.59
17.59
17.59
17.59
17.59
17.59
17.59
17.59
17.59
17.59
17.59
17.59
17.59
17.59
17.59
17.59
17.59
17.59
17.59
17.59
17.59
17.59
17.59
17.59
17.59
17.59
17.59
17.59
17.59
17.59
17.59
17.59
17.59
17.59
17.59
$90.47
90.47
90.47
90.47
90.47
90.47
90.47
90.47
90.47
90.47
90.47
90.47
90.47
90.47
90.47
90.47
90.47
90.47
90.47
90.47
90.47
90.47
90.47
90.47
90.47
90.47
90.47
90.47
90.47
90.47
90.47
90.47
90.47
90.47
90.47
90.47
90.47
90.47
90.47
90.47
90.47
90.47
90.47
90.47
90.47
90.47
90.47
90.47
90.47
90.47
90.47
90.47
90.47
90.47
90.47
90.47
90.47
90.47
90.47
90.47
90.47
90.47
90.47
90.47
90.47
90.47
Sfmt 4700
E:\FR\FM\04AUR2.SGM
04AUR2
Total
rate
$813.43
795.71
724.03
649.58
655.97
585.07
601.74
552.11
528.47
616.68
616.68
515.64
529.04
458.14
456.37
460.99
414.90
365.27
404.98
380.17
312.81
393.75
253.71
742.65
581.34
519.30
501.58
416.49
469.67
391.68
443.08
370.40
437.76
366.86
455.49
381.04
437.76
366.86
384.59
324.32
365.09
310.14
405.86
373.95
384.59
352.68
336.73
311.91
311.91
288.87
264.05
246.32
280.00
267.59
232.14
221.51
373.95
356.22
352.68
334.95
303.05
288.87
256.96
246.32
212.64
203.78
36538
Federal Register / Vol. 82, No. 149 / Friday, August 4, 2017 / Rules and Regulations
TABLE 5—RUG–IV CASE-MIX ADJUSTED FEDERAL RATES AND ASSOCIATED INDEXES—RURAL
asabaliauskas on DSKBBXCHB2PROD with RULES
RUG–IV category
Nursing index
Therapy index
2.67
2.57
2.61
2.19
2.55
2.15
2.47
2.19
2.26
1.56
1.56
0.99
1.51
1.11
1.10
1.45
1.19
0.91
1.36
1.22
0.84
1.50
0.71
3.58
2.67
2.32
2.22
1.74
2.04
1.60
1.89
1.48
1.86
1.46
1.96
1.54
1.86
1.46
1.56
1.22
1.45
1.14
1.68
1.50
1.56
1.38
1.29
1.15
1.15
1.02
0.88
0.78
0.97
0.90
0.70
0.64
1.50
1.40
1.38
1.28
1.10
1.02
0.84
0.78
0.59
0.54
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
........................
........................
........................
........................
........................
........................
........................
........................
........................
........................
........................
........................
........................
........................
........................
........................
........................
........................
........................
........................
........................
........................
........................
........................
........................
........................
........................
........................
........................
........................
........................
........................
........................
........................
........................
........................
........................
........................
........................
........................
........................
........................
........................
RUX ..............................
RUL ..............................
RVX ..............................
RVL ..............................
RHX ..............................
RHL ..............................
RMX .............................
RML ..............................
RLX ..............................
RUC .............................
RUB ..............................
RUA ..............................
RVC ..............................
RVB ..............................
RVA ..............................
RHC .............................
RHB ..............................
RHA ..............................
RMC .............................
RMB .............................
RMA .............................
RLB ..............................
RLA ..............................
ES3 ..............................
ES2 ..............................
ES1 ..............................
HE2 ..............................
HE1 ..............................
HD2 ..............................
HD1 ..............................
HC2 ..............................
HC1 ..............................
HB2 ..............................
HB1 ..............................
LE2 ...............................
LE1 ...............................
LD2 ...............................
LD1 ...............................
LC2 ...............................
LC1 ...............................
LB2 ...............................
LB1 ...............................
CE2 ..............................
CE1 ..............................
CD2 ..............................
CD1 ..............................
CC2 ..............................
CC1 ..............................
CB2 ..............................
CB1 ..............................
CA2 ..............................
CA1 ..............................
BB2 ..............................
BB1 ..............................
BA2 ..............................
BA1 ..............................
PE2 ..............................
PE1 ..............................
PD2 ..............................
PD1 ..............................
PC2 ..............................
PC1 ..............................
PB2 ..............................
PB1 ..............................
PA2 ..............................
PA1 ..............................
VerDate Sep<11>2014
16:48 Aug 03, 2017
Jkt 241001
PO 00000
Frm 00010
Nursing
component
Therapy
component
$452.14
435.20
441.98
370.85
431.82
364.08
418.27
370.85
382.71
264.17
264.17
167.65
255.70
187.97
186.27
245.54
201.51
154.10
230.30
206.59
142.25
254.01
120.23
606.24
452.14
392.87
375.93
294.65
345.45
270.94
320.05
250.62
314.97
247.24
331.91
260.78
314.97
247.24
264.17
206.59
245.54
193.05
284.49
254.01
264.17
233.69
218.45
194.74
194.74
172.73
149.02
132.09
164.26
152.41
118.54
108.38
254.01
237.08
233.69
216.76
186.27
172.73
142.25
132.09
99.91
91.44
Fmt 4701
Non-case mix
therapy comp
Non-case mix
component
$287.91
287.91
197.07
197.07
130.87
130.87
84.68
84.68
43.11
287.91
287.91
287.91
197.07
197.07
197.07
130.87
130.87
130.87
84.68
84.68
84.68
43.11
43.11
........................
........................
........................
........................
........................
........................
........................
........................
........................
........................
........................
........................
........................
........................
........................
........................
........................
........................
........................
........................
........................
........................
........................
........................
........................
........................
........................
........................
........................
........................
........................
........................
........................
........................
........................
........................
........................
........................
........................
........................
........................
........................
........................
........................
........................
........................
........................
........................
........................
........................
........................
........................
........................
........................
........................
........................
........................
........................
........................
........................
........................
........................
........................
........................
........................
........................
18.79
18.79
18.79
18.79
18.79
18.79
18.79
18.79
18.79
18.79
18.79
18.79
18.79
18.79
18.79
18.79
18.79
18.79
18.79
18.79
18.79
18.79
18.79
18.79
18.79
18.79
18.79
18.79
18.79
18.79
18.79
18.79
18.79
18.79
18.79
18.79
18.79
18.79
18.79
18.79
18.79
18.79
18.79
$92.14
92.14
92.14
92.14
92.14
92.14
92.14
92.14
92.14
92.14
92.14
92.14
92.14
92.14
92.14
92.14
92.14
92.14
92.14
92.14
92.14
92.14
92.14
92.14
92.14
92.14
92.14
92.14
92.14
92.14
92.14
92.14
92.14
92.14
92.14
92.14
92.14
92.14
92.14
92.14
92.14
92.14
92.14
92.14
92.14
92.14
92.14
92.14
92.14
92.14
92.14
92.14
92.14
92.14
92.14
92.14
92.14
92.14
92.14
92.14
92.14
92.14
92.14
92.14
92.14
92.14
Sfmt 4700
E:\FR\FM\04AUR2.SGM
04AUR2
Total rate
$832.19
815.25
731.19
660.06
654.83
587.09
595.09
547.67
517.96
644.22
644.22
547.70
544.91
477.18
475.48
468.55
424.52
377.11
407.12
383.41
319.07
389.26
255.48
717.17
563.07
503.80
486.86
405.58
456.38
381.87
430.98
361.55
425.90
358.17
442.84
371.71
425.90
358.17
375.10
317.52
356.47
303.98
395.42
364.94
375.10
344.62
329.38
305.67
305.67
283.66
259.95
243.02
275.19
263.34
229.47
219.31
364.94
348.01
344.62
327.69
297.20
283.66
253.18
243.02
210.84
202.37
asabaliauskas on DSKBBXCHB2PROD with RULES
Federal Register / Vol. 82, No. 149 / Friday, August 4, 2017 / Rules and Regulations
4. 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 proposed to continue this
practice for FY 2018, 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 2018, the updated wage data are for
hospital cost reporting periods
beginning on or after October 1, 2013
and before October 1, 2014 (FY 2014
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. More
specifically, we believe auditing all SNF
cost reports, similar to the process used
to audit inpatient hospital cost reports
for purposes of the Inpatient Prospective
Payment System (IPPS) wage index,
would place a burden on providers in
terms of responding to documented
audit requests. We also believe that
adopting such an approach would
require a significant commitment of
resources by CMS and the Medicare
Administrative Contractors, potentially
far in excess of those required under the
IPPS given that there are nearly five
times as many SNFs as there are
hospitals. Therefore, while we continue
to believe that the development of such
an audit process could improve SNF
cost reports in such a manner as to
VerDate Sep<11>2014
16:48 Aug 03, 2017
Jkt 241001
permit us to establish a SNF-specific
wage index, we do not regard an
undertaking of this magnitude as being
feasible within the current level of
programmatic resources.
In addition, we proposed 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 2018 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 stated in the proposed rule we
would use the average wage index from
all contiguous Core-Based Statistical
Areas (CBSAs) as a reasonable proxy.
For FY 2018, there are no rural
geographic areas that do not have
hospitals, and thus, we stated that this
methodology would not be applied. For
rural Puerto Rico, we stated that 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
stated 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 stated 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 2018, the only
urban area without wage index data
available is CBSA 25980, HinesvilleFort Stewart, GA. The wage index
applicable to FY 2018 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.
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 https://
www.whitehouse.gov/omb/bulletins_
b03-04, 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 1-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
PO 00000
Frm 00011
Fmt 4701
Sfmt 4700
36539
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.
In the FY 2015 SNF PPS final rule (79
FR 45644 through 45646), we finalized
changes to the SNF PPS wage index
based on the newest OMB delineations,
as described in OMB Bulletin No. 13–
01, beginning in FY 2015, including a 1year transition with a blended wage
index for FY 2015. 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). Subsequently, 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. 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
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 wage index
applicable to FY 2018 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.
Once calculated, we stated in the
proposed rule 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 laborintensive and vary with the local labor
market) in the input price index. In the
E:\FR\FM\04AUR2.SGM
04AUR2
asabaliauskas on DSKBBXCHB2PROD with RULES
36540
Federal Register / Vol. 82, No. 149 / Friday, August 4, 2017 / Rules and Regulations
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; Professional fees:
Labor-related; Administrative and
Facilities Support Services; All other—
Labor-Related Services; and a
proportion of Capital-Related expenses.
Effective beginning FY 2018, as
discussed in section III.D.1. of the
proposed rule, we proposed to revise
the labor-related share to reflect the
relative importance of the 2014-based
SNF market basket cost weights for the
following cost categories: Wages and
Salaries; Employee Benefits;
Professional fees: Labor-related;
Administrative and Facilities Support
services; Installation, Maintenance, and
Repair services; All Other: LaborRelated 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 2018. 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 2018 than the base
year weights from the SNF market
basket. The methodology for calculating
the labor-related portion for FY 2018 is
discussed in section III.D.1. of this final
rule and the labor-related share is
provided in Table 15.
We invited public comments on these
proposals. A discussion of the
comments we received, along with our
responses, appear below.
Comment: One commenter expressed
concern with what appears to be a
precipitous drop in the New Bern, North
Carolina (CBSA 35100) wage index. The
commenter noted that in the SNF PPS
final rule for 2017, the wage index for
this CBSA was 0.8539, but that in the
FY 2018 SNF PPS proposed rule, this
value had dropped to 0.5988. The
commenter requests that the
information used to determine the wage
indexes be reviewed prior to the release
of the final rule.
Response: We appreciate the
commenter’s concern regarding the
decrease in the wage index for CBSA
35100. There is a wage data verification
and correction process which is
discussed in the Inpatient Prospective
VerDate Sep<11>2014
16:48 Aug 03, 2017
Jkt 241001
Payment System (IPPS) proposed and
final rules each year. The most recent
discussion appears in the FY 2018 IPPS
proposed rule (82 FR 19899 through
19900. 19911 through 19915). Based on
the final wage data for FY 2018, the
wage index for CBSA 35100 has been
updated to 0.8277, which is only a
slight decrease compared to the FY 2017
value.
Comment: Several commenters
recommend that we continue exploring
potential approaches to establish a SNFspecific wage index either by modifying
the use of current hospital wage data by
eliminating certain job categories
specific to hospitals only, or by utilizing
collected SNF-specific wage data only.
More specifically, these commenters
suggest that a SNF-specific wage index
could benefit from weighting it by
occupational mix data for SNFs,
allowing for a rural floor policy, and by
implementation of a reclassification
system.
Response: We appreciate the
commenters raising these concerns
regarding the use of the hospital wage
index data under the SNF PPS, and the
commenter’s recommendation to
continue exploring potential approaches
for collecting SNF-specific wage data to
establish a SNF-specific wage index.
However, we note that, consistent with
the preceding discussion in this final
rule as well as our previous responses
to these recurring comments (most
recently published in the FY 2017 SNF
PPS final rule (81 FR 51979 through
51980)), developing such a wage index
would require a resource-intensive audit
process similar to that used for IPPS
hospital data, to improve the quality of
the SNF cost report data in order for it
to be used as part of this analysis. We
would further note that as this audit
process is quite extensive in the case of
approximately 3,300 hospitals, it would
be significantly more so in the case of
approximately 15,000 SNFs. As
discussed above, we believe auditing all
SNF cost reports, similar to the process
used to audit inpatient hospital cost
reports for purposes of the Inpatient
Prospective Payment System (IPPS)
wage index, would place a burden on
providers in terms of recordkeeping and
completion of the cost report worksheet.
We also believe that adopting such an
approach would require a significant
commitment of resources by CMS and
the Medicare Administrative
Contractors, potentially far in excess of
those required under the IPPS given that
there are nearly five times as many
SNFs as there are hospitals. Therefore,
while we continue to review all
available data and contemplate the
potential methodological approaches for
PO 00000
Frm 00012
Fmt 4701
Sfmt 4700
a SNF-specific wage index in the future,
we continue to believe that in the
absence of the appropriate SNF-specific
wage data, using the pre-reclassified
hospital inpatient wage data (without
the occupational mix adjustment) is
appropriate and reasonable for the SNF
PPS.
Further, we appreciate these
commenters’ suggestion that we modify
the current hospital wage data used to
construct the SNF PPS wage index to
reflect the SNF environment more
accurately by eliminating certain job
categories specific to hospitals only.
While we consider whether or not such
an approach may constitute an interim
step in the process of developing a SNFspecific wage index, we would note that
other provider types also use the
hospital wage index as the basis for
their associated wage index. As such,
we believe that such a recommendation
should be part of a broader discussion
of wage index reform across Medicare
payment systems.
We note that section 315 of BIPA
authorized us to establish a geographic
reclassification procedure that is
specific to SNFs, only after collecting
the data necessary to establish a SNFspecific wage index that is based on
data from nursing homes. However, to
date this has been infeasible 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. To the extent we are
able to develop and implement a SNFspecific wage index in the future, we
may consider at that time whether it
would be appropriate to implement a
reclassification system and an
occupational mix adjustment, as
suggested by commenters.
As it relates to the suggestion that we
adopt a rural floor policy with a SNFspecific wage index, we do not believe
it would be prudent to adopt such a
policy under the SNF PPS. As we stated
in the FY 2016 SNF PPS final rule (80
FR 46401), MedPAC has recommended
eliminating the rural floor policy (which
actually sets a floor for urban hospitals)
from the calculation of the IPPS wage
index (see, for example, Chapter 3 of
MedPAC’s March 2013 Report to
Congress on Medicare Payment Policy,
available at https://medpac.gov/docs/
default-source/reports/mar13_ch03.pdf,
which notes on page 65 that in 2007,
MedPAC had ‘‘. . . recommended
eliminating these special wage index
adjustments and adopting a new wage
index system to avoid geographic
inequities that can occur due to current
wage index policies (Medicare Payment
Advisory Commission 2007b.’’) As we
stated in the FY 2016 SNF PPS final
E:\FR\FM\04AUR2.SGM
04AUR2
Federal Register / Vol. 82, No. 149 / Friday, August 4, 2017 / Rules and Regulations
rule, if we were to adopt the rural floor
under the SNF PPS, we believe that the
SNF PPS wage index could become
vulnerable to problems similar to those
that MedPAC identified in its March
2013 Report to Congress.
Accordingly, after considering the
comments received and for the reasons
discussed previously in this section and
in the FY 2018 SNF PPS proposed rule
(82 FR 21022 through 21026), we are
finalizing the FY 2018 wage index
adjustment and related policies as
proposed in the FY 2018 SNF PPS
proposed rule. For FY 2018, the updated
wage data are for hospital cost reporting
periods beginning on or after October 1,
2013 and before October 1, 2014 (FY
2014 cost report data). As noted above,
36541
the wage index applicable to FY 2018 is
set forth in Tables A and B available on
the CMS Web site at https://
www.cms.gov/Medicare/Medicare-Feefor-Service-Payment/SNFPPS/
WageIndex.html. Tables 6 and 7 show
the RUG–IV case-mix adjusted federal
rates for FY 2018 by labor-related and
non-labor-related components.
TABLE 6—RUG–IV CASE-MIX ADJUSTED FEDERAL RATES FOR URBAN SNFS BY LABOR AND NON-LABOR COMPONENT
asabaliauskas on DSKBBXCHB2PROD with RULES
RUG–IV category
Total rate
RUX .............................................................................................................................................
RUL ..............................................................................................................................................
RVX ..............................................................................................................................................
RVL ..............................................................................................................................................
RHX .............................................................................................................................................
RHL ..............................................................................................................................................
RMX .............................................................................................................................................
RML .............................................................................................................................................
RLX ..............................................................................................................................................
RUC .............................................................................................................................................
RUB .............................................................................................................................................
RUA .............................................................................................................................................
RVC .............................................................................................................................................
RVB ..............................................................................................................................................
RVA ..............................................................................................................................................
RHC .............................................................................................................................................
RHB .............................................................................................................................................
RHA .............................................................................................................................................
RMC .............................................................................................................................................
RMB .............................................................................................................................................
RMA .............................................................................................................................................
RLB ..............................................................................................................................................
RLA ..............................................................................................................................................
ES3 ..............................................................................................................................................
ES2 ..............................................................................................................................................
ES1 ..............................................................................................................................................
HE2 ..............................................................................................................................................
HE1 ..............................................................................................................................................
HD2 ..............................................................................................................................................
HD1 ..............................................................................................................................................
HC2 ..............................................................................................................................................
HC1 ..............................................................................................................................................
HB2 ..............................................................................................................................................
HB1 ..............................................................................................................................................
LE2 ...............................................................................................................................................
LE1 ...............................................................................................................................................
LD2 ..............................................................................................................................................
LD1 ..............................................................................................................................................
LC2 ..............................................................................................................................................
LC1 ..............................................................................................................................................
LB2 ...............................................................................................................................................
LB1 ...............................................................................................................................................
CE2 ..............................................................................................................................................
CE1 ..............................................................................................................................................
CD2 ..............................................................................................................................................
CD1 ..............................................................................................................................................
CC2 ..............................................................................................................................................
CC1 ..............................................................................................................................................
CB2 ..............................................................................................................................................
CB1 ..............................................................................................................................................
CA2 ..............................................................................................................................................
CA1 ..............................................................................................................................................
BB2 ..............................................................................................................................................
BB1 ..............................................................................................................................................
BA2 ..............................................................................................................................................
BA1 ..............................................................................................................................................
PE2 ..............................................................................................................................................
PE1 ..............................................................................................................................................
PD2 ..............................................................................................................................................
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$813.43
795.71
724.03
649.58
655.97
585.07
601.74
552.11
528.47
616.68
616.68
515.64
529.04
458.14
456.37
460.99
414.90
365.27
404.98
380.17
312.81
393.75
253.71
742.65
581.34
519.30
501.58
416.49
469.67
391.68
443.08
370.40
437.76
366.86
455.49
381.04
437.76
366.86
384.59
324.32
365.09
310.14
405.86
373.95
384.59
352.68
336.73
311.91
311.91
288.87
264.05
246.32
280.00
267.59
232.14
221.51
373.95
356.22
352.68
E:\FR\FM\04AUR2.SGM
04AUR2
Labor
portion
$575.91
563.36
512.61
459.90
464.43
414.23
426.03
390.89
374.16
436.61
436.61
365.07
374.56
324.36
323.11
326.38
293.75
258.61
286.73
269.16
221.47
278.78
179.63
525.80
411.59
367.66
355.12
294.87
332.53
277.31
313.70
262.24
309.93
259.74
322.49
269.78
309.93
259.74
272.29
229.62
258.48
219.58
287.35
264.76
272.29
249.70
238.40
220.83
220.83
204.52
186.95
174.39
198.24
189.45
164.36
156.83
264.76
252.20
249.70
Non-labor
portion
$237.52
232.35
211.42
189.68
191.54
170.84
175.71
161.22
154.31
180.07
180.07
150.57
154.48
133.78
133.26
134.61
121.15
106.66
118.25
111.01
91.34
114.98
74.08
216.85
169.75
151.64
146.46
121.62
137.14
114.37
129.38
108.16
127.83
107.12
133.00
111.26
127.83
107.12
112.30
94.70
106.61
90.56
118.51
109.19
112.30
102.98
98.33
91.08
91.08
84.35
77.10
71.93
81.76
78.14
67.78
64.68
109.19
104.02
102.98
36542
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TABLE 6—RUG–IV CASE-MIX ADJUSTED FEDERAL RATES FOR URBAN SNFS BY LABOR AND NON-LABOR COMPONENT—
Continued
RUG–IV category
PD1
PC2
PC1
PB2
PB1
PA2
PA1
Total rate
..............................................................................................................................................
..............................................................................................................................................
..............................................................................................................................................
..............................................................................................................................................
..............................................................................................................................................
..............................................................................................................................................
..............................................................................................................................................
334.95
303.05
288.87
256.96
246.32
212.64
203.78
Labor
portion
237.14
214.56
204.52
181.93
174.39
150.55
144.28
Non-labor
portion
97.81
88.49
84.35
75.03
71.93
62.09
59.50
TABLE 7—RUG–IV CASE-MIX ADJUSTED FEDERAL RATES FOR RURAL SNFS BY LABOR AND NON-LABOR COMPONENT
asabaliauskas on DSKBBXCHB2PROD with RULES
RUG–IV category
Total rate
RUX .............................................................................................................................................
RUL ..............................................................................................................................................
RVX ..............................................................................................................................................
RVL ..............................................................................................................................................
RHX .............................................................................................................................................
RHL ..............................................................................................................................................
RMX .............................................................................................................................................
RML .............................................................................................................................................
RLX ..............................................................................................................................................
RUC .............................................................................................................................................
RUB .............................................................................................................................................
RUA .............................................................................................................................................
RVC .............................................................................................................................................
RVB ..............................................................................................................................................
RVA ..............................................................................................................................................
RHC .............................................................................................................................................
RHB .............................................................................................................................................
RHA .............................................................................................................................................
RMC .............................................................................................................................................
RMB .............................................................................................................................................
RMA .............................................................................................................................................
RLB ..............................................................................................................................................
RLA ..............................................................................................................................................
ES3 ..............................................................................................................................................
ES2 ..............................................................................................................................................
ES1 ..............................................................................................................................................
HE2 ..............................................................................................................................................
HE1 ..............................................................................................................................................
HD2 ..............................................................................................................................................
HD1 ..............................................................................................................................................
HC2 ..............................................................................................................................................
HC1 ..............................................................................................................................................
HB2 ..............................................................................................................................................
HB1 ..............................................................................................................................................
LE2 ...............................................................................................................................................
LE1 ...............................................................................................................................................
LD2 ..............................................................................................................................................
LD1 ..............................................................................................................................................
LC2 ..............................................................................................................................................
LC1 ..............................................................................................................................................
LB2 ...............................................................................................................................................
LB1 ...............................................................................................................................................
CE2 ..............................................................................................................................................
CE1 ..............................................................................................................................................
CD2 ..............................................................................................................................................
CD1 ..............................................................................................................................................
CC2 ..............................................................................................................................................
CC1 ..............................................................................................................................................
CB2 ..............................................................................................................................................
CB1 ..............................................................................................................................................
CA2 ..............................................................................................................................................
CA1 ..............................................................................................................................................
BB2 ..............................................................................................................................................
BB1 ..............................................................................................................................................
BA2 ..............................................................................................................................................
BA1 ..............................................................................................................................................
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$832.19
815.25
731.19
660.06
654.83
587.09
595.09
547.67
517.96
644.22
644.22
547.70
544.91
477.18
475.48
468.55
424.52
377.11
407.12
383.41
319.07
389.26
255.48
717.17
563.07
503.80
486.86
405.58
456.38
381.87
430.98
361.55
425.90
358.17
442.84
371.71
425.90
358.17
375.10
317.52
356.47
303.98
395.42
364.94
375.10
344.62
329.38
305.67
305.67
283.66
259.95
243.02
275.19
263.34
229.47
219.31
E:\FR\FM\04AUR2.SGM
04AUR2
Labor
portion
$589.19
577.20
517.68
467.32
463.62
415.66
421.32
387.75
366.72
456.11
456.11
387.77
385.80
337.84
336.64
331.73
300.56
266.99
288.24
271.45
225.90
275.60
180.88
507.76
398.65
356.69
344.70
287.15
323.12
270.36
305.13
255.98
301.54
253.58
313.53
263.17
301.54
253.58
265.57
224.80
252.38
215.22
279.96
258.38
265.57
243.99
233.20
216.41
216.41
200.83
184.04
172.06
194.83
186.44
162.46
155.27
Non-labor
portion
$243.00
238.05
213.51
192.74
191.21
171.43
173.77
159.92
151.24
188.11
188.11
159.93
159.11
139.34
138.84
136.82
123.96
110.12
118.88
111.96
93.17
113.66
74.60
209.41
164.42
147.11
142.16
118.43
133.26
111.51
125.85
105.57
124.36
104.59
129.31
108.54
124.36
104.59
109.53
92.72
104.09
88.76
115.46
106.56
109.53
100.63
96.18
89.26
89.26
82.83
75.91
70.96
80.36
76.90
67.01
64.04
36543
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TABLE 7—RUG–IV CASE-MIX ADJUSTED FEDERAL RATES FOR RURAL SNFS BY LABOR AND NON-LABOR COMPONENT—
Continued
RUG–IV category
PE2
PE1
PD2
PD1
PC2
PC1
PB2
PB1
PA2
PA1
Total rate
..............................................................................................................................................
..............................................................................................................................................
..............................................................................................................................................
..............................................................................................................................................
..............................................................................................................................................
..............................................................................................................................................
..............................................................................................................................................
..............................................................................................................................................
..............................................................................................................................................
..............................................................................................................................................
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
2018 (federal rates effective October 1,
2017), we stated in the proposed rule
that we would apply an adjustment to
fulfill the budget neutrality requirement.
We stated 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 2017 to
the weighted average wage adjustment
factor for FY 2018. For this calculation,
we stated we would use the same FY
2016 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.
We proposed a budget neutrality factor
of 1.0003. We did not receive any
comments regarding our proposed
budget neutrality calculation. Thus, we
are finalizing the budget neutrality
methodology as proposed. The final
budget neutrality factor for FY 2018 is
1.0013. We note that this is different
from the budget neutrality factor
provided in the FY 2018 SNF PPS
proposed rule (82 FR 21026) due to an
updated wage index file and updated
364.94
348.01
344.62
327.69
297.20
283.66
253.18
243.02
210.84
202.37
Labor
portion
Non-labor
portion
258.38
246.39
243.99
232.00
210.42
200.83
179.25
172.06
149.27
143.28
106.56
101.62
100.63
95.69
86.78
82.83
73.93
70.96
61.57
59.09
claims file used to calculate the budget
neutrality factor.
5. Adjusted Rate Computation Example
Using the hypothetical SNF XYZ,
Table 8 shows the adjustments made to
the federal per diem rates to compute
the provider’s actual per diem PPS
payment for FY 2018. We derive the
Labor and Non-labor columns from
Table 6. The wage index used in this
example is based on the FY 2018 SNF
PPS wage index, which may be found in
Table A available on the CMS Web site
at https://www.cms.gov/Medicare/
Medicare-Fee-for-Service-Payment/
SNFPPS/WageIndex.html. As illustrated
in Table 8, SNF XYZ’s total PPS
payment for FY 2018 would equal
$47,596.42.
TABLE 8—ADJUSTED RATE COMPUTATION EXAMPLE SNF XYZ: LOCATED IN FREDERICK, MD (URBAN CBSA 43524)
WAGE INDEX: 0.9863
[See Wage Index in Table A] 1
RUG–IVgroup
RVX
ES2
RHA
CC2
BA2
Wage
index
Labor
..................................
..................................
..................................
* ...............................
..................................
Adjusted
labor
Non-labor
Adjusted
rate
Percent
adjustment
Medicare
days
Payment
$512.61
411.59
258.61
238.40
164.36
0.9863
0.9863
0.9863
0.9863
0.9863
$505.59
405.95
255.07
235.13
162.11
$211.42
169.75
106.66
98.33
67.78
$717.01
575.70
361.73
333.46
229.89
$717.01
575.70
361.73
760.29
229.89
14
30
16
10
30
$10,038.14
17,271.00
5,787.68
7,602.90
6,896.70
....................
....................
....................
....................
....................
....................
100
47,596.42
* 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.
C. Additional Aspects of the SNF PPS
asabaliauskas on DSKBBXCHB2PROD with RULES
1. 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
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resident assessment process and casemix classification system discussed in
section III.B.3. of this final 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 § 413.345, we
include in each update of the federal
payment rates in the Federal Register
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Fmt 4701
Sfmt 4700
the designation of those specific RUGs
under the classification system that
represent the required SNF level of care,
as provided in § 409.30. As set forth in
the FY 2011 SNF PPS update notice (75
FR 42910), this designation reflects an
administrative presumption under the
66-group RUG–IV system that
beneficiaries who are correctly assigned
to one of the upper 52 RUG–IV groups
on the initial 5-day, Medicare-required
assessment are automatically classified
as meeting the SNF level of care
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asabaliauskas on DSKBBXCHB2PROD with RULES
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 final rule, we continue to
designate the upper 52 RUG–IV groups
for purposes of this administrative
presumption, consisting of all groups
encompassed by the following RUG–IV
categories:
• Rehabilitation plus Extensive
Services.
• Ultra High Rehabilitation.
• Very High Rehabilitation.
• High Rehabilitation.
• Medium Rehabilitation.
• Low Rehabilitation.
• Extensive Services.
• Special Care High.
• Special Care Low.
• Clinically Complex.
However, we note that this
administrative presumption policy does
not supersede the SNF’s responsibility
to ensure that its decisions relating to
level of care are appropriate and timely,
including a review to confirm that the
services prompting the beneficiary’s
assignment to one of the upper 52 RUG–
IV groups (which, in turn, serves to
trigger the administrative presumption)
are themselves medically necessary. As
we explained in the FY 2000 SNF PPS
final rule (64 FR 41667), the
administrative presumption:
. . . is itself rebuttable in those individual
cases in which the services actually received
by the resident do not meet the basic
statutory criterion of being reasonable and
necessary to diagnose or treat a beneficiary’s
condition (according to section 1862(a)(1) of
the Act). Accordingly, the presumption
would not apply, for example, in those
situations in which a resident’s assignment to
one of the upper . . . groups is itself based
on the receipt of services that are
subsequently determined to be not
reasonable and necessary.
Moreover, we want to stress the
importance of careful monitoring for
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changes in each patient’s condition to
determine the continuing need for Part
A SNF benefits after the ARD of the 5day assessment.
In connection with the administrative
level of care presumption, in the FY
2018 SNF PPS proposed rule (82 FR
21027), we proposed to amend the
existing regulations text at § 413.345 by
removing the parenthetical phrase
‘‘(including the designation of those
specific Resource Utilization Groups
under the resident classification system
that represent the required SNF level of
care, as provided in § 409.30 of this
chapter)’’ that currently appears in the
second sentence of § 413.345. We stated
in the proposed rule that the deletion of
the current reference to publishing such
material annually in the Federal
Register, along with the specific
reference to ‘‘Resource Utilization
Groups,’’ would serve to conform the
text of these regulations more closely to
that of the corresponding statutory
language at section 1888(e)(4)(H)(ii) of
the Act, which refers in more general
terms to the applicable ‘‘case mix
classification system.’’ Moreover, we
noted in the proposed rule that the
recurring announcements in the Federal
Register of the administrative
presumption’s designated groups as part
of each annual update of the SNF PPS
rates has in actual practice proven to be
largely a formality, resulting in exactly
the same designated groups repetitively
being promulgated routinely year after
year. Accordingly, we proposed instead
to disseminate this standard description
of the administrative presumption’s
designated groups exclusively through
the SNF PPS Web site, and to announce
such designations in rulemaking only in
the event that we are actually proposing
to make changes in them.
Along with this proposed revision, we
also proposed to make appropriate
conforming revisions in other portions
of the regulations text (82 FR 21027).
Specifically, we proposed to remove
from the introductory text of § 409.30,
the parenthetical phrase ‘‘(in the annual
publication of Federal prospective
payment rates described in § 413.345 of
this chapter)’’ for the same reasons we
proposed to remove the parenthetical
phrase from § 413.345, as discussed in
the proposed rule and in this final rule
above. In addition, we proposed to
replace the phrase to ‘‘one of the
Resource Utilization Groups that is
designated’’ in § 409.30’s introductory
text with the phrase ‘‘one of the casemix classifiers CMS designates’’ to
conform more closely with the statutory
language in section 1888(e)(4)(G) and
(H) of the Act, which refers in more
general terms to the ‘‘resident
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Fmt 4701
Sfmt 4700
classification system’’ or ‘‘case mix
classification system,’’ and to clarify
that ‘‘CMS’’ makes these designations.
Additionally, we proposed to revise
§ 409.30 to reflect more clearly our
longstanding policy that the assignment
of a designated case-mix classifier
would serve to trigger the administrative
presumption only when that assignment
is itself correct. As we noted in the FY
2000 SNF PPS final rule (64 FR 41667,
July 30, 1999), ‘‘. . . 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.’’ We also proposed to make
similar conforming revisions in the
‘‘resident classification system’’
definition that currently appears in
§ 413.333 to replace ‘‘Resource
Utilization Groups’’ with ‘‘resident
classification system’’, as well as in the
material in § 424.20(a)(1)(ii) on SNF
level of care certifications to replace the
phrase ‘‘one of the Resource Utilization
Groups designated’’ with ‘‘one of the
case-mix classifiers that CMS
designates,’’ in both cases to conform
more closely with the statutory language
in section 1888(e)(4)(G) and (H) of the
Act, as discussed in the proposed rule
(82 FR 21027) and in this final rule,
which refers in more general terms to
the ‘‘resident classification system’’ or
‘‘case mix classification system,’’ and to
clarify in § 424.20(a)(1)(ii) that ‘‘CMS’’
designates these case-mix classifiers.
Finally, regarding § 424.20, we proposed
to revise paragraph (e)(2)(ii)(B)(2) by
updating its existing cross-reference to
the provision at § 483.40(e) on
delegating physician tasks in SNFs,
which was recently redesignated as new
§ 483.30(e) under the revised long-term
care facility requirements for
participation (81 FR 68861, October 4,
2016). Finally, we proposed to remove
the word ‘‘Optional’’ from the title of 42
CFR part 413 (82 FR 21098), as this is
an obsolete reference to an optional
prospective payment methodology for
low-volume SNFs that predated the SNF
PPS and is no longer in effect.
Commenters submitted the following
comments on our proposals described
above related to the SNF Level of Care—
Administrative Presumption aspects of
the SNF PPS. A discussion of these
comments, along with our responses,
appears below.
Comment: We received a comment
about our proposed revisions to
§§ 413.333 and 413.345 that would
result in removing the term ‘‘Resource
Utilization Groups,’’ and in § 413.333,
utilizing the term ‘‘resident
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Federal Register / Vol. 82, No. 149 / Friday, August 4, 2017 / Rules and Regulations
classification system’’ in its place. The
commenter interpreted our use of the
term ‘‘resident classification system’’ in
this context as referring specifically to
the Resident Classification System,
Version I (RCS–I), the particular casemix classification model that is
currently under development as
discussed in our advance notice of
proposed rulemaking with comment
(CMS–1686–ANPRM, 82 FR 20980, May
4, 2017). Based on that assumption, the
commenter expressed the view that it
would be premature and confusing to
adopt terminology referencing a
particular model that has not been
finalized at this point.
Response: We wish to clarify that our
use of the term ‘‘resident classification
system’’ in this context refers solely to
a case-mix classification system in the
generic sense, and not to the particular
model discussed in the ANPRM, which
we will continue to refer to as the
Resident Classification System, Version
I (or RCS–I). We note that the term
‘‘resident classification system’’ in the
more generic sense has long been
utilized as such in the existing
regulations at § 413.333, and that our
proposed changes were not intended to
restrict the regulations text to any one
particular type of classification system,
but rather, to do the opposite by
removing the existing, specific
references to the RUG model. As we
noted in the proposed rule (82 FR
21027), such revisions would actually
serve to conform the regulations text
‘‘. . . more closely with the statutory
language in section 1888(e)(4)(G) and
(H) of the Act, . . . which refers in more
general terms to the ‘resident
classification system’ . . .’’ (emphasis
added). Accordingly, we are revising
these portions of the regulations text as
proposed, as discussed in this final rule.
Comment: One commenter inquired
about our proposed clarification in
§ 409.30 which, similar to the existing
regulations at § 424.20(a)(1)(ii), would
specify that a resident qualifies for the
level of care presumption only when
‘‘correctly’’ assigned to one of the casemix classifiers designated for this
purpose. In explaining the reason for
this clarification in the proposed rule
(82 FR 21027), we cited a prior
discussion of the presumption in the FY
2000 final rule (64 FR 41667, July 30,
1999), which had noted that ‘‘. . . 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.’’ The commenter questioned
whether, in this scenario, the resident’s
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assignment to a RUG that turns out to
be incorrect would result in
disqualifying the resident from SNF
coverage altogether. The commenter
also requested clarification in the
wording of a portion of § 30.1 of the
Medicare Benefit Policy Manual
(MBPM), Chapter 8 that discusses how
services furnished during the prior
hospital stay are to be coded on the
resident assessment.
Response: Regarding the scenario
discussed above (in which the services
that triggered a given RUG assignment
on the initial assessment are found to be
not reasonable and necessary), if the
resident is then reassigned to a different
RUG that is itself designated as meeting
the level of care presumption, the
resident would, in fact, still qualify for
the presumption on that basis, as the
end result of the reassignment would be
that the resident has been ‘‘correctly
assigned’’ to one of the designated RUGs
on that assessment. Alternatively, if the
reassignment is to one of the less
intensive RUGs that is not designated as
meeting the presumption, the resident
would still receive an individual level
of care determination using the existing
administrative criteria. Finally,
regarding the request to clarify the
MBPM instructions on coding
procedures, we believe this comment is
beyond the scope of this rule. As we
noted in the FY 2002 SNF PPS final
rule, ‘‘. . . specific operational
instructions (such as those describing
the details of particular billing
procedures) are beyond the scope of the
SNF PPS final rule’’ (66 FR 39588, July
31, 2001). However, we will forward
this comment to the appropriate
component within CMS for
consideration.
After consideration of the comments
received, for the reasons discussed
above and in the FY 2018 SNF PPS
proposed rule (82 FR 21026 through
21027), we are finalizing, without
modification, our proposed revisions to
§§ 409.30, 413.333, 413.345,
424.20(a)(1)(ii) and (e)(2)(ii)(B)(2), and
our revision to the title of 42 CFR part
413 as discussed in this final rule. In
addition, as we proposed, we will
henceforth disseminate the standard
description of the administrative
presumption’s designated groups
exclusively through the SNF PPS Web
site, and will announce such
designations in rulemaking only in the
event that we are actually proposing to
make changes in them.
2. 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
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36545
consolidated Medicare bills to its
Medicare Administrative Contractor
(MAC) 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_04152015.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
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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, the
amendments enacted in section 103 of
the BBRA do not 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
is consistent with 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 the FY 2018 SNF PPS
proposed rule (82 FR 21028), we
specifically invited 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 stated that we may consider
excluding a particular service if it meets
our criteria for exclusion as specified
above. We also requested that
commenters 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
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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, we stated in the proposed
rule that, 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, 2017). 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.
In the proposed rule, we noted that
one category of services which
consolidated billing excludes under
§ 411.15(p)(3) consists of certain
exceptionally intensive types of
outpatient hospital services. As we
explained in the FY 2000 SNF PPS final
rule, this exclusion applies to ‘‘. . .
those types of outpatient hospital
services that we specifically identify as
being beyond the scope of SNF care
plans generally’’ (64 FR 41676, July 30,
1999, emphasis added). As discussed in
the FY 2018 SNF PPS proposed rule (82
FR 21028), to further clarify this
longstanding policy noted above that
the outpatient hospital exclusion
applies solely to those services that we
specifically designate for this purpose,
we proposed to revise § 411.15(p)(3)(iii)
to state this more explicitly. In addition,
we note that recent revisions in the
long-term care facility requirements for
participation (81 FR 68858, October 4,
2016) have moved the comprehensive
care plan regulations from their
previous location at § 483.20(k) to a
new, redesignated § 483.21(b);
accordingly, we proposed to make a
conforming revision in the existing
cross-reference to that provision that
appears in § 411.15(p)(3)(iii).
We did not receive any public
comments on our proposed revisions to
§ 411.15(p)(3)(iii). Therefore, for the
reasons discussed in this final rule and
in the FY 2018 SNF PPS proposed rule,
we are finalizing our revisions to
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§ 411.15(p)(3)(iii) as proposed, without
modification.
Commenters submitted the following
comments related to the proposed rule’s
discussion of the consolidated billing
aspects of the SNF PPS. A discussion of
these comments, along with our
responses, appears below.
Comment: One commenter suggested
that, rather than specifying those
particular items and services that are
excluded from SNF consolidated billing,
CMS should comprehensively identify
the full range of items and services that
are subject to this provision.
Response: We note that the online
listing by HCPCS code of those services
that are excluded from consolidated
billing (in the annual updates that are
posted at https://www.cms.gov/
Medicare/Billing/
SNFConsolidatedBilling/)
follows the overall structure of the
statutory provision itself. This statutory
provision, in turn, specifies in section
1888(e)(2)(A)(ii) through (iv) of the Act
those particular services that are
excluded from it, so that any services
not so specified would remain subject to
the provision (this follows the similar
structure that was originally established
in the hospital bundling provision at
section 1862(a)(14) of the Act, which
served as the model for SNF
consolidated billing). As discussed in
the General Explanation of the Major
Categories (available online at https://
www.cms.gov/Medicare/Billing/
SNFConsolidatedBilling/Downloads/
2017-General-Explanation.pdf), one
exception to this overall pattern
involves the administrative carve-out
from SNF consolidated billing under 42
CFR 411.15(p)(3)(iii) for ambulatory
surgical services performed in the
outpatient hospital setting (Major
Category I.F):
Inclusions, rather than exclusions, are
given in this one case, because of the great
number of surgery procedures that are
excluded and can only be safely performed
in a hospital operating room setting. It is
easier to automate edits around the much
shorter list of inclusions under this category,
representing minor procedures that can be
performed in the SNF itself (emphasis in the
original).
Comment: We received a number of
comments regarding the statutory
exclusion from consolidated billing for
certain high-intensity chemotherapy
drugs and the administrative exclusion
for certain high-intensity outpatient
hospital services. One commenter in
particular expressed continuing
dissatisfaction with what it
characterized as CMS’s ‘‘inadequate
regulatory action’’ in modifying the
consolidated billing requirement to
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reflect the introduction of expensive
new drugs, and the expanded provision
of outpatient services in nonhospital
settings. The commenter cited as
examples some previous comments that
it had submitted during the FY 2004
rulemaking cycle, in which it had
recommended the exclusion of certain
additional chemotherapy drugs, and the
expansion of the existing administrative
exclusion for certain high-intensity
outpatient hospital services to
encompass freestanding (nonhospital)
settings as well. Regarding the latter
recommendation, the commenter
indicated that to date, CMS has not
revisited this ‘‘site of service’’ rule.
Response: Regarding the commenter’s
previous recommendation during the
FY 2004 rulemaking cycle for additional
chemotherapy exclusions, our response
in the FY 2004 final rule (68 FR 46060,
August 4, 2003) explained that ‘‘. . .
most of the chemotherapy drugs . . .
mentioned by commenters were
considered for exclusion under the
BBRA, but were not adopted by the
Congress in the BBRA list of excluded
items and services.’’ As further
explained in several subsequent
rulemaking cycles (most recently, in the
FY 2016 final rule (80 FR 46407, August
4, 2015)),
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. . . our position has always been that the
BBRA’s discretionary authority to exclude
codes within certain designated service
categories applies solely to codes that were
created subsequent to the BBRA’s enactment,
and not to those codes that were already in
existence as of July 1, 1999 (the date that the
legislation itself uses as the reference point
for identifying the codes that it designates for
exclusion). As we explained in the FY 2010
final rule (74 FR 40354), this position reflects
the assumption that if a particular code was
already in existence as of that date but not
designated for exclusion, this meant that it
was intended to remain within the SNF PPS
bundle, subject to the BBRA Conference
Report’s provision for a GAO review of the
code set that was conducted the following
year (H.R. Rep. 106–479 at 854 (1999) (Conf.
Rep.)).
Further, we note that we have indeed
continued to solicit recommendations
periodically for additional exclusions
within those specified service categories
(such as chemotherapy services) for
which the law authorizes us to do so,
and we have, in fact, adopted those
recommendations to the extent that the
recommended services meet the
applicable criteria for exclusion.
With regard to the administrative
exclusion for high-intensity outpatient
hospital services, we note that we not
only addressed this issue in the FY 2004
final rule itself (68 FR 46061, August 4,
2003) but, as discussed below, we have
revisited it repeatedly in subsequent
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rulemaking in response to the recurring
public comments that we have received
on the issue since that time. For
example, the FY 2014 final rule (78 FR
47957 through 47958, August 6, 2013)
cited the explanation in numerous
previous rules (along with Medicare
Learning Network (MLN) Matters article
SE0432, available online at https://
www.cms.gov/Outreach-and-Education/
Medicare-Learning-Network-MLN/
MLNMattersArticles/Downloads/
SE0432.pdf) that ‘‘. . . the rationale for
establishing this exclusion was to
address those types of services that are
so far beyond the normal scope of SNF
care that they require the intensity of the
hospital setting in order to be furnished
safely and effectively’’ (emphasis in the
original), and also noted that when the
Congress enacted the consolidated
billing exclusion for certain RHC and
FQHC services in section 410 of the
MMA, the accompanying legislative
history’s description of present law
directly acknowledged the hospitalspecific nature of this exclusion. In
addition, the FY 2012 final rule (76 FR
48532, August 8, 2011) indicated that
ever since its inception, this exclusion
was intended to be hospital-specific: It
cited the applicable discussion in the
May 12, 1998 interim final rule (63 FR
26298), which explained that this
exclusion was created within the
context of the concurrent development
of a new PPS specifically for outpatient
hospital services, reflecting the need
‘‘. . . to delineate the respective areas of
responsibility for the SNF under the
Consolidated Billing provision, and for
the hospital under the outpatient
bundling provision, with regard to these
services.’’ This point was further
reinforced in the subsequent final rule
for FY 2000 (64 FR 41676, July 30,
1999), which noted that
. . . a key concern underlying the
development of the consolidated billing
exclusion of certain outpatient hospital
services specifically involves the need to
distinguish those services that comprise the
SNF bundle from those that will become part
of the outpatient hospital bundle that is
currently being developed in connection
with the outpatient hospital PPS.
Accordingly, we are not extending the
outpatient hospital exclusion from
consolidated billing to encompass any other,
freestanding settings.
Finally, the FY 2010 final rule (74 FR
40355, August 11, 2009), while
acknowledging that advances in medical
technology over time may make it
feasible to perform such high-intensity
outpatient services more widely in
nonhospital settings, then went on to
cite the FY 2006 final rule in noting that
such a development ‘‘. . . would not
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36547
argue in favor of excluding the
nonhospital performance of the service
from consolidated billing, . . . but
rather, would call into question whether
the service should continue to be
excluded from consolidated billing at
all, even when performed in the
hospital setting’’ (70 FR 45049, August
4, 2005).
Comment: One commenter reiterated
a recommendation made in previous
rulemaking cycles to exclude the oral
chemotherapy drug Revlimid®
(lenalidomide).
Response: We note that a discussion
of our decision not to adopt the
exclusion recommendations regarding
this drug appears in the final rule for FY
2015 (79 FR 45641 through 45642,
August 5, 2014), which was also
referenced in the FY 2017 final rule (81
FR 51985, August 5, 2016) as well.
Comment: Several commenters
reiterated the same set of comments that
they had submitted previously during
last year’s rulemaking cycle, which had
noted the importance of continuing to
exclude certain customized prosthetic
devices from consolidated billing, and
urged expanding that exclusion to
encompass orthotics as well. These
commenters had also recommended the
following four HCPCS codes for
exclusion: L5010—Partial foot, molded
socket, ankle height, with toe filler;
L5020—Partial foot, molded socket,
tibial tubercle height, with toe filler;
L5969—Addition, endoskeletal anklefoot or ankle system, power assist,
includes any type motor(s); and L5987—
All lower extremity prosthesis, shank
foot system with vertical loading pylon.
One of the commenters now noted in
addition that although our previous
response in the FY 2017 final rule (81
FR 51986, August 5, 2016) had
indicated that code L5969 ‘‘. . . actually
appears already on the exclusion list
under Major Category III.D.
(‘Customized Prosthetic Devices’),
where this particular L code has, in fact,
been listed ever since its initial
assignment in January 2014,’’ the
commenter has been unable to locate
this code on the list of exclusions in the
2017 Annual Part B MAC Update.
Response: We refer to the previous
discussion in the FY 2017 final rule (81
FR 51986, August 5, 2016) regarding our
decision not to adopt the
recommendations for excluding
orthotics and HCPCS codes L5010,
L5020, and L5987. In addition, while
that final rule was correct in noting that
ever since its initial assignment, code
L5969 has appeared as an exclusion
under Major Category III.D.
(‘‘Customized Prosthetic Devices’’) in
the Annual Part A MAC Update, this
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particular code was inadvertently
omitted from the corresponding
exclusion list in File 1 of the Annual
Part B MAC Update. We appreciate
being apprised of the omission, and will
take the necessary steps to rectify this
oversight.
Comment: One commenter made
reference to high-cost medications that
are currently not excluded from
consolidated billing, and requested
guidance in this context regarding the
applicable policy on residents being
requested to supply their own
medications to minimize the cost to the
nursing home.
Response: In terms of Medicare
payment, with limited exceptions (such
as certain specified, high-intensity
chemotherapy drugs), medications that
are required during the course of a
Medicare-covered SNF stay are included
within the SNF’s bundled per diem
payment for the covered stay itself,
which the SNF is required under the
terms of its provider agreement to
accept as payment in full (see section
1866(a)(1)(A)(i) of the Act and the
implementing regulations at
§ 489.21(a)). Further, § 489.20(s)
requires the SNF to furnish these
bundled services either directly with its
own resources, or under an
‘‘arrangement’’ in which the SNF itself
accepts the professional and financial
responsibility for the arranged-for
services (see the discussion of
arrangements that appears in § 409.3
and in § 10.3 of the Medicare General
Information, Eligibility, and Entitlement
Manual, Chapter 5). Section 489.21(h)
further indicates that even if an SNF
fails to furnish directly or make
arrangements for such a service, the
beneficiary is not to bear the financial
liability for the service.
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3. 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, SNFlevel 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
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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 final rule for the SNF
PPS also apply to all non-CAH swingbed 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/. We received no
comments on this aspect of the
proposed rule.
D. Other Issues
1. Revising and Rebasing the SNF
Market Basket Index
Section 1888(e)(5)(A) of the Act
requires the Secretary to establish a
market basket index that reflects the
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 in
section III.B. of this rule, to update the
SNF PPS per diem rates and to
determine the labor-related share on an
annual basis.
The SNF market basket is a fixedweight, Laspeyres-type price index. A
Laspeyres price index measures the
change in price, over time, of the same
mix of goods and services purchased in
the base period. Any changes in the
quantity or mix of goods and services
(that is, intensity) purchased over time
relative to a base period are not
measured.
The index itself is constructed in
three steps. First, a base period is
selected (in the FY 2018 SNF PPS
proposed rule (82 FR 21029), the
proposed base period was 2014) and
total base period expenditures are
estimated for a set of mutually exclusive
and exhaustive spending categories with
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the proportion of total costs that each
category represents being calculated.
These proportions are called cost or
expenditure weights. Second, each
expenditure category is matched to an
appropriate price or wage variable,
referred to as a price proxy. In nearly
every instance, these price proxies are
derived from publicly available
statistical series that are published on a
consistent schedule (preferably at least
on a quarterly basis). Finally, the
expenditure weight for each cost
category is multiplied by the level of its
respective price proxy. The sum of these
products (that is, the expenditure
weights multiplied by their price levels)
for all cost categories yields the
composite index level of the market
basket in a given period. Repeating this
step for other periods produces a series
of market basket levels over time.
Dividing an index level for a given
period by an index level for an earlier
period produces a rate of growth in the
input price index over that timeframe.
Effective for cost reporting periods
beginning on or after July 1, 1998, we
revised and rebased our 1977 routine
costs input price index and adopted a
total expenses SNF input price index
using FY 1992 as the base year. In the
FY 2002 SNF PPS final rule (66 FR
39582), we rebased and revised the
market basket to a base year of FY 1997.
In the FY 2008 SNF PPS final rule (72
FR 43425), we rebased and revised the
market basket to a base year of FY 2004.
In the FY 2014 SNF PPS final rule (78
FR 47939), we last revised and rebased
the SNF market basket, which included
updating the base year from FY 2004 to
FY 2010. For FY 2018, we proposed (82
FR 21029) to rebase the market basket to
reflect 2014 Medicare-allowable total
cost data (routine, ancillary, and capitalrelated) from freestanding SNFs and to
revise applicable cost categories and
price proxies used to determine the
market basket. We proposed to maintain
our policy of using data from
freestanding SNFs, which represent 93
percent of the total SNFs shown in
Table 26. We believe using freestanding
MCR data, as opposed to the hospitalbased SNF MCR data, for the proposed
cost weight calculation is most
appropriate because of the complexity
of hospital-based data and the
representativeness of the freestanding
data. Hospital-based SNF expenses, are
embedded in the hospital cost report.
Any attempt to incorporate data from
hospital-based facilities requires more
complex calculations and assumptions
regarding the ancillary costs related to
the hospital-based SNF unit. We believe
the use of freestanding SNF cost report
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data is technically appropriate for
reflecting the cost structures of SNFs
serving Medicare beneficiaries.
We proposed to use 2014 as the base
year as we believe that the 2014
Medicare cost reports represented the
most recent, complete set of Medicare
cost report (MCR) data available to
develop cost weights for SNFs at the
time of rulemaking. The 2014 Medicare
cost reports are for cost reporting
periods beginning on and after October
1, 2013 and before October 1, 2014.
While these dates appear to reflect fiscal
year data, we note that a Medicare cost
report that begins in this timeframe is
generally classified as a ‘‘2014 cost
report.’’ For example, we found that of
the available 2014 Medicare cost reports
for SNFs, approximately 7 percent had
an October 1, 2013 begin date,
approximately 70 percent of the reports
had a January 1, 2014 begin date, and
approximately 12 percent had a July 1,
2014 begin date. For this reason, and for
the reasons explained below, we
proposed to define the base year of the
market basket as ‘‘2014-based’’ instead
of ‘‘FY 2014-based’’.
Specifically, we proposed to develop
cost category weights for the 2014-based
SNF market basket in two stages. First,
we proposed to derive eight major
expenditures or cost weights from the
2014 MCR data (CMS Form 2540–10) for
freestanding SNFs: Wages and Salaries;
Employee Benefits; Contract Labor;
Pharmaceuticals; Professional Liability
Insurance; Home Office Contract Labor;
Capital-related; and a residual ‘‘All
Other’’. With the exception of the Home
Office Contract Labor cost weight, these
are the same cost categories calculated
using the 2010 MCR data for the FY
2010-based SNF market basket. We
provided a detailed discussion of our
proposal to use the 2014 MCR data to
determine the Home Office Contract
Labor cost weight in section IV.A.1.a of
the proposed rule and in section
III.D.1.a of this final rule. The residual
‘‘All Other’’ category would reflect all
remaining costs that are not captured in
the other seven cost categories. Second,
we proposed to divide the residual ‘‘All
Other’’ cost category into subcategories
using U.S. Department of Commerce
Bureau of Economic Analysis’ (BEA)
2007 Benchmark Input-Output (I–O)
‘‘use table before redefinitions,
purchaser’s value’’ for the Nursing and
Community Care Facilities industry
(NAICS 623A00) aged forward to 2014
using price changes. Furthermore, we
proposed to continue to use the same
overall methodology as was used for the
FY 2010-based SNF market basket to
develop the capital related cost weights
of the 2014-based SNF market basket.
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We note that we are no longer referring
to the market basket as a ‘‘FY 2014based’’ market basket and instead refer
to the market basket as simply ‘‘2014based.’’ We proposed this change in
naming convention for the market
basket because the base year cost weight
data for the proposed market basket do
not reflect strictly fiscal year data. For
example, the 2014-based SNF market
basket uses Medicare cost report data
and other government data that reflects
fiscal year 2014, calendar year 2014, and
state fiscal year 2014 expenses to
determine the base year cost weights.
Given that it is based on a mix of
classifications of 2014 data, we
proposed to refer to the market basket
simply as ‘‘2014-based’’ as opposed to a
‘‘FY 2014-based’’ or ‘‘CY 2014-based’’.
We refer readers to the FY 2018 SNF
PPS proposed rule (82 FR 21029
through 21041) for a complete
discussion of our proposals and
associated rationale related to revising
and rebasing the SNF market basket. We
received a number of comments on the
proposed revising and rebasing of the
SNF market basket. A discussion of
these comments, with our responses,
appears throughout this section.
Comment: Several commenters
supported the rebasing and revising of
the SNF market basket from base year
2010 to base year 2014, stating that the
weights for calculating the market
basket update should reflect the most
up-to-date cost data available. Other
commenters requested that we meet
with certain health care association
representatives before we move forward
with the proposed rebasing of the SNF
market basket for FY 2018.
Response: We appreciate the
commenters’ support to rebase the
market basket to 2014. We believe that
it is reasonable and appropriate to
rebase the market basket to 2014 as we
believe this reflects the most complete
and up-to-date cost data available. We
note that we are available to meet with
interested parties upon request to
discuss their research and ideas for
future rebasings.
Comment: Several commenters
requested that we align the rebasing
schedule of the SNF market basket with
the acute inpatient hospital market
basket rebasing schedule. They claimed
that updating the SNF market basket
schedule will improve the accuracy of
the SNF market basket updates,
particularly since the SNF wage index is
directly linked to the hospital wage
index. One commenter requested we
provide information on ways to work
collaboratively with the industry to
develop an alternative approach to the
SNF market basket methodology and to
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more appropriately update weights
using more current data on a rolling
basis. The commenter requested an
explanation of why a chained index,
which updates cost weights on a
continual basis is not employed instead
of a fixed-weight index approach.
Response: We appreciate the
commenters’ suggestion to align the
rebasing schedule of the SNF market
basket with the acute inpatient hospital
market basket rebasing schedule. As
discussed in the FY 2006 IPPS final rule
(70 FR 47407), in accordance with
section 404 of Public Law 108–173, we
established a rebasing frequency of
every four years for the IPPS hospital
market basket. We last rebased the SNF
market basket four years ago, reflecting
a FY 2010 base year, in the FY 2014
SNF PPS final rule (78 FR 47939). We
will continue to monitor the major cost
share weights derived from the
Medicare cost reports to evaluate
whether a rebasing of the SNF market
basket is necessary and may consider
rebasing the SNF market basket
consistent with the IPPS rebasing
schedule.
In regards to the use of a fixed-weight
index approach, we have found that
healthcare provider cost share weights
do not change substantially on an
annual basis and, therefore, the use of
a Laspeyres index formula, with base
year weights updated on a regular basis
(such as every few years), is technically
appropriate for the CMS market baskets.
In a 2008 paper,1 the CMS Office of the
Actuary (OACT) investigated the impact
of using an alternative price index
formula on the inpatient hospital market
basket and concluded that market basket
rebasings more frequent than every 5
years would not result in any significant
changes in update factors. This study
also found that the use of an alternative
index formula, such as a Paasche,
Fisher, or Tornqvist, would not lead to
an appreciable change to the results.
a. Development of Cost Categories and
Weights
i. Use of Medicare Cost Report Data To
Develop Major Cost Weights
To create a market basket that is
representative of freestanding SNF
providers serving Medicare patients and
to help ensure accurate major cost
weights (which is the percent of total
Medicare allowable costs, as defined
below), we proposed to apply edits to
remove reporting errors and outliers.
Specifically, the SNF Medicare cost
1 https://www.cms.gov/Research-Statistics-Dataand-Systems/Statistics-Trends-and-Reports/
MedicareProgramRatesStats/Downloads/
alternativeindexweights.pdf.
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reports used to calculate the market
basket cost weights excluded any
providers that reported costs less than
or equal to zero for the following
categories: Total facility costs; total
operating costs; Medicare general
inpatient routine service costs; and
Medicare PPS payments. The final
sample used included roughly 96
percent of those providers who
submitted a Medicare cost report for
2014.
Additionally, for each of the major
cost weights, except the Home Office
Contract Labor cost weight (Wages and
Salaries, Employee Benefits, Contract
Labor, Pharmaceuticals, Professional
Liability Insurance, and Capital-related
Expenses) the data were trimmed to
remove outliers (a standard statistical
process) by: (1) Requiring that major
expenses (such as Wages and Salaries
costs) and total Medicare-allowable
costs are greater than zero; and (2)
excluding the top and bottom five
percent of the major cost weight (for
example, Wages and Salaries costs as a
percent of total Medicare-allowable
costs).
We note that in the FY 2018 SNF PPS
proposed rule, we mistakenly
referenced that we used the same
trimming methodology for the Home
Office Contract Labor cost weight that
we used for the other major cost weights
(a top and bottom five percent trimming
methodology).
For the Home Office Contract Labor
cost weight, we applied a one percent
top-only trimming methodology. This
allowed all providers’ Medicareallowable costs to be included, even if
their home office contract labor costs
were zero. We believe, as the Medicare
cost report data (Worksheet S2 line 45)
indicate, that not all SNF providers have
a Home Office. Providers without a
Home Office can incur these expenses
directly by having their own staff, for
which the costs would be included in
the Wages and Salaries and Benefits cost
weights. Alternatively, providers
without a Home Office could also
purchase related services from external
contractors for which these expenses
would be captured in the residual ‘‘AllOther’’ cost weight. We believe this one
percent top-only trimming methodology
is appropriate as it addresses outliers
while allowing providers with zero
Home Office Contract Labor costs to be
included in the Home Office Contract
Labor cost weight calculation. If we
applied both top and bottom five
percent trimming methodology we
would exclude providers who have zero
Home Office Contract Labor costs.
The major cost weight trimming
process is done for each cost weight
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individually and, therefore, providers
excluded from one cost weight
calculation are not automatically
excluded from other cost weight
calculations. These were the same types
of edits utilized for the FY 2010-based
SNF market basket (with the exception
of the Home Office Contract Labor cost
weight which was not broken out using
Medicare Cost Reports for the FY 2010
based SNF market basket), as well as
other PPS market baskets (including but
not limited to IPPS market basket and
HHA market basket). We believe this
trimming process improves the accuracy
of the data used to compute the major
cost weights by removing possible data
misreporting.
Finally, the final weights of the
proposed 2014-based SNF market basket
were based on weighted means. For
example, the final Wages and Salaries
cost weight after trimming is equal to
the sum of total Medicare-allowable
wages and salaries divided by the sum
of total Medicare-allowable costs. This
methodology is consistent with the
methodology used to calculate the FY
2010-based SNF market basket cost
weights and other PPS market basket
cost weights.
As stated above, the major cost
weights of the 2014-based SNF market
basket were derived from 2014 MCR
data that is reported on CMS Form
2540–10, effective for freestanding SNFs
with a cost reporting period beginning
on or after December 1, 2010. The major
cost weights for the FY 2010-based SNF
market basket were derived from the
2010 MCR data that is reported on CMS
Form 2540–96. CMS Form 2540–96 was
effective for freestanding SNFs with cost
reporting periods beginning on and after
October 1, 1997. The OMB control
number for both Form 2549–10 and
Form 2540–96 is 0938–0463.
For all of the cost weights, we
proposed to use Medicare allowabletotal costs as the denominator (that is,
Wages and Salaries cost weight = Wages
and Salaries costs divided by Medicareallowable total costs). Medicareallowable total costs were proposed to
be equal to total costs (after overhead
allocation) from Worksheet B part 1,
column 18, for lines 30, 40 through 49,
51, 52, and 71 plus Medicaid drug costs
as defined below. We also proposed to
include estimated Medicaid drug costs
in the pharmacy cost weight, as well as
the denominator for total Medicareallowable costs. This is the same
methodology used for the FY 2010based SNF market basket and the FY
2004-based SNF market basket. The
inclusion of Medicaid drug costs was
finalized in the FY 2008 SNF PPS final
rule (72 FR 43425 through 43430), and
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for the same reasons set forth in that
final rule, we proposed to continue to
use this methodology in the 2014-based
SNF market basket.
We proposed that for the 2014-based
SNF market basket we obtain costs for
one new major cost category from the
Medicare cost reports that was not used
in the FY 2010-based SNF market
basket—Home Office Contract Labor
Costs.
We described the detailed
methodology for obtaining costs for each
of the eight major cost categories in
section V.A.1.a. of the FY 2018 SNF PPS
proposed rule (82 FR 21030) and below
in section III.D.1.a. of this rule. The
methodology used is similar to the
methodology used in the FY 2010-based
SNF market basket, as described in the
FY 2014 SNF PPS final rule (78 FR
47940 through 47942).
(1) Wages and Salaries: To derive
Wages and Salaries costs for the
Medicare-allowable cost centers, we
proposed first to calculate total
unadjusted wages and salaries costs as
reported on Worksheet S–3, part II,
column 3, line 1. We then proposed to
remove the wages and salaries
attributable to non-Medicare-allowable
cost centers (that is, excluded areas), as
well as a portion of overhead wages and
salaries attributable to these excluded
areas. Excluded area wages and salaries
were equal to wages and salaries as
reported on Worksheet S–3, part II,
column 3, lines 3, 4, and 7 through 11
plus nursing facility and nonreimbursable salaries from Worksheet A,
column 1, lines 31, 32, 50, and 60
through 63.
Overhead wages and salaries are
attributable to the entire SNF facility;
therefore, we proposed to include only
the proportion attributable to the
Medicare-allowable cost centers. We
proposed to estimate the proportion of
overhead wages and salaries that is
attributable to the non-Medicareallowable costs centers (that is,
excluded areas) by multiplying the ratio
of excluded area wages and salaries (as
defined above) to total wages and
salaries as reported on Worksheet S–3,
part II, column 3, line 1 by total
overhead wages and salaries as reported
on Worksheet S3, Part III, column 3, line
14. We used a similar methodology to
derive wages and salaries costs in the
FY 2010-based SNF market basket.
(2) Employee Benefits: We proposed
Medicare-allowable employee benefits
to be equal to total benefits as reported
on Worksheet S–3, part II, column 3,
lines 17 through 19 minus nonMedicare-allowable (that is, excluded
area) employee benefits and minus a
portion of overhead benefits attributable
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to these excluded areas. Non-Medicareallowable employee benefits were
derived by multiplying total excluded
wages and salaries (as defined above in
the ‘Wages and Salaries’ section) times
the ratio of total benefit costs as
reported on Worksheet S–3, part II,
column 3, lines 17 through 19 to total
wages and salary costs as reported on
Worksheet S3, part II, column 3, line 1.
Likewise, the portion of overhead
benefits attributable to the excluded
areas was derived by multiplying
overhead wages and salaries attributable
to the excluded areas (as defined in the
‘Wages and Salaries’ section) times the
ratio of total benefit costs to total wages
and salary costs (as defined above). We
used a similar methodology in the FY
2010-based SNF market basket.
(3) Contract Labor: We proposed to
derive Medicare-allowable contract
labor costs from Worksheet S–3, part II,
column 3, line 17. We note that in the
FY 2018 SNF PPS proposed rule (82 FR
21030), we mistakenly referenced line
17. These costs are actually reported in
Worksheet S–3, part II, column 3, line
14 as per the CMS Form 2540–10
instructions (which reflects costs for
contracted direct patient care services,
that is, nursing, therapeutic,
rehabilitative, or diagnostic services
furnished under contract rather than by
employees and management contract
services). We note that the processing of
the data was correct. We used
Worksheet S–3, part II, column 3, line
14 in our analysis. Our written
description in the proposed rule of the
line we used was, however, incorrect.
(4) Pharmaceuticals: We proposed to
calculate pharmaceuticals costs using
the non-salary costs from the Pharmacy
cost center (Worksheet B, part I, column
0, line 11 less Worksheet A, column 1,
line 11) and the Drugs Charged to
Patients’ cost center (Worksheet B, part
I, column 0, line 49 less Worksheet A,
column 1, line 49). Since these drug
costs were attributable to the entire SNF
and not limited to Medicare-allowable
services, we proposed to adjust the drug
costs by the ratio of Medicare-allowable
pharmacy total costs (Worksheet B, part
I, column 11, for lines 30, 40 through
49, 51, 52, and 71) to total pharmacy
costs from Worksheet B, part I, column
11, line 11. Worksheet B, part I allocates
the general service cost centers, which
are often referred to as ‘‘overhead costs’’
(in which pharmacy costs are included)
to the Medicare-allowable and nonMedicare-allowable cost centers. This
adjustment was made for those
providers who reported Pharmacy cost
center expenses. Otherwise, we
assumed the non-salary Drugs Charged
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to Patients costs were Medicareallowable.
Second, similar to the FY 2010-based
SNF market basket, we proposed to
continue to adjust the drug expenses
reported on the MCR to include an
estimate of total Medicaid drug costs,
which are not represented in the
Medicare-allowable drug cost weight.
Similar to the FY 2010-based SNF
market basket, we estimated Medicaid
drug costs based on data representing
dual-eligible Medicaid beneficiaries.
Medicaid drug costs were estimated by
multiplying Medicaid dual-eligible drug
costs per day times the number of
Medicaid days as reported in the
Medicare-allowable skilled nursing cost
center (Worksheet S3, part I, column 5,
line 1) in the SNF MCR. Medicaid dualeligible drug costs per day (where the
day represents an unduplicated drug
supply day) were estimated using a
sample of 2014 Part D claims for those
dual-eligible beneficiaries who had a
Medicare SNF stay during the year.
Medicaid dual-eligible beneficiaries
would receive their drugs through the
Medicare Part D benefit, which would
work directly with the pharmacy and,
therefore, these costs would not be
represented in the Medicare SNF MCRs.
A random twenty percent sample of
Medicare Part D claims data yielded a
Medicaid drug cost per day of $19.62.
We note that the FY 2010-based SNF
market basket also relied on data from
the Part D claims, which yielded a dualeligible Medicaid drug cost per day of
$17.39 for 2010.
Provided below are summaries of the
comments we received related to the
Pharmaceuticals cost category, as well
as our responses.
Comment: One commenter was
concerned with the lower
Pharmaceuticals cost weight in the
2014-based SNF market basket
compared to the 2010-based SNF market
basket. They were unable to explain the
decrease given their experience with
annual pharmaceutical price increases
and the introduction of new
pharmaceuticals.
Several commenters also had specific
concerns regarding the methodology
utilized to determine the
Pharmaceuticals cost weight. The
commenters stated that the vast majority
of SNFs did not report costs on the cost
report line for the ‘‘Pharmacy’’
department. They stated that only a
small number of SNFs have in-house
Pharmacies and that those SNFs were
used as a proxy for the pharmaceutical
costs for all SNFs; one commenter
requested an alternative method.
Several commenters were also
concerned by the addition of estimated
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36551
Part D medication costs to the ‘‘Drugs
Charged to Patients’’ data reported on
Row 49 of the cost report. The
commenter questioned why this type of
‘‘gross up’’ was not, as far as they could
tell, applied to any of the other ancillary
cost centers.
Response: The methodology used to
determine the cost weights in the 2014based SNF market basket and 2010based SNF market basket is the same.
The change in the Pharmaceuticals cost
weight in the 2014-based SNF market
basket (7.3 percent) from the FY 2010based SNF market basket (7.9 percent) is
a function of the growth rate of
pharmaceutical expenses relative to
other components of the market basket
over this time period. Our own internal
analysis shows increasing drug costs
from FY 2010 to FY 2014; however,
during this time period, pharmaceutical
costs increased at a slower rate than
other components of the market
basket—such as capital and contract
labor expenses. This relative
comparison resulted in a decrease in the
Pharmaceuticals cost weight of 0.6
percentage point between the FY 2010based SNF market basket and 2014based SNF market basket (7.9 percent to
7.3 percent) while the capital cost
weight increased 0.5 percentage point
(7.4 percent to 7.9 percent) and contract
labor grew 1.3 percentage points (5.5
percent to 6.8 percent). It is also
important to consider that the increase
in pharmaceutical costs over this period
reflects changes in both the price of
prescription drugs, proxied by the
Producer Price Index for Prescription
Drugs, as well the quantity and intensity
of prescriptions. Our analysis of the data
shows that the decrease in the
Pharmaceuticals cost weight was
consistent, in aggregate, across urban
and rural status SNFs as well as across
for-profit, government, and nonprofit
ownership type SNFs.
As stated above and in the FY 2018
SNF PPS proposed rule (82 FR 21030
through 21031), we proposed to
calculate pharmaceutical costs using the
non-salary costs reported in the
Pharmacy cost center (Worksheet B, part
I, column 0, line 11 less Worksheet A,
column 1, line 11) and the Drugs
Charged to Patients’ cost center
(Worksheet B, part I, column 0, line 49
less Worksheet A, column 1, line 49),
hereafter referred to as total MCR drug
costs. Since these drug costs were
attributable to the entire SNF and not
limited to Medicare-allowable services,
we proposed to adjust the drug costs by
the ratio of Medicare-allowable
pharmacy total costs (Worksheet B, part
I, column 11, for lines 30, 40 through
49, 51, 52, and 71) to total pharmacy
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costs (Worksheet B, part I, column 11,
line 11).
We understand the commenter’s
concern regarding the adjustment to the
total MCR drug costs using the
Pharmacy cost center as only 20 percent
of providers reported Pharmacy cost
center expenses. We are clarifying that
the adjustment was only applied to
those 20 percent of providers who
reported Pharmacy costs. We assumed
that all of the drug costs were Medicareallowable for the remaining 80 percent
of providers. We added a clarifying
sentence in the Pharmacy cost weight
calculation of this final rule. Applying
this adjustment had only a marginal
impact on the drug cost weight
(lowering it by only 0.1 percentage
point). As a sensitivity, we also derived
an alternative by using the ratio of
Skilled Nursing Facility days (as
reported on Worksheet S3, part 1,
column 7 line 1) to Total Facility days.
This would result in a Pharmaceuticals
cost weight of 7.1 percent compared to
the 2014-based cost weight of 7.3
percent.
As stated in the proposed rule (82 FR
21031), the 2014-based SNF market
basket included an adjustment to the
drug expenses reported on the MCR to
include an estimate of total Medicaid
drug costs, which are not represented in
the Medicare-allowable drug cost
weight. As stated above, the 2014-based
SNF market basket reflects total
Medicare allowable costs (that is, total
costs for all payers for those services
reimbursable under the SNF PPS). For
the FY 2006-based SNF market basket
(72 FR 43426), commenters noted that
the total pharmaceutical costs reported
on the MCR did not include
pharmaceutical costs for dual-eligible
Medicaid patients as these were directly
reimbursed by Medicaid. Since all of the
other cost category weights reflect
Medicaid patients (including the
compensation costs for dispersing these
drugs), we made an adjustment to
include these drug expenses. The
pharmaceutical cost weight using only
2014 MCR data without any adjustments
is 3.0 percent, compared to the
proposed Pharmaceuticals cost weight
(including the adjustment for Medicaid
dual-eligible drug costs) of 7.3 percent.
Comment: One commenter requested
further explanation on how Part D drug
costs were incorporated into the
Pharmaceuticals cost weight. They
questioned how the 20 percent sample
was selected and the rationale for
selecting this population to estimate
non-SNF Medicaid drug costs. They
questioned if there were analytics to
support these decisions and also
requested clarification for why the drug
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costs for patients with a SNF stay would
be comparable to patients in a nursing
facility that had not had a
hospitalization during the year. They
also questioned whether the Part D
claims were matched to the SNF stay
and if Part D claims for the SNF stay
were excluded. They further questioned
which cost variables in Part D claims
were used, how the costs per day were
calculated and the rationale for
producing this estimate.
Response: As stated previously in this
section, the 2014-based SNF market
basket reflects total Medicare allowable
costs (that is, total costs for all payers
for those services reimbursable under
the SNF PPS). For the FY 2006-based
SNF market basket (72 FR 43426),
commenters noted that the total
pharmaceutical costs reported on the
MCR did not include pharmaceutical
costs for dual-eligible Medicaid patients
as these were directly reimbursed by
Medicaid. Since all of the other cost
category weights reflect Medicaid
patients (including the compensation
costs for dispensing these drugs), we
made an adjustment to include these
Medicaid drug expenses so the market
basket cost weights would be calculated
consistently.
For the 2014-based SNF market
basket, as stated in the FY 2018 SNF
PPS proposed rule (82 FR 21031), we
estimated Medicaid drug costs by
multiplying Medicaid dual-eligible drug
costs per day times the number of
Medicaid days as reported in the
Medicare-allowable skilled nursing
facility cost center (Worksheet S3, part
I, column 5, line 1) on the SNF MCR.
The Medicaid dual-eligible drug costs
per day (where the day represents an
unduplicated drug supply day) were
estimated using a random 20 percent
sample of 2014 Part D claims for those
dual-eligible beneficiaries who had a
Medicare SNF stay during the year. We
believe this sample is a reasonable
proxy for total drug costs per day for
Medicaid patients residing in a skilled
nursing unit under a Medicaid stay. Our
analysis of the Part D claims data shows
that dual-eligible beneficiaries have
higher drug costs per day than ‘‘nonduals’’ and that dual-eligible
beneficiaries who have had a SNF Part
A stay during the year have higher drug
costs per day ($19.62) compared to
those dual-eligible beneficiaries with no
SNF Part A stay during the year
($14.82).
The total drug costs per unduplicated
day represented all drug costs incurred
during the 2014 calendar year for those
dual-eligible beneficiaries with a SNF
Medicare stay during that 2014 calendar
year. Therefore, they include drug costs
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incurred during the Medicaid SNF stay
occurring in the 2014 calendar year. The
total drug costs from the Part D claims
includes the drug ingredient cost, the
dispensing fee, vaccine administration
fee and sales tax. We used a 20 percent
sample of Part D claims (approximately
287 million claims) where claims were
randomly selected based on the
beneficiary ID number.
Comment: One commenter stated that
they see an increase in the number of
Veterans being served by SNFs. They
further stated that Medicare patients, if
they were admitted to a non-VA nursing
home, would use their Medicare benefit.
However, in a VA home, the commenter
claimed that the patient would use their
VA benefit which covers the drug
costs—and not the nursing home. The
commenter concluded that there would
be many drug costs that are not
represented on the cost report that
traditionally would have been. The
commenter requested clarification on
how we will address this challenge.
Response: We appreciate the
commenter raising this concern. We
believe the current methodology and
resulting Pharmaceutical cost weight is
reasonable, in part because VA costs
would not have a significant impact on
the market basket cost weights
(according to the CMS National Health
Expenditure Accounts, VA spending
accounted for roughly 3 percent of total
Nursing Care Facilities and Continuing
Care Retirement Communities
expenditures in 2014). However, in the
future we plan to monitor this issue in
more depth to ensure the market basket
is adequately capturing the appropriate
costs.
(5) Professional Liability Insurance:
We proposed to calculate the
professional liability insurance costs
from Worksheet S–2 of the MCRs as the
sum of premiums; paid losses; and selfinsurance (Worksheet S–2, column 1
through 3, line 41).
Provided below are summaries of the
comments we received related to the
Professional Liability Insurance cost
category, as well as our responses.
Comment: One commenter stated that
we should calculate a weight for
professional liability insurance
considering other data sources. As an
example, the commenter provided a link
to AHCA’s Aon Professional Liability
Study stating that the 2016 report
documents a significant and continual
increase in professional liability costs.
Response: We thank the commenter
for providing the link to this study. As
stated in the FY 2018 SNF proposed
rule (82 FR 21031), the professional
liability insurance cost weight is
derived using data from Worksheet S–2
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of the Medicare Cost Reports. These
data represent the sum of premiums,
paid losses, and self-insurance
(Worksheet S–2, column 1 through 3,
line 41). We continue to believe that
using these data submitted by SNFs on
the Medicare cost report represent the
best data source to derive the
professional liability insurance cost
weight. We will continue to evaluate
other data sources, including the study
provided by the commenter, to obtain
additional information regarding
professional liability insurance costs for
SNFs.
(6) Capital-Related: We proposed to
derive the Medicare-allowable capitalrelated costs from Worksheet B, part II,
column 18 for lines 30, 40 through 49,
51, 52, and 71.
(7) Home Office Contract Labor Costs:
We proposed to calculate Medicareallowable home office contract labor
costs by multiplying total home office
contract labor costs (as reported on
Worksheet S3, part 2, column 3, line 16)
times the ratio of Medicare-allowable
operating costs (Medicare-allowable
total costs less Medicare-allowable
capital costs) to total operating costs
(equal to Worksheet B, part I, column
18, line 100 less Worksheet B, part I,
column 0, line 1 and 2).
(8) All Other (residual): We proposed
to calculate the ‘‘All Other’’ cost weight
as a residual, calculated by subtracting
the major cost weights (Wages and
Salaries, Employee Benefits, Contract
Labor, Pharmaceuticals, Professional
Liability Insurance, Home Office
Contract Labor, and Capital-Related)
from 100.
Provided below are summaries of the
general comments we received related
to the major cost category weights, as
well as our responses.
Comment: One commenter noted that
the decrease in cost weights related to
wages, benefits, contract labor, and
pharmaceuticals from FY 2010 to the
proposed base year of 2014 did not
reflect, in any way, their experience. For
geographic locations that have a large
proportion of staff whose wages and
benefits are driven by collective
bargaining agreements, such as the NY
metropolitan area where providers have
seen regular cost increases over the 4
years, the commenter claimed that the
decrease in cost weight does not make
sense.
Response: The purpose of the SNF
market basket is to measure the price
inflation facing average SNFs serving
Medicare beneficiaries at the national
level. A change in the Wages and
Salaries cost weight is a function of the
growth rate of Wages and Salaries
expenses relative to other components
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of the market basket, based on data
directly supplied to CMS by SNFs. We
would further note that differences in
wage and wage-related costs among
geographic regions are accounted for by
the application of the wage index.
Comment: One commenter requested
we show the numerators and
denominators for the calculation of each
weight so that it is possible to comment
on any bias that may be introduced by
exclusions.
Response: We disagree with the
commenter’s suggestion that we should
provide the numerators and
denominators for the calculation as we
do not believe this would allow
commenters to determine whether any
bias may be introduced by exclusions.
Rather, we believe that the detailed
description of the data (specifically the
Medicare cost report worksheet fields)
and trimming methodologies allow the
commenter to evaluate the bias.
Specifically, commenters are able to
evaluate the accuracy and
reasonableness of the Medicare cost
report worksheet fields. They are also
able to replicate the results and then
compare the trimmed cost share weight
samples to the national average
distribution of total costs. We reiterate
that in deriving the proposed SNF cost
weights, we used a similar trimming
methodology for each of the major cost
weights, with the exception of the Home
Office Contract Labor cost weight as
discussed earlier in this final rule (as we
explained, for the Home Office Contract
Labor cost weight, we used an
alternative methodology). Our review of
the trimmed samples for each of the
major cost weights (Wages and Salaries,
Employee Benefits, Contract Labor,
Professional Liability, Home Office
Contract Labor, Pharmaceuticals and
Capital) resulted in a total cost
distribution that was similar to the cost
distribution of the untrimmed sample
when compared by urban/rural status,
ownership-type (for-profit, nonprofit, or
government) and then by census region.
We would further note that, as stated
above, the trimming of the individual
cost weights was done independently of
each other, in an effort to produce the
most representative data for each of the
major cost weights. Finally, we would
note that the 5 percent trim is the same
methodology used to derive cost share
weights (with the exception of the Home
Office Contract Labor cost weight) for
other CMS market baskets.
Comment: One commenter questioned
whether it is time to possibly make
some revisions to Worksheet A of the
Medicare SNF cost report. They
provided suggested additional cost
categories that they believe would help
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construct a more accurate market basket
and to account for regional fluctuations
(for example, utility costs, property
insurance rates, etc).
Response: The commenter’s specific
detailed recommendations for changes
to the Medicare cost report are outside
the scope of the FY 2018 SNF PPS
proposed rule. However, we appreciate
and will consider the commenter’s
suggestion to capture additional
information on the SNF Medicare cost
report for possible future use in the SNF
market basket.
Comment: One commenter had
several questions on the methodology
used to develop the major cost weights
of the 2014-based SNF market basket.
The commenter specifically questioned
our trimming methods and whether we
excluded partial-year cost reports (that
is, providers with cost report data of less
than 12 months). They also stated there
was no information provided regarding
the treatment of missing data in the cost
report fields and that zero and missing
data do not have the same meaning.
They further stated that missing data
was high for certain weights with over
40 percent of cost reports having
missing values for professional liability
insurance, over 70 percent of cost
reports having missing values in home
office contract labor costs, and over 80
percent having missing values in the
Pharmacy cost center used to determine
the Pharmaceuticals cost weight.
Response: We appreciate the
commenter’s review of the methodology
used to develop the 2014-based SNF
market basket. We made no edits to
remove providers with partial cost
reporting periods and, therefore, they
were included in the initial set of cost
reports. In response to this comment, we
examined the impact of excluding those
providers that reported costs for a
period of fewer than 270 days
(representing about 3⁄4 of the cost
reporting year) and, similar to the
commenter’s finding, found that its
impact on the major cost weights was
minimal with less than 0.1 percentage
point in absolute terms. Given its small
impact, we do not believe it is necessary
to revise the 2014-based SNF market
basket to reflect the exclusion of reports
with a partial cost reporting period;
however, we will consider the merits of
this edit for future rebasings.
In regards to the commenter’s request
for information on the treatment of
missing data in the cost report fields,
CMS receives Medicare cost report data
via the Electronic Cost Reporting file
from the Medicare Administrative
Contractor. These files do not have
missing values for numeric fields;
therefore, fields are zero or greater. The
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public-use files provided on the CMS
Web site, however, convert the zero
values to missing or null.
We recognize the commenter’s
concern of providers’ reporting zero
Professional Liability and
Pharmaceutical costs. As stated, in the
FY 2018 SNF PPS proposed rule (82 FR
21030), for each of the major cost
weights, except for Home Office
Contract Labor as discussed above, (that
is (Wages and Salaries, Employee
Benefits, Contract Labor,
Pharmaceuticals, Professional Liability
Insurance, Home Office Contract Labor,
and Capital-related Expenses) the data
were trimmed to remove outliers (a
standard statistical process) by first
requiring that major expenses and total
Medicare-allowable costs are greater
than zero. For these major cost weights
(Wages and Salaries, Employee Benefits,
Contract Labor, Professional Liability,
Capital and Pharmaceuticals), we
believe that providers should incur
these expenses to provide SNF services
to beneficiaries. Therefore, cost reports
with zero costs for major expenses
(except Home Office Contract Labor
costs) were excluded from the market
basket cost weight calculation before
trimming the top and bottom five
percent. We note, as stated in the
proposed rule, the trimming method is
done for each cost weight individually
and, therefore, providers excluded from
one cost weight calculation are not
automatically excluded from other cost
weight calculations. This methodology
allows us to use the largest possible
sample of providers that report expenses
for any given category.
However, as discussed earlier, we do
not believe, as the Medicare cost report
data (Worksheet S2, line 45) indicates,
that all SNF providers will have a Home
Office and then will also ‘‘purchase’’
services from their home office. Rather,
providers can incur these expenses
directly by having their own staff, for
which the costs would be included in
the Wages and Salaries and Benefits cost
weights, or be purchased from
contractors that are not directly
affiliated with SNF, for which these
expenses would be captured in the
residual ‘‘All-Other’’ cost weight.
Therefore, as discussed above, for the
Home Office Contract Labor cost weight,
we instead applied a one percent top
trimming methodology but allowed all
providers’ Medicare-allowable costs to
be included, even if their home office
contract labor costs were zero.
Also, we included all data for
subcategories of the major cost weights,
except Home Office Contract Labor
costs, (such as excluded area salaries
component of the Wages and Salaries
costs) even if they are zero as we believe
it is reasonable for some of these
specific costs to not be applicable to
some providers. We must rely on the
data that are submitted by providers and
always encourage providers to fill out
the cost report forms using the most
accurate and complete data available to
them.
Comment: One commenter made note
of their inability to replicate all of the
proposed cost weights using the
methodology provided in the proposed
rule. Specifically, the commenter was
unable to replicate the Contract Labor
cost weight and Home Office Contract
Labor cost weight.
Response: We appreciate the
commenter’s review of our methodology
and their replication efforts. We note
that in the FY 2018 SNF PPS proposed
rule, we made an error in the
description of which Medicare cost
report line is used to determine the
Medicare allowable contract labor costs.
The proposed rule stated that Medicare
allowable contract labor costs would be
equal to Worksheet S–3, part II, column
3, line 17, which reflects costs for
contracted direct patient care services,
that is, nursing, therapeutic,
rehabilitative, or diagnostic services
furnished under contract, rather than by
employees and management contract
services. These Medicare allowable
contract labor costs are actually reported
in Worksheet S–3, part II, column 3, line
14 as per the CMS Form 2540–10
instructions. We note that the
processing of the data was correct, and
we appropriately used Worksheet S–3,
part II, column 3, line 14, but our
written description of the line used was
not. We apologize for any confusion and
have corrected this typographical error
in this final rule.
As stated above, in the FY 2018 SNF
PPS proposed rule, we mistakenly
indicated that we used the same
trimming methodology for the Home
Office Contract Labor cost weight that
we used for the other major cost weights
(a top and bottom five percent trimming
method). For the Home Office Contract
Labor cost weight we applied a one
percent top-only trimming
methodology. This trimming
methodology allowed all providers’
Medicare-allowable costs to be
included, even if their home office
contract labor costs were zero. We
believe this one percent trimming
methodology is appropriate for the
Home Office Contract Labor cost weight
as it addresses outliers while allowing
providers with zero Home Office
Contract Labor costs to be included in
the Home Office Contract Labor cost
weight calculation. Applying a five
percent top and bottom trimming
methodology would exclude providers
who have zero Home Office Contract
Labor costs.
After consideration of the public
comments we received, for the reasons
discussed above and in the FY 2018
SNF PPS proposed rule, we are
finalizing the major cost weights as
proposed, without modification. Table 9
below shows the major cost categories
and their respective cost weights as
derived from the Medicare cost reports
for this final rule.
TABLE 9—MAJOR COST CATEGORIES AS DERIVED FROM THE MEDICARE COST REPORTS
Final
2014-based
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Major cost categories
Wages and Salaries ................................................................................................................................................
Employee Benefits ...................................................................................................................................................
Contract Labor .........................................................................................................................................................
Pharmaceuticals ......................................................................................................................................................
Professional Liability Insurance ...............................................................................................................................
Home Office Contract Labor * ..................................................................................................................................
Capital-related ..........................................................................................................................................................
All other (residual) ...................................................................................................................................................
44.3
9.3
6.8
7.3
1.1
0.7
7.9
22.6
* Home office contract labor costs were included in the residual ‘‘All Other’’ cost weight of the FY 2010-based SNF market basket.
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46.1
10.5
5.5
7.9
1.1
n/a
7.4
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The Wages and Salaries and
Employee Benefits cost weights as
calculated directly from the Medicare
cost reports decreased by 1.8 and 1.2
percentage points, respectively, while
the Contract Labor cost weight increased
1.3 percentage points between the FY
2010-based SNF market basket and
2014-based SNF market basket. The
decrease in the Wages and Salaries
occurred among most cost centers and
in aggregate for the General Service
(overhead) and Inpatient Routine
Service cost centers, which together
account for about 80 percent of total
facility costs.
As we did for the FY 2010-based SNF
market basket (78 FR 26452), we
proposed to allocate contract labor costs
to the Wages and Salaries and Employee
Benefits cost weights based on their
relative proportions under the
assumption that contract labor costs are
comprised of both wages and salaries
and employee benefits. The contract
labor allocation proportion for wages
and salaries is equal to the Wages and
Salaries cost weight as a percent of the
sum of the Wages and Salaries cost
weight and the Employee Benefits cost
weight. Using the 2014 Medicare cost
report data, this percentage is 83
percent; therefore, we proposed to
allocate approximately 83 percent of the
Contract Labor cost weight to the Wages
and Salaries cost weight and 17 percent
to the Employee Benefits cost weight.
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For the FY 2010-based SNF market
basket, the wages and salaries to
employee benefit ratio was 81/19
percent.
We did not receive public comments
on our proposed allocation of contract
labor costs to Wages and Salaries and
Employee Benefits. For the reasons
discussed above and in the FY 2018
SNF PPS proposed rule, we are
finalizing the allocation methodology
and percentages as proposed, without
modification. Table 10 below shows the
Wages and Salaries and Employee
Benefits cost weights after contract labor
allocation for the FY 2010-based SNF
market basket and the 2014-based SNF
market basket.
TABLE 10—WAGES AND SALARIES AND EMPLOYEE BENEFITS COST WEIGHTS AFTER CONTRACT LABOR ALLOCATION
Final
2014-based
market
basket
Major cost categories
Wages and Salaries ................................................................................................................................................
Employee Benefits ...................................................................................................................................................
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ii. Derivation of the Detailed Operating
Cost Weights
To further divide the ‘‘All Other’’
residual cost weight estimated from the
2014 Medicare cost report data into
more detailed cost categories, we
proposed to use the 2007 Benchmark
I–O ‘‘Use Tables/Before Redefinitions/
Purchaser Value’’ for Nursing and
Community Care Facilities industry
(NAICS 623A00), published by the
Census Bureau’s Bureau of Economic
Analysis (BEA). These data are publicly
available at the following Web site:
https://www.bea.gov/industry/io_
annual.htm. The BEA Benchmark I–O
data are generally scheduled for
publication every 5 years with the most
recent data available for 2007. The 2007
Benchmark I–O data are derived from
the 2007 Economic Census and are the
building blocks for BEA’s economic
accounts. Therefore, they represent the
most comprehensive and complete set
of data on the economic processes or
mechanisms by which output is
produced and distributed.2 BEA also
produces Annual I–O estimates.
However, while based on a similar
methodology, these estimates reflect less
comprehensive and less detailed data
sources and are subject to revision when
benchmark data become available.
Instead of using the less detailed
Annual I–O data, we proposed to inflate
2 https://www.bea.gov/papers/pdf/IOmanual_
092906.pdf.
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the 2007 Benchmark I–O data aged
forward to 2014 by applying the annual
price changes from the respective price
proxies to the appropriate market basket
cost categories that are obtained from
the 2007 Benchmark I–O data. We
repeated this practice for each year. We
then calculated the cost shares that each
cost category represents of the 2007 data
inflated to 2014. These resulting 2014
cost shares were applied to the ‘‘All
Other’’ residual cost weight to obtain
the detailed cost weights for the
proposed 2014-based SNF market
basket. For example, the cost for Food:
Direct Purchases represents 13.7 percent
of the sum of the ‘‘All Other’’ 2007
Benchmark I–O Expenditures inflated to
2014. Therefore, the Food: Direct
Purchases cost weight represents 3.1
percent of the proposed 2014-based SNF
market basket’s ‘‘All Other’’ cost
category (0.137 × 22.6 percent = 3.1
percent). For the FY 2010-based SNF
market basket (78 FR 26456), we used
the same methodology utilizing the
2002 Benchmark I–O data (aged to FY
2010).
Using this methodology, we proposed
to derive 21 detailed SNF market basket
operating cost category weights from the
proposed 2014-based SNF market basket
‘‘All Other’’ residual cost weight (22.6
percent). These categories are: (1) Fuel:
Oil and Gas; (2) Electricity; (3) Water
and Sewerage; (4) Food: Direct
Purchases; (5) Food: Contract Services;
(6) Chemicals; (7) Medical Instruments
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50.0
10.5
FY
2010-based
market
basket
50.6
11.5
and Supplies; (8) Rubber and Plastics;
(9) Paper and Printing Products; (10)
Apparel; (11) Machinery and
Equipment; (12) Miscellaneous
Products; (13) Professional Fees: LaborRelated; (14) Administrative and
Facilities Support Services; (15)
Installation, Maintenance, and Repair
Services; (16) All Other: Labor-Related
Services; (17) Professional Fees:
Nonlabor-Related; (18) Financial
Services; (19) Telephone Services; (20)
Postage; and (21) All Other: NonlaborRelated Services.
We note that the machinery and
equipment expenses are for equipment
that is paid for in a given year and not
depreciated over the asset’s useful life.
Depreciation expenses for movable
equipment are reflected in the capital
component of the proposed 2014-based
SNF market basket (described in section
V.A.1.c. of the proposed rule (82 FR
21032) and section III.D.1.c. of this final
rule).
We would also note that for ease of
reference we proposed to rename the
Nonmedical Professional Fees: LaborRelated and Nonmedical Professional
Fees: Nonlabor-related cost categories
(as labeled in the FY 2010-based SNF
market basket) to be Professional Fees:
Labor-Related and Professional Fees:
Nonlabor-Related in the 2014-based
SNF market basket. These cost
categories still represent the same
nonmedical professional fees that were
included in the FY 2010-based SNF
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market basket, which we describe in
section V.A.4. of the proposed rule (82
FR 21039) and section III.D.1.d. of this
final rule.
For the 2014-based SNF market
basket, we proposed to include a
separate cost category for Installation,
Maintenance, and Repair Services to
proxy these costs by a price index that
better reflects the price changes of labor
associated with maintenance-related
services. Previously these costs were
included in the All Other: Labor-Related
Services category of the FY 2010-based
SNF market basket.
Provided below are summaries of the
comments we received regarding the
derivation of the detailed operating cost
weights, as well as our responses.
Comment: Several commenters
believe a SNF cost distribution study
from 2007 is out-of-date and not likely
to represent the distribution of cost in
2014 or going forward. For example,
according to the commenter, operational
changes driven by the Requirements of
Participation will have substantial
impacts. The commenter stated that the
function of a market basket is to update
SNF payment based on real changes in
cost over time. The commenter claimed
that the use of a static 2007 study is
inconsistent with the fundamental
intent of the market basket. The
commenter requested information
regarding how CMS could gather more
current data on SNF costs.
Response: To further divide the ‘‘All
Other’’ residual cost weight of 22.6
percent into more detailed cost
categories, we proposed to use the 2007
Benchmark I–O for Nursing and
Community Care Facilities industry
(NAICS 623A00). For each of the
detailed expenses (such as food: Direct
purchase), we inflate the 2007 expense
to 2014 using the relevant price proxies.
The resulting 2014 cost shares based on
these inflated expenses were applied to
the ‘‘All Other’’ residual cost weight to
obtain the detailed cost weights for the
2014-based SNF market basket.
Thus, our methodology does in fact
reflect changes in expenses from 2007 to
2014, but is based on the assumption
that the change in quantities over this
period is equal to the change in prices.
We believe this is a reasonable
assumption as it is consistent with
historical data which shows the cost
shares changing over time. We believe
this is a better methodology for
developing the market basket rather
than keeping the shares fixed between
2007 and 2014 or proxying the ‘‘All
Other’’ residual by an aggregate index
such as the CPI All-Items, which would
not reflect the unique cost structures of
SNFs.
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It is not until late 2018, when BEA is
expected to release 2012 Benchmark
I–O data, that we will be able to
determine whether the growth in
quantities for these specific costs grew
similarly to prices over this period, as
we currently assume in the market
basket. We will evaluate these data and
consider its inclusion for the
development of the SNF market basket
in the future.
After consideration of the public
comments we received, for the reasons
discussed above and in the FY 2018
SNF PPS proposed rule, we are
finalizing the detailed operating cost
weights and methodology for deriving
such weights as proposed, without
modification.
iii. Derivation of the Detailed Capital
Cost Weights
Similar to the FY 2010-based SNF
market basket, we proposed to further
divide the Capital-related cost weight
into: Depreciation, Interest, Lease and
Other Capital-related cost weights.
We proposed to calculate the
depreciation cost weight (that is,
depreciation costs excluding leasing
costs) using depreciation costs from
Worksheet S–2, column 1, lines 20 and
21. Since the depreciation costs reflect
the entire SNF facility (Medicare and
non-Medicare-allowable units), we
proposed to use total facility capital
costs as the denominator. This
methodology assumes that the
depreciation of an asset is the same
regardless of whether the asset was used
for Medicare or non-Medicare patients.
This methodology yielded depreciation
as a percent of capital costs of 27.3
percent for 2014. We then applied this
percentage to the proposed 2014-based
SNF market basket Medicare-allowable
Capital-related cost weight of 7.9
percent, yielding a Medicare-allowable
depreciation cost weight (excluding
leasing expenses, which is described in
more detail below) of 2.2 percent. To
further disaggregate the Medicareallowable depreciation cost weight into
fixed and moveable depreciation, we
proposed to use the 2014 SNF MCR data
for end-of-the-year capital asset balances
as reported on Worksheet A7. The 2014
SNF MCR data showed a fixed/
moveable split of 83/17. The FY 2010based SNF market basket, which
utilized the same data from the FY 2010
MCRs, had a fixed/moveable split of
85/15.
We also proposed to derive the
interest expense share of capital-related
expenses from 2014 SNF MCR data,
specifically from Worksheet A, column
2, line 81. Similar to the depreciation
cost weight, we proposed to calculate
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the interest cost weight using total
facility capital costs. This methodology
yielded interest as a percent of capital
costs of 27.4 percent for 2014. We then
applied this percentage to the proposed
2014-based SNF market basket
Medicare-allowable Capital-related cost
weight of 7.9 percent, yielding a
Medicare-allowable interest cost weight
(excluding leasing expenses) of 2.2
percent. As done with the last SNF
market basket rebasing (78 FR 26454),
we proposed to determine the split of
interest expense between for-profit and
not-for-profit facilities based on the
distribution of long-term debt
outstanding by type of SNF (for-profit or
not-for-profit/government) from the
2014 SNF MCR data. We estimated the
split between for-profit and not-forprofit interest expense to be 27/73
percent compared to the FY 2010-based
SNF market basket with 41/59 percent.
Because the detailed data were not
available in the MCRs, we proposed to
use the most recent 2014 Census Bureau
Service Annual Survey (SAS) data to
derive the capital-related expenses
attributable to leasing and other capitalrelated expenses. The FY 2010-based
SNF market basket used the 2010 SAS
data. Based on the 2014 SAS data, we
determined that leasing expenses are 63
percent of total leasing and capitalrelated expenses costs. In the FY 2010based SNF market basket, leasing costs
represent 62 percent of total leasing and
capital-related expenses costs. We then
applied this percentage to the proposed
2014-based SNF market basket residual
Medicare-allowable capital costs of 3.6
percent derived from subtracting the
Medicare-allowable depreciation cost
weight and Medicare-allowable interest
cost weight from the 2014-based SNF
market basket of total Medicareallowable capital cost weight (7.9
percent ¥ 2.2 percent ¥ 2.2 percent =
3.6 percent). This produced the
proposed 2014-based SNF Medicareallowable leasing cost weight of 2.3
percent and all-other capital-related cost
weight of 1.3 percent.
Lease expenses are not broken out as
a separate cost category in the SNF
market basket, but are distributed
among the cost categories of
depreciation, interest, and other capitalrelated expenses, reflecting the
assumption that the underlying cost
structure and price movement of leasing
expenses is similar to capital costs in
general. As was done with past SNF
market baskets and other PPS market
baskets, we assumed 10 percent of lease
expenses are overhead and proposed to
assign them to the other capital-related
expenses cost category. This is based on
the assumption that leasing expenses
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include not only depreciation, interest,
and other capital-related costs but also
additional costs paid to the lessor. We
distributed the remaining lease
expenses to the three cost categories
based on the proportion of depreciation,
interest, and other capital-related
expenses to total capital costs,
excluding lease expenses.
We did not receive any public
comments on our proposed
methodology for deriving the detailed
capital cost weights. Therefore, for the
reasons discussed above and in the FY
2018 SNF PPS proposed rule, we are
36557
finalizing the detailed capital cost
weights and methodology as proposed,
without modification.
Table 11 shows the capital-related
expense distribution (including
expenses from leases) in the final 2014based SNF market basket and the FY
2010-based SNF market basket.
TABLE 11—COMPARISON OF THE CAPITAL-RELATED EXPENSE DISTRIBUTION OF THE 2014-BASED SNF MARKET BASKET
AND THE FY 2010-BASED SNF MARKET BASKET
Final
2014-based
SNF market
basket
Cost category
Capital-related Expenses .........................................................................................................................................
Total Depreciation ............................................................................................................................................
Total Interest .....................................................................................................................................................
Other Capital-related Expenses .......................................................................................................................
7.9
2.9
3.0
2.0
FY
2010-based
SNF market
basket
7.4
3.2
2.1
2.1
Note: The cost weights are calculated using three decimal places. For presentational purposes, we are displaying one decimal and therefore,
the detail capital cost weights may not add to the total capital-related expenses cost weight due to rounding.
Table 12 presents the final 2014-based
SNF market basket and the FY 2010based SNF market basket.
TABLE 12—2014-BASED SNF MARKET BASKET AND FY 2010-BASED SNF MARKET BASKET
Final
2014-based
SNF market
basket
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Cost category
Total .........................................................................................................................................................................
Compensation ..........................................................................................................................................................
Wages and Salaries 1 .......................................................................................................................................
Employee Benefits 1 .........................................................................................................................................
Utilities .....................................................................................................................................................................
Electricity ..........................................................................................................................................................
Fuel: Oil and Gas .............................................................................................................................................
Water and Sewerage ........................................................................................................................................
Professional Liability Insurance ...............................................................................................................................
All Other ...................................................................................................................................................................
Other Products .....................................................................................................................................................
Pharmaceuticals ...............................................................................................................................................
Food: Direct Purchase ......................................................................................................................................
Food: Contract Purchase .................................................................................................................................
Chemicals .........................................................................................................................................................
Medical Instruments and Supplies ...................................................................................................................
Rubber and Plastics .........................................................................................................................................
Paper and Printing Products ............................................................................................................................
Apparel .............................................................................................................................................................
Machinery and Equipment ................................................................................................................................
Miscellaneous Products ....................................................................................................................................
All Other Services ....................................................................................................................................................
Labor-Related Services ........................................................................................................................................
Professional Fees: Labor-related .....................................................................................................................
Installation, Maintenance, and Repair Services ...............................................................................................
Administrative and Facilities Support ...............................................................................................................
All Other: Labor-Related Services ....................................................................................................................
Non Labor-Related Services ................................................................................................................................
Professional Fees: Nonlabor-Related ..............................................................................................................
Financial Services ............................................................................................................................................
Telephone Services ..........................................................................................................................................
Postage .............................................................................................................................................................
All Other: Nonlabor-Related Services ..............................................................................................................
Capital-Related Expenses .......................................................................................................................................
Total Depreciation ................................................................................................................................................
Building and Fixed Equipment .........................................................................................................................
Movable Equipment ..........................................................................................................................................
Total Interest ........................................................................................................................................................
For-Profit SNFs .................................................................................................................................................
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100.0
60.4
50.0
10.5
2.6
1.2
1.3
0.2
1.1
27.9
14.3
7.3
3.1
0.7
0.2
0.6
0.8
0.8
0.3
0.3
0.3
13.6
7.4
3.8
0.6
0.5
2.5
6.2
1.8
2.0
0.5
0.2
1.8
7.9
2.9
2.5
0.4
3.0
0.8
FY
2010-based
SNF market
basket
100.0
62.1
50.6
11.5
2.2
1.4
0.7
0.1
1.1
27.2
16.1
7.9
3.7
1.2
0.2
0.8
1.0
0.8
0.2
0.2
0.3
11.0
6.2
3.4
n/a
0.5
2.3
4.8
2.0
0.9
0.6
0.2
1.1
7.4
3.2
2.7
0.5
2.1
0.9
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TABLE 12—2014-BASED SNF MARKET BASKET AND FY 2010-BASED SNF MARKET BASKET—Continued
Final
2014-based
SNF market
basket
Cost category
Government and Nonprofit SNFs .....................................................................................................................
Other Capital-Related Expenses .........................................................................................................................
2.1
2.0
FY
2010-based
SNF market
basket
1.2
2.1
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Note: The cost weights are calculated using three decimal places. For presentational purposes, we are displaying one decimal and therefore,
the detailed cost weights may not add to the aggregate cost weights or to 100.0 due to rounding.
1 Contract labor is distributed to wages and salaries and employee benefits based on the share of total compensation that each category
represents.
b. Price Proxies Used To Measure
Operating Cost Category Growth
After developing the 30 cost weights
for the 2014-based SNF market basket,
we selected the most appropriate wage
and price proxies currently available to
represent the rate of change for each
expenditure category. With four
exceptions (three for the capital-related
expenses cost categories and one for
Professional Liability Insurance (PLI)),
we base the wage and price proxies on
Bureau of Labor Statistics (BLS) data,
and group them into one of the
following BLS categories:
• Employment Cost Indexes:
Employment Cost Indexes (ECIs)
measure the rate of change in
employment wage rates and employer
costs for employee benefits per hour
worked. These indexes are fixed-weight
indexes and strictly measure the change
in wage rates and employee benefits per
hour. ECIs are superior to Average
Hourly Earnings (AHE) as price proxies
for input price indexes because they are
not affected by shifts in occupation or
industry mix, and because they measure
pure price change and are available by
both occupational group and by
industry. The industry ECIs are based
on the 2004 North American
Classification System (NAICS).
• Producer Price Indexes: Producer
Price Indexes (PPIs) measure price
changes for goods sold in other than
retail markets. PPIs are used when the
purchases of goods or services are made
at the wholesale level.
• Consumer Price Indexes: Consumer
Price Indexes (CPIs) measure change in
the prices of final goods and services
bought by consumers. CPIs are only
used when the purchases are similar to
those of retail consumers rather than
purchases at the wholesale level, or if
no appropriate PPI were available.
We evaluated the price proxies using
the criteria of reliability, timeliness,
availability, and relevance. Reliability
indicates that the index is based on
valid statistical methods and has low
sampling variability. Widely accepted
statistical methods ensure that the data
were collected and aggregated in a way
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that can be replicated. Low sampling
variability is desirable because it
indicates that the sample reflects the
typical members of the population.
(Sampling variability is variation that
occurs by chance because only a sample
was surveyed rather than the entire
population.) Timeliness implies that the
proxy is published regularly, preferably
at least once a quarter. The market
baskets are updated quarterly, and
therefore, it is important for the
underlying price proxies to be up-todate, reflecting the most recent data
available. We believe that using proxies
that are published regularly (at least
quarterly, whenever possible) helps to
ensure that we are using the most recent
data available to update the market
basket. We strive to use publications
that are disseminated frequently,
because we believe that this is an
optimal way to stay abreast of the most
current data available. Availability
means that the proxy is publicly
available. We prefer that our proxies are
publicly available because this will help
ensure that our market basket updates
are as transparent to the public as
possible. In addition, this enables the
public to be able to obtain the price
proxy data on a regular basis. Finally,
relevance means that the proxy is
applicable and representative of the cost
category weight to which it is applied.
The CPIs, PPIs, and ECIs that we have
selected to propose in this regulation
meet these criteria. Therefore, we
believe that they continue to be the best
measure of price changes for the cost
categories to which they would be
applied.
Table 15 in the proposed rule (82 FR
21039) lists all price proxies for the
2014-based SNF market basket. Below is
a detailed explanation of the proposed
price proxies used for each operating
cost category.
• Wages and Salaries: We proposed
to use the ECI for Wages and Salaries for
Private Industry Workers in Nursing
Care Facilities (NAICS 6231; BLS series
code CIU2026231000000I) to measure
price growth of this category. NAICS
623 includes facilities that provide a
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mix of health and social services, with
many of the health services being
largely some level of nursing services.
Within NAICS 623 is NAICS 6231,
which includes nursing care facilities
primarily engaged in providing
inpatient nursing and rehabilitative
services. These facilities, which are
most comparable to Medicare-certified
SNFs, provide skilled nursing and
continuous personal care services for an
extended period of time, and, therefore,
have a permanent core staff of registered
or licensed practical nurses. This is the
same index used in the FY 2010-based
SNF market basket.
• Employee Benefits: We proposed to
use the ECI for Benefits for Nursing Care
Facilities (NAICS 6231) to measure
price growth of this category. The ECI
for Benefits for Nursing Care Facilities
is calculated using BLS’s total
compensation (BLS series ID
CIU2016231000000I) for nursing care
facilities series and the relative
importance of wages and salaries within
total compensation. We believe this
constructed ECI series is technically
appropriate for the reason stated above
in the Wages and Salaries price proxy
section. This is the same index used in
the FY 2010-based SNF market basket.
• Electricity: We proposed to use the
PPI Commodity for Commercial Electric
Power (BLS series code WPU0542) to
measure the price growth of this cost
category. This is the same index used in
the FY 2010-based SNF market basket.
• Fuel: Oil and Gas: We proposed to
change the proxy used for the Fuel: Oil
and Gas cost category. The FY 2010based SNF market basket uses the PPI
Commodity for Commercial Natural Gas
(BLS series code WPU0552) to proxy
these expenses. For the 2014-based SNF
market basket, we proposed to use a
blend of the PPI Industry for Petroleum
Refineries (BLS series code PCU32411–
32411) and the PPI Commodity for
Natural Gas (BLS series code
WPU0531). Our analysis of the Bureau
of Economic Analysis’ 2007 Benchmark
I–O data for Nursing and Community
Care Facilities shows that petroleum
refineries expenses accounts for
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approximately 65 percent and natural
gas accounts for approximately 35
percent of the fuel: Oil and gas
expenses. Therefore, we proposed a
blended proxy of 65 percent of the PPI
Industry for Petroleum Refineries (BLS
series code PCU32411–32411) and 35
percent of the PPI Commodity for
Natural Gas (BLS series code
WPU0531). We believe that these two
price proxies are the most technically
appropriate indices available to measure
the price growth of the Fuel: Oil and
Gas category in the 2014-based SNF
market basket.
• Water and Sewerage: We proposed
to use the CPI All Urban for Water and
Sewerage Maintenance (BLS series code
CUUR0000SEHG01) to measure the
price growth of this cost category. This
is the same index used in the FY 2010based SNF market basket.
• Professional Liability Insurance: We
proposed to use the CMS Hospital
Professional Liability Insurance Index to
measure price growth of this category.
We were unable to find a reliable data
source that collects SNF-specific PLI
data. Therefore, we proposed to use the
CMS Hospital Professional Liability
Index, which tracks price changes for
commercial insurance premiums for a
fixed level of coverage, holding nonprice factors constant (such as a change
in the level of coverage). This is the
same index used in the FY 2010-based
SNF market basket. We believe this is an
appropriate proxy to measure the price
growth associated of SNF professional
liability insurance as it captures the
price inflation associated with other
medical institutions that serve Medicare
patients.
• Pharmaceuticals: We proposed to
use the PPI Commodity for
Pharmaceuticals for Human Use,
Prescription (BLS series code
WPUSI07003) to measure the price
growth of this cost category. This is the
same index used in the FY 2010-based
SNF market basket.
• Food: Wholesale Purchases: We
proposed to use the PPI Commodity for
Processed Foods and Feeds (BLS series
code WPU02) to measure the price
growth of this cost category. This is the
same index used in the FY 2010-based
SNF market basket.
• Food: Retail Purchase: We proposed
to use the CPI All Urban for Food Away
From Home (All Urban Consumers)
(BLS series code CUUR0000SEFV) to
measure the price growth of this cost
category. This is the same index used in
the FY 2010-based SNF market basket.
• Chemicals: For measuring price
change in the Chemicals cost category,
we proposed to use a blended PPI
composed of the Industry PPIs for Other
Basic Organic Chemical Manufacturing
(NAICS 325190) (BLS series code
PCU32519–32519), Soap and Cleaning
Compound Manufacturing (NAICS
36559
325610) (BLS series code PCU32561–
32561), and Other Miscellaneous
Chemical Product Manufacturing
(NAICS 3259A0) (BLS series code
PCU325998325998).
Using the 2007 Benchmark I–O data,
we found that these three NAICS
industries accounted for approximately
96 percent of SNF chemical expenses.
The remaining four percent of SNF
chemical expenses are for three other
incidental NAICS chemicals industries
such as Paint and Coating
Manufacturing. We proposed to create a
blended index based on those three
NAICS chemical expenses listed above
that account for 96 percent of SNF
chemical expenses. We proposed to
create this blend based on each NAICS’
expenses as a share of their sum. These
expenses as a share of their sum are
listed in Table 34.
The FY 2010-based SNF market
basket also used a blended chemical
proxy that was based on 2002
Benchmark I–O data. We believe our
proposed chemical blended index for
the 2014-based SNF market basket is
technically appropriate as it reflects
more recent data on SNFs purchasing
patterns. Table 13 in the proposed rule
(82 FR 21035) provided the weights for
the 2014-based blended chemical index
and the FY 2010-based blended
chemical index. The table is also shown
below.
TABLE 13—PROPOSED CHEMICAL BLENDED INDEX WEIGHTS
2014-based
index
(%)
2010-based
index
(%)
Industry description
325190 .............................................
25510 ...............................................
325610 .............................................
3259A0 .............................................
Other basic organic chemical manufacturing ............................................
Paint and coating manufacturing ..............................................................
Soap and cleaning compound manufacturing ..........................................
Other miscellaneous chemical product manufacturing .............................
22
n/a
37
41
7
12
49
32
Total ..........................................
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NAICS
....................................................................................................................
100
100
As discussed below, we are finalizing
the weights for the 2014-based blended
chemical index as proposed, without
modification.
• Medical Instruments and Supplies:
We proposed to use a blend for the
Medical Instruments and Supplies cost
category. The 2007 Benchmark I–O data
shows an approximate 60/40 split
between ‘Medical and Surgical
Appliances and Supplies’ and ‘Surgical
and Medical Instruments’. Therefore, we
proposed a blend composed of 60
percent of the PPI Commodity for
Medical and Surgical Appliances and
Supplies (BLS series code WPU1563)
and 40 percent of the PPI Commodity
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for Surgical and Medical Instruments
(BLS series code WPU1562).
The FY 2010-based SNF market
basket used the single, higher level PPI
Commodity for Medical, Surgical, and
Personal Aid Devices (BLS series code
WPU156). We believe that the proposed
price proxy better reflects the mix of
expenses for this cost category as
obtained from the 2007 Benchmark I–O
data.
• Rubber and Plastics: We proposed
to use the PPI Commodity for Rubber
and Plastic Products (BLS series code
WPU07) to measure price growth of this
cost category. This is the same index
used in the FY 2010-based SNF market
basket.
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• Paper and Printing Products: We
proposed to use the PPI Commodity for
Converted Paper and Paperboard
Products (BLS series code WPU0915) to
measure the price growth of this cost
category. This is the same index used in
the FY 2010-based SNF market basket.
• Apparel: We proposed to use the
PPI Commodity for Apparel (BLS series
code WPU0381) to measure the price
growth of this cost category. This is the
same index used in the FY 2010-based
SNF market basket.
• Machinery and Equipment: We
proposed to use the PPI Commodity for
Machinery and Equipment (BLS series
code WPU11) to measure the price
growth of this cost category. This is the
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Federal Register / Vol. 82, No. 149 / Friday, August 4, 2017 / Rules and Regulations
same index used in the FY 2010-based
SNF market basket.
• Miscellaneous Products: For
measuring price change in the
Miscellaneous Products cost category,
we proposed to use the PPI Commodity
for Finished Goods less Food and
Energy (BLS series code WPUFD4131).
Both food and energy are already
adequately represented in separate cost
categories and should not also be
reflected in this cost category. This is
the same index used in the FY 2010based SNF market basket.
• Professional Fees: Labor-Related:
We proposed to use the ECI for Total
Compensation for Private Industry
Workers in Professional and Related
(BLS series code CIU2010000120000I) to
measure the price growth of this
category. This is the same index used in
the FY 2010-based SNF market basket
(which was called the Nonmedical
Professional Fees: Labor-Related cost
category).
• Administrative and Facilities
Support Services: We proposed to use
the ECI for Total Compensation for
Private Industry Workers in Office and
Administrative Support (BLS series
code CIU2010000220000I) to measure
the price growth of this category. This
is the same index used in the FY 2010based SNF market basket.
• Installation, Maintenance and
Repair Services: We proposed to include
a separate cost category for Installation,
Maintenance, and Repair Services to
proxy these costs by a price index that
better reflects the price changes of labor
associated with maintenance-related
services. We proposed to use the ECI for
Total Compensation for All Civilian
Workers in Installation, Maintenance,
and Repair (BLS series code
CIU1010000430000I) to measure the
price growth of this new cost category.
Previously these costs were included in
the All Other: Labor-Related Services
category and were proxied by the ECI
for Total Compensation for Private
Industry Workers in Service
Occupations (BLS series code
CIU2010000300000I).
• All Other: Labor-Related Services:
We proposed to use the ECI for Total
Compensation for Private Industry
Workers in Service Occupations (BLS
series code CIU2010000300000I) to
measure the price growth of this cost
category. This is the same index used in
the FY 2010-based SNF market basket.
• Professional Fees: NonLaborRelated: We proposed to use the ECI for
Total Compensation for Private Industry
Workers in Professional and Related
(BLS series code CIU2010000120000I) to
measure the price growth of this
category. This is the same index used in
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the FY 2010-based SNF market basket
(which was called the Nonmedical
Professional Fees: Nonlabor-Related cost
category).
• Financial Services: We proposed to
use the ECI for Total Compensation for
Private Industry Workers in Financial
Activities (BLS series code
CIU201520A000000I) to measure the
price growth of this cost category. This
is the same index used in the FY 2010based SNF market basket.
• Telephone Services: We proposed
to use the CPI All Urban for Telephone
Services (BLS series code
CUUR0000SEED) to measure the price
growth of this cost category. This is the
same index used in the FY 2010-based
SNF market basket.
• Postage: We proposed to use the
CPI All Urban for Postage (BLS series
code CUUR0000SEEC) to measure the
price growth of this cost category. This
is the same index used in the FY 2010based SNF market basket.
• All Other: NonLabor-Related
Services: We proposed to use the CPI
All Urban for All Items Less Food and
Energy (BLS series code
CUUR0000SA0L1E) to measure the
price growth of this cost category. This
is the same index used in the FY 2010based SNF market basket.
We did not receive any public
comments on our proposed price
proxies for each of the operating cost
categories. For the reasons discussed
above and in the FY 2018 SNF PPS
proposed rule, we are finalizing the
price proxies of the operating cost
categories as proposed, without
modification. In addition, we did not
receive any public comments on our
proposed weights for the 2014-based
blended chemical index. Thus, for the
reasons discussed above and in the FY
2018 SNF PPS proposed rule, we are
finalizing the weights for 2014-based
blended chemical index as proposed,
without modification.
c. Price Proxies Used To Measure
Capital Cost Category Growth
We proposed to apply the same price
proxies as were used in the FY 2010based SNF market basket, and below is
a detailed explanation of the price
proxies used for each capital cost
category. We also proposed to continue
to vintage weight the capital price
proxies for Depreciation and Interest to
capture the long-term consumption of
capital. This vintage weighting method
is the same method that was used for
the FY 2010-based SNF market basket
and is described below.
• Depreciation—Building and Fixed
Equipment: We proposed to use the
BEA Chained Price Index for Private
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Fixed Investment in Structures,
Nonresidential, Hospitals and Special
Care (BEA Table 5.4.4. Price Indexes for
Private Fixed Investment in Structures
by Type). This BEA index is intended to
capture prices for construction of
facilities such as hospitals, nursing
homes, hospices, and rehabilitation
centers.
• Depreciation—Movable Equipment:
We proposed to use the PPI Commodity
for Machinery and Equipment (BLS
series code WPU11). This price index
reflects price inflation associated with a
variety of machinery and equipment
that would be utilized by SNFs
including but not limited to medical
equipment, communication equipment,
and computers.
• Nonprofit Interest: We proposed to
use the average yield on Municipal
Bonds (Bond Buyer 20-bond index).
• For-Profit Interest: We proposed to
use the average yield on Moody’s AAA
corporate bonds (Federal Reserve). We
proposed different proxies for the
interest categories because we believe
interest price pressures differ between
nonprofit and for-profit facilities.
• Other Capital: Since this category
includes fees for insurances, taxes, and
other capital-related costs, we proposed
to use the CPI All Urban for Owners’
Equivalent Rent of Primary Residence
(BLS series code CUUR0000SEHC01),
which would reflect the price growth of
these costs.
We believe that these price proxies
continue to be the most appropriate
proxies for SNF capital costs that meet
our selection criteria of relevance,
timeliness, availability, and reliability.
As stated above, we proposed to
continue to vintage weight the capital
price proxies for Depreciation and
Interest to capture the long-term
consumption of capital. To capture the
long-term nature, the price proxies are
vintage-weighted; and the vintage
weights are calculated using a two-step
process. First, we determined the
expected useful life of capital and debt
instruments held by SNFs. Second, we
identified the proportion of
expenditures within a cost category that
is attributable to each individual year
over the useful life of the relevant
capital assets, or the vintage weights.
We proposed to rely on Bureau of
Economic Analysis (BEA) fixed asset
data to derive the useful lives of both
fixed and movable capital, which is the
same data source used to derive the
useful lives for the FY 2010-based SNF
market basket. The specifics of the data
sources used are explained below.
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Federal Register / Vol. 82, No. 149 / Friday, August 4, 2017 / Rules and Regulations
i. Calculating Useful Lives for Moveable
and Fixed Assets
Estimates of useful lives for movable
and fixed assets for the 2014-based SNF
market basket are 10 and 23 years,
respectively. These estimates are based
on three data sources from the BEA: (1)
Current-cost average age; (2) historicalcost average age; and (3) industryspecific current cost net stocks of assets.
BEA current-cost and historical-cost
average age data by asset type are not
available by industry but are published
at the aggregate level for all industries.
The BEA does publish current-cost net
capital stocks at the detailed asset level
for specific industries. There are 61
detailed movable assets (including
intellectual property) and there are 32
detailed fixed assets in the BEA
estimates. Since we seek aggregate
useful life estimates applicable to SNFs,
we developed a methodology to
approximate movable and fixed asset
ages for nursing and residential care
services (NAICS 623) using the
published BEA data. For the proposed
FY 2014 SNF market basket, we used
the current-cost average age for each
asset type from the BEA fixed assets
Table 2.9 for all assets and weight them
using current-cost net stock levels for
each of these asset types in the nursing
and residential care services industry,
NAICS 6230. (For example, nonelectro
medical equipment current-cost net
stock (accounting for about 37 percent
of total moveable equipment currentcost net stock in 2014) is multiplied by
an average age of 4.7 years. Current-cost
net stock levels are available for
download from the BEA Web site at
https://www.bea.gov/national/FA2004/
Details/. We then aggregated
the ‘‘weighted’’ current-cost net stock
levels (average age multiplied by
current-cost net stock) into moveable
and fixed assets for NAICS 6230. We
then adjusted the average ages for
moveable and fixed assets by the ratio
of historical-cost average age (Table
2.10) to current-cost average age (Table
2.9).
This produced historical cost average
age data for movable (equipment and
intellectual property) and fixed
(structures) assets specific to NAICS
6230 of 4.8 and 11.6 years, respectively.
The average age reflects the average age
of an asset at a given point in time,
whereas we want to estimate a useful
life of the asset, which would reflect the
average over all periods an asset is used.
To do this, we multiplied each of the
average age estimates by two to convert
to average useful lives with the
assumption that the average age is
normally distributed (about half of the
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assets are below the average at a given
point in time, and half above the
average at a given point in time). This
produced estimates of likely useful lives
of 9.6 and 23.2 years for movable and
fixed assets, which we rounded to 10
and 23 years, respectively. We proposed
an interest vintage weight time span of
21 years, obtained by weighting the
fixed and movable vintage weights (23
years and 10 years, respectively) by the
fixed and movable split (87 percent and
13 percent, respectively). This is the
same methodology used for the FY
2010-based SNF market basket which
had useful lives of 22 years and 6 years
for fixed and moveable assets,
respectively. The impact of revising the
useful life for moveable assets from 6
years to 10 years had little to no impact
on the growth rate of the 2014-based
SNF market basket capital cost weight.
Over the 2014 to 2026 time period, the
impact on the growth rate of the capital
cost weight was no larger than 0.01
percent in absolute terms.
ii. Constructing Vintage Weights
Given the expected useful life of
capital (fixed and moveable assets) and
debt instruments, we then must
determine the proportion of capital
expenditures attributable to each year of
the expected useful life for each of the
three asset types: Building and fixed
equipment, moveable equipment, and
interest. These proportions represent the
vintage weights. We were not able to
find a historical time series of capital
expenditures by SNFs. Therefore, we
proposed to approximate the capital
expenditure patterns of SNFs over time,
using alternative SNF data sources. For
building and fixed equipment, we used
the stock of beds in nursing homes from
the National Nursing Home Survey
(NNHS) conducted by the National
Center for Health Statistics (NCHS) for
1962 through 1999. For 2000 through
2010, we extrapolated the 1999 bed data
forward using a 5-year moving average
of growth in the number of beds from
the SNF MCR data. For 2011 to 2014, we
proposed to extrapolate the 2010 bed
data forward using the average growth
in the number of beds over the 2011 to
2014 time period. We then used the
change in the stock of beds each year to
approximate building and fixed
equipment purchases for that year. This
procedure assumes that bed growth
reflects the growth in capital-related
costs in SNFs for building and fixed
equipment. We believe that this
assumption is reasonable because the
number of beds reflects the size of a
SNF, and as a SNF adds beds, it also
likely adds fixed capital.
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36561
As was done for the FY 2010-based
SNF market basket (as well as prior
market baskets), we proposed to
estimate moveable equipment purchases
based on the ratio of ancillary costs to
routine costs. The time series of the
ratio of ancillary costs to routine costs
for SNFs measures changes in intensity
in SNF services, which are assumed to
be associated with movable equipment
purchase patterns. The assumption here
is that as ancillary costs increase
compared to routine costs, the SNF
caseload becomes more complex and
would require more movable
equipment. The lack of movable
equipment purchase data for SNFs over
time required us to use alternative SNF
data sources. A more detailed
discussion of this methodology was
published in the FY 2008 SNF final rule
(72 FR 43428). We believe the resulting
two time series, determined from beds
and the ratio of ancillary to routine
costs, reflect real capital purchases of
building and fixed equipment and
movable equipment over time.
To obtain nominal purchases, which
are used to determine the vintage
weights for interest, we converted the
two real capital purchase series from
1963 through 2014 determined above to
nominal capital purchase series using
their respective price proxies (the BEA
Chained Price Index for Nonresidential
Construction for Hospitals & Special
Care Facilities and the PPI for
Machinery and Equipment). We then
combined the two nominal series into
one nominal capital purchase series for
1963 through 2014. Nominal capital
purchases are needed for interest
vintage weights to capture the value of
debt instruments.
Once we created these capital
purchase time series for 1963 through
2014, we averaged different periods to
obtain an average capital purchase
pattern over time: (1) For building and
fixed equipment, we averaged 30, 23year periods; (2) for movable equipment,
we averaged 43, 10-year periods; and (3)
for interest, we averaged 32, 21-year
periods. We calculate the vintage weight
for a given year by dividing the capital
purchase amount in any given year by
the total amount of purchases during the
expected useful life of the equipment or
debt instrument. To provide greater
transparency, we posted on the CMS
market basket Web site at https://
www.cms.gov/Research-Statistics-Dataand-Systems/Statistics-Trends-andReports/MedicareProgramRatesStats/
MarketBasketResearch.html, an
illustrative spreadsheet that contains an
example of how the vintage-weighted
price indexes are calculated.
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We did not receive any public
comments on our proposed price
proxies used for each of the detailed
capital cost categories or on our
methodology for deriving the vintage
weights. For the reasons discussed
above and in the FY 2018 SNF PPS
proposed rule, we are finalizing the
price proxies of the capital cost
categories, the vintage weights, and the
methodology for deriving the vintage
weights, as proposed without
modification.
The vintage weights for the 2014based SNF market basket and the FY
2010-based SNF market basket are
presented in Table 14.
TABLE 14—FINAL 2014-BASED VINTAGE WEIGHTS AND FY 2010-BASED VINTAGE WEIGHTS
Building and fixed equipment
Year 1
Movable equipment
Interest
2014-based
23 years
FY 2010based
25 years
2014-based
10 years
FY 2010based
6 years
2014-based
21 years
FY 2010based
22 years
1 ...............................................................
2 ...............................................................
3 ...............................................................
4 ...............................................................
5 ...............................................................
6 ...............................................................
7 ...............................................................
8 ...............................................................
9 ...............................................................
10 .............................................................
11 .............................................................
12 .............................................................
13 .............................................................
14 .............................................................
15 .............................................................
16 .............................................................
17 .............................................................
18 .............................................................
19 .............................................................
20 .............................................................
21 .............................................................
22 .............................................................
23 .............................................................
24 .............................................................
25 .............................................................
26 .............................................................
.056
.055
.054
.052
.049
.046
.044
.043
.040
.038
.038
.039
.039
.039
.039
.039
.040
.041
.043
.042
.042
.042
.042
........................
........................
........................
.061
.059
.053
.050
.046
.043
.041
.039
.036
.034
.034
.034
.033
.032
.031
.031
.032
.034
.035
.036
.038
.039
.042
.043
.044
........................
.085
.087
.091
.097
.099
.102
.108
.109
.110
.112
........................
........................
........................
........................
........................
........................
........................
........................
........................
........................
........................
........................
........................
........................
........................
........................
.165
.160
.167
.167
.169
.171
........................
........................
........................
........................
........................
........................
........................
........................
........................
........................
........................
........................
........................
........................
........................
........................
........................
........................
........................
........................
.032
.033
.034
.036
.037
.039
.041
.043
.044
.045
.048
.052
.056
.058
.060
.059
.057
.057
.056
.056
.057
........................
........................
........................
........................
........................
.030
.030
.032
.033
.035
.037
.039
.040
.041
.043
.045
.047
.048
.048
.050
.052
.055
.058
.060
.060
.058
.058
........................
........................
........................
........................
Total ..................................................
1.000
1.000
1.000
1.000
1.000
1.000
Note: The vintage weights are calculated using thirteen decimals. For presentational purposes, we are displaying three decimals and therefore, the detail vintage weights may not add to 1.000 due to rounding.
1 Year 1 represents the vintage weight applied to the farthest year while the vintage weight for year 23, for example, would apply to the most
recent year.
Table 15 shows all the price proxies
for the final 2014 based SNF market
basket.
TABLE 15—PRICE PROXIES FOR THE FINAL 2014-BASED SNF MARKET BASKET
Cost category
Weight
Proposed price proxy
100.0
60.4
50.0
Employee Benefits 1 .............................................................
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Total ............................................................................................
Compensation .............................................................................
Wages and Salaries 1 ..........................................................
10.5
Utilities .........................................................................................
Electricity ..............................................................................
Fuel: Oil and Gas ................................................................
Water and Sewerage ...........................................................
2.6
1.2
1.3
0.2
Professional Liability Insurance ..................................................
All Other ......................................................................................
Other Products .....................................................................
Pharmaceuticals ...........................................................
1.1
27.9
14.3
7.3
Food: Direct Purchase ..................................................
Food: Contract Purchase .............................................
3.1
0.7
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ECI for Wages and Salaries for Private Industry Workers in
Nursing Care Facilities.
ECI for Total Benefits for Private Industry Workers in Nursing
Care Facilities.
PPI Commodity for Commercial Electric Power.
Blend of Fuel PPIs.
CPI for Water and Sewerage Maintenance (All Urban Consumers).
CMS Professional Liability Insurance Premium Index.
PPI Commodity for Pharmaceuticals for Human Use, Prescription.
PPI Commodity for Processed Foods and Feeds.
CPI for Food Away From Home (All Urban Consumers).
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36563
TABLE 15—PRICE PROXIES FOR THE FINAL 2014-BASED SNF MARKET BASKET—Continued
Cost category
Weight
Proposed price proxy
Chemicals .....................................................................
Medical Instruments and Supplies ...............................
Rubber and Plastics .....................................................
Paper and Printing Products ........................................
0.2
0.6
0.8
0.8
Apparel .........................................................................
Machinery and Equipment ............................................
Miscellaneous Products ................................................
All Other Services .......................................................................
Labor-Related Services .......................................................
Professional Fees: Labor-related .................................
0.3
0.3
0.3
13.6
7.4
3.8
Installation, Maintenance, and Repair Services ...........
0.6
Administrative and Facilities Support ...........................
0.5
All Other: Labor-Related Services ................................
2.5
Non Labor-Related Services ...............................................
Professional Fees: Nonlabor-Related ..........................
6.2
1.8
Financial Services ........................................................
2.0
Telephone Services ......................................................
Postage .........................................................................
All Other: Nonlabor-Related Services ..........................
Capital-Related Expenses ..........................................................
Total Depreciation ................................................................
Building and Fixed Equipment .....................................
0.5
0.2
1.8
7.9
2.9
2.5
Movable Equipment ......................................................
0.4
Total Interest ........................................................................
For-Profit SNFs .............................................................
3.0
0.8
Government and Nonprofit SNFs .................................
2.1
Other Capital-Related Expenses .........................................
2.0
Blend of Chemical PPIs.
Blend of Medical Instruments and Supplies PPIs.
PPI Commodity for Rubber and Plastic Products.
PPI Commodity for Converted Paper and Paperboard Products.
PPI Commodity for Apparel.
PPI Commodity for Machinery and Equipment.
PPI Commodity for Finished Goods Less Food and Energy.
ECI for Total Compensation for Private Industry Workers in
Professional and Related.
ECI for Total Compensation for All Civilian workers in Installation, Maintenance, and Repair.
ECI for Total Compensation for Private Industry Workers in
Office and Administrative Support.
ECI for Total Compensation for Private Industry Workers in
Service Occupations.
ECI for Total Compensation for Private Industry Workers in
Professional and Related.
ECI for Total Compensation for Private Industry Workers in Financial Activities.
CPI for Telephone Services.
CPI for Postage.
CPI for All Items Less Food and Energy.
BEA’s Chained Price Index for Private Fixed Investment in
Structures, Nonresidential, Hospitals and Special Care—vintage weighted 23 years.
PPI Commodity for Machinery and Equipment—vintage
weighted 10 years.
Moody’s—Average yield on AAA bonds, vintage weighted 21
years.
Moody’s—Average yield on Domestic Municipal Bonds—vintage weighted 21 years.
CPI for Owners’ Equivalent Rent of Primary Residence.
Note: The cost weights are calculated using three decimal places. For presentational purposes, we are displaying one decimal and, therefore,
the detailed cost weights may not add to the aggregate cost weights or to 100.0 due to rounding.
1 Contract labor is distributed to wages and salaries and employee benefits based on the share of total compensation that each category
represents.
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c. Labor-Related Share
We define the labor-related share
(LRS) as those expenses that are laborintensive and vary with, or are
influenced by, the local labor market.
Each year, we calculate a revised laborrelated share based on the relative
importance of labor-related cost
categories in the input price index.
Effective beginning with FY 2018, we
proposed to revise and update the laborrelated share to reflect the relative
importance of the 2014-based SNF
market basket cost categories that we
believe are labor-intensive and vary
with, or are influenced by, the local
labor market. For the proposed 2014based SNF market basket, these are: (1)
Wages and Salaries (including allocated
contract labor costs as described above);
(2) Employee Benefits (including
allocated contract labor costs as
described above); (3) Professional fees:
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Labor-related; (4) Administrative and
Facilities Support Services; (5)
Installation, Maintenance, and Repair
services; (6) All Other: Labor-Related
Services; and (7) a proportion of capitalrelated expenses. We proposed to
continue to include a proportion of
capital-related expenses because a
portion of these expenses are deemed to
be labor-intensive and vary with, or are
influenced by, the local labor market.
For example, a proportion of
construction costs for a medical
building would be attributable to local
construction workers’ compensation
expenses.
Consistent with previous SNF market
basket revisions and rebasings, the All
Other: Labor-related services cost
category is mostly comprised of
building maintenance and security
services (including, but not limited to,
landscaping services, janitorial services,
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waste management services, and
investigation and security services).
Because these services tend to be laborintensive and are mostly performed at
the SNF facility (and therefore, unlikely
to be purchased in the national market),
we believe that they meet our definition
of labor-related services.
The proposed inclusion of the
Installation, Maintenance, and Repair
Services cost category into the laborrelated share remains consistent with
the current labor-related share, since
this cost category was previously
included in the FY 2010-based SNF
market basket All Other: Labor-related
Services cost category. We proposed to
establish a separate Installation,
Maintenance, and Repair Services cost
category so that we can use the ECI for
Total Compensation for All Civilian
Workers in Installation, Maintenance,
and Repair to reflect the specific price
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changes associated with these services.
We also use this cost category in the
2012-based IRF market basket (80 FR
47059), 2012-based IPF market basket
(80 FR 46667), and 2013-based LTCH
market basket (81 FR 57091).
As discussed in the FY 2014 SNF PPS
proposed rule (78 FR 26462), in an effort
to determine more accurately the share
of nonmedical professional fees
(included in the 2014-based SNF market
basket Professional Fees cost categories)
that should be included in the laborrelated share, we surveyed SNFs
regarding the proportion of those fees
that are attributable to local firms and
the proportion that are purchased from
national firms. Based on these weighted
results, we determined that SNFs
purchase, on average, the following
portions of contracted professional
services inside their local labor market:
• 78 percent of legal services.
• 86 percent of accounting and
auditing services.
• 89 percent of architectural,
engineering services.
• 87 percent of management
consulting services.
Together, these four categories
represent 3.3 percentage points of the
total costs for the 2014-based SNF
market basket. We applied the
percentages from this special survey to
their respective SNF market basket
weights to separate them into laborrelated and nonlabor-related costs. As a
result, we proposed to designate 2.8
percentage points of the 3.3 percentage
points to the labor-related share, with
the remaining 0.5 percentage point is
categorized as nonlabor-related.
For the proposed 2014-based SNF
market basket, we conducted a similar
analysis of home office data. The
Medicare cost report CMS Form 2540–
10 requires a SNF to report information
regarding their home office provider.
Approximately 57 percent of SNFs
reported some type of home office
information on their Medicare cost
report for 2014 (for example, city, state,
zip code). Using the data reported on
the Medicare cost report, we compared
the location of the SNF with the
location of the SNF’s home office. For
the FY 2010-based SNF market basket,
we used the Medicare HOMER database
to determine the location of the
provider’s home office as this
information was not available on the
Medicare cost report CMS Form 2540–
96. For the 2014-based SNF market
basket, we proposed to determine the
proportion of home office contract labor
costs that should be allocated to the
labor-related share based on the percent
of total SNF home office contract labor
costs as reported in Worksheet S–3, Part
II attributable to those SNFs that had
home offices located in their respective
local labor markets—defined as being in
the same Metropolitan Statistical Area
(MSA). We determined a SNF’s and
home office’s MSAs using their zip code
information from the Medicare cost
reports.
Using this methodology, we
determined that 28 percent of SNFs’
home office contract labor costs were for
home offices located in their respective
local labor markets. Therefore, we
proposed to allocate 28 percent of home
office expenses to the labor-related
share. The FY 2010-based SNF market
basket allocated 32 percent of home
office expenses to the labor-related
share.
In the proposed 2014-based SNF
market basket, home office expenses
that were subject to allocation based on
the home office allocation methodology
represent 0.7 percent of the 2014-based
SNF market basket. Based on the home
office results, we proposed to apportion
0.2 percentage point of the 0.7
percentage point figure into the laborrelated share (0.7 × 0.28 = 0.193, or 0.2)
and designate the remaining 0.5
percentage point as nonlabor-related.
Therefore, based on the two allocations
mentioned above, we proposed to
apportion 3.0 percentage points into the
labor-related share. This amount is
added to the portion of professional fees
that we continue to identify as laborrelated using the I–O data such as
contracted advertising and marketing
costs (0.8 percentage point of total
operating costs) resulting in a
Professional Fees: Labor-Related cost
weight of 3.8 percent.
We did not receive any public
comments on our proposed
methodology for deriving the laborrelated share. For the reasons discussed
above and in the FY 2018 SNF PPS
proposed rule, we are finalizing our
proposals, without modification, as
discussed above to update and revise
the labor-related share effective October
1, 2017, to reflect the relative
importance of the following 2014-based
SNF market basket cost weights that we
believe are labor-intensive and vary
with, or are influenced by, the local
labor market: (1) Wages and Salaries
(including allocated contract labor costs
as described above); (2) Employee
Benefits (including allocated contract
labor costs as described above); (3)
Professional fees: Labor-related; (4)
Administrative and Facilities Support
Services; (5) Installation, Maintenance,
and Repair services; (6) All Other:
Labor-Related Services; and (7) a
proportion of capital-related expenses.
Table 16 compares the 2014-based
labor-related share and the FY 2010based labor-related share based on the
relative importance of IGI’s most recent
second quarter 2017 forecast with
historical data through the first quarter
of 2017. The FY 2018 SNF PPS
proposed rule (82 FR 21040) reflected
IGI’s first quarter 2017 forecast with
historical data through the fourth
quarter of 2016. As stated in the FY
2018 SNF PPS proposed rule (82 FR
21019), our policy has been that, if more
recent data becomes available (for
example, a more recent estimate of the
SNF market basket and/or MFP
adjustment), we would use such data, if
appropriate, to determine the SNF
market basket percentage change, laborrelated share relative importance,
forecast error adjustment, and MFP
adjustment in the SNF PPS final rule.
We note that in Table 16 of the FY
2018 SNF PPS proposed rule (82 FR
21041), we misreported the FY 2017
labor-related share as 69.1 percent (this
was the FY 2016 labor-related share (80
FR 46402)). The FY 2017 labor-related
share was 68.8 percent as finalized in
the FY 2017 SNF PPS final rule (81 FR
51979, 51980). We present the FY 2017
labor-related share in Table 16 below.
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TABLE 16—FY 2018 AND FY 2017 SNF LABOR-RELATED SHARE
Relative
importance,
labor-related,
FY 2018
(2014-based
index)
2017:Q2 forecast
Relative
importance,
labor-related,
FY 2017
(FY 2010-based
index)
2016:Q2 forecast
50.3
10.2
48.8
11.1
Wages and Salaries 1 ......................................................................................................................................
Employee Benefits 1 .........................................................................................................................................
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TABLE 16—FY 2018 AND FY 2017 SNF LABOR-RELATED SHARE—Continued
Relative
importance,
labor-related,
FY 2018
(2014-based
index)
2017:Q2 forecast
Relative
importance,
labor-related,
FY 2017
(FY 2010-based
index)
2016:Q2 forecast
Professional fees: Labor-Related ....................................................................................................................
Administrative and Facilities Support Services ...............................................................................................
Installation, Maintenance and Repair Services 2 .............................................................................................
All Other: Labor-related Services ....................................................................................................................
Capital-related (.391) .......................................................................................................................................
3.7
0.5
0.6
2.5
3.0
3.4
0.5
n/a
2.3
2.7
Total ..........................................................................................................................................................
70.8
68.8
1 The
Wages and Salaries and Employee Benefits cost weight reflect contract labor costs as described above.
classified in the All Other: Labor-related services cost category in the FY 2010-based SNF market basket.
Source: IHS Global Inc. 2nd quarter 2017 forecast with historical data through 1st quarter 2017.
2 Previously
The FY 2018 SNF labor-related share
(LRS) is 2.0 percentage points higher
than the FY 2017 SNF LRS, which is
based on the FY 2010-based SNF market
basket relative importance. This implies
an increase in the quantity of the laborrelated services because rebasing the
index contributed significantly to the
increase. Also contributing to the higher
labor-related share is a higher capitalrelated cost weight in the 2014-based
SNF market basket compared to the FY
2010-based SNF market basket. As
stated above, we include a proportion of
capital-related expenses in the laborrelated share as we believe a portion of
these expenses (such as construction
labor costs) are deemed to be labor-
intensive and vary with, or are
influenced by, the local labor market.
d. Market Basket Estimate for the FY
2018 SNF PPS Update
As discussed previously in this final
rule, beginning with the FY 2018 SNF
PPS update, we are adopting the 2014based SNF market basket as the
appropriate market basket of goods and
services for the SNF PPS. Based on IHS
Global Inc.’s (IGI) second quarter 2017
forecast with historical data through the
first quarter of 2017, the most recent
estimate of the 2014-based SNF market
basket for FY 2018 is 2.6 percent. As
stated above, the FY 2018 SNF PPS
proposed rule reflected IGI’s first
quarter 2017 forecast with historical
data through the fourth quarter of 2016.
IGI is a nationally recognized economic
and financial forecasting firm that
contracts with CMS to forecast the
components of CMS’ market baskets.
Table 17 compares the 2014-based
SNF market basket and the FY 2010based SNF market basket percent
changes. For the historical period
between FY 2013 and FY 2016, the
average difference between the two
market baskets is ¥0.3 percentage
point. This is primarily the result of the
lower pharmaceuticals cost category
weight, increased Fuel: Oil and Gas cost
category weight, and the change in the
Fuels price proxy. For the forecasted
period between FY 2017 and FY 2019,
there is no difference in the average
growth rate.
TABLE 17—2014-BASED SNF MARKET BASKET AND FY 2010-BASED SNF MARKET BASKET, PERCENT CHANGES: 2013
TO 2019
2014-based
SNF market
basket
Fiscal year
(FY)
Historical data:
FY 2013 ............................................................................................................................................................
FY 2014 ............................................................................................................................................................
FY 2015 ............................................................................................................................................................
FY 2016 ............................................................................................................................................................
Average FY 2013–2016 ...................................................................................................................................
Forecast:
FY 2017 ............................................................................................................................................................
FY 2018 ............................................................................................................................................................
FY 2019 ............................................................................................................................................................
Average FY 2017–2019 ...................................................................................................................................
FY 2010based SNF
market basket
1.6
1.6
1.8
1.9
1.7
1.8
1.7
2.3
2.3
2.0
2.7
2.6
2.7
2.7
2.7
2.7
2.7
2.7
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Source: IHS Global Inc. 2nd quarter 2017 forecast with historical data through 1st quarter 2017.
While we ordinarily would adopt the
use of this 2014-based SNF market
basket percentage to update the SNF
PPS per diem rates for FY 2018, we note
that section 411(a) of the MACRA
amended section 1888(e) of the Act to
add section 1888(e)(5)(B)(iii) of the Act,
which establishes a special rule for FY
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2018 that requires the market basket
percentage, after the application of the
productivity adjustment, to be 1.0
percent. In accordance with section
1888(e)(5)(B)(iii) of the Act, we will use
a market basket percentage of 1.0
percent to update the federal rates set
forth in this final rule. We proposed to
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use the 2014-based SNF market basket
to determine the market basket
percentage update for the SNF PPS per
diem rates effective FY 2019. For the
reasons discussed above and in the FY
2018 SNF PPS proposed rule, we are
finalizing our proposal to use the 2014based SNF market basket to determine
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the market basket percentage update for
the SNF PPS per diem rates, effective
FY 2019. In addition, as stated in
section III.D.1.d. in this preamble, we
are adopting the use of the 2014-based
SNF market basket to determine the
labor-related share effective October 1,
2017.
2. Skilled Nursing Facility (SNF)
Quality Reporting Program (QRP)
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a. Background and Statutory Authority
Section 1888(e)(6)(A)(i) of the Act, as
added by section 2(c)(4) of the
Improving Medicare Post-Acute Care
Transformation Act of 2014 (IMPACT
Act), requires that for fiscal years
beginning with FY 2018, in the case of
a SNF that does not submit data as
applicable in accordance with sections
1888(e)(6)(B)(i)(II) and (III) of the Act for
a fiscal year, the Secretary reduce the
market basket percentage described in
section 1888(e)(5)(B)(i) of the Act for
payment rates during that fiscal year by
two percentage points. In section III.B.2.
of this final rule, we discuss revisions
in the market basket update regulations
at § 413.337(d) that will implement this
provision. In accordance with this
statutory mandate, we have
implemented a SNF Quality Reporting
Program (QRP), which we believe
promotes higher quality and more
efficient health care for Medicare
beneficiaries. 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 a
full discussion of the statutory
background and policy considerations
that have shaped the SNF QRP.
When we use the term ‘‘FY (year)SNF
QRP,’’ we are referring to the fiscal year
for which the SNF QRP requirements
applicable to that fiscal year must be
met in order for a SNF to receive the full
market basket percentage when
calculating the payment rates applicable
to it for that fiscal year.
The IMPACT Act (Pub. L. 113–185)
amended Title XVIII of the Act, in part,
by adding a new section 1899B that
requires the Secretary to establish new
data reporting requirements for certain
post-acute care (PAC) providers,
including SNFs. Specifically, new
sections 1899B(a)(1)(A)(ii) and (iii) of
the Act require SNFs, inpatient
rehabilitation facilities (IRFs), Long
Term Care Hospitals (LTCHs), and home
health agencies (HHAs), under the
provider-type’s respective quality
reporting program (which, for SNFs, is
found at section 1888(e)(6) of the Act),
to report data on quality measures
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specified under section 1899B(c)(1) of
the Act for at least five domains, and
data on resource use and other measures
specified under section 1899B(d)(1) of
the Act for at least three domains.
Section 1899B(a)(1)(A)(i) of the Act
further requires each of these PAC
provider-types to report under its
respective quality reporting program
standardized resident assessment data
in accordance with subsection (b), for at
least the quality measures specified
under subsection (c)(1), and that is for
at least five specific categories:
Functional status; cognitive function
and mental status; special services,
treatments, and interventions; medical
conditions and co-morbidities; and
impairments. Section 1899B(a)(1)(B) of
the Act requires that all of the data that
must be reported in accordance with
section 1899B(a)(1)(A) of the Act be
standardized and interoperable to allow
for the exchange of the information
among PAC providers and other
providers and the use of such data to
enable access to longitudinal
information and to facilitate coordinated
care. We refer readers to the FY 2016
SNF PPS final rule (80 FR 46427
through 46429) for additional
information on the IMPACT Act and its
applicability to SNFs.
b. General Considerations Used for
Selection of Quality 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,3 which incorporates the three
broad aims of the National Quality
Strategy.4
As part of our consideration for
measures for use in the SNF QRP, we
review and evaluate measures that have
been implemented in other programs
and take into account measures that
have been endorsed by NQF for
provider settings other than the SNF
setting. We have previously adopted
measures that we referred to as
‘‘applications’’ of those measures. We
have received questions pertaining to
the term ‘‘application’’ and want to
clarify that when we refer to a proposed
or implemented measure as an
‘‘application of’’ the measure, we mean
that the measure will be used in the
SNF setting, rather than the setting for
which it was endorsed by the NQF. For
3 https://www.cms.gov/Medicare/QualityInitiatives-Patient-Assessment-Instruments/Quality
InitiativesGenInfo/CMS-Quality-Strategy.html.
4 https://www.ahrq.gov/workingforquality/nqs/nqs
2011annlrpt.htm.
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example, in the FY 2016 SNF PPS final
rule (80 FR 46440 through 46444), we
adopted a measure entitled Application
of Percent of Residents Experiencing
One or More Falls With Major Injury
(Long Stay) (NQF #0674), which is
currently endorsed for the nursing home
setting but not for the SNF setting. For
such measures, we intend to seek NQF
endorsement for the SNF setting, and if
the NQF endorses one or more of them,
we will update the title of the measure
to remove the reference to
‘‘application’’.
We received several comments
generally related to the proposed
measures, the IMPACT Act, NQF
endorsement, and training needs. The
comments and our responses are
discussed below.
Comment: A few commenters
expressed concern that CMS has not
provided a timeline for seeking NQF
endorsement for non-NQF-endorsed
quality measures in the SNF QRP. One
commenter expressed further concern
that non-NQF-endorsed measures may
be implemented before undergoing
adequate testing, as required for NQF
endorsement. Another commenter
expressed concern regarding the
adequacy of resources allocated to
complete necessary testing and obtain
consensus endorsement for measures as
required by the IMPACT Act. All
commenters commenting on this topic
requested further information from CMS
regarding the process and timeline for
seeking NQF endorsement.
Response: We recognize that the NQF
endorsement process is an important
part of measure development and plan
to submit non-NQF-endorsed quality
measures in the SNF QRP adopted in
this rule for NQF endorsement as soon
as feasible, with an intended timeframe
of 2018. With regard to adequate testing
prior to implementation, we wish to
note that we engage in multiple testing
activities prior to measure
implementation. These activities
include testing of items and measures in
their intended settings, public posting of
measure testing data, when possible,
seeking public comment on measures in
the various stages of their development,
and utilization of technical expert input
on measure development, including
expert evaluation of the validity and
importance of measures. We interpret
the commenter’s comment regarding the
adequacy of the resources necessary to
obtain consensus endorsement as efforts
to engage stakeholders. We believe that
we commit an adequate level of
resources to the measure development
process and the NQF endorsement
process. Such resources are outlined
above and include engaging in pilot
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testing with providers, seeking public
comment, convening TEPs, and
engaging subject matter experts to
provide feedback throughout the
measure development process.
Comment: One commenter
recommended aligning the SNF QRP
quality measures with other CMS
initiatives such as the Financial
Alignment Initiative, the value-based
payment program and the Medicaid
managed care initiatives under the
Section 1115 waiver authorities.
Response: We acknowledge the value
of aligning the SNF QRP measures to
other CMS initiatives and we will seek
to align measures with other initiatives
in an effort to reduce provider burden
where feasible.
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(1) Measuring and Accounting for Social
Risk Factors in the SNF QRP
In, the FY 2018 SNF PPS proposed
rule (82 FR 21042 through 21043), we
discussed accounting for social risk
factors in the SNF QRP. We stated that
we consider related factors that may
affect measures in the SNF QRP. We
understand that social risk factors such
as income, education, race and
ethnicity, employment, disability,
community resources, and social
support (certain factors of which are
also sometimes referred to as
socioeconomic status (SES) factors or
socio-demographic status (SDS) factors)
play a major role in health. One of our
core objectives is to improve beneficiary
outcomes including reducing health
disparities, and we want to ensure that
all beneficiaries, including those with
social risk factors, receive high quality
care. In addition, we seek to ensure that
the quality of care furnished by
providers and suppliers is assessed as
fairly as possible under our programs
while ensuring that beneficiaries have
adequate access to excellent care.
We have been reviewing reports
prepared by the Office of the Assistant
Secretary for Planning and Evaluation
(ASPE) and the National Academies of
Sciences, Engineering, and Medicine on
the issue of measuring and accounting
for social risk factors in CMS’ quality
measurement and payment programs,
and considering options on how to
address the issue in these programs. On
December 21, 2016, ASPE submitted a
Report to Congress on a study it was
required to conduct under section 2(d)
of the IMPACT Act. The study analyzed
the effects of certain social risk factors
of Medicare beneficiaries on quality
measures and measures of resource use
used in one or more of nine Medicare
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value-based purchasing programs.5 The
report also included considerations for
strategies to account for social risk
factors in these programs. In a January
10, 2017 report released by The National
Academies of Sciences, Engineering,
and Medicine, that body provided
various potential methods for measuring
and accounting for social risk factors,
including stratified public reporting.6
In addition, the NQF undertook a 2year trial period in which new
measures, measures undergoing
maintenance review, and measures
endorsed with the condition that they
enter the trial period were assessed to
determine whether risk adjustment for
selected social risk factors was
appropriate for these measures. This
trial entailed temporarily allowing
inclusion of social risk factors in the
risk-adjustment approach for these
measures. The trial has concluded and
NQF will issue recommendations on the
future inclusion of social risk factors in
risk adjustment for quality measures.
As we continue to consider the
analyses and recommendations from
these reports and await the
recommendations of the NQF trial on
risk adjustment for quality measures, we
are continuing to work with
stakeholders in this process. As we have
previously communicated, we are
concerned about holding providers to
different standards for the outcomes of
their patients with social risk factors
because we do not want to mask
potential disparities or minimize
incentives to improve the outcomes for
disadvantaged populations. Keeping
this concern in mind, while we sought
input on this topic previously, we
continue to seek public comment on
whether we should account for social
risk factors in measures in the SNF QRP,
and if so, what method or combination
of methods would be most appropriate
for accounting for social risk factors.
Examples of methods include:
Confidential reporting to providers of
measure rates stratified by social risk
factors, public reporting of stratified
measure rates, and potential risk
adjustment of a particular measure as
appropriate based on data and evidence.
In addition, in the FY 2018 SNF PPS
proposed rule (82 FR 21042 through
21043), we sought public comment on
5 Office of the Assistant Secretary for Planning
and Evaluation. 2016. Report to Congress: Social
Risk Factors and Performance Under Medicare’s
Value-Based Purchasing Programs. Available at
https://aspe.hhs.gov/pdf-report/report-congresssocial-risk-factors-and-performance-undermedicares-value-based-purchasing-programs.
6 National Academies of Sciences, Engineering,
and Medicine. 2017. Accounting for social risk
factors in Medicare payment. Washington, DC: The
National Academies Press.
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36567
which social risk factors might be most
appropriate for reporting stratified
measure scores and/or potential risk
adjustment of a particular measure.
Examples of social risk factors include,
but are not limited to, dual eligibility/
low-income subsidy, race and ethnicity,
and geographic area of residence. We
also sought comments on which of these
factors, including current data sources
where this information would be
available, could be used alone or in
combination, and whether other data
should be collected to better capture the
effects of social risk. We will take
commenters’ input into consideration as
we continue to assess the
appropriateness and feasibility of
accounting for social risk factors in the
SNF QRP. We note that any such
changes would be proposed through
future notice and comment rulemaking.
We look forward to working with
stakeholders as we consider the issue of
accounting for social risk factors and
reducing health disparities in CMS
programs. Of note, implementing any of
the above methods would be taken into
consideration in the context of how this
and other CMS programs operate (for
example, data submission methods,
availability of data, statistical
considerations relating to reliability of
data calculations, among others), so we
sought comment on operational
considerations. We are committed to
ensuring that Medicare beneficiaries
have access to and receive excellent
care, and that the quality of care
furnished by providers and suppliers is
assessed fairly in CMS programs. A
discussion of the comments we received
on this topic, along with our responses,
appears below.
Comment: Some commenters were
generally supportive of accounting for
social risk factors for the SNF QRP
quality measures. Many commenters
stated that there was evidence
demonstrating that these factors can
have substantial influence on patient
health outcomes. Some commenters
noted that social risk factors are beyond
the control of the facility and were
concerned that without risk adjustment,
differences in quality scores may reflect
differences in patient populations rather
than differences in quality. Commenters
also recommended incorporating the
results of the NQF SES trial period into
consideration of adopting riskadjustment strategies.
A few commenters, while
acknowledging the influence of social
risk factors on health outcomes,
cautioned against adjusting for them in
quality measurement due to the
potential for unintended consequences.
These commenters expressed concern
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over the possibility that risk-adjusted
measures may remove incentives for
quality improvement among facilities
that serve higher levels of underserved
populations.
Regarding the methodology for risk
adjustment, some commenters made
specific recommendations regarding the
type of risk adjustment that should be
used. One commenter suggested that
both risk stratification and statistical
risk adjustment be used. Commenters
stated that any risk stratification should
be considered on a measure-by-measure
basis, and that measures that are broadly
within the control of the facility and
reflective of direct care, such as pressure
ulcers, should not be stratified. Multiple
commenters recommended that we
conduct further research and testing of
risk-adjustment methods. A few
commenters noted the importance of
continued monitoring of the effect of
social risk factors on health outcomes
and on the SNF QRP over time. Other
commenters recommended adjusting for
social risk factors, specifically for
resource use measures assessing
potentially preventable readmissions,
Medicare Spending Per Beneficiary, and
social and environmental risk factors for
functional improvement measures.
Another commenter noted there are
meaningful SES, clinical or other
differences between traditional
Medicare versus Medicare Advantage
(MA) enrollees that could affect
comparisons between facilities with
different proportion of Medicare
Advantage and Part A stays. The
commenter further requested that this
possibility should be investigated.
In addition to support for our
suggested categories of race and
ethnicity, dual eligibility status, and
geographical location, specific social
risk factors suggested by commenters
included: Patient-level factors such as
lack of personal resources, education
level, healthcare literacy, employment,
and limited English proficiency.
Commenters also suggested community
resources and other factors such as
access to adequate food, medications,
availability of primary care and therapy
services, living conditions including
living alone, lack of an adequate support
system or caregiver availability.
Regarding sources for data collection, a
commenter suggested the use of
confidential patient-reported data to
determine social risk and another
commenter suggested using confidential
electronic health records to collect data
relevant to social risk factors.
There were a few comments
discussing confidential and public
reporting of data adjusted for social risk
factors. While a commenter
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recommended that risk-stratified
measures should be publicly reported
for purposes of transparency, another
commenter noted that the public
reporting of stratified rates could create
a disincentive to care for disadvantaged
populations.
Response: As we have previously
stated, we are concerned about holding
providers to different standards for the
outcomes of their patients with social
risk factors, because we do not want to
mask potential disparities. We believe
that the path forward should incentivize
improvements in health outcomes for
disadvantaged populations while
ensuring that beneficiaries have
adequate access to excellent care.
We will consider all suggestions as we
continue to assess each measure and the
overall program. We intend to explore
options including but not limited to
measure stratification by social risk
factors in a consistent manner across
programs, informed by considerations of
stratification methods described in
section IX.A.13 of the preamble of the
FY 2018 IPPS/LTCH PPS final rule. We
thank commenters for this important
feedback and will continue to consider
options to account for social risk factors
that would allow us to view disparities
and potentially incentivize
improvement in care for patients and
beneficiaries. We will also consider
providing feedback to providers on
outcomes for individuals with social
risk factors in confidential reports.
c. Collection of Standardized Resident
Assessment Data Under the SNF QRP
(1) Definition of Standardized Resident
Assessment Data
Section 1888(e)(6)(B)(i)(III) of the Act
requires that for fiscal year 2019
(beginning October 1, 2018) and each
subsequent year, SNFs report
standardized resident assessment data
required under section 1899B(b)(1) of
the Act. For purposes of meeting this
requirement, section 1888(e)(6)(B)(ii) of
the Act requires a SNF to submit the
standardized resident assessment data
required under section 1819(b)(3) of the
Act using the standard instrument
designated by the state under section
1819(e)(5) of the Act.
For purposes of the SNF QRP, we
refer to beneficiaries who receive
services from SNFs as ‘‘residents,’’ and
we collect certain information about the
SNF services they receive using the
Resident Assessment Instrument
Minimum Data Set (MDS).
Section 1899B(b)(1)(B) of the Act
describes standardized resident
assessment data as data required for at
least the quality measures described in
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sections 1899B(c)(1) of the Act and that
is for the following categories:
• Functional status, such as mobility
and self-care at admission to a PAC
provider and before discharge from a
PAC provider;
• Cognitive function, such as ability
to express ideas and to understand and
mental status, such as depression and
dementia;
• Special services, treatments and
interventions such as the need for
ventilator use, dialysis, chemotherapy,
central line placement and total
parenteral nutrition;
• Medical conditions and
comorbidities such as diabetes,
congestive heart failure and pressure
ulcers;
• Impairments, such as incontinence
and an impaired ability to hear, see or
swallow; and
• Other categories deemed necessary
and appropriate.
As required under section
1899B(b)(1)(A) of the Act, the
standardized resident assessment data
must be reported at least for SNF
admissions and discharges, but the
Secretary may require the data to be
reported more frequently.
In the FY 2018 SNF PPS proposed
rule (82 FR 21043 through 21044), we
proposed to define the standardized
resident assessment data that SNFs must
report to comply with section 1888(e)(6)
of the Act, as well as the requirements
for the reporting of these data. The
collection of standardized resident
assessment data is critical to our efforts
to drive improvement in health care
quality across the four post-acute care
(PAC) settings to which the IMPACT
Act applies. We intend to use these data
for a number of purposes, including
facilitating their exchange and
longitudinal use among health care
providers to enable high quality care
and outcomes through care
coordination, as well as for quality
measure calculation, and identifying
comorbidities that might increase the
medical complexity of a particular
admission.
SNFs are currently required to report
resident assessment data through the
MDS by responding to an identical set
of assessment questions using an
identical set of response options (we
refer to each solitary question/response
option as a data element and we refer to
a group of questions/responses as data
elements), both of which incorporate an
identical set of definitions and
standards. The primary purpose of the
identical questions and response
options is to ensure that we collect a set
of standardized resident assessment
data elements across SNFs which we
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can then use for a number of purposes,
including SNF payment and measure
calculation for the SNF QRP.
LTCHs, IRFs, and HHAs are also
required to report patient assessment
data through their applicable PAC
assessment instruments, and they do so
by responding to identical assessment
questions developed for their respective
settings using an identical set of
response options (which incorporate an
identical set of definitions and
standards). Like the MDS, the questions
and response options for each of these
other PAC assessment instruments are
standardized across the PAC provider
type to which the PAC assessment
instrument applies. However, the
assessment questions and response
options in the four PAC assessment
instruments are not currently
standardized with each other. As a
result, questions and response options
that appear on the MDS cannot be
readily compared with questions and
response options that appear, for
example, on the Inpatient Rehabilitation
Facility-Patient Assessment Instrument
(IRF–PAI) the PAC assessment
instrument used by IRFs. This is true
even when the questions and response
options are similar. This lack of
standardization across the four PAC
provider types has limited our ability to
compare one PAC provider type with
another for purposes such as care
coordination and quality improvement.
To achieve a level of standardization
across SNFs, LTCHs, IRFs, and HHAs
that enables us to make comparisons
between them, we proposed to define
‘‘standardized resident assessment
data’’ 7 as patient or resident assessment
questions and response options that are
identical in all four PAC assessment
instruments, and to which identical
standards and definitions apply.
Standardizing the questions and
response options across the four PAC
assessment instruments will also enable
the data to be interoperable allowing it
to be shared electronically, or otherwise,
between PAC provider types. It will
enable the data to be comparable for
various purposes, including the
development of cross-setting quality
measures, which may enhance provider
and resident choice when selecting a
post-acute care setting that will deliver
the best outcome possible, and to inform
payment models that take into account
patient characteristics rather than
setting, as described in the IMPACT Act.
7 The FY 2018 SNF PPS proposed rule (82 FR
21044) used the term ‘‘standardized patient
assessment data.’’ For purposes of the final rule we
use the term ‘‘standardized resident assessment
data’’.
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We sought comment on this
definition. A discussion of these
comments, along with our responses,
appears below.
Comment: Most commenters
expressed general support for the
definition of standardized patient/
resident assessment data. One
commenter further expressed support
for CMS efforts to standardize
assessment data to promote care
coordination and quality improvements
as required under the IMPACT Act.
Response: We thank the commenters
for their support.
Final Decision: We are finalizing our
definition of standardized resident
assessment data as proposed.
(2) General Considerations Used for the
Selection of Standardized Resident
Assessment Data
As part of our effort to identify
appropriate standardized resident
assessment data for purposes of
collecting under the SNF QRP, we
sought input from the general public,
stakeholder community, and subject
matter experts on items that would
enable person-centered, high quality
health care, as well as access to
longitudinal information to facilitate
coordinated care and improved
beneficiary outcomes.
To identify optimal data elements for
standardization, our data element
contractor organized teams of
researchers for each category, and each
team worked with a group of advisors
made up of clinicians and academic
researchers with expertise in PAC.
Information-gathering activities were
used to identify data elements, as well
as key themes related to the categories
described in section 1899B(b)(1)(B) of
the Act. In January and February 2016,
our data element contractor also
conducted provider focus groups for
each of the four PAC provider types,
and a focus group for consumers that
included current or former PAC patients
and residents, caregivers, ombudsmen,
and patient advocacy group
representatives. The Development and
Maintenance of Post-Acute Care CrossSetting Standardized Patient
Assessment Data Focus Group 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.
We also assembled a 16-member TEP
that met on April 7 and 8, 2016, and
January 5 and 6, 2017, in Baltimore,
Maryland, to provide expert input on
data elements that are currently in each
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36569
PAC assessment instrument, as well as
data elements that could be
standardized. The Development and
Maintenance of Post-Acute Care CrossSetting Standardized Patient
Assessment Data TEP Summary Reports
are available at https://www.cms.gov/
Medicare/Quality-Initiatives-PatientAssessment-Instruments/Post-AcuteCare-Quality-Initiatives/IMPACT-Act-of2014/IMPACT-Act-Downloads-andVideos.html.
As part of the environmental scan,
data elements currently in the four
existing PAC assessment instruments
were examined to see if any could be
considered for proposal as standardized
resident assessment data. Specifically,
this evaluation included consideration
of data elements in OASIS–C2 (effective
January 2017); IRF–PAI, v1.4 (effective
October 2016); LCDS, v3.00 (effective
April 2016); and MDS 3.0, v1.14
(effective October 2016). Data elements
in the standardized assessment
instrument that we tested in the PostAcute Care Payment Reform
Demonstration (PAC PRD)—the
Continuity Assessment Record and
Evaluation (CARE) were also
considered. A literature search was also
conducted to determine whether
additional data elements to propose as
standardized resident assessment data
could be identified.
We additionally held four Special
Open Door Forums (SODFs) on October
27, 2015; May 12, 2016; September 15,
2016; and December 8, 2016, to present
data elements we were considering and
to solicit input. At each SODF, some
stakeholders provided immediate input,
and all were invited to submit
additional comments via the CMS
IMPACT Mailbox at
PACQualityInitiative@cms.hhs.gov.
We also convened a meeting with
federal agency subject matter experts
(SMEs) on May 13, 2016. In addition, a
public comment period was open from
August 12, to September 12, 2016, to
solicit comments on detailed candidate
data element descriptions, data
collection methods, and coding
methods. The IMPACT Act Public
Comment Summary Report containing
the public comments (summarized and
verbatim) and our responses, is
available at https://www.cms.gov/
Medicare/Quality-Initiatives-PatientAssessment-Instruments/Post-AcuteCare-Quality-Initiatives/IMPACT-Act-of2014/IMPACT-Act-Downloads-andVideos.html.
We specifically sought to identify
standardized resident assessment data
that we could feasibly incorporate into
the LTCH, IRF, SNF, and HHA
assessment instruments and that have
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the following attributes: (1) Being
supported by current science; (2) testing
well in terms of their reliability and
validity, consistent with findings from
the Post-Acute Care Payment Reform
Demonstration (PAC PRD); (3) the
potential to be shared (for example,
through interoperable means) among
PAC and other provider types to
facilitate efficient care coordination and
improved beneficiary outcomes; (4) the
potential to inform the development of
quality, resource use and other
measures, as well as future payment
methodologies that could more directly
take into account individual beneficiary
health characteristics; and (5) the ability
to be used by practitioners to inform
their clinical decision and care planning
activities. We also applied the same
considerations that we apply with
quality measures, including the CMS
Quality Strategy which is framed using
the three broad aims of the National
Quality Strategy.
d. Policy for Retaining SNF QRP
Measures and Application of That
Policy to Standardized Resident
Assessment Data
In the FY 2016 SNF PPS final rule (80
FR 46431 through 46432), we adopted
our policy for measure removal and also
finalized that when we initially adopt a
measure for the SNF QRP, 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. In the FY 2018 SNF PPS
proposed rule (82 FR 21044) we
proposed to apply this policy to the
standardized resident assessment data
that we adopt for the SNF QRP.
We sought public comment on our
proposal. A discussion of these
comments, along with our responses,
appears below.
Comment: Several commenters
supported applying the existing policy
for retaining SNF QRP measures to
standardized resident assessment data.
Response: We thank the commenters
for their support.
Final Decision: After consideration of
the public comments we received, we
are finalizing our proposal to apply the
policy for retaining SNF QRP measures
to the standardized resident assessment
data as proposed.
e. Policy for Adopting Changes to SNF
QRP Measures and Application of That
Policy to Standardized Resident
Assessment Data
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 did
not propose to make any changes to this
policy in the FY 2018 SNF PPS
proposed rule (82 FR 21044 through
20145). We did propose to apply this
policy to the standardized resident
assessment data that we adopt for the
SNF QRP.
We sought public comment on our
proposal. A discussion of these
comments, along with our responses,
appears below.
Comment: All commenters who
commented on this topic expressed
support for our subregulatory process
for adopting non-substantive changes to
SNF QRP measures, recognizing that the
measures will require adjustments over
time to reflect changes in practice or
populations. All of these commenters
also specifically expressed support for
our proposal to apply this approach to
the standardized resident assessment
data proposed for the SNF QRP. Many
of these commenters further supported
our policy to make substantive changes
to quality measures using the
rulemaking process. The commenters
also recognized that corrections and
adjustments to measures may become
necessary over time and that we will
provide a clear rationale for such
changes, as well as a mechanism for
public comment on these changes.
Response: We appreciate the
commenters’ support.
Final Decision: After consideration of
the public comments we received, we
are finalizing our proposal to apply our
policy for adopting changes to the SNF
QRP measures to the standardized
resident assessment data as proposed.
f. Quality Measures Currently Adopted
for the SNF QRP
The SNF QRP currently has seven
adopted measures as outlined in Table
18.
TABLE 18—QUALITY MEASURES CURRENTLY ADOPTED FOR THE SNF QRP
Short name
Measure name & data source
Resident Assessment Instrument Minimum Data Set
Pressure Ulcers ............................................................
Application of Falls .......................................................
Application of Functional Assessment/Care Plan ........
DRR ..............................................................................
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 LTCH Patients with an Admission and Discharge Functional
Assessment and a Care Plan That Addresses Function (NQF #2631).*
Drug Regimen Review Conducted with Follow-Up for Identified Issues-Post Acute Care
(PAC) Skilled Nursing Facility Quality Reporting Program.*
Claims-based
MSPB ............................................................................
DTC ...............................................................................
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PPR ...............................................................................
Total Estimated Medicare Spending Per Beneficiary (MSPB)—Post Acute Care (PAC)
Skilled Facility (SNF) Quality Reporting Program (QRP).*
Discharge to Community-Post Acute Care (PAC) Skilled Nursing Facility (SNF) Quality
Reporting Program (QRP).*
Potentially Preventable 30-Day Post-Discharge Readmission Measure for Skilled Nursing Facility Quality Reporting Program.*
* Not currently NQF-endorsed for the SNF Setting.
We received several comments about
quality measures currently adopted for
the SNF QRP which are summarized
and discussed below.
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Comment: A few commenters
expressed views regarding the
Potentially Preventable 30-Day PostDischarge Readmission Measure for SNF
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QRP, a measure previously finalized in
the FY 2017 SNF PPS final rule (81 FR
52030 through 52034). Comments
included recommendations for
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additional testing and evaluation of the
PPR definition and measure exclusions.
One commenter supported the public
reporting thresholds. Another
commenter requested that patient-level
data be made available to SNFs to
facilitate quality improvement and
review and corrections. We also
received some comments related to
accounting for social risk factors.
Response: While we received
comments regarding this previously
finalized measure, the changes we
proposed pertain only to the years of
data used to calculate this measure and
therefore we consider these comments
to be out of scope of this current rule.
We did address these issues in the FY
2017 SNF PPS final rule (81 FR 52030
through 52034), and we refer the reader
to that detailed discussion. We continue
to believe that the measure
specifications are appropriate for this
measure. We also refer readers to
section III.D.2.b.1 of this rule for
responses to comments received related
to social risk factors for this measure.
Comment: We received a comment
regarding the Drug Regimen Review
Conducted with Follow-Up for
Identified Issues-PAC SNF QRP
measure, a measure previously finalized
in the FY 2017 SNF PPS final rule. The
commenter expressed support for
MedPAC comments regarding the
measure, including the MedPAC
recommendation that we develop a
measure to evaluate PAC provider
support for medication reconciliation
throughout the care continuum,
including provider transfer of the
patient medication list to the follow-up
provider at patient discharge. The
commenter stated the importance of
provider access to patient medication
lists and suggested that requiring
providers to transmit the patient
medication list to the follow-up
provider at discharge may improve
patient safety and prevent avoidable
readmissions.
Response: We appreciate the
comments received for this finalized
measure. We refer readers to the FY
2017 SNF PPS final rule (81 FR 52034
through 52039) for detailed responses
related to the previously finalized Drug
Regimen Review Conducted with
Follow-Up for Identified Issues-PAC
SNF QRP measure.
Comment: A few commenters
expressed views regarding the Medicare
Spending per Beneficiary-PAC SNF
QRP, a measure finalized in the FY 2017
SNF PPS final rule (81 FR 52014
through 52021). Commenters addressed
the risk-adjustment approach, clinically
unrelated services, confidential
feedback reporting, accounting for social
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risk factors, MSPB–PAC measure
alignment, and unintended
consequences related to implementation
of the measure. One commenter felt that
the measure was confusing, and that
patients and providers might incorrectly
interpret it as a measure of quality
rather than efficiency. Another
commenter encouraged CMS to utilize
claims and patient assessment data to
incorporate functional status into the
risk-adjustment. Another commenter
expressed concern that PAC providers’
performance on this measure would
focus on costs per patient, without fully
accounting for patient outcomes, and
that efficiency should not be based
solely on the MSPB–PAC measures.
This commenter also noted that this
measure may result in limiting access to
certain patients. One commenter stated
that the MSPB–PAC measures should be
more uniformly defined so as to
facilitate a meaningful comparison of
spending for beneficiaries across PAC
settings. Another commenter felt that
the measure was flawed with regard to
putting SNFs at risk for post-discharge
services beyond their control. The
commenter encouraged CMS to provide
additional details regarding the types of
services that would be considered
‘‘included and associated services.’’
Another commenter urged CMS to
provide the opportunity for confidential
feedback between CMS and providers
before publicly displaying the MSPB–
PAC measures.
Response: While we received
comments regarding the previously
finalized measure, Medicare Spending
per Beneficiary-PAC SNF QRP, since no
changes were proposed to this measure,
we consider comments received to be
outside the scope of the current rule. We
addressed these issues in the FY 2017
SNF PPS final rule (81 FR 52014
through 52021), and we refer readers to
that detailed discussion. We continue to
believe that the measure specifications,
including the risk-adjustment, are
appropriate for this measure. With
regard to comments related to
accounting for social risk factors, we
refer readers to section III.D.2.b.1. of this
rule.
Comment: We received comments
related to the Discharge to CommunityPAC SNF QRP measure, a measure
previously finalized in the FY 2017 SNF
PPS final rule. Comments included
suggestions to adjust for
sociodemographic and socioeconomic
risk factors and caregiver support, to
adjust for factors unique to providers
offering dedicated services to specialty
residents (for example, those with HIV/
AIDS) who may encounter greater
challenges with community transitions,
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to exclude patients who died in the
observation window following return to
a community setting, to distinguish
between a patient’s return to home in
the community versus home in a
custodial nursing facility, to assess
reliability and validity of the claims
discharge status code used to calculate
the measure, and to submit the measure
for NQF endorsement. Commenters also
shared concerns about risk adjustment
for social factors as this could mask
disparities in care, potential unintended
consequences for patients expected to
have difficult transitions to the
community such as decreased PAC
access and increased healthcare costs
due to more costly acute care stays, lack
of adjustment for regional differences in
community-based needs and supports,
and lack of adjustment for patients’
goals in the community, such as those
seeking end-of-life care outside of
formal hospice services.
Response: While we received
comments regarding the previously
finalized Discharge to Community-PAC
SNF QRP measure, since no changes
were proposed to this measure, we
consider comments received to be
outside the scope of the current rule. We
previously responded to comments on
these topics in the FY 2017 SNF PPS
final rule (81 FR 52021 through 52029);
we refer the commenters to the FY 2017
SNF PPS final rule for a detailed
response on these issues. We also note
that in the FY 2018 SNF PPS proposed
rule (81 FR 21058), we sought comment
on the exclusion of baseline nursing
facility residents as a potential future
modification of the Discharge to
Community-PAC SNF QRP measure. We
refer readers to section III.D.2.i.1 of this
final rule for a discussion of this issue.
We also refer readers to section
III.D.2.b.1. of this final rule for
responses to comments received related
to accounting for social risk factors for
the Discharge to Community-PAC SNF
QRP measure.
g. SNF QRP Quality Measures Beginning
With the FY 2020 SNF QRP
In the FY 2018 SNF PPS proposed
rule (82 FR 21045 through 21057),
beginning with the FY 2020 SNF QRP,
in addition to the quality measures we
are retaining under our policy described
in section III.D.2.f. of this final rule, we
proposed to remove the current pressure
ulcer measure entitled Percent of
Residents or Patients with Pressure
Ulcers That Are New or Worsened
(Short Stay) (NQF #0678) and to replace
it with a modified version of the
measure entitled Changes in Skin
Integrity Post-Acute Care: Pressure
Ulcer/Injury and to adopt four function
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outcome measures on resident
functional status. We also proposed to
characterize the data elements described
below as standardized resident
assessment data under section
1899B(b)(1)(B) of the Act that must be
reported by SNFs under the SNF QRP
through the MDS.
The measures are as follows:
• Changes in Skin Integrity PostAcute Care: Pressure Ulcer/Injury.
• Application of IRF Functional
Outcome Measure: Change in Self-Care
Score for Medical Rehabilitation
Patients (NQF #2633).
• Application of IRF Functional
Outcome Measure: Change in Mobility
Score for Medical Rehabilitation
Patients (NQF #2634).
• Application of IRF Functional
Outcome Measure: Discharge Self-Care
Score for Medical Rehabilitation
Patients (NQF #2635).
• Application of IRF Functional
Outcome Measure: Discharge Mobility
Score for Medical Rehabilitation
Patients (NQF #2636).
The measures are described in more
detail below.
(1) Replacing the Current Pressure
Ulcer Quality Measure, Percent of
Residents or Patients with Pressure
Ulcers That Are New or Worsened
(Short Stay) (NQF #0678), with a
Modified Pressure Ulcer Measure,
Changes in Skin Integrity Post-Acute
Care: Pressure Ulcer/Injury
(a) Measure Background
In the FY 2018 SNF PPS proposed
rule (82 FR 21045 through 21049), we
proposed to remove the current pressure
ulcer measure, Percent of Residents or
Patients with Pressure Ulcers That Are
New or Worsened (Short Stay) (NQF
#0678) from the SNF QRP measure set
and replace it with a modified version
of that measure, Changes in Skin
Integrity Post-Acute Care: Pressure
Ulcer/Injury, beginning with the FY
2020 SNF QRP. The change in the
measure name is to reduce confusion
about the new modified measure. The
modified version differs from the
current version of the measure because
it includes new or worsened
unstageable pressure ulcers, including
deep tissue injuries (DTIs), in the
measure numerator. The modified
version of the measure would satisfy the
IMPACT Act domain of skin integrity
and changes in skin integrity.
We note that the technical
specifications for the pressure ulcer
measure were updated in August 2016
through a subregulatory process to
ensure technical alignment of the SNF
measure specifications with the LTCH,
IRF, and HH specifications. The
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technical updates were added to ensure
clarity in how the measure is calculated,
and to avoid possible over counting of
pressure ulcers in the numerator. We
corrected the technical specifications to
mitigate the risk of over counting new
or worsened pressure ulcers and to
reflect the actual unit of analysis as
finalized in the rule, which is a stay
(Medicare Part A stay) for SNF QRP,
consistent with the IRF, and LTCH
QRPs, rather than an episode (which
could include multiple stays) as is used
in the case of Nursing Home Compare.
Thus, we updated the SNF measure
specifications to reflect all resident
stays, rather than the most-recent
episode in a quarter, which is
comprised of one or more stays in that
measure calculation. Also, to ensure
alignment, we corrected our
specifications to ensure that healed
wounds are not incorrectly captured in
the measure. Further, we corrected the
specifications to ensure the exclusion of
residents who expire during their SNF
stay. The SNF specifications can be
reviewed on our Web site at https://
www.cms.gov/Medicare/QualityInitiatives-Patient-AssessmentInstruments/NursingHomeQualityInits/
Skilled-Nursing-Facility-QualityReporting-Program/SNF-QualityReporting-Program-Measures-andTechnical-Information.html.
(b) Measure Importance
As described in the FY 2016 SNF PPS
final rule (80 FR 46433), pressure ulcers
are high-cost adverse events and an
important measure of quality. For
information on the history and rationale
for the relevance, importance, and
applicability of having a pressure ulcer
measure in the SNF QRP, we refer
readers to the FY 2016 SNF PPS final
rule (80 FR 46433 through 46434).
We proposed to adopt a modified
version of the current pressure ulcer
measure because unstageable pressure
ulcers, including DTIs, are similar to
Stage 2, Stage 3, and Stage 4 pressure
ulcers in that they represent poor
outcomes, are a serious medical
condition that can result in death and
disability, are debilitating and painful,
and are often an avoidable outcome of
medical care.8 9 10 11 12 13 Studies show
8 Casey, G. (2013). ‘‘Pressure ulcers reflect quality
of nursing care.’’ Nurs N Z 19(10):20–24.
9 Gorzoni, M.L. and S.L. Pires (2011). ‘‘Deaths In
nursing homes.’’ Rev Assoc Med Bras 57(3):327–
331.
10 Thomas, J.M., et al. (2013). ‘‘Systematic review:
health-related characteristics of elderly hopitalized
adults and nursing home residents associated with
short-term mortality.’’ J Am Geriatr Soc 61(6): 902–
911.
11 White-Chu, E.F., et al. (2011). ‘‘Pressure ulcers
in long-term care.’’ Clin Geriatr Med 27(2):241–258.
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that most pressure ulcers can be avoided
and can also be healed in acute, postacute, and long-term care settings with
appropriate medical care.14
Furthermore, some studies indicate
that DTIs, if managed using appropriate
care, can be resolved without
deteriorating into a worsened pressure
ulcer.15 16 While DTIs are a subset of
unstageable pressure ulcers, we collect
DTI data elements separately and
analyze them both separately and with
other unstageable pressure ulcer item
categories in our analysis below. We
note that DTIs are categorized as a type
of unstageable pressure ulcer on the
MDS and other post-acute care item
sets.
While there are few studies that
provide information regarding the
incidence of unstageable pressure ulcers
in PAC settings, an analysis conducted
by a contractor suggests the incidence of
unstageable pressure ulcers varies
according to the type of unstageable
pressure ulcer and setting.17 This
analysis examined the national
incidence of new unstageable pressure
ulcers in SNFs at discharge compared
with admission using SNF discharges
from January through December 2015.
The contractor found a national
incidence of 0.40 percent of new
unstageable pressure ulcers due to
slough and/or eschar, 0.02 percent of
new unstageable pressure ulcers due to
non-removable dressing/device, and
0.57 percent of new DTIs. In addition,
an international study spanning the
time period 2006 to 2009, provides
some evidence to suggest that the
12 Bates-Jensen BM. Quality indicators for
prevention and management of pressure ulcers in
vulnerable elders. Ann Int Med. 2001;135 (8 Part 2),
744–51.
13 Bennet, G, Dealy, C Posnett, J (2004). The cost
of pressure ulcers in the UK, Age and Aging,
33(3):230–235.
14 Black, Joyce M., et al. ‘‘Pressure ulcers:
avoidable or unavoidable? Results of the national
pressure ulcer advisory panel consensus
conference.’’ Ostomy-Wound Management 57.2
(2011): 24.
15 Sullivan, R. (2013). A Two-year Retrospective
Review of Suspected Deep Tissue Injury Evolution
in Adult Acute Care Patients. Ostomy Wound
Management 59(9) https://www.o-wm.com/article/
two-year-retrospective-review-suspected-deeptissue-injury-evolution-adult-acute-care-patien.
16 Posthauer, ME, Zulkowski, K. (2005). Special to
OWM: The NPUAP Dual Mission Conference:
Reaching Consensus on Staging and Deep Tissue
Injury. Ostomy Wound Management 51(4) https://
www.o-wm.com/content/the-npuap-dual-missionconference-reaching-consensus-staging-and-deeptissue-injury.
17 Final Measure Specifications for SNF QRP
Quality Measures and Standardized Resident
Assessment Data Elements, available at https://
www.cms.gov/Medicare/Quality-Initiatives-PatientAssessment-Instruments/NursingHomeQualityInits/
Skilled-Nursing-Facility-Quality-Reporting-Program
/SNF-Quality-Reporting-Program-Measures-andTechnical-Information.html.
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proportion of pressure ulcers identified
as DTI has increased over time.18
The inclusion of unstageable pressure
ulcers, including DTIs, in the numerator
of this measure is expected to increase
measure scores and variability in
measure scores, thereby improving the
ability to discriminate among poor- and
high-performing SNFs. In the currently
implemented pressure ulcer measure,
Percent of Residents or Patients with
Pressure Ulcers That Are New or
Worsened (Short Stay) (NQF #0678),
analysis using data from Quarter 4 2015
through Quarter 3 2016 reveals that the
SNF mean score is 1.75 percent; the
25th and 75th percentiles are 0.0
percent and 2.53 percent, respectively;
and 29.11 percent of facilities have
perfect scores. In the measure, Changes
in Skin Integrity Post-Acute Care:
Pressure Ulcer/Injury, during the same
timeframe, the SNF mean score is 2.58
percent; the 25th and 75th percentiles
are 0.65 percent and 3.70 percent,
respectively; and 20.32 percent of
facilities have perfect scores.
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(c) Stakeholder Feedback
Our measure development contractor
sought input from subject matter
experts, including Technical Expert
Panels (TEPs), over the course of several
years on various skin integrity topics
and specifically those associated with
the inclusion of unstageable pressure
ulcers, including DTIs. Most recently,
on July 18, 2016, a TEP convened by our
measure development contractor
provided input on the technical
specifications of this quality measure,
including the feasibility of
implementing the proposed measure’s
updates related to the inclusion of
unstageable ulcers, including DTIs,
across PAC settings. The TEP supported
the updates to the measure across PAC
settings, including the inclusion in the
numerator of unstageable pressure
ulcers due to slough and/or eschar that
are new or worsened, new unstageable
pressure ulcers due to a non-removable
dressing or device, and new DTIs. The
TEP recommended supplying additional
guidance to providers regarding each
type of unstageable pressure ulcer. This
support was in agreement with earlier
TEP meetings, held on June 13, and
November 15, 2013, which had
recommended that CMS update the
specifications for the pressure ulcer
measure to include unstageable pressure
18 VanGilder, C, MacFarlane, GD, Harrison, P,
Lachenbruch, C, Meyer, S (2010). The
Demographics of Suspected Deep Tissue Injury in
the United States: An Analysis of the International
Pressure Ulcer Prevalence Survey 2006–2009.
Advances in Skin & Wound Care. 23(6): 254–261.
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ulcers in the numerator.19 20 Exploratory
data analysis conducted by our measure
development contractor suggests that
the addition of unstageable pressure
ulcers, including DTIs, will increase the
observed incidence and variation in the
rate of new or worsened pressure ulcers
at the facility level, which may improve
the ability of the proposed quality
measure to discriminate between poorand high-performing facilities.
We solicited stakeholder feedback on
this proposed measure by means of a
public comment period held from
October 17 through November 17, 2016.
In general, we received considerable
support for the proposed measure. A
few commenters supported all of the
changes to the current pressure ulcer
measure that resulted in the measure,
with one commenter noting the
significance of the work to align the
pressure ulcer quality measure
specifications across the PAC settings.
Many commenters supported the
inclusion of unstageable pressure ulcers
due to slough/eschar, due to nonremovable dressing/device, and DTIs in
the quality measure. Other commenters
did not support the inclusion of DTIs in
the quality measure because they stated
that there is no universally accepted
definition for this type of skin injury.
The public comment summary report
for the proposed measure is 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. This summary includes
further detail about our responses to
various concerns and ideas stakeholders
raised at that time.
The NQF-convened Measures
Application Partnership (MAP) PostAcute Care/Long-Term Care (PAC/LTC)
Workgroup met on December 14 and 15,
19 Schwartz, M., Nguyen, K.H., Swinson Evans,
T.M., Ignaczak, M.K., Thaker, S., and Bernard, S.L.:
Development of a Cross-Setting Quality Measure for
Pressure Ulcers: OY2 Information Gathering, Final
Report. Centers for Medicare & Medicaid Services,
November 2013. Available: https://www.cms.gov/
Medicare/Quality-Initiatives-Patient-AssessmentInstruments/Post-Acute-Care-Quality-Initiatives/
Downloads/Development-of-a-Cross-SettingQuality-Measure-for-Pressure-Ulcers-InformationGathering-Final-Report.pdf.
20 Schwartz, M., Ignaczak, M.K., Swinson Evans,
T.M., Thaker, S., and Smith, L.: The Development
of a Cross-Setting Pressure Ulcer Quality Measure:
Summary Report on November 15, 2013, Technical
Expert Panel Follow-Up Webinar. Centers for
Medicare & Medicaid Services, January 2014.
Available: https://www.cms.gov/Medicare/QualityInitiatives-Patient-Assessment-Instruments/PostAcute-Care-Quality-Initiatives/Downloads/
Development-of-a-Cross-Setting-Pressure-UlcerQuality-Measure-Summary-Report-on-November15-2013-Technical-Expert-Pa.pdf.
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2016, and provided input to us about
this measure. The workgroup provided
a recommendation of ‘‘support for
rulemaking’’ for use of the measure in
the SNF QRP. The MAP Coordinating
Committee met on January 24 and 25,
2017, and provided a recommendation
of ‘‘conditional support for rulemaking’’
for use of the proposed measure in the
SNF QRP. The MAP’s conditions of
support include that, as a part of
measure implementation, CMS provide
guidance on the correct collection and
calculation of the measure result, as
well as guidance on public reporting
Web sites explaining the impact of the
specification changes on the measure
result. The MAP’s conditions also
specify that CMS continue analyzing the
proposed measure to investigate
unexpected results reported in public
comment. We intend to fulfill these
conditions by offering additional
training opportunities and educational
materials in advance of public reporting,
and by continuing to monitor and
analyze the proposed measure. More
information about the MAP’s
recommendations for this measure is
available at https://
www.qualityforum.org/WorkArea/
linkit.aspx?LinkIdentifier=id&
ItemID=84452.
We reviewed the NQF’s consensus
endorsed measures and were unable to
identify any NQF-endorsed pressure
ulcer quality measures for PAC settings
that are inclusive of unstageable
pressure ulcers. There are related
measures, but after careful review, we
determined these measures are not
applicable for use in SNFs based on the
populations addressed or other aspects
of the specifications. We are unaware of
any other such quality measures that
have been endorsed or adopted by
another consensus organization for the
SNF setting. Therefore, based on the
evidence discussed above, we proposed
to adopt the quality measure entitled,
Changes in Skin Integrity Post-Acute
Care: Pressure Ulcer/Injury, for the SNF
QRP beginning with the FY 2020 SNF
QRP. We plan to submit the proposed
measure to the NQF for endorsement
consideration as soon as feasible.
(d) Data Collection
The data for this quality measure
would be collected using the MDS,
which is currently submitted by SNFs
through the Quality Improvement and
Evaluation System (QIES) Assessment
Submission and Processing (ASAP)
System. The proposed standardized
resident assessment data applicable to
this measure that must be reported by
SNFs for admissions as well as
discharges occurring on or after October
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1, 2018 is described in section III.D.2. of
this final rule. SNFs are already
required to complete unstageable
pressure ulcer data elements on the
MDS. While the inclusion of
unstageable wounds in the proposed
measure results in a measure calculation
methodology that is different from the
methodology used to calculate the
current pressure ulcer measure, the data
elements needed to calculate the
proposed measure are already included
in the MDS. In addition, this proposed
measure will further standardize the
data elements used in risk adjustment of
this measure. Our proposal to eliminate
duplicative data elements will result in
an overall reduced reporting burden for
SNFs for the proposed measure.
To view the updated MDS, with the
proposed changes, we refer to the reader
to https://www.cms.gov/medicare/
quality-initiatives-patient-assessmentinstruments/nursinghomequalityinits/
mds30raimanual.html. For more
information on MDS submission using
the QIES ASAP System, we refer readers
to https://www.cms.gov/Medicare/
Quality-Initiatives-Patient-AssessmentInstruments/NursingHomeQualityInits/
NHQIMDS30Technical
Information.html.
For technical information about this
proposed measure, including
information about the measure
calculation and the standardized
resident assessment data elements used
to calculate this measure, we refer
readers to the document titled, Final
Measure Specifications for SNF QRP
Quality Measures and Standardized
Resident Assessment Data Elements,
available at https://www.cms.gov/
Medicare/Quality-Initiatives-PatientAssessment-Instruments/NursingHome
QualityInits/Skilled-Nursing-FacilityQuality-Reporting-Program/SNFQuality-Reporting-Program-Measuresand-Technical-Information.html.
We proposed that SNFs begin
reporting the proposed pressure ulcer
measure, Changes in Skin Integrity PostAcute Care: Pressure Ulcer/Injury,
which will replace the current pressure
ulcer measure, with data collection
beginning October 1, 2018 for
admissions as well as discharges.
We sought public comment on our
proposal to replace the current pressure
ulcer measure, Percent of Residents or
Patients with Pressure Ulcers That Are
New or Worsened (Short Stay) (NQF
#0678), with a modified version of that
measure, entitled Changes in Skin
Integrity Post-Acute Care: Pressure
Ulcer/Injury, beginning with the FY
2020 SNF QRP. A discussion of these
comments, along with our responses,
appears below.
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Comment: Many commenters
supported the proposed replacement of
the current pressure ulcer measure, the
Percent of Residents or Patients with
Pressure Ulcers That Are New or
Worsened (Short Stay) (NQF #0678),
with a modified version of that measure,
entitled Changes in Skin Integrity PostAcute Care: Pressure Ulcer/Injury.
Commenters recognized that the
proposed measure will meet the
requirements of the IMPACT Act for the
Skin Integrity and Changes in Skin
Integrity domain. Commenters believed
that the revisions identified in the
proposed rule will improve on the
existing pressure ulcer measure and
ensure that the data collected accurately
reflects the care and conditions of the
SNF patient population. One
commenter supported the use of data
elements that are already in use in the
MDS to reduce reporting burden for
providers. Another commenter noted
that revisions to quality measures are an
important part of ensuring accurate
information that is reflective of
advances in knowledge and technology,
and ensuring that the data reflect the
patient population.
Response: We appreciate the
commenters’ support to replace the
current pressure ulcer measure, Percent
of Residents or Patients with Pressure
Ulcers That Are New or Worsened
(Short Stay) (NQF #0678), with a
modified version of the measure,
Changes in Skin Integrity Post-Acute
Care: Pressure Ulcer/Injury to fulfill the
requirements of the IMPACT Act. We
agree that this proposal will limit
regulatory burden and promote high
quality care, as the commenters
describe.
Comment: A few commenters
expressed concerns that the variation in
measure scores between facilities could
reflect differences in the interpretation
of definitions for unstageable pressure
ulcers or DTIs, rather than actual
differences in quality or care practices.
One commenter cautioned that a
measure should not be changed to create
performance variation, but rather to be
consistent with current science or to
provide clarity and consistent data
collection. The commenters encouraged
additional testing of the measure to
ensure that it collects accurate data.
Response: We have performed testing
to compare the performance of the
proposed measure with the existing
pressure ulcer/injury measure. Current
findings indicate that the measure is
both valid and reliable in the SNF,
LTCH, and IRF settings.
The reliability and validity of the data
elements used to calculate this quality
measure have been tested in several
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ways. Rigorous testing on both
reliability and validity of the data
elements in the MDS 3.0 provides
evidence for the data elements used in
the SNF, LTCH, and IRF settings.21 The
MDS 3.0 pilot test showed good
reliability, and the results are applicable
to the IRF–PAI as well as the LTCH
CARE Data Set because the data
elements tested are the same as those
used in the IRF–PAI and LTCH CARE
Data Set. Across pressure ulcer data
elements, average gold-standard to goldstandard kappa statistic was 0.905. The
average gold-standard to facility-nurse
kappa statistic was 0.937. These kappa
scores indicate ‘‘almost perfect’’
agreement using the Landis and Koch
standard for strength of agreement.22
To assess the construct validity of this
measure, or the degree to which the
measure construct measures what it
claims or purports to be measuring, our
measure contractor sought input from
TEPs over the course of several years.
Most recently, on July 18, 2016, a TEP
supported the inclusion in the
numerator of unstageable pressure
ulcers due to slough and/or eschar that
are new or worsened, new unstageable
pressure ulcers/injuries due to a nonremovable dressing or device, and new
DTIs. The measure testing activities
were presented to TEP members for
their input on the reliability, validity,
and feasibility of this measure change.
The TEP members supported the
measure construct.
The proposed measure also increased
the variability of measures scores
between providers, as noted by some
commenters. We would like to clarify
that the goal of the proposed measure is
not to create performance variation
where none exists, but rather to better
measure existing performance variation.
This increased variability of scores
between facilities will improve the
ability of the measure to distinguish
between high- and low-performing
facilities.
We will continue to perform
reliability and validity testing in
compliance with NQF guidelines and
the Blueprint for the CMS Measures
Management System to ensure that that
the measure demonstrates scientific
acceptability (including reliability and
validity) and meets the goals of the QRP.
21 Saliba, D., & Buchanan, J. (2008, April).
Development and validation of a revised nursing
home assessment tool: MDS 3.0. Contract No. 500–
00–0027/Task Order #2. Santa Monica, CA: Rand
Corporation. Retrieved from https://
www.cms.hhs.gov/NursingHomeQualityInits/
Downloads/MDS30FinalReport.pdf.
22 Landis, R., & Koch, G. (1977, March). The
measurement of observer agreement for categorical
data. Biometrics 33(1), 159–174.
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Finally, as with all measure
development and implementation, we
will provide training and guidance prior
to implementation of the measure to
promote consistency in the
interpretation of the measure.
Comment: Commenters requested
further training and guidance in
completing the M0300 data element that
will be used to calculate the proposed
quality measure. One commenter stated
that confusion exists related to
worsening of pressure ulcers,
unstageable pressure ulcers due to
slough or eschar, and the concept of
‘‘present on admission’’. One
commenter stated that the use of these
data elements would require SNFs to
calculate the number of new or
worsened pressure ulcers by subtracting
those present on admission. Some
commenters stated that the modified
measure may be difficult for providers
to capture because they are being asked
to report on a different data element.
Response: The measure will be
calculated using data reported on the
M0300 data element collected at
discharge, which only requires SNFs to
report the number of pressure ulcers for
each stage (including stages 2, 3, and 4,
unstageable due to slough and/or
eschar, unstageable due to nonremovable dressing/device, and DTIs),
and of those, the number that were
present on admission. The M0300 data
element currently exists on the MDS,
and the current MDS RAI Manual, as
well as prior versions of the Manual,
include guidance about how to
complete the data element, including
unstageable pressure ulcers and
pressure ulcers that are present on
admission. The MDS RAI Manual can be
found at https://www.cms.gov/
Medicare/Quality-Initiatives-PatientAssessment-Instruments/
NursinghomeQualityInits/
MDS30RAIManual.html.
Comment: We received several
comments regarding the inclusion of
unstageable pressure ulcers in the
proposed measure. One commenter
specifically supported the inclusion of
these types of pressure ulcers. Other
commenters did not support the
inclusion of unstageable pressure ulcers,
in the quality measure as proposed, and
encouraged further testing. Some
commenters stated that there is a lack of
clear definition of pressure ulcers
included in this measure, and that those
definitions may be too subjective to get
reliable data. Commenters also
requested that we provide training
opportunities and educational materials
prior to the implementation of this
measure.
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Response: We appreciate the support
we have received regarding the
inclusion of unstageable pressure ulcers,
including DTIs, in the proposed quality
measure. We believe that the inclusion
of unstageable pressure ulcers in the
measure will result in a fuller picture of
quality to residents and families, and
lead to further quality improvement
efforts that will advance patient safety
by reducing the rate of facility acquired
pressure ulcers at any stage. We would
like to clarify that the definitions of
pressure ulcers are adapted from the
National Pressure Ulcer Advisory Panel
(NPUAP), and are standardized across
all PAC settings. These definitions are
universally accepted, objective, and
considered to be the gold-standard
definition by national and international
stakeholders such as the NPUAP,
European Pressure Ulcer Advisory Panel
(EPUAP), Wound, Ostomy and
Continence Nurses Society (WOCN),
amongst others. As a result, the use of
these universally accepted definitions of
pressure ulcers furthers our
commitment to ensuring that all quality
measures implemented in the QRP meet
the testing goals of the QRP.
To provide greater clarity about the
definitions of different types of
unstageable pressure ulcers and how to
code them on the MDS, we are currently
engaged in multiple educational efforts.
These include training events, updates
to the manuals and training materials,
and responses to Help Desk questions to
promote understanding and proper
coding of these data elements. We will
continue to engage in these training
activities prior to implementation of the
proposed measure.
Comment: One commenter
specifically supported the new measure
and the specific inclusion of DTIs, and
stressed the importance and impact of
such change in increasing the number of
pressure ulcers captured. The
commenter stated that it would be
important to note the impact on the Five
Star Quality Rating System. This
commenter also noted that some DTIs
can also evolve or worsen, despite being
managed with appropriate care. Other
commenters did not support the
inclusion of DTIs in the measure. These
commenters stated that there is not a
universally accepted definition of DTIs,
and that DTIs are commonly
misdiagnosed, which could lead to
surveillance bias.
Response: We appreciate the
comments regarding the inclusion of
DTIs in the proposed quality measure.
DTIs are often an avoidable outcome of
medical care, are debilitating and
painful, and can result in death and/or
disability, similar to Stage 2, Stage 3 and
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Stage 4 pressure ulcers. While some
DTIs may worsen, studies indicate that
many DTIs, if managed using
appropriate care, can be resolved
without deteriorating into a worsened
pressure ulcer. Therefore, we believe
that the inclusion of DTIs in the
proposed quality measure is essential to
be able to accurately reflect the number
of these types of pressure injuries and
to provide the appropriate patient care.
Further, we believe that it is important
to do a thorough assessment on every
patient in each PAC setting, including a
thorough skin assessment documenting
the presence of any pressure ulcers or
injuries of any kind, including DTIs. We
agree that it is important to conduct
thorough and consistent assessments to
avoid the possibility of surveillance
bias.
When considering the addition of
DTIs to the measure numerator, we
convened cross-setting TEPs in June and
November 2013, and obtained input
from clinicians, experts, and other
stakeholders. An additional crosssetting TEP convened by our measure
development contractor in July 2016
also supported the recommendation to
include unstageable pressure ulcers,
including DTIs, in the numerator of the
quality measure. Given DTIs’ potential
impact on mortality, morbidity, and
quality of life, it may be detrimental to
the quality of care to exclude DTIs from
a pressure ulcer quality measure.
We do not intend to include the
proposed measure in the Five Star
Quality Rating System calculations.
Comment: Several commenters
recommended that we attain NQF
endorsement of the Changes in Skin
Integrity Post-Acute Care: Pressure
Ulcer/Injury measure prior to
implementation.
Response: While this measure is not
currently NQF-endorsed, we recognize
that the NQF endorsement process is an
important part of measure development
and plan to submit this measure for
NQF endorsement consideration as soon
as feasible.
Comment: Several commenters noted
that there is a difference in the
denominator across settings in terms of
which payer sources (Medicare Part A
or Medicare Advantage) are included in
the measure. Commenters
recommended that we ensure that
common denominators are used when
displaying this measure for quality
comparison purposes. One commenter
stated that there is an IMPACT Act
mandate to implement ‘‘interoperable
measures’’ across PAC settings.
Response: We recognize that data is
currently collected from different payer
sources for each PAC setting. We believe
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that quality care is best assessed through
the collection of data from all patients,
and strive to include the largest possible
patient population in the measure
denominator. For this reason, we do not
seek to limit the denominator in each
setting based on the data currently
available in other settings (that is,
limiting every setting denominator to
Medicare Part A patients). Regarding the
concern that different patient
population denominators are misleading
to consumers and providers, we seek to
clarify the intent and use of this quality
measure through rulemaking, provider
training, and ongoing communication
with stakeholders. Ongoing
communication includes the posting of
measure specifications and
communication accompanying public
reporting. Further, we will take into
consideration the expansion of the SNF
QRP to include all payer sources
through future rulemaking.
The Changes in Skin Integrity PostAcute Care: Pressure Ulcer/Injury
measure is harmonized across all PAC
settings and uses standardized resident
assessment data as required by the
IMPACT Act. Further, we would like to
clarify that the M0300 data element
used to calculate this measure is
standardized across all PAC settings,
enabling interoperability. This
standardization and interoperability of
data elements allows for the exchange of
information among PAC providers and
other providers to whom this data is
applicable. We refer readers to the
measure specifications, which describe
the specifications for the measure in
PAC settings, Final Specifications for
SNF QRP Quality Measures and
Standardized Resident Assessment Data
Elements, available at https://
www.cms.gov/Medicare/QualityInitiatives-Patient-AssessmentInstruments/NursingHomeQualityInits/
Skilled-Nursing-Facility-QualityReporting-Program/SNF-QualityReporting-Program-Measures-andTechnical-Information.html.
Comment: One commenter indicated
support for our efforts to standardize
data elements across PAC settings and
encouraged further standardization of
coding instructions across settings. The
commenter specifically noted that
coding guidance surrounding Kennedy
Ulcers seems to differ between the
LTCH and SNF manuals. The
commenter urged us to thoroughly
review all manuals to ensure
standardization of coding guidance and
instructions.
Response: The LTCH QRP Manual
Version 3.0 instructs LTCHS to not
count Kennedy ulcers in the pressure
ulcer data elements. The MDS RAI
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Manual Version 1.14 provides guidance
regarding the etiology of ulcers that
should be reported in the data elements,
but does not provide specific guidance
on Kennedy ulcers. The guidance in the
two manuals differs in order to be
specific to each setting. Although the
guidance is tailored to be most
applicable to each setting, the data
elements are standardized. Therefore,
we do not expect this tailored guidance
to add variation to the measure outcome
or to the standardized resident
assessment data.
Comment: A few commenters noted
that SNF performance scores on the
proposed measure are likely to differ
from performance scores on the
currently implemented pressure ulcer
measure, Percent of Residents or
Patients with Pressure Ulcers That Are
New or Worsened (Short Stay) (NQF
#0678). They recommended
development of educational materials
for the public to explain the perceived
shifts in performance.
Response: We appreciate commenters’
concerns about differences in
performance scores between the two
measures and the possibility of
misinterpretation. While the proposed
measure will not be directly comparable
to the existing measure, it is expected to
provide an improved measure of quality
moving forward since it will more
accurately capture the number of new
and worsened pressure ulcers and
include unstageable pressure ulcers.
Further information and training will be
provided to providers as well as
consumers regarding how to interpret
scores on the proposed measure, to
avoid any possible confusion between
the proposed measure and the existing
measure.
Comment: One commenter suggested
that we include additional risk factors
in the proposed measure for populations
that may be compromised physically,
such as the ventilator-dependent
population, and to include factors such
as whether the resident experienced a
hospital stay, was in the emergency
department for an extended period of
time, was on a stretcher for an extended
period of time, was receiving palliative
care, and other hospital factors that may
lead to the development of pressure
ulcers. The commenter also
recommended that social risk factors be
accounted for in the quality measure.
One commenter stated that the proposed
measure should be properly risk
adjusted.
Response: The proposed quality
measure would be risk adjusted for
functional mobility admission
performance, bowel continence,
diabetes mellitus or peripheral vascular
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disease/peripheral arterial disease, and
low body mass index in each of the four
settings. This risk adjustment
methodology is described further in the
Final Specifications for SNF QRP
Quality Measures and Standardized
Resident Assessment Data Elements,
available at https://www.cms.gov/
Medicare/Quality-Initiatives-PatientAssessment-Instruments/
NursingHomeQualityInits/SkilledNursing-Facility-Quality-ReportingProgram/SNF-Quality-ReportingProgram-Measures-and-TechnicalInformation.html. As with our measure
modification and evaluation processes,
we will continue to analyze this
measure, specifically assessing the
addition of variables to the risk
adjustment model, and testing the
inclusion of other risk factors as
additional risk adjustors. This
continued refinement of the risk
adjustment models will ensure that the
measure remains valid and reliable to
inform quality improvement within and
across each PAC setting, and to fulfill
the public reporting goals of quality
reporting programs. Our approach to
using social risk factors for risk
adjustment is further described in
section III.D.2.B.1 of this final rule.
Comment: One commenter requested
clarification regarding the proposed
measure and the population it is applied
to, stating that the long stay pressure
ulcer quality measure and short stay
pressure ulcer quality measure appear to
be combined into a single measure.
Response: The proposed measure,
Changes in Skin Integrity Post-Acute
Care: Pressure Ulcer/Injury, is distinct
from both the Percent of Residents or
Patients with Pressure Ulcers That Are
New or Worsened (Short-Stay) Measure
(NQF #0678) and the Percent of High
Risk Residents with Pressure Ulcers
(Long Stay) Measure (NQF #0679).
There are several key differences
between these measures and the
programs they are used in. The long-stay
measure, Percent of High-Risk Residents
with Pressure Ulcers (NQF #0679),
measures the percent of residents with
one or more conditions indicating high
risk to develop pressure ulcers
(impaired bed mobility or transfer,
comatose, or malnutrition/risk of
malnutrition) with any pressure ulcers.
This measure is used in the Nursing
Home Quality Initiative (NHQI) and
reported on Nursing Home Compare.
Conversely, the short-stay measure,
Percent of Residents with Pressure
Ulcers that are New or Worsened (shortstay) (NQF #0678), currently used in
used in the SNF QRP, assesses the
percentage of residents who develop
new pressure ulcers or have existing
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pressure ulcers worsen over their course
of stay in a PAC facility.
The short stay measure does not
include unstageable pressure ulcers in
the numerator. The measure is used in
the NHQI and reported on Nursing
Home Compare, and is also currently
applied to SNF residents for the SNF
QRP.
We reviewed both the short stay and
long stay measures for suitability, but
the short stay measure does not include
unstageable pressure ulcers in the
numerator, as described above, and the
long stay measure was determined to
not be applicable for use in SNFs due
to the populations addressed. The
proposed measure is to be applied to the
SNF population, which comprises
residents who are receiving skilled
nursing services. This measure includes
new or worsened pressure ulcers that
are numerically staged or unstageable,
and is standardized across the PAC
settings. Further information about the
specifications of this measure can be
found at https://www.cms.gov/
Medicare/Quality-Initiatives-PatientAssessment-Instruments/NursingHome
QualityInits/Skilled-Nursing-FacilityQuality-Reporting-Program/SNFQuality-Reporting-Program-Measuresand-Technical-Information.html.
Final Decision: After consideration of
the public comments we received, we
are finalizing our proposal to remove
the current pressure ulcer measure,
Percent of Residents or Patients with
Pressure Ulcers That Are New or
Worsened (Short Stay) (NQF #0678),
from the SNF QRP measure set and to
replace it with a modified version of
that measure, entitled Changes in Skin
Integrity Post-Acute Care: Pressure
Ulcer/Injury, for the SNF QRP with an
implementation date of October 1, 2018.
(2) Functional Outcome Measures
In the FY 2018 SNF PPS proposed
rule (82 FR 21047 through 21057) we
proposed for the SNF QRP four
measures that we are specifying under
section 1899B(c)(1) of the Act for the
purposes of meeting the functional
status, cognitive function, and changes
in function and cognitive function
domain: (1) Application of the IRF
Functional Outcome Measure: Change
in Self-Care Score for Medical
Rehabilitation Patients (NQF #2633); (2)
Application of the IRF Functional
Outcome Measure: Change in Mobility
Score for Medical Rehabilitation
Patients (NQF #2634); (3) Application of
the IRF Functional Outcome Measure:
Discharge Self-Care Score for Medical
Rehabilitation Patients (NQF #2635);
and (4) Application of the IRF
Functional Outcome Measure: Discharge
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Mobility Score for Medical
Rehabilitation Patients (NQF #2636). We
finalized the same functional outcome
measures for the IRF QRP in the FY
2016 IRF PPS final rule (80 FR 47111
through 47117). These measures are: (1)
IRF Functional Outcome Measure:
Change in Self-Care for Medical
Rehabilitation Patients (NQF #2633); (2)
IRF Functional Outcome Measure:
Change in Mobility Score for Medical
Rehabilitation (NQF #2634); (3) IRF
Functional Outcome Measure: Discharge
Self-Care Score for Medical
Rehabilitation Patients (NQF #2635);
and (4) IRF Functional Outcome
Measure: Discharge Mobility Score for
Medical Rehabilitation Patients (NQF
#2636). We believe these measures
satisfy section 1899B(c)(1)(A) of the Act
because they address functional status,
cognitive function, and changes in
function and cognitive function domain.
We intend to propose functional
outcome measures for the home health
and long-term care hospital settings in
the future.
In developing these SNF functional
outcome quality measures, we sought to
build on our cross-setting function work
by leveraging data elements currently
collected in the MDS section GG, which
would minimize additional data
collection burden while increasing the
feasibility of cross-setting item
comparisons.
SNFs provide skilled services, such as
skilled nursing or therapy services.
Residents receiving care in SNFs
include those whose illness, injury, or
condition has resulted in a loss of
function, and for whom rehabilitative
care is expected to help regain that
function. Treatment goals may include
fostering residents’ ability to manage
their daily activities so that they can
complete self-care and mobility
activities as independently as possible,
and, if feasible, return to a safe, active,
and productive life in a communitybased setting. Given that the primary
goal of many SNF residents is
improvement in function, SNF
clinicians assess and document
residents’ functional status at admission
and at discharge to evaluate the
effectiveness of the rehabilitation care
provided to individual residents and the
SNF’s effectiveness.
Examination of SNF data shows that
SNF treatment practices directly
influence resident outcomes. For
example, therapy services provided to
SNF residents have been found to be
correlated with the functional
improvement that SNF residents
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achieve (that is, functional outcomes).23
Several studies found patients’
functional outcomes vary based on
treatment by physical and occupational
therapists. Specifically, therapy was
associated with significantly greater
odds of improving mobility and selfcare functional independence,24 shorter
length of stay,25 and a greater likelihood
of discharge to community.26
Furthermore, Jung et al.27 found that an
additional hour of therapy treatment per
week was associated with
approximately a 3.1 percentage-point
increase in the likelihood of returning to
the community among residents with a
hip fracture. Achieving these targeted
resident outcomes, including improved
self-care and mobility functional
independence, reduced length of stay,
and increased discharges to the
community, is a core goal of SNFs.
Among SNF residents receiving
rehabilitation services, the amount of
treatment received can vary. For
example, the amount of therapy
treatment provided varies by type (that
is, for-profit versus not-for-profit) and
facility location (that is, urban versus
rural).28 29
Measuring residents’ functional
improvement across all SNFs on an
ongoing basis would permit
identification of SNF characteristics,
such as ownership types or locations,
associated with better or worse resident
risk adjusted outcomes and thus help
SNFs optimally target quality
improvement efforts.
23 Jette, D. U., R. L. Warren, & C. Wirtalla. (2005).
The relation between therapy intensity and
outcomes of rehabilitation in skilled nursing
facilities. Archives of Physical Medicine and
Rehabilitation, 86 (3), 373–9.
24 Lenze, E.J., Host, H.H., Hildebrand, M.W.,
Morrow-Howell, N., Carpenter, B., Freedland, K.E.,
. . . & Binder, E.F. (2012). Enhanced medical
rehabilitation increases therapy intensity and
engagement and improves functional outcomes in
post acute rehabilitation of older adults: a
randomized-controlled trial. Journal of the
American Medical Directors Association, 13(8),
708–712.
25 Medicare Payment Advisory Commission (US).
(2016). Report to the Congress: Medicare payment
policy. Medicare Payment Advisory Commission.
26 Cary, M.P., Pan, W., Sloane, R., Bettger, J.P.,
Hoenig, H., Merwin, E.I., & Anderson, R.A. (2016).
Self-Care and Mobility Following Postacute
Rehabilitation for Older Adults with Hip Fracture:
A Multilevel Analysis. Archives of Physical
Medicine and Rehabilitation, 97(5), 760–771.
27 Jung, H.Y., Trivedi, A.N., Grabowski, D.C., &
Mor, V. (2016). Does More Therapy in Skilled
Nursing Facilities Lead to Better Outcomes in
Patients With Hip Fracture? Physical therapy, 96(1),
81–89.
28
29 Grabowski, D.C., Feng, Z., Hirth, R., Rahman,
M., & Mor, V. (2013). Effect of nursing home
ownership on the quality of post-acute care: An
instrumental variables approach. Journal of Health
Economics, 32(1), 12–21.
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MedPAC 30 noted that while there was
an overall increase in the share of
intensive therapy days between 2002
and 2012, the for-profit and urban
facilities had higher shares of intensive
therapy than not-for-profit facilities and
those located in rural areas. Data from
2011 to 2014 indicate that this variation
is not explained by patient
characteristics, such as activities of
daily living, comorbidities and age, as
SNF residents with stays in 2011 were
more independent on average than the
average SNF resident with stays in 2014.
Because more intense therapy is
associated with more functional
improvement for certain beneficiaries,
this variation in rehabilitation services
supports the need to monitor SNF
residents’ functional outcomes.
Therefore, we believe there is an
opportunity for improvement in this
area.
In addition, a recent analysis that
examined the incidence, prevalence,
and costs of common rehabilitation
conditions found that back pain,
osteoarthritis, and rheumatoid arthritis
are the most common and costly
conditions affecting more than 100
million individuals and costing more
than $200 billion per year.31 Persons
with these medical conditions are
admitted to SNFs for rehabilitation
treatment.
The use of standardized mobility and
self-care data elements would
standardize the collection of functional
status data, which could improve
communication when residents are
transferred between providers. Most
SNF residents receive care in an acute
care hospital prior to the SNF stay, and
many SNF residents receive care from
another provider after the SNF stay.
Recent research provides empirical
support for the risk adjustment variables
for these quality measures. In a study of
resident functional improvement in
SNFs, Wysocki et al.32 found that
several resident conditions were
significantly related to resident
functional improvement, including
cognitive impairment, delirium,
30 Medicare Payment Advisory Commission (US).
(2016). Report to the Congress: Medicare payment
policy. Medicare Payment Advisory Commission.
31 Ma V.Y., Chan L., & Carruthers K.J. (2014).
Incidence, Prevalence, Costs, and Impact on
Disability of Common Conditions Requiring
Rehabilitation in the United States: Stroke, Spinal
Cord Injury, Traumatic Brain Injury, Multiple
Sclerosis, Osteoarthritis, Rheumatoid Arthritis,
Limb Loss, and Back Pain. Archives of Physical
Medicine and Rehabilitation, 95(5), 986–995.
32 Wysocki, A., Thomas, K.S., & Mor, V. (2015).
Functional Improvement Among Short-Stay
Nursing Home Residents in the MDS 3.0. Journal of
the American Medical Directors Association, 16(6),
470–474. https://doi.org/10.1016/
j.jamda.2014.11.018.
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dementia, heart failure, and stroke.
Also, Cary et al. found that several
resident characteristics were
significantly related to resident
functional improvement, including age,
cognitive function, self-care function at
admission, and comorbidities.33
These outcome-based quality
measures could inform SNFs about
opportunities to improve care in the
area of function and strengthen
incentives for quality improvement
related to resident function.
We describe each of the four
functional outcome quality measures
below, and then follow with a
discussion of the comments we
received.
(a) Application of IRF Functional
Outcome Measure: Change in Self-Care
Score for Medical Rehabilitation
Patients (NQF #2633)
The outcome quality measure,
Application of IRF Functional Outcome
Measure: Change in Self-Care Score for
Medical Rehabilitation Patients (NQF
#2633), is an application of the outcome
measure finalized in the IRF QRP
entitled, IRF Functional Outcome
Measure: Change in Self-Care Score for
Medical Rehabilitation Patients (NQF
#2633). The quality measure estimates
the mean risk-adjusted improvement in
self-care score between admission and
discharge among SNF residents. A
summary of the NQF-endorsed quality
measure specifications can be accessed
on the NQF Web site: https://
www.qualityforum.org/qps/2633.
Detailed specifications for the NQFendorsed quality measure can be
accessed at https://www.qualityforum.org
/ProjectTemplateDownload.aspx
?SubmissionID=2633.
The functional outcome measure, the
Application of IRF Functional Outcome
Measure: Change in Self-Care Score for
Medical Rehabilitation Patients (NQF
#2633), requires the collection of
admission and discharge functional
status data by trained clinicians using
standardized patient data elements that
assess specific functional self-care
activities such as shower/bathe self,
dressing upper body and dressing lower
body. These self-care items are daily
activities that clinicians typically assess
at the time of admission and/or
discharge to determine residents’ needs,
evaluate resident progress, and/or
prepare residents and families for a
transition to home or to another
33 Cary, M.P., Pan, W., Sloane, R., Bettger, J.P.,
Hoenig, H., Merwin, E.I., & Anderson, R.A. (2016).
Self-Care and Mobility Following Postacute
Rehabilitation for Older Adults With Hip Fracture:
A Multilevel Analysis. Archives of Physical
Medicine and Rehabilitation, 97(5), 760–771.
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provider. The standardized self-care
function data elements are coded using
a 6-level rating scale that indicates the
resident’s level of independence with
the activity; higher scores indicate more
independence. The outcome quality
measure also requires the collection of
risk factor data, such as resident
functioning prior to the current reason
for admission, bladder continence,
communication ability and cognitive
function, at the time of admission.
The data elements included in the
quality measure were originally
developed and tested as part of the PAC
PRD version of the Continuity
Assessment Record and Evaluation
(CARE) Item Set,34 which was designed
to standardize assessment of patients’
and residents’ status across acute and
post-acute providers, including IRFs,
SNFs, HHAs and LTCHs. The
development of the CARE Item Set and
a description and rationale for each item
is described in a report entitled ‘‘The
Development and Testing of the
Continuity Assessment Record and
Evaluation (CARE) Item Set: Final
Report on the Development of the CARE
Item Set: Volume 1 of 3.’’ 35 Reliability
and validity testing were conducted as
part of CMS’ Post-Acute Care Payment
Reform Demonstration, and we
concluded that the functional status
items have acceptable reliability and
validity. A description of the testing
methodology and results are available in
several reports, including the report
entitled ‘‘The Development and Testing
of the Continuity Assessment Record
And Evaluation (CARE) Item Set: Final
Report On Reliability Testing: Volume 2
of 3’’ 36 and the report entitled ‘‘The
Development and Testing of The
Continuity Assessment Record And
Evaluation (CARE) Item Set: Final
Report on Care Item Set and Current
Assessment Comparisons: Volume 3 of
3.’’ 37 The reports are available on CMS’
Post-Acute Care Quality Initiatives Web
page at https://www.cms.gov/Medicare/
Quality-Initiatives-Patient-AssessmentInstruments/Post-Acute-Care-QualityInitiatives/CARE-Item-Set-and-BCARE.html.
34 Barbara Gage et al., ‘‘The Development and
Testing of the Continuity Assessment Record and
Evaluation (CARE) Item Set: Final Report on the
Development of the CARE Item Set’’ (RTI
International, 2012).
35 Barbara Gage et al., ‘‘The Development and
Testing of the Continuity Assessment Record and
Evaluation (CARE) Item Set: Final Report on the
Development of the CARE Item Set’’ (RTI
International, 2012).
36 Ibid.
37 Ibid.
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(i) Stakeholder Input
A cross-setting function TEP
convened by our measure development
contractor on September 9, 2013
provided input on the initial technical
specifications of this quality measure,
Application of IRF Functional Outcome
Measure: Change in Self-Care Score for
Medical Rehabilitation Patients (NQF
#2633). The TEP was supportive of the
implementation of this measure and
supported CMS’s efforts to standardize
patient/resident assessment data
elements. The TEP 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.
The MAP met on December 14 and
15, 2015, and provided input on the
measure, Application of IRF Functional
Outcome Measure: Change in Self-Care
Score for Medical Rehabilitation
Patients (NQF #2633) for use in the SNF
QRP. The MAP recognized that this
quality outcome measure is an
adaptation of a currently endorsed
measure for the IRF population, and
encouraged continued development to
ensure alignment of this measure across
PAC settings. The MAP noted there
should be some caution in the
interpretation of measure results due to
resident differentiation between
facilities. The MAP also noted possible
duplication as the MDS already
includes function data elements. We
note that the data elements for the
measure are similar, but not the same as
the existing MDS Section G function
data elements. The data elements for the
measure include those that are the
standardized patient assessment data for
functional status under section
1899B(b)(1)(B)(i) of the Act. The MAP
also stressed the importance of
considering burden on providers when
measures are considered for
implementation. The MAP’s overall
recommendation was for ‘‘encourage
further development.’’ More information
about the MAP’s recommendations for
this measure is available at https://
www.qualityforum.org/WorkArea/
linkit.aspx
?LinkIdentifier=id&ItemID=81593.
Since the MAP’s review and
recommendation for further
development, we have continued to
develop this measure by soliciting input
via a TEP, providing a public comment
opportunity, and providing an update
on measure development to the MAP
via the feedback loop. More specifically,
our measure development contractor
convened a SNF-specific function TEP
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on May 5, 2016, to provide further input
on the technical specifications of this
quality measure by reviewing the IRF
specifications and the specifications of
competing and related function quality
measures. Overall, the TEP was
supportive of the measure and
supported our efforts to standardize
patient assessment data elements. The
SNF-specific function 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.
We also solicited stakeholder
feedback on the development of this
measure by means of a public comment
period that was open from October 7,
2016, until November 4, 2016. There
was general support of the measure
concept and the importance of
functional improvement. Comments on
the measure varied, with some
commenters supportive of the measure,
while others were either not in favor of
the measure, or in favor of suggested
potential modifications to the measure
specifications. The public comment
summary report for the measure is
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.
Further, we engaged with
stakeholders when we presented an
update on the development of this
quality measure to the MAP on October
19, 2016, during a MAP feedback loop
meeting. Slides from that meeting are
available at https://
www.qualityforum.org/WorkArea/
linkit.aspx?LinkIdentifier=id&
ItemID=83640.
(ii) Competing and Related Measures
and Measure Justification
During the development of this
proposed functional outcome measure,
we have monitored and reviewed NQFendorsed measures that are competing
and/or related to the proposed quality
measures. We identified six competing
and related quality measures focused on
self-care functional improvement for
residents in the SNF setting entitled: (1)
CARE: Improvement in Self Care (NQF
#2613); (2) Functional Change: Change
in Self-Care Score for Skilled Nursing
Facilities (NQF #2769); (3) Functional
Status Change for Patients with
Shoulder Impairments (NQF #0426); (4)
Functional Status Change for Patients
with Elbow, Wrist and Hand
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Impairments (NQF #0427); (5)
Functional Status Change for Patients
with General Orthopedic Impairments
(NQF #0428); and (6) Change in Daily
Activity Function as Measures by the
AM–PAC (NQF #0430). We reviewed
the technical specifications for these six
quality measures and compared these
specifications to those of our outcomebased quality measure, the Application
of IRF Functional Outcome Measure:
Change in Self-Care Score for Medical
Rehabilitation Patients (NQF #2633),
and have noted the following
differences in the technical
specifications: (1) The number of risk
adjustors and variance explained by
these risk adjustors in the regression
models; (2) the use of functional
assessment items that were developed
and tested for cross-setting use; (3) the
use of items that are already on the MDS
3.0 and what this means for burden; (4)
the handling of missing functional
status data; and (5) the use of exclusion
criteria that are baseline clinical
conditions. We describe these key
specifications of the proposed outcome
measure, Application of IRF Functional
Outcome Measure: Change in Self-Care
Score for Medical Rehabilitation
Patients (NQF #2633), in detail below.
Our literature review, input from
technical expert panels, public
comment feedback, and data analyses
demonstrated the importance of
adequate risk adjustment of admission
case mix factors for functional outcome
measures. Inadequate risk adjustment of
admission case mix factors may lead to
erroneous conclusions about the quality
of care delivered within the facility, and
thus is a potential threat to the validity
of a quality measure that examines
outcomes of care, such as functional
outcomes. The quality measure, the
Application of IRF Functional Outcome
Measure: Change in Self-Care Score for
Medical Rehabilitation Patients (NQF
#2633) risk adjusts for more than 60 risk
factors, explaining approximately 25
percent of the variance in change in
function, and includes all of the
following risk factors: prior functioning,
prior device use, age, functional status
at admission, primary diagnosis, and
comorbidities. These risk factors are key
predictors of functional performance
and should be accounted for in any
facility-level comparison of functional
outcomes.
Another key feature of the measure,
the Application of IRF Functional
Outcome Measure: Change in Self-Care
Score for Medical Rehabilitation
Patients (NQF #2633), is that it uses the
functional assessment data elements
and the associated rating scale that were
developed and tested for cross-setting
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use. The measure uses functional
assessment items from the CARE Item
Set, which were developed and tested as
part of the PAC–PRD between 2006 and
2010. The items were designed to build
on the existing science for functional
assessment instruments, and included a
review of the strengths and limitations
of existing functional assessment
instruments. An important strength of
the standardized function items from
the CARE instrument is that they allow
comparison and tracking of patients’
and residents’ functional outcomes as
they move across post-acute settings.
Specifically, the CARE Item Set was
designed to standardize assessment of
patients’ status across acute and postacute settings, including SNFs, IRFs,
LTCHs, and HHAs. The risk-adjustors
for various setting-specific versions of
this measure differ by the inclusion of
adjustors such as comorbidities in the
IRF measure. However, we believe that
the differences in risk adjustment will
not hinder future comparability across
settings. Agencies such as MedPAC
have supported a coordinated approach
to measurement across settings using
standardized patient data elements.
A third important consideration is
that some of the data elements
associated with the measure are already
included on the MDS in section GG,
because we adopted a cross-setting
function process measure in the SNF
QRP FY 2016 Final Rule (FR 80 46444
through 46453). Three of the self-care
data elements necessary to calculate that
quality measure, an Application of the
Percent of Long-Term Care Hospital
Patient with a Functional Assessment
and a Care Plan that Addresses Function
(NQF #2631) are used to calculate the
quality measure. Provider burden of
reporting on multiple items was a key
consideration discussed by stakeholders
in our recent TEP is available at https://
www.cms.gov/Medicare/QualityInitiatives-Patient-AssessmentInstruments/Post-Acute-Care-QualityInitiatives/IMPACT-Act-of-2014/
IMPACT-Act-Downloads-andVideos.html.
We believe it is important to include
the records of residents with missing
functional assessment data when
calculating a facility-level functional
outcome quality measure for SNFs. The
proposed measure, the Application of
IRF Functional Outcome Measure:
Change in Self-Care Score for Medical
Rehabilitation Patients (NQF #2633),
incorporates a method to address
missing functional assessment data.
We believe certain clinically-defined
exclusion criteria are important to
specify in a functional outcome quality
measure to maintain the validity of the
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quality measure. Exclusions for the
quality measure, Application of IRF
Functional Outcome Measure: Change
in Self-Care Score for Medical
Rehabilitation Patients (NQF #2633),
were selected through a review of the
literature, input from Technical Expert
Panels, and input from the public
comment process. The quality measure,
Application of IRF Functional Outcome
Measure: Change in Self-Care Score for
Medical Rehabilitation Patients (NQF
#2633) is intended to capture
improvement in self-care function from
admission to discharge for residents
who are admitted with an expectation of
functional improvement. Therefore, we
exclude residents with certain
conditions, for example progressive
neurologic conditions, because these
residents are typically not expected to
improve on self-care skills for activities
such as lower body dressing.
Furthermore, we exclude residents who
are independent on all self-care items at
the time of admission, because no
improvement in self-care can be
measured with the selected set of items
by discharge. Including residents with
limited expectation for improvement
could introduce incentives for SNFs to
restrict access to these residents.
We would like to note that our
measure developer presented and
discussed these technical specification
differentiations with TEP members
during the May 6, 2016 TEP meeting to
obtain TEP input on preferred
specifications for valid functional
outcome quality measures. The
differences in measure specifications
and the TEP feedback are presented in
the TEP Summary Report, which is
available at https://www.cms.gov/
Medicare/Quality-Initiatives-PatientAssessment-Instruments/Post-AcuteCare-Quality-Initiatives/IMPACT-Act-of2014/IMPACT-Act-Downloads-andVideos.html. Overall, the TEP supported
the use of a risk adjustment model that
addressed all of the following risk
factors: Prior functioning, admission
functioning, prior diagnosis and
comorbidities. In addition, they
supported exclusion criteria that would
address functional improvement
expectations of residents.
(iii) Data Collection Mechanism
Data for the quality measure, the
Application of IRF Functional Outcome
Measure: Change in Self-Care Score for
Medical Rehabilitation Patients (NQF
#2633), would be collected using the
MDS, with the submission through the
QIES ASAP system. For more
information on SNF QRP reporting
through the QIES ASAP system, refer to
CMS Web site at https://www.cms.gov/
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Medicare/Quality-Initiatives-PatientAssessment-Instruments/Nursing
HomeQualityInits/Skilled-NursingFacility-Quality-Reporting-Program/
SNF-Quality-Reporting-ProgramMeasures-and-TechnicalInformation.html. The calculation of the
quality measure would be based on the
data collection of standardized items to
be included in the MDS. The function
items used to calculate this measure are
the same set of functional status data
items that have been added to the IRFPAI version 1.4, for the purpose of
providing standardized resident
assessment data elements under the
domain of functional status, which is
required by the IMPACT Act.
If finalized for implementation into
the SNF QRP, the MDS would be
modified so as to enable us to calculate
this quality measure using additional
data elements that are standardized with
the IRF-PAI and such data would be
obtained at the time of admission and
discharge for all SNF residents covered
under a Part A stay. The standardized
items used to calculate this proposed
quality measure do not duplicate
existing Section G items currently used
for data collection within the MDS. The
quality measure and standardized data
element specifications for the
Application of IRF Functional Outcome
Measure: Change in Self-Care Score for
Medical Rehabilitation Patients (NQF
#2633) can be found on the SNF QRP
Measures and Technical Information
Web site at https://www.cms.gov/
Medicare/Quality-Initiatives-PatientAssessment-Instruments/Nursing
HomeQualityInits/Skilled-NursingFacility-Quality-Reporting-Program/
SNF-Quality-Reporting-ProgramMeasures-and-TechnicalInformation.html.
(b) Application of IRF Functional
Outcome Measure: Change in Mobility
Score for Medical Rehabilitation
Patients (NQF #2634)
This quality measure is an application
of the outcome measure finalized in the
IRF QRP entitled, IRF Functional
Outcome Measure: Change in Mobility
Score for Medical Rehabilitation
Patients (NQF #2634). This quality
measure estimates the risk-adjusted
mean improvement in mobility score
between admission and discharge
among SNF residents. A summary of
this quality measure can be accessed on
the NQF Web site: https://www.quality
forum.org/qps/2634. Detailed
specifications for this quality measure
can be accessed at https://www.quality
forum.org/ProjectTemplate
Download.aspx?SubmissionID=2634.
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As previously noted, residents
seeking care in SNFs include those
whose illness, injury, or condition has
resulted in a loss of function, and for
whom rehabilitative care is expected to
help regain that function. Several
studies found patients’ functional
outcomes vary based on treatment.
Physical and occupational therapy
treatment was associated with greater
functional gains, shorter stays, and a
greater likelihood of a discharge to a
community. Among SNF residents
receiving rehabilitation services, the
amount of therapy prescribed can vary
widely, and this variation is not always
associated with resident characteristics.
This variation in rehabilitation services
supports the need to monitor SNF
resident’s functional outcomes, as we
believe there is an opportunity for
improvement in this area.
The functional outcome measure, the
Application of IRF Functional Outcome
Measure: Change in Mobility Score for
Medical Rehabilitation Patients (NQF
#2634), requires the collection of
admission and discharge functional
status data by trained clinicians using
standardized resident data elements that
assess specific functional mobility
activities such as toilet transfer and
walking. These mobility items are daily
activities that clinicians typically assess
at the time of admission and/or
discharge to determine resident’s needs,
evaluate resident progress, and prepare
residents and families for a transition to
home or to another care provider. The
standardized mobility function items
are coded using a 6-level rating scale
that indicates the resident’s level of
independence with the activity; higher
scores indicate more independence.
The functional assessment items
included in the outcome quality
measures were originally developed and
tested as part of the Post-Acute Care
Payment Reform Demonstration version
of the CARE Item Set, which was
designed to standardize assessment of
patients’ status across acute and postacute providers, including SNFs, HHAs,
IRFs, and LTCHs.
This outcome quality measure also
requires the collection of risk factors
data, such as resident functioning prior
to the current reason for admission,
history of falls, bladder continence,
communication ability and cognitive
function, at the time of admission.
A cross-setting function TEP
convened by our measure development
contractor on September 9, 2013
provided input on the initial technical
specifications of this proposed quality
measure, the Application of IRF
Functional Outcome Measure: Change
in Mobility Score for Medical
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Rehabilitation Patients (NQF #2634).
The TEP was supportive of the
implementation of this measure and
supported our efforts to standardize
patient/resident assessment data
elements. The TEP 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.
The list of measures under
consideration for the SNF QRP,
including this quality measure, was
released to the public on November 27,
2015, and early comments were
submitted between December 1 and
December 7, 2015. The MAP met on
December 14 and 15, 2015, sought
public comment on this measure from
December 23, 2015, to January 13, 2015,
and met on January 26 and 27, 2016.
The NQF provided the MAP’s input to
us as required under section 1890A(a)(3)
of the Act in the final report, MAP 2016
Considerations for Implementing
Measures for Federal Programs: PostAcute and Long-Term Care, which is
available at https://
www.qualityforum.org/Setting_Priorities
/Partnership/MAP_Final_Reports.aspx.
The MAP recognized that this measure
is an adaptation of currently endorsed
measures for the IRF population, and
encouraged continued development to
ensure alignment across PAC settings.
They also noted there should be some
caution in the interpretation of measure
results due to patient/resident
differentiation between facilities. To
alignment across PAC settings, the selfcare items included in the proposed
quality measure are the same self-care
items that are included in the IRF-PAI
Version 1.4. We agree with the MAP
that patient/resident populations can
vary across IRFs and SNFs, and we have
taken this issue into consideration while
selecting and testing the risk adjustors,
which include medical conditions,
admission function, prior functioning
and comorbidities. The risk-adjustors
for the IRF and the SNF versions of this
measure differ by the inclusion of
adjustors such as comorbidities in the
IRF measure. As noted, though there are
differences between the measures we
believe that the differences in risk
adjustment will not hinder future
comparability across measures.
The MAP also noted possible
duplication as the MDS already
includes function data elements. The
data elements for the measure are
similar, but not the same as the existing
MDS Section G function data elements.
The data elements for the measures
include those that are the proposed
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standardized resident assessment data
elements for function. The MAP also
stressed the importance of considering
burden on providers when measures are
considered for implementation. We
appreciate the issue of burden and have
taken that into consideration in
developing the measure. Please refer to
the FY 2016 SNF PPS final rule (80 FR
46428) for more information on the
MAP.
The MAP’s overall recommendation
was for ‘‘encourage further
development.’’ More information about
the MAP’s recommendations for this
proposed measure is available at https://
www.qualityforum.org/WorkArea/
linkit.aspx?LinkIdentifier=
id&ItemID=81593.
Since the MAP’s review and
recommendation for further
development, we have continued to
develop this measure including
soliciting input from a TEP, providing a
public comment opportunity, and
providing an update on measure
development to the MAP via the
feedback loop. More specifically, our
measure development contractor
convened a SNF-specific TEP on May 5,
2016 to provide further input on the
technical specifications of this proposed
quality measure by reviewing the IRF
specifications and the specifications of
competing and related function quality
measures. Overall, the TEP was
supportive of the measure and
supported our efforts to standardize
patient/resident assessment data
elements. The SNF-specific function
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.
We also solicited stakeholder
feedback on the development of this
measure by means of a public comment
period open from October 7, until
November 4, 2016. There was general
support of the measure concept and the
importance of functional improvement.
Comments on the measure varied, with
some commenters supportive of the
measure, while others were either not in
favor of the measure, or in favor of
suggested potential modifications to the
measure specifications. The public
comment summary report for the
proposed measure is available on the
CMS Web site at https://www.cms.gov/
Medicare/Quality-Initiatives-PatientAssessment-Instruments/Post-AcuteCare-Quality-Initiatives/IMPACT-Act-of2014/IMPACT-Act-Downloads-andVideos.html.
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We also engaged with the NQF
convened MAP when we presented an
update on the development of this
quality measure on October 19, 2016,
during a MAP feedback loop meeting.
Slides from that meeting are available at
https://www.qualityforum.org/WorkArea/
linkit.aspx?LinkIdentifier=id
amp;ItemID=83640.
During the development of this
measure, we have monitored and
reviewed NQF-endorsed measures that
are competing and related. We
identified seven competing and related
quality measures focused on
improvement in mobility for residents
in the SNF setting entitled: (1) CARE:
Improvement in Mobility (NQF #2612);
(2) Functional Change: Change in
Mobility Score (NQF 2774); (3)
Functional Status Change for Patients
with Knee Impairments (NQF #0422);
(4) Functional Status Change for
Patients with Hip Impairments (NQF
#0423); (5) Functional Status Change for
Patients with Foot and Ankle
Impairments (NQF #0424); (6)
Functional Status Change for Patients
with Lumbar Impairments (NQF #0425);
and (7) Change in Basic Mobility as
Measures by the AM–PAC (NQF #0429).
We reviewed the technical
specifications for these seven measures
carefully and compared them with the
specifications of the proposed quality
measure, the Application of IRF
Functional Outcome Measure: Change
in Mobility Score for Medical
Rehabilitation Patients (NQF #2634) and
have noted the following differences in
the technical specifications: (1) The
number of risk adjustors and variance
explained by these risk adjustors in the
regression models; (2) the use of
functional assessment items that were
developed and tested for cross-setting
use; (3) the use of items that are already
on the MDS 3.0 and what this means for
burden; (4) the handling of missing
functional status data; and (5) the use of
exclusion criteria that are baseline
clinical conditions. We describe these
key specifications of the proposed
outcome measure, the Application of
IRF Functional Outcome Measure:
Change in Mobility Score for Medical
Rehabilitation Patients (NQF #2634),
below in more detail.
Our literature review, input from
technical expert panels, public
comment feedback, and analyses
demonstrated the importance of
adequate risk adjustment of admission
case mix factors for functional outcome
measures. Inadequate risk adjustment of
admission case mix factors may lead to
erroneous conclusions about the quality
of care delivered within the facility, and
thus is a potential threat to the validity
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of a quality measure that examines
outcomes of care, such as functional
status. The quality measure, the
Application of IRF Functional Outcome
Measure: Change in Mobility Score for
Medical Rehabilitation Patients (NQF
#2634) risk adjusts for more than 60 risk
factors, explaining approximately 23
percent of the variance in change in
function, and includes all of the
following risk adjusters: Prior
functioning, prior device use, age,
functional status at admission, primary
diagnosis and comorbidities. These are
key predictors of functional
performance and need to be accounted
for in any facility-level functional
outcome quality measure.
Another key feature of the proposed
measure, Application of IRF Functional
Outcome Measure: Change in Mobility
Score for Medical Rehabilitation
Patients (NQF #2634), is that it uses the
functional assessment data elements
and the associated rating scale that were
developed and tested for cross-setting
use. The measure uses functional
assessment items from the CARE Item
Set, which were developed and tested as
part of the PAC PRD between 2006 and
2010.
The items were designed to build on
the existing science for functional
assessment instruments, and included a
review of the strengths and limitations
of existing functional assessment
instruments. An important strength of
the cross-setting function items from the
CARE instrument is that they allow
tracking of patients’ and residents’
functional outcomes as they move
across post-acute settings. Specifically,
the CARE Item Set was designed to
standardize assessment of patients’ and
residents’ status across acute and postacute settings, including SNFs, IRFs,
LTCHs, and HHAs. MedPAC has
publicly supported a coordinated
approach to measurement across
settings using standardized resident
assessment data elements.
A third important consideration is
that some of the data elements
associated with the measure,
Application of IRF Functional Outcome
Measure: Change in Mobility Score for
Medical Rehabilitation Patients (NQF
#2634), are already included on the
MDS in section GG, because we adopted
a cross-setting function process measure
in the SNF QRP FY 2016 Final Rule (FR
80 46444 through 46453), and seven of
the mobility data elements necessary to
calculate that quality measure, an
Application of the Percent of Long-Term
Care Hospital Patient with a Functional
Assessment and a Care Plan that
Addresses Function (NQF #2631) are
used to calculate the proposed quality
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measure. Provider burden of reporting
on multiple measures was a key
consideration discussed by stakeholders
in our recent TEP: https://www.cms.gov/
Medicare/Quality-Initiatives-PatientAssessment-Instruments/Post-AcuteCare-Quality-Initiatives/IMPACT-Act-of2014/IMPACT-Act-Downloads-andVideos.html.
We believe it is important to include
the records of residents with missing
functional assessment data when
calculating a facility-level functional
outcome quality measure for SNFs. The
measure, Application of IRF Functional
Outcome Measure: Change in Mobility
Score for Medical Rehabilitation
Patients (NQF #2634), incorporates a
method to address missing functional
assessment data.
We believe certain clinically-defined
exclusion criteria are important to
specify in a functional outcome quality
measure to maintain the validity of the
quality measure. Exclusions for the
proposed quality measure, Change in
Mobility Score for Medical
Rehabilitation Patients (NQF #2634),
were selected through a literature
review, input from TEPs, and input
from the public comment process. The
Application of IRF Functional Outcome
Measure: Change in Mobility Score for
Medical Rehabilitation Patients (NQF
#2634) is intended to capture
improvement in mobility from
admission to discharge for residents
who are admitted with an expectation of
functional improvement. Therefore, we
exclude residents with certain
conditions, for example progressive
neurologic conditions, because these
residents are typically not expected to
improve on mobility skills for activities
such as walking. Furthermore, we
exclude residents who are independent
on all mobility items at the time of
admission, because no improvement can
be measured with the selected set of
items by discharge. Inclusion of
residents with limited expectation for
improvement could introduce
incentives for SNF providers to limited
access to these residents.
Our measure developer contractor
presented and discussed these technical
specification differentiations during the
May 6, 2016 TEP meeting to obtain TEP
input on preferred specifications for
valid functional outcome quality
measures. The differences in measure
specifications and the TEP feedback are
presented in the TEP Summary Report,
which is available at https://
www.cms.gov/Medicare/QualityInitiatives-Patient-AssessmentInstruments/Post-Acute-Care-QualityInitiatives/IMPACT-Act-of-2014/
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Data for the quality measure, the
Application of IRF Functional Outcome
Measure: Change in Mobility Score for
Medical Rehabilitation Patients (NQF
#2634), would be collected using the
MDS, with the submission through the
QIES ASAP system. For more
information on SNF QRP reporting
through the QIES ASAP system, refer to
https://www.cms.gov/Medicare/QualityInitiatives-Patient-AssessmentInstruments/NursingHomeQualityInits/
Skilled-Nursing-Facility-QualityReporting-Program/SNF-QualityReporting-Program-Measures-andTechnical-Information.html.
The calculation of the quality measure
would be based on the data collection
of standardized items to be included in
the MDS. The function items used to
calculate this measure are the same set
of functional status data items that have
been added to the IRF–PAI version 1.4,
for the purpose of providing
standardized resident assessment data
elements under the domain of
functional status. If this quality measure
is finalized for implementation in the
SNF QRP, the MDS would be modified
so as to enable the calculation of these
standardized items that are used to
calculate this proposed quality measure.
The collection of data by means of the
standardized items would be obtained at
admission and discharge. The
standardized items used to calculate
this quality measure do not duplicate
existing items currently used for data
collection within the MDS. The quality
measure and standardized data element
specifications for the Application of IRF
Functional Outcome Measure: Change
in Mobility Score for Medical
Rehabilitation Patients (NQF #2634) is
available on the SNF QRP Measures and
Technical Information Web site at
https://www.cms.gov/Medicare/QualityInitiatives-Patient-AssessmentInstruments/NursingHomeQualityInits/
Skilled-Nursing-Facility-QualityReporting-Program/SNF-QualityReporting-Program-Measures-andTechnical-Information.html.
(c) Application of IRF Functional
Outcome Measure: Discharge Self-Care
Score for Medical Rehabilitation
Patients (NQF #2635)
This quality measure is an application
of the outcome quality measure
finalized in the IRF QRP entitled, IRF
Functional Outcome Measure: Discharge
Self-Care Score for Medical
Rehabilitation Patients (NQF #2635).
The quality measure estimates the
percentage of SNF residents who meet
or exceed an expected discharge self-
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care score. A summary of this quality
measure can be accessed on the NQF
Web site at https://
www.qualityforum.org/qps/2635.
Detailed specifications for the quality
measure can be accessed at https://
www.qualityforum.org/ProjectTemplate
Download.aspx?SubmissionID=2635.
As previously noted, residents
seeking care in SNFs include
individuals whose illness, injury, or
condition has resulted in a loss of
function, and for whom rehabilitative
care is expected to help regain that
function. Several studies found patients’
functional outcomes vary based on
treatment by physical and occupational
therapists. Therapy was associated with
greater functional gains, shorter stays,
and a greater likelihood of discharge to
community. Among SNF residents
receiving rehabilitation services, the
amount of treatment prescribed can vary
widely, and this variation is not
associated with resident characteristics.
This variation in rehabilitation services
supports the need to monitor SNF
resident’s functional outcomes, as we
believe there is an opportunity for
improvement in this area.
The outcome quality measure,
Application of IRF Functional Outcome
Measure: Discharge Self-Care Score or
Medical Rehabilitation Patients (NQF
#2635), requires the collection of
functional status data at admission and
discharge by trained clinicians using
standardized resident assessment data
elements such as eating, oral hygiene,
and lower body dressing. These self-care
items are daily activities that clinicians
typically assess at the time of admission
and discharge to determine residents’
needs, evaluate resident progress, and
prepare residents and families for a
transition to home or to another
provider. The self-care function data
elements are coded using a 6-level
rating scale that indicates the resident’s
level of independence with the activity;
higher scores indicate more
independence.
The functional assessment items
included in the outcome quality
measures were originally developed and
tested as part of the Post-Acute Care
Payment Reform Demonstration version
of the CARE Item Set, which was
designed to standardize assessment of
patients’ status across acute and postacute providers, including SNFs, HHAs,
IRFs, and LTCHs.
This outcome quality measure also
requires the collection of risk factors
data, such as resident functioning prior
to the current reason for admission,
bladder continence, communication
ability, and cognitive function at the
time of admission.
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36583
A cross-setting function TEP
convened by our measure development
contractor on September 9, 2013
provided input on the initial technical
specifications of this proposed quality
measure, the Application of IRF
Functional Outcome Measure: Discharge
Self-Care Score for Medical
Rehabilitation Patients (NQF #2635).
The TEP was supportive of the
implementation of this measure and
supported CMS’s efforts to standardize
patient/resident assessment data
elements. The TEP 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.
The MAP met on December 14 and
15, 2015, and provided input on the
proposed measure, Application of IRF
Functional Outcome Measure: Discharge
Self-Care Score for Medical
Rehabilitation Patients (NQF #2635) for
use in the SNF QRP. The MAP
recognized that this quality measure is
an adaptation of a currently endorsed
measure for the IRF population, and
encouraged continued development to
ensure alignment of this measure across
PAC settings. The MAP also noted there
should be some caution in the
interpretation of measure results due to
patient/resident differentiation between
facilities. The MAP also stressed the
importance of considering burden on
providers when measures are
considered for implementation. The
MAP also noted possible duplication as
the MDS already includes function data
elements. The data elements for the
proposed measure are similar, but not
the same as the existing MDS function
data elements. The data elements for the
measures include those that are the
proposed standardized assessment data
elements for function. The MAP’s
overall recommendation was to
‘‘encourage further development.’’ More
information about the MAP’s
recommendations for this measure is
available at https://
www.qualityforum.org/WorkArea/
linkit.aspx?LinkIdentifier=id&
ItemID=81593.
Since the 2015 MAP’s review and
recommendation for further
development, we have continued to
develop this measure including
soliciting input via a TEP, proving a
public comment opportunity and
providing an update on measure
development to the MAP via the
feedback loop. More specifically, our
measure development contractor
convened a SNF-specific TEP on May 5,
2016 to provide further input on the
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technical specifications of this quality
measure by reviewing the IRF
specifications and the specifications of
competing and related function quality
measures. Overall, the TEP was
supportive of the measure. Specifically,
they supported the risk adjustors,
suggested some additional risk
adjustors, supported the exclusion
criteria and supported CMS’s efforts to
standardize patient/resident assessment
data elements. The SNF-specific
function TEP 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.
We also solicited stakeholder
feedback on the development of this
measure by means of a public comment
period open from October 7, 2016 until
November 4, 2016. There was general
support of the measure concept and the
importance of functional improvement.
Comments on the measure varied, with
some commenters supportive of the
measure, while others were either not in
favor of the measure, or in favor of
suggested potential modifications to the
measure specifications. Some comments
focused on suggestions for additional
risk adjustors, and the data elements.
The public comment summary report
for the measure is available on the CMS
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 also engaged with stakeholders
when we presented an update on the
development of this quality measure to
the MAP on October 19, 2016, during a
MAP feedback loop meeting. Slides
from that meeting are available at https://
www.qualityforum.org/WorkArea/
linkit.aspx?
LinkIdentifier=id&ItemID=83640.
During the development of this
measure, we monitored and reviewed
NQF-endorsed measures that are
competing and related. We identified
six competing and related quality
measures focused on self-care functional
improvement for residents in the SNF
setting entitled: (1) CARE: Improvement
in Self Care (NQF #2613); (2) Functional
Change: Change in Self-Care Score (NQF
#2286); (3) Functional Status Change for
Patients with Shoulder Impairments
(NQF #0426); (4) Functional Status
Change for Patients with Elbow, Wrist
and Hand Impairments (NQF #0427); (5)
Functional Status Change for Patients
with General Orthopedic Impairments
(NQF #0428); and (6) Change in Daily
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Activity Function as Measures by the
AM–PAC (NQF #0430).
As described above, we reviewed the
technical specifications for these six
measures and compared them with the
specifications for the quality measure,
Application of IRF Functional Outcome
Measure: Discharge Self-Care Score for
Medical Rehabilitation Patients (NQF
#2635) and, as described in detail above,
we noted the following differences in
the technical specifications: (1) The
number of risk adjustors and variance
explained by these risk adjustors in the
regression models; (2) the use of
functional assessment items that were
developed and tested for cross-setting
use; (3) the use of items that are already
on the MDS 3.0 and what this means for
burden; (4) the handling of missing
functional status data; and (5) the use of
exclusion criteria that are baseline
clinical conditions.
Consistent with the other functional
outcome measures, the specifications for
this quality measure, Application of IRF
Functional Outcome Measure: Discharge
Self-Care Score for Medical
Rehabilitation Patients (NQF #2635),
were developed based on our literature
review, input from technical expert
panels, public comment feedback and
data analyses. The details about the
specifications for the measures
described above also apply to this
quality measure. Overall, the TEP
supported the use of a risk adjustment
model that addressed prior functioning,
admission functioning, prior diagnosis
and comorbidities. In addition, they
supported exclusion criteria that would
address functional improvement
expectations of residents.
Our measure developer contractor
presented and discussed these technical
specification differentiations during the
May 6, 2016 TEP meeting to obtain TEP
input on preferred specifications for
valid functional outcome quality
measures. The differences in measure
specifications and the TEP feedback are
presented in the TEP Summary Report,
which is available at https://
www.cms.gov/Medicare/QualityInitiatives-Patient-AssessmentInstruments/Post-Acute-Care-QualityInitiatives/IMPACT-Act-of-2014/
IMPACT-Act-Downloads-andVideos.html.
Data for the quality measure, the
Application of IRF Functional Outcome
Measure: Discharge Self-Care Score for
Medical Rehabilitation Patients (NQF
#2635), would be collected using the
MDS, with the submission through the
QIES ASAP system. For more
information on SNF QRP reporting
through the QIES ASAP system, refer to
CMS Web site at https://www.cms.gov/
PO 00000
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Medicare/Quality-Initiatives-PatientAssessment-Instruments/NursingHome
QualityInits/Skilled-Nursing-FacilityQuality-Reporting-Program/SNFQuality-Reporting-Program-Measuresand-Technical-Information.html.
The calculation of the proposed
quality measure would be based on the
data collection of standardized items to
be included in the MDS. The function
items used to calculate this measure are
the same set of functional status data
items that have been added to the IRF–
PAI version 1.4, for the purpose of
providing standardized resident
assessment data elements under the
domain of functional status.
The collection of data by means of the
standardized items would be obtained at
admission and discharge. The
standardized items used to calculate
this quality measure do not duplicate
existing items currently used for data
collection within the MDS. The quality
measure and standardized data element
specifications for the Application of IRF
Functional Outcome Measure: Discharge
Self-Care Score for Medical
Rehabilitation Patients (NQF #2635) can
be found on the SNF QRP Measures and
Technical Information Web site at
https://www.cms.gov/Medicare/QualityInitiatives-Patient-AssessmentInstruments/NursingHomeQualityInits/
Skilled-Nursing-Facility-QualityReporting-Program/SNF-QualityReporting-Program-Measures-andTechnical-Information.html.
If finalized for implementation into
the SNF QRP, the MDS would be
modified so as to enable us to calculate
the proposed measure using additional
data elements that are standardized with
the IRF–PAI and such data would be
obtained at the time of admission and
discharge for all SNF residents covered
under a Part A stay.
(d) Application of IRF Functional
Outcome Measure: Discharge Mobility
Score for Medical Rehabilitation
Patients (NQF #2636)
This quality measure is an application
of the outcome quality measure
finalized in the IRF QRP entitled, IRF
Functional Outcome Measure: Discharge
Mobility Score for Medical
Rehabilitation Patients (NQF #2636).
This quality measure estimates the
percentage of SNF residents who meet
or exceed an expected discharge
mobility score. A summary of this
quality measure can be accessed on the
NQF Web site: https://
www.qualityforum.org/qps/2636.
Detailed specifications for this quality
measure can be accessed at https://
www.qualityforum.org/ProjectTemplate
Download.aspx?SubmissionID=2636.
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As previously noted, residents
seeking care in SNFs include
individuals whose illness, injury, or
condition has resulted in a loss of
function, and for whom rehabilitative
care is expected to help regain that
function. Several studies found patients’
functional outcomes vary based on
treatment by physical and occupational
therapists. Therapy was associated with
greater functional gains, shorter stays,
and a greater likelihood of discharge to
community. Among SNF residents
receiving rehabilitation services, the
amount of treatment prescribed can vary
widely, and this variation is not
associated with resident characteristics.
This variation in rehabilitation services
supports the need to monitor SNF
resident’s functional outcomes, as we
believe there is an opportunity for
improvement in this area.
The functional outcome measure,
Application of IRF Functional Outcome
Measure: Discharge Mobility Score for
Medical Rehabilitation Patients (NQF
#2636), requires the collection of
admission and discharge functional
status data by trained clinicians using
standardized resident data elements that
assess specific functional mobility
activities such as bed mobility and
walking. These standardized mobility
items are daily activities that clinicians
typically assess at the time of admission
and/or discharge to determine residents’
needs, evaluate resident progress and
prepare residents and families for a
transition to home or to another care
provider. The standardized mobility
function items are coded using a 6-level
rating scale that indicates the resident’s
level of independence with the activity;
higher scores indicate more
independence.
The functional assessment items
included in the outcome quality
measures were originally developed and
tested as part of the Post-Acute Care
Payment Reform Demonstration version
of the CARE Item Set, which was
designed to standardize assessment of
patient or resident status across acute
and post-acute providers, including
SNFs, HHAs, IRFs, and LTCHs.
This quality measure requires the
collection of risk factors data, such as
resident functioning prior to the current
reason for admission, history of falls,
bladder continence, communication
ability and cognitive function, at the
time of admission.
A cross-setting function TEP
convened by our measure development
contractor on September 9, 2013
provided input on the initial technical
specifications of this quality measure,
Application of IRF Functional Outcome
Measure: Discharge Mobility Score for
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Medical Rehabilitation Patients (NQF
#2636). The TEP was supportive of the
implementation of this measure and
supported our efforts to standardize
patient assessment data elements. The
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 MAP met on December 14 and
15, 2015, and provided input on the
measure, Application of IRF Functional
Outcome Measure: Discharge Mobility
Score for Medical Rehabilitation
Patients (NQF #2636), for use in the
SNF QRP. The MAP recognized that this
quality measure is an adaptation of a
currently endorsed measure for the IRF
population, and encouraged continued
development to ensure alignment of this
measure across PAC settings. The MAP
noted there should be some caution in
the interpretation of measure results due
to patient/resident differentiation
between facilities. The MAP also
stressed the importance of considering
burden on providers when measures are
considered for implementation. The
MAP also noted possible duplication as
the MDS already includes function data
elements. The data elements for the
proposed measure are similar, but not
the same as the existing MDS function
data elements. The data elements for the
measure include those that are the
standardized patient data elements for
function. The MAP’s overall
recommendation was to ‘‘encourage
further development.’’ More information
about the MAP’s recommendations for
this proposed measure is available at
https://www.qualityforum.org/WorkArea/
linkit.aspx?Link
Identifier=id&ItemID=81593.
Since the MAP’s review and
recommendation for further
development, we have continued to
develop this measure including
soliciting input via a TEP, proving a
public comment opportunity and
providing an update on measure
development to the MAP via the
feedback loop. More specifically, our
measure development contractor
convened a SNF-specific TEP on May 5,
2016, to provide further input on the
technical specifications of this quality
measure by reviewing the IRF
specifications and the specifications of
competing and related function quality
measures. Overall, the TEP was
supportive of the measure and
supported our efforts to standardize
patient/resident assessment data
elements. The SNF-specific function
TEP summary report is available at
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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 by means of a public comment
period open from October 7, 2016, until
November 4, 2016. There was general
support of the measure concept and the
importance of functional improvement.
Comments on the measure varied, with
some commenters supportive of the
measure, while others were either not in
favor of the measure, or suggested
potential modifications to the measure
specifications.
The public comment summary report
for the proposed measure is 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 engaged with stakeholders
when we presented an update on the
development of this quality measure to
the MAP on October 19, 2016, during a
MAP feedback loop meeting. Slides
from that meeting are available at https://
www.qualityforum.org/WorkArea/
linkit.aspx?
LinkIdentifier=id&ItemID=83640.
During the development of this
measure, we have monitored and
reviewed the NQF-endorsed measures
that are competing and related. We
identified seven competing and related
quality measures focused on mobility
functional improvement for residents in
the SNF setting entitled: (1) CARE:
Improvement in Mobility (NQF #2612);
(2) Functional Change: Change in
Mobility Score (NQF #2774); (3)
Functional Status Change for Patients
with Knee Impairments (NQF #0422);
(4) Functional Status Change for
Patients with Hip Impairments (NQF
#0423); (5) Functional Status Change for
Patients with Foot and Ankle
Impairments (NQF #0424); (6)
Functional Status Change for Patients
with Lumbar Impairments (NQF #0425);
and (7) Change in Basic Mobility as
Measures by the AM–PAC (NQF #0429).
As described above, we reviewed the
technical specifications for these seven
measures carefully and compared them
with the specifications of the proposed
quality measure, Application of IRF
Functional Outcome Measure: Discharge
Mobility Score for Medical
Rehabilitation Patients (NQF #2636) and
have noted the following differences in
the technical specifications: (1) The
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number of risk adjustors and variance
explained by these risk adjustors in the
regression models; (2) the use of
functional assessment items that were
developed and tested for cross-setting
use; (3) the use of items that are already
on the MDS 3.0 and what this means for
burden; (4) the handling of missing
functional status data; and (5) the use of
exclusion criteria that are baseline
clinical conditions.
Consistent with the other functional
outcome measures, the specifications for
this quality measure, Application of IRF
Functional Outcome Measure: Discharge
Mobility Score for Medical
Rehabilitation Patients (NQF #2636),
were developed based on our literature
review, input from technical expert
panels, public comment feedback and
data analyses. The details about how the
specifications for the measures differ as
described in the previous functional
outcome measure sections, also apply to
this quality measure.
Our measure developer contractor
presented and discussed these technical
specification differentiations during the
May 6, 2016 TEP meeting to obtain TEP
input on preferred specifications for
valid functional outcome quality
measures. The differences in measure
specifications and the TEP feedback are
presented in the TEP Summary Report,
which is available at https://
www.cms.gov/Medicare/QualityInitiatives-Patient-AssessmentInstruments/Post-Acute-Care-QualityInitiatives/IMPACT-Act-of-2014/
IMPACT-Act-Downloads-andVideos.html.
Data for the quality measure, the
Application of IRF Functional Outcome
Measure: Discharge Mobility Score for
Medical Rehabilitation Patients (NQF
#2636), would be collected using the
MDS, with the submission through the
QIES ASAP system. Additional
information on SNF QRP reporting
through the QIES ASAP system can be
found on the CMS Web site at https://
www.cms.gov/Medicare/QualityInitiatives-Patient-AssessmentInstruments/NursingHomeQualityInits/
Skilled-Nursing-Facility-QualityReporting-Program/SNF-QualityReporting-Program-Measures-andTechnical-Information.html.
The calculation of the quality measure
would be based on the data collection
of standardized items to be included in
the MDS. The function items used to
calculate this measure are the same set
of functional status data items that have
been added to the IRF-PAI version 1.4,
for the purpose of providing
standardized resident assessment data
elements under the domain of
functional status.
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The collection of data by means of the
standardized items would be obtained at
admission and discharge. The
standardized items used to calculate
this quality measure do not duplicate
existing items currently used for data
collection within the MDS. The quality
measure and standardized resident data
element specifications for the
Application of IRF Functional Outcome
Measure: Discharge Change in Mobility
Score for Medical Rehabilitation
Patients (NQF #2636) can be found on
the SNF QRP Measures and Technical
Information Web site at https://
www.cms.gov/Medicare/QualityInitiatives-Patient-AssessmentInstruments/NursingHomeQualityInits/
Skilled-Nursing-Facility-QualityReporting-Program/SNF-QualityReporting-Program-Measures-andTechnical-Information.html.
If finalized for implementation into
the SNF QRP, the MDS would be
modified so as to enable us to calculate
the measure using additional data
elements that are standardized with the
IRF-PAI and such data would be
obtained at the time of admission and
discharge for all SNF residents covered
under a Part A stay.
We sought public comments on our
proposal to adopt the four functional
outcome quality measures, entitled
Application of IRF Functional Outcome
Measure: Change in Self-Care Score for
Medical Rehabilitation Patients (NQF
#2633); Application of IRF Functional
Outcome Measure: Change in Mobility
Score for Medical Rehabilitation
Patients (NQF #2634);, Application of
IRF Functional Outcome Measure:
Discharge Self-Care Score for Medical
Rehabilitation Patients (NQF #2635);
and Application of IRF Functional
Outcome Measure: Discharge Mobility
Score for Medical Rehabilitation
Patients (NQF #2636), beginning with
the FY 2020 SNF QRP. All of the
comments we received addressed all
four measures, and our discussion of
them follows.
Comment: Several stakeholders
supported the adoption of all four
functional status quality measures into
the SNF QRP. One commenter noted
that self-care and mobility are of
particular concern for persons with
advanced illness. This commenter
further noted that function affects daily
life and quality of life for both persons
and caregivers, and that tracking this
information during a SNF stay and at
discharge would improve transitions.
The commenter encouraged us to
increase measurement of functional
status for all patients in all settings.
Another commenter who supported the
measures noted that valid and reliable
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measures of functional outcomes are
important for informing treatment
planning. Two commenters supported
all 4 functional status quality measures
in the SNF setting, and noted their
general support for quality measures in
all PAC settings that assess functional
status and the real-life needs of
beneficiaries. These two commenters
believe that these four functional
outcome measures move the SNF QRP
in this direction. Another commenter
stated that having a core set of data
elements will allow for tracking of
function across the continuum of care
and is in alignment with the goals of the
IMPACT Act. Another commenter
supported our efforts to improve quality
of care and ensure appropriate resource
allocation among PAC settings, and
specifically voiced agreement for
adapting the NQF-endorsed functional
outcome measures from the IRF setting
to the SNF setting to align measures
noting the intent of the IMPACT Act.
This commenter stated that measures
should be clinically relevant,
representative for a given setting and
patient population, and meaningful to
patients and families.
Response: We appreciate the
commenters’ support for the four
functional status outcome quality
measures that we proposed to adopt for
the SNF QRP. We agree that patient and
resident functioning in the areas of selfcare care and mobility are clinically
relevant and are an important area of
quality in post-acute care (PAC) settings.
In addition, we believe that examining
resident functioning during the SNF
stay will help SNFs focus on optimizing
residents’ functioning and discharge
planning and support residents’
transitions from the SNF to home or
another setting. Finally, we agree that
valid and reliable measures of
functional outcomes will assist SNFs in
planning treatment aimed at increasing
or maintaining functional status.
Comment: One commenter offered
support for these measures in concept,
but expressed concern that the proposed
measures have not been tested in the
SNF setting. The commenter
recommended that testing across
population types take place prior to any
public reporting to avoid confusion
among providers and consumers.
Response: CMS strongly agrees that
item and quality measure validity and
reliability are important. The self-care
and mobility items underwent several
types of testing across post-acute care
settings, including SNFs, as part of the
Post-Acute Care Payment Reform
Demonstration (PAC PRD). This testing,
which included data from 60 SNFs
(contributing almost 4,000 CARE
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assessments) examined the items’
feasibility, reliability, and validity.
Overall, these results indicate moderate
to substantial agreement on these items.
Details regarding the reliability and
validity testing, can be found in reports
entitled The Development and Testing
of the Continuity Assessment Record
and Evaluation (CARE) Item Set,
Volumes 1 through 3, Continuity
Assessment Record and Evaluation
(CARE) Item Set: Video Reliability
Testing, and Continuity Assessment
Record and Evaluation (CARE) Item Set:
Additional provider-Type Specific
Interater Reliability Analyses. These
reports are available at https://
www.cms.gov/Medicare/QualityInitiatives-Patient-AssessmentInstruments/Post-Acute-Care-QualityInitiatives/CARE-Item-Set-and-BCARE.html.
As part of our quality measure
development work, we conducted
additional reliability and validity
testing, including Rasch analysis, which
showed acceptable reliability and
validity, and these results were
discussed during the May 2016 TEP
meeting and are summarized in the SNF
Function TEP Summary Report, which
is available at https://www.cms.gov/
Medicare/Quality-Initiatives-PatientAssessment-Instruments/
NursingHomeQualityInits/SkilledNursing-Facility-Quality-ReportingProgram/SNF-Quality-ReportingProgram-Measures-and-TechnicalInformation.html. Therefore, given the
overall findings of these reliability and
validity analyses, we believe that the
proposed functional outcome measures
are sufficiently reliable for the SNF
QRP.
In addition, beginning October 1,
2016, SNFs are reporting several of the
self-care and mobility data elements that
are needed to calculate these measures.
The quality measure, an Application of
the Percent of LTCH Patients with a
Functional Assessment and a Care Plan
that Addresses Function (NQF #2631),
was finalized for use in the SNF QRP in
FY 2016 (80 FR 46444 through 46453).
This process measure includes several
of the self-care and mobility items
included in the SNF functional outcome
measures, and we are conducting tests
of the reliability and validity of that
data. We conduct ongoing analysis of
reliability and validity of adopted
measures.
Comment: One commenter did not
support the proposed function measures
because the NQF has not endorsed them
for the SNF setting and the Measure
Applications Partnership (MAP)
recommended continued development.
Two commenters recommended that we
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seek rapid NQF endorsement for the
four outcome measures to remove the
‘‘application of’’ and ‘‘IRF’’ wording
from the measure titles and to prevent
confusion among consumers,
policymakers, and payers when
displayed. One of these commenters
stated that quality performance
outcomes reported by an NQF endorsed
measure in one setting may not
necessarily be comparable to an
‘‘application’’ of the same measure in
another setting due to differences in
patient populations, payment policy,
and specific measure calculation details,
case mix adjustors such as comorbidities, and other measure details.
Another commenter recommended that
the official name of the proposed
measure distinguish them as SNF
quality measures, which would decrease
the public confusion when viewing
them on Nursing Home Compare.
Response: While these measures are
not currently NQF-endorsed for SNFs,
we recognize that the NQF endorsement
process is an important part of measure
development and plan to submit these
four measures for consideration of NQF
endorsement after one full year of data
collection. We initially presented the
four SNF outcome measures to the MAP
in December 2015. After the MAP
meeting, we continued development as
recommended. Our measure developer
contractor convened a SNF Function
TEP in May 2016 and we then requested
and received public comment via the
CMS Measures Management Web site.
In October 2016, we presented a review
of our additional measure development
work to the MAP as part of the feedback
loop to give an update on the measure
development activities.
We appreciate the comments
pertaining to NQF endorsement of the
measures before they are publicly
displayed and comments on the titling
of the proposed functional outcome
measures. With regard to the measure
title, we recognize the confusion of
leveraging the words ‘‘IRF’’ in our title
application when we are collecting for
a SNF population, and we will reassess
the titling for these outcome measures to
decrease confusion among all
stakeholders.
Comment: Several commenters
expressed concern about the added
burden of collecting data for the
functional outcome measures. One
commenter noted that the addition of
the section GG items needed for the
function outcome measures will
increase the time providers need to
complete residents’ assessments. A few
commenters stated that changes in the
MDS as a result of these measures will
involve additional staff time and
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resources for training and monitoring
compliance. One commenter suggested
that we provide financial support for the
additional reporting burden.
Response: We appreciate the
commenters’ concerns associated with
the proposed functional outcome
measures. We recognize that any new
data collection is associated with
burden and take such concerns under
consideration when developing and
selecting quality measures. As we
develop quality measures, we review
existing items and consider the
appropriateness of adding or deleting
any items. We note that some of the data
elements associated with the measure
are already included on the MDS in
section GG, because we adopted a crosssetting function process measure in the
SNF QRP FY 2016 Final Rule (80 FR
46444 through 46453). Three of the selfcare data elements and seven mobility
data elements necessary to calculate that
quality measure, an Application of the
Percent of Long-Term Care Hospital
Patient with a Functional Assessment
and a Care Plan that Addresses Function
(NQF #2631) are used to calculate the
quality measure and are finalized in this
rule as standardized resident assessment
data elements.
Comment: Three commenters noted
that the requirement to assess residents
while utilizing both the section G—
Functional Status and section GG—
Functional Abilities and Goals items on
the MDS is burdensome. One of the
commenters explained that to address
the same functional activities in two
different sections of the MDS, with
different item definitions, and with
different look-back periods, is
excessively burdensome, and introduces
unnecessary risk for reporting errors.
The two other commenters further
suggested that we analyze the section G
mobility and self-care items that address
the same or similar domains in section
GG to identify opportunities to
eliminate the redundant and noncompliant mobility and self-care items
from section G.
Response: We recognize that the items
in section G and section GG address
similar domains of mobility and selfcare. However, for the SNF QRP, we
believe that the section GG items and
the associated 6-level scale will allow us
to better distinguish change at the
highest and lowest levels of functioning
by documenting minimal change from
no change at the low end of the scale.
This is important for measuring progress
in some of the most complex cases
treated in PAC. The items in section GG
were developed with input from the
clinical therapy communities to better
measure the change in function,
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regardless of the severity of the
individual’s functional limitations. To
reduce the potential burden associated
with collecting additional items, we
have included several mechanisms in
the section GG to reduce the number of
items that apply to any one resident.
First, in section GG, there are skip
patterns pertaining to walking and
wheelchair mobility that allow the
clinician to skip items if the resident
does not walk or does not use a
wheelchair, respectively. The skip
patterns mean that only a subset of
section GG items are needed for most
residents. Second, section GG items will
only be collected at admission and
discharge.
Comment: Two comments requested
more detailed information about how
the functional outcome measures could
be used to improve quality and how we
expect to use the information.
Response: We believe that examining
residents’ functional outcomes will help
SNF staff focus on optimizing patients’
functioning and supporting patients’
transition from the SNF to home or
another setting. Furthermore, we believe
that the feedback we provide to SNFs on
these measures will allow providers to
monitor their performance on key
rehabilitation outcomes, relative to
other facilities, and identify
opportunities to improve their quality of
care.
Comment: One commenter voiced
concern about the proposal to include
functional outcome measures that focus
on functional improvement without also
proposing measures that cover SNF
residents who are in the facility for
functional maintenance or the
prevention or slowing of functional
decline. The commenter stated that the
standards of care and goals for patients
in an IRF cannot be adopted for SNFs
unless an additional measure that
focuses on residents covered under
functional maintenance is also adopted.
The commenter further noted that
adoption of the four functional outcome
measures will send the wrong message
to SNFs and indicate they are being
judged solely on whether they improve
residents’ functioning. The commenter
recommends delaying implementation
of these measures until a maintenance
measure can also be implemented
simultaneously. This commenter
disagreed that the exclusion of patients
not receiving physical therapy or
occupational therapy is an appropriate
proxy for SNF residents for whom there
is no expectation of functional
improvement and suggested we
consider another measure that does not
penalize SNFs that provide maintenance
therapy.
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Response: We agree that our measures
should address maintenance and the
prevention or slowing of functional
decline, and we note that the functional
process measure, Application of Percent
of LTCH Patients with an Admission
and Discharge Functional Assessment
and a Care Plan that Addresses Function
(NQF #2631), which is already included
in the SNF QRP measure set, addresses
this topic. The functional process
measure requires that a SNF conduct a
functional assessment at both admission
and discharge and that such assessment
include at least one goal related to
function. Such functional status goals
may focus on maintenance of function,
slowing decline in function or
functional improvement. Likewise, the
proposed discharge functional outcome
measures, Application of the IRF
Function Outcome Measure: Discharge
Self-Care Score for Medical
Rehabilitation Patients (NQF #2635) and
Application of the IRF Function
Outcome Measure: Discharge Mobility
Score for Medical Rehabilitation
Patients (NQF #2636), calculate the
residents’ observed and expected
discharge functional status.
Maintenance of function or slowed
decline in function may be expected
based on the resident’s characteristics
and this would be captured in these
measures. We also support future
quality measurement work that will
assess the development of other
measures that focus on maintaining
function and the slowing of functional
decline.
Finally, we would like to note that the
Nursing Home Quality Initiative
includes two quality measures focused
on functional maintenance and slowing
decline. These measures are reported to
the public on the Nursing Home
Compare Web site and are calculated
using MDS Section G data elements. We
intend to develop similar quality
measures focused on maintenance of
function and decline in function that
would be calculated using section GG
Self-Care and Mobility data elements.
With regard to unintended
consequences, we will monitor potential
unintended consequences of this
exclusion criterion, and take these
suggestions into consideration during
our ongoing efforts to improve our
quality measures.
Comment: One commenter agreed
with the exclusion of residents who do
not have an expectation of functional
improvement for the 2 change
functional outcome measures
(Application of IRF Functional Outcome
Measure: Change in Self-Care for
Medical Rehabilitation Patients (NQF
#2633) and Application of IRF
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Functional Outcome Measure: Change
in Mobility Score for Medical
Rehabilitation Patients (NQF #2634))
and requested clarification as to how we
would identify these residents. The
commenter requested additional detail
regarding residents who qualify for this
exclusion at admission and for residents
whose status changes during the SNF
stay. The commenter noted that to
ensure accurate and appropriate
identification of beneficiaries who
qualify for this exclusion, CMS needs to
provide more detail regarding it. One
commenter stated that we should
provide additional information
regarding how SNFs will be held
accountable if the goal changes from
expecting functional improvement in a
resident to not expecting functional
improvement during the resident’s stay.
Another commenter also voiced concern
that changes in residents’ goals between
admission and discharge are common
and would impact outcomes.
Response: For this exclusion criterion,
we provide the list of medical
conditions that we will use in the Final
Rule Specifications for SNF QRP
Quality Measures document, which is
available at https://www.cms.gov/
Medicare/Quality-Initiatives-PatientAssessment-Instruments/
NursingHomeQualityInits/SkilledNursing-Facility-Quality-ReportingProgram/SNF-Quality-ReportingProgram-Measures-and-TechnicalInformation.html.
We recognize that a resident’s status
or goals may change during the SNF
stay, and the measures include several
exclusions that are applied based on the
resident’s status at discharge to reflect
this change prior to the end of the stay.
For example, a resident may experience
an incomplete stay due to an urgent
medical condition and is discharged to
an acute care hospital. We recognize
that it is challenging to collect discharge
functional assessment data under these
circumstances. For this reason, these
residents are excluded from the four
functional outcome measures. We
would also like to clarify that the
collection of a patient’s goal is simply
to track whether a patient’s goal was
established on admission rather than to
track the expectation of function
improvement.
Another exclusion criterion in the 4
functional outcome measures relates to
residents who are discharged to hospice.
This may be a circumstance where a
resident’s status changed during the stay
due to a new medical diagnosis or an
unexpected worsening of a resident’s
condition. The list of all measure
exclusions and the specifications for
each of these exclusion criteria are
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provided in the Final Rule
Specifications for SNF QRP Quality
Measures document. We will continue
to monitor for other examples as part of
our ongoing quality measure
development work.
Comment: Several commenters
disagreed with one proposed exclusion
criteria, Residents who do not receive
physical or occupational therapy
services. Two commenters suggested
that we adopt more person-centered
criteria that reflect functional
improvement expectations in addition
to or to replace the current proposed
exclusion that focuses on therapy
services. The two commenters stated
that providers who administer therapy
services to residents to maintain, but not
improve function, would have lower
functional improvement scores and the
criterion ‘‘creates a significant
disincentive to provide any physical
therapy (PT) or occupational therapy
(OT) to SNF residents that require
skilled services to maintain or delay
decline in function.’’ One of the two
commenters stated this may be a
disincentive to provide therapy to
residents who fit into the Jimmo class of
beneficiaries who may not improve but
still need SNF services. One of these
commenters recommended that CMS
exclude residents whose aggregate
‘‘Admission Performance’’ mobility
(GG01701) or self-care (GG01301) score
(see Step 1 of the CMS proposed quality
measures algorithms) is greater than or
equal to their ‘‘Discharge Goal’’ mobility
(GG01702) or self-care (GG01302) score.
Another commenter opposed excluding
from the functional outcome measures
residents who do not receive
occupational therapy or physical
therapy.
One commenter who disagreed with
the proposed exclusions criterion
further noted that the exclusion of
‘‘residents who do not receive physical
or occupational therapy services,’’ for
the 4 functional outcome measures is
substantively different than the May
2016 SNF Function TEP discussion, and
the 2016 CMS Measurement
Management Public Comment
document. This commenter recognized
that the exclusion did refer to
‘‘Residents who do not have an
expectation of functional
improvement,’’ which was subsequently
clarified to exclude ‘‘Residents who do
not receive physical or occupational
therapy services.’’ The commentator
expressed that no explanation or data
analysis was provided to justify the
change in the exclusion definition.
Response: We thank the commenters
for their feedback and suggestions. We
acknowledge the commenters’ concern
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about excluding residents who do not
receive physical or occupational therapy
services. As noted in the SNF Function
TEP Report, our measure development
contractor did solicit suggestions from
TEP members about methods to
operationalize exclusion criteria so that
the quality measure would include only
residents who were expected to improve
functional status, and TEP members did
not offer a specific recommendation to
address this issue. For residents who are
expected to improve their functional
abilities, physical and/or occupational
therapy would be part of the resident’s
care plan to assist the resident to relearn
how to perform the activity or to learn
a new way to perform the activity. With
regard to the commenter’s suggestion to
exclude residents whose aggregate
‘‘Admission Performance’’ is greater
than or equal to their ‘‘Discharge Goal,’’
we would like to clarify that the
Function Process Measure requires
SNFs to code at least one Discharge Goal
item on the 5-day admission
assessment. The suggestion would
require SNFs to code all function
Discharge Goal items, which is not
currently required, and this would incur
a significant burden on SNFs.
Comment: MedPAC noted the
importance of monitoring the accuracy
of data that is reported on measures that
assess functional status.
Response: We agree with MedPAC on
the importance of monitoring the
accuracy of functional status data that is
reported to CMS, as data accuracy is
necessary to calculate reliable and valid
quality measures. To that end, we
conduct ongoing analyses of the
assessment data submitted from PAC
providers to ensure accuracy by
examining the reliability and validity of
the data elements on a quarterly basis.
Comment: One commenter cautioned
that the education level and
professional expertise of personnel
collecting SNF functional outcome
measure data are important to consider
when analyzing and drawing
conclusions about the data.
Response: We recognize that each
SNF may have unique workflow issues,
which may mean that data collection
protocols are not exactly alike.
However, we require that SNFs submit
accurate data, and we provide training
and other resources.
Comment: One commenter supported
the general numerator and denominator
definitions proposed for the four
proposed SNF functional outcome
measures.
Response: We appreciate the
commenter’s support.
Comment: One commenter expressed
support for the denominator exclusion
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criteria proposed for the four proposed
SNF functional outcome measures.
Response: We appreciate the
commenter’s support.
Comment: One commenter expressed
concern regarding the exclusion,
‘‘residents who are scored as
independent upon admission,’’ from the
change in self-care score measure and
the inclusion of these residents in the
self-care discharge score measure. The
commenter explained that this will
cause confusion among providers, and
recommended that further education be
offered to providers.
Response: This exclusion criterion
only applies to the two change quality
measures (Application of IRF
Functional Outcome Measure: Change
in Self-Care for Medical Rehabilitation
Patients (NQF #2633) and Application
of IRF Functional Outcome Measure:
Change in Mobility Score for Medical
Rehabilitation Patients (NQF #2634)),
and is related to a measurement issue.
A resident who is independent with
each of the self-care or mobility
activities in section GG at the time of
admission would be coded a 6 on each
of those items, and any improvement in
self-care or mobility skills the resident
achieved during the stay could not be
measured with the same set of function
data elements and rating scale at
discharge. Therefore, residents who are
at the ‘‘ceiling’’ of the self-care or
mobility scale at the start of a SNF stay
are excluded from the respective change
in self-care or change in mobility quality
measure. Including these residents in a
change quality measure may
disadvantage providers serving these
residents, as the change in self-care or
mobility could not be mathematically
higher than zero. We would like to note
that residents who are independent with
all self-care or mobility activities are
included in the discharge self-care and
the discharge mobility quality measures,
and for the discharge quality measures,
maintaining independence with all the
self-care or mobility activities is the
expected outcome. With regard to
provider knowledge about this topic, we
recognize the importance of
comprehensive training and we intend
to provide such training.
Comment: Two commenters noted
that the calculation of the 4 functional
outcome quality measures requires
recoding of ‘‘activity did not occur’’
codes. These commenters expressed
concern about recoding the ‘‘activity did
not occur’’ codes (that is, codes 07, 09,
88) to 01—Dependent, and one of the
two commenters did not support
recoding of missing data as the method
was not clear. [The other commenter
expressed concern that recoding the
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activity not attempted codes to 01 will
not accurately reflect resident status or
change, and that mobility and self-care
tasks being refused, not applicable, or
not attempted due to medical or safety
concerns, does not necessarily mean the
resident is dependent.
Another commenter noted that this
recoding can result in different
statistical and clinical inferences
compared to not recoding items to 01.
The commenter recommended further
detail regarding the use of ‘‘activity did
not occur’’ codes and that an analysis be
conducted that compares the recoding
method to excluding any or all the four
‘‘activity did not occur’’ item responses,
and provide the percentage of patient
stays impacted. The commenter
requested that these results be shared
with stakeholders for comment before
adopting these four proposed functional
outcomes measures.
Response: We appreciate the concerns
presented by commenters about
handling missing data and the ‘‘activity
not attempted’’ codes. ‘‘Activity did not
occur’’ codes and missing data are
recoded to 01. Dependent to calculate
the quality measure. The rationale for
this recoding relates to the likelihood
that when a resident cannot attempt an
activity due to a medical condition or
safety concern, that the resident often
would have required significant
assistance from one or more helpers to
complete the activity had the activity
been attempted. Thus, the resident
would have been considered dependent
with the activity. Likewise, the code 09,
‘‘Not applicable,’’ is used to indicate
that the activity was not attempted, and
that the resident did not perform the
activity prior to the current illness,
injury or exacerbation. We believe our
re-coding approach is better than
excluding any resident stays that
include one or more items coded as
‘‘activity not attempted,’’ because
excluding these residents would
exclude residents who, in general, are
lower functioning. That said, we are
exploring other methods of recoding
items when an activity was not
attempted. We believe it is important to
continue to monitor the reliability and
validity of the functional outcome
measures, including issues such as this
one. Ongoing analyses of these items
and outcomes may provide support for
an alternative approach to item recoding
in the future.
Comment: One commenter
conditionally supported the inclusion of
only Medicare Part A residents, but
requested that we consider revising this
criterion in the future to include SNF
Medicare Advantage enrollees. The
commenter noted that with growing
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enrollment in the Medicare Advantage
program, excluding these beneficiaries
may result in the outcome measure not
adequately representing quality of care
for the entire SNF. The commenter
recommended that we pursue the
regulatory and/or statutory approaches
necessary to make data reporting and
analysis possible include the Medicare
Advantage population, and that this was
essential so that functional outcomes of
all Medicare beneficiaries (Part A or
Medicare Advantage) reported by these
proposed measures would more
accurately represent the quality of care
provided by a SNF. Two commenters
commented that the description of the
proposed measures should specify that
the measure estimates outcomes for the
Medicare Part A coverage benefit, as
opposed to the admission and discharge
from a nursing home. The commenter
noted this was important because a
Medicare Part A resident may remain in
the nursing facility at the end of the Part
A coverage period, so while the resident
may be ‘‘discharged’’ from Part A
benefits, he/she is not ‘‘discharged’’
from the nursing home.
Response: The commenter is correct
that the functional outcome measures
apply only to Medicare Part A SNF
residents. The assessment data for the
functional outcome measures would be
collected at the start of the SNF Part A
stay and the end of the Part A stay. We
appreciate the suggestion to expand the
proposed measure collection to a
Medicare Advantage population. We
will take the recommendation to expand
the measure population into
consideration in future measure
development efforts. Additional
discussion of the expansion of quality
measures to include all residents
regardless of payer status can be found
in section III.D.2.k.5
Comment: One commenter noted
there are meaningful SES, clinical, or
other differences between traditional
Medicare versus Medicare Advantage
(MA) enrollees that could affect
comparisons between facilities with
different proportion of Medicare
Advantage and Part A stays. The
commenter further requested that this
possibility should be investigated.
Response: For a discussion of social
risk factors in the SNF QRP, please see
the discussion in section III.D.2.b.1 of
this rule.
Comment: One commenter stated that
the calculation of the four proposed
measures is complex, particularly with
respect to the calculation of the
expected discharge functional status
score using a formula, which may result
in providers not understanding the
precise target outcome. The commenter
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further noted that the measure scores
might be inappropriately compared
across PAC settings even though they
are calculated differently using different
risk adjustor coefficients. The
commenter stated that significant
education and ongoing feedback for
providers will be necessary when these
measures are implemented to improve
quality of care and suggested that we
simplify the calculations for the
functional outcome measures.
Another commenter voiced concern
that the calculated ‘‘Expected score’’ for
the function outcome measures would
be an inaccurate point of comparison if
the risk adjustors were not accurate. The
commenter suggested that we fully
evaluate the risk adjustors in a large
data sample to ensure they are
appropriate prior to implementation.
The commenter also suggested that we
should have a transparent process that
is clearly communicated with
stakeholders to clarify and refine risk
adjustors for the functional outcome
measures. The commenter noted that if
there is not a refinement period of the
risk adjustors, providers will be
penalized for their performance on these
measures at the same time that we are
examining the risk adjustors’ accuracy
and possibly modifying them.
Response: We continuously examine
the performance of quality measures
and revise measures, including risk
adjustment, to optimize measurement of
quality ensuring that our measures and
their components are accurate. We also
continue to seek stakeholder input as
we conduct our internal measure
maintenance work. Further, we agree
that education is important and
necessary to help SNFs, as well as other
PAC settings, understand how the four
proposed functional outcome measures
will be calculated. To that end, we
intend to provide training materials
through the CMS webinars, open door
forums, and help desk support. The
expected scores are calculated using the
results of our risk-adjustment models.
During our May 2016 TEP, we discussed
the risk adjustment models extensively,
and these discussions included a review
of our analyses of the mean admission,
discharge and change for the self-care
and mobility scores for each risk
adjustor. We also reviewed the risk
adjustors for competing measures. These
discussions are summarized in the SNF
Function Summary TEP report, which is
available at https://www.cms.gov/
Medicare/Quality-Initiatives-PatientAssessment-Instruments/
NursingHomeQualityInits/SkilledNursing-Facility-Quality-ReportingProgram/SNF-Quality-ReportingProgram-Measures-and-Technical-
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Information.html. We believe the risk
adjustment model is methodologically
strong.
Comment: One commenter generally
supported the proposed risk adjustment
approach for the four proposed
functional outcome measures, but
requested additional items to address
social risk, such as Medicare-Medicaid
status. The commenter recommended
testing of the risk adjustment
methodology to ensure it adjusts for
meaningful differences. Another
commenter suggested that we risk adjust
the four proposed functional outcome
measures for social and environmental
factors, such as social support and an
accessible home environment. The
commenter stated that by not adjusting
for social and environmental risk
factors, we might be creating conflicting
incentives between functional
improvement and resource use
measures. Another commenter
supported the use of other assessment
data, such as mode of communication
and gateway processes. One commenter
expressed support for the proposed risk
adjustors for the functional outcome
measures, but recommended that we
reassess all risk adjusters once the new
MDS data are submitted.
Response: We selected the risk factors
based on literature review, clinical
relevance, TEP input, and empirical
findings from the PAC–PRD analyses.
For a discussion of social risk factors in
the SNF QRP, we refer the commenter
to section III.D.2.b.1. of this rule. We
agree with the importance of testing and
continuously monitoring the risk
adjustment models so that the
functional outcome quality measures
reflect true differences in the
effectiveness of treatments provided by
SNFs. We will continue to examine the
performance of our quality measures
and revise risk adjustment approaches
as necessary to optimize quality
measurement.
Comment: Several commenters
supported the use of selected risk
adjustors and specifically noted that
they support risk adjustors in the areas
of age, admission function score,
medical conditions, and impairments.
One commenter stated that the proposed
list of comorbidities used for risk
adjustment of the functional outcome
measures appears comprehensive but
requested further detail of the source of
the comorbidities data and the proposed
look-back period for including the
comorbidities. One commenter
supported the inclusion of prior
functioning and prior device use items
for risk adjustment in the functional
outcome measures but was concerned
that the collection of this data will add
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administrative burden. Some
commenters noted that coding for
addition risk adjusters might cause
additional provider burden. One
commenter supported the inclusion of
new data elements for risk adjustment,
specifically the prior functioning, prior
device use, primary medical condition
category and prior surgery items, but
under the condition that we
appropriately account for the additional
reporting burden within the SNF PPS
rates. Another commenter expressed
concern about the accuracy and burden
of collecting the items that refer to a
time period outside the defined period
of the SNF stay. One commenter stated
that SNFs would not know what
determines the model estimate, and
proposed that we provide the
benchmark for comparison prior to the
fiscal year. In addition, this commenter
questioned the use of a statistical model
since section GG includes the
establishment of goals, arguing
outcomes could be compared to the
SNF’s own established goals. Other
commenters requested that we use the
median discharge scores instead of the
mean values as a way to avoid the
impact of outliers on the expected score.
Another commenter expressed that poor
risk adjustment would penalize SNFs
that provide care to medically-complex
and socioeconomically disadvantaged
residents, and threaten access to care.
Response: We agree with commenters
on the importance of risk adjustment as
functional outcomes can vary based on
residents’ demographic and admission
clinical status. Risk adjustment allows
for the comparison of functional
outcomes across SNFs. As with other
risk adjustors, both prior functioning
and prior device use were identified as
important risk adjustors for the
functional outcome measures through
data analyses. In development of the
quality measures, we selected riskadjustors including comorbidities, and
other health and prior functioning
items, based on evidence in the
literature, stakeholder comments during
TEPs, public comment opportunities
statistical findings, and input from
subject matter experts. As we develop
and refine quality measures, we review
existing items, listen to feedback from
providers, and consider the
appropriateness of adding or deleting
any items to the MDS. Reduction of
burden is an important consideration as
we develop and refine quality measures,
which includes risk adjustors for
outcome measures. We would like to
emphasize the importance of risk
adjustment as functional outcomes can
vary based on residents’ demographic
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and clinical factors. Prior functioning is
an important predictor of functional
improvement and this is data routinely
collected by therapists when developing
a resident’s care plan.
We agree with the commenter that it
is important for risk adjustment of
quality measures to be reliable and
valid. As mentioned previously, the risk
adjustors were determined based on
data analysis, stakeholder input,
literature review, clinical relevance and
public comment. As noted above, we
agree with the commenter for the need
to re-examine the risk adjustment model
when additional data become available.
In addition, we appreciate the
continued involvement of stakeholders
in all phases of measure development
and implementation.
We refer the commenter to the
Specifications for SNF QRP Quality
Measures and Standardized Resident
Assessment Data Elements document
available at https://www.cms.gov/
Medicare/Quality-Initiatives-PatientAssessment-Instruments/
NursingHomeQualityInits/SkilledNursing-Facility-Quality-ReportingProgram/SNF-Quality-ReportingProgram-Measures-and-TechnicalInformation.html for additional details
about the risk adjustment approach.
With regard to the use of the
discharge goals, we would like to note
that the quality measure, Application of
Percent of Long-Term Care Hospital
Patients with an Admission and
Discharge Functional Assessment and a
Care Plan that Addresses Function (NQF
#2631), requires documentation of only
one goal. Using goals to determine
outcomes would require SNFs to
complete all goals in section GG, which
would add significant burden. With
regard to the suggestion of using the
median rather than the mean value, we
will examine this approach as we
examine additional data to determine
how it affects quality measure scores.
We would like to note that the risk
adjustment model for these outcomes
includes up to 60 risk-adjusters, and
includes more clinically and
statistically relevant adjusters for
function than other risk-adjusted
functional outcomes measures. We will
pursue ongoing monitoring and analysis
of these proposed functional outcome
measures to identify any potential
disparities across patient and facility
characteristics.
Comment: One commenter was
concerned that the PAC PRD data from
34 nursing facilities and other providers
used to develop the risk adjustors for
the functional outcome measures for
SNFs were inadequate. The commenter
felt that a larger volume of data is
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necessary to verify the current risk
adjustors. The commenter
recommended that we reevaluate these
risk adjustors on a regular basis to
ensure their accuracy and to ensure that
SNF providers are not evaluated and
penalized in the future based on
inadequate risk adjustment. The
commenter also stated that suggestions
offered during a Technical Expert Panel
should be tested with data before
becoming part of the quality measure
and payment system.
Response: As previously discussed,
the risk adjustors were selected based
on literature review, clinical relevance,
Technical Expert Panel input, public
comment opportunities, and empirical
findings from the data analyses from 60
SNFs and approximately 4,000 resident
assessments. Based on our
comprehensive approach to developing
the models and the alignment between
these models and the IRF models, we
believe that our models are adequate for
risk adjustment for the four SNF
functional outcome measures. As part of
measure maintenance and evaluation,
we routinely analyze data to monitor the
performance of implemented quality
measures, including risk adjustment
models, and thus we agree with the
commenter that we should re-examine
the risk adjustment model when
national data become available. We aim
to develop accurate and fair measures
and we continuously examine the
performance of quality measures and
revise measures, including risk
adjustment, to optimize measurement of
quality.
Comment: Some commenters
requested that additional risk adjusters
be included in the proposed outcome
measures’ statistical models, and that
each model includes a similar set of risk
adjusters. One commenter requested
that cognition and age be included in
the model, while other commenters
were concerned that ‘‘prior functioning:
functional cognition’’, ‘‘fall history’’,
and ‘‘prior functioning: mobility’’ were
not included in the self-care model.
Another commenter disagreed with the
specification ‘‘independent’’ as the
reference category since it appeared this
also included residents with an
unknown prior functional status. The
commenter explained that in PAC
settings, it is more likely that a patient
who cannot report their prior functional
status was more dependent rather than
more independent before being
admitted, so should not be grouped into
the ‘‘independent’’ reference category.
Response: The majority of risk
adjusters are the same in both the selfcare and mobility functional outcome
models. With regard to the variables
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included in the mobility models, but not
included in the self-care models, these
variables were all tested in the self-care
model, but they were not statistically
significant predictors of the change in
self-care scores or the discharge self-care
scores. As noted above, we will
continue to examine the risk adjustment
models when more data become
available. We would also like to clarify
that cognition and age are included in
risk adjustment models and that the
Brief Interview for Mental Status (BIMS)
specifically accounts for functional
variation associated with cognition
status. Regarding the reference group
‘‘independent’’ for the prior functional
status risk adjustors, we appreciate the
commenter’s suggestion and will take it
into consideration.
Comment: Several commenters
requested additional information
regarding coding of some of the risk
adjustment variables. One commenter
requested additional detail about how a
SNF would identify the appropriate
primary medical condition category for
the proposed new MDS item I0020,
which is used for risk adjustment of the
functional outcome measures. The
commenter stated that the current
approach of requiring the provider to
identify one of the 13 primary medical
diagnoses or list an ICD–10 code is
burdensome and suggested rather a
provider should enter the applicable
ICD–10 code onto the MDS, which
would then be mapped by the MDS
grouper software to identify the
applicable condition. The commenter
further stated that the admitting
diagnosis for admission to a SNF may
not be directly relevant to the diagnosis
associated with mobility and self-care
treatment plans and goals, unlike with
IRFs, and recommended that we revise
this section of the MDS to request
providers report the primary medical
condition associated with mobility and
self-care treatment. Another commenter
requested more clarification on the use
ICD–10 codes in defining the primary
medical condition category, and further
noted concern that these codes are more
prevalent in the IRF setting, compared
to the SNF setting. This commenter
expressed concern about where the
diagnosis group information will come
from and explained that ICD–10 coding
is complete and requires multiple levels
of consideration and clinical input.
Another commenter requested
information on how ‘‘medically
complex’’ is defined. Other commenters
requested further clarification on where
information for items such as
mechanical ventilation will be acquired,
how ‘‘major surgery’’ is defined and
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how the interaction between primary
diagnosis and SNF admission functional
status is determined in risk adjustment.
Response: We appreciate the
commenters’ concerns regarding coding
of the primary medical conditions as
well as the coding of mechanical
ventilation and major surgery for risk
adjustment. As previously noted, we
intend to provide guidance on these
issues as part of our comprehensive
training. Some of these variables were
added to the IRF–PAI Version 1.4 when
the functional outcome measures were
adopted in the IRF QRP, and since these
primary medical conditions will be
aligned across the IRF and SNF settings,
providers can get a preview of the
coding guidance and definitions in the
IRF PAI Training Manual on page J–5,
which is available at https://
www.cms.gov/Medicare/QualityInitiatives-Patient-AssessmentInstruments/IRF-Quality-Reporting/IRFPAI-and-IRF-QRP-Manual.html. The
RAI manual will also be updated with
all timely and accurate information.
With regard to the primary medical
condition diagnosis, which are risk
adjustors for the four functional
outcome measures, the proposed MDS
effective October 1, 2018 does include
primary diagnosis as a data element.
Comment: One commenter noted that
the use of the term ‘‘Primary
rehabilitation diagnosis’’ does not
recognize that not all patients are
admitted for rehabilitation.
Response: We would like to clarify
that the term ‘‘Primary rehabilitation
diagnosis’’ is not used as part of the four
proposed functional outcome measures.
Comment: One commenter supported
the use of the BIMS for risk adjustment
of the functional outcome measures,
stating that learning and memory
deficits can significantly impact the
rehabilitation of residents with
functional impairments. However, the
commenter stated that the BIMS is
designed as a resident interview and
that the use of the BIMS alone as risk
adjustment in the SNF setting would be
problematic due to the high percentage
of residents unable to complete the
BIMS as a result of severe cognitive or
physical impairments. The commenter
stated that a SNF resident’s inability to
complete the BIMS is often associated
with slower rates and lesser degrees of
functional improvement than those
residents that can complete the BIMS.
This commenter requested clarification
as to how we will address risk
adjustment for these residents and
suggested excluding SNF residents that
cannot complete the BIMS items if they
are not accounted for in the current risk
adjustment model. The commenter also
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suggested development of standardized
patient assessment data for clinician
observation of cognitive function and
mental status in the future to account
for residents who are unable to
complete the BIMS.
Response: We appreciate the
commenter’s feedback regarding the use
of the BIMS in risk adjustment for the
functional outcome measures. We
would like to clarify that in the MDS
3.0, if a resident is unable to complete
the BIMS, the provider is directed to
administer the Staff Assessment for
Mental Status (C0700–C1000), and the
data from the staff assessment for
mental status is used for cognitive status
risk adjustment when the BIMS score is
not available. With regard to the
residents who are unable to be
interviewed for the BIMS due to
communication disorders, the BIMS can
also be administered in writing. Further,
we note that communication
impairment is also a risk adjusters the
self-care and mobility models. With
regard to the residents who are unable
to be interviewed for the BIMS due to
communication disorders, we note that
communication impairment is also a
risk adjusters the self-care and mobility
models.
Comment: MedPAC noted the
importance of using a consistent
definition for ‘‘at admission’’ to enable
accurate comparisons across PAC
providers. The commenter stated that
we should require that the assessment
be completed within 3 days of
admission and stated that the Day-5
assessment in SNFs is problematic since
it can be conducted between Day 1 and
Day 8.
Response: We appreciate the
importance of data collection within
consistent assessment time frames and
we maintain a consistent approach to
collecting information on or as close to
the time of admission as possible. For
example, on the 5-day assessment in
SNF, the assessment time frame for the
section GG Self-Care and Mobility data
items on the MDS is 3 calendar days at
the time of admission (first 3 calendar
days) and discharge (day of discharge
and the 2 days prior to the day of
discharge). Therefore, across all PAC
assessment instruments, we are
collecting on a patient’s usual
performance within that three-day time
period. That is, the 3-day assessment
time frame for the section GG Self-Care
and Mobility data elements is
standardized across the three
institutional PAC settings, SNFs, IRFs
and LTCHs.
Comment: Two commenters requested
that we ensure that the four quality
measures are consistently reviewed for
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reliability, accuracy, and applicability to
patients in different PAC settings to
develop standards to compare quality
across PAC settings. The commenters
requested that we consider whether
variation in training and practices
among providers in various PAC
settings affects data entry processes for
the MDS and other PAC instruments,
and whether this undermines the
comparability of the proposed
functional outcome measures. Another
commenter requested that we provide
clear language that cross-setting
applications are not valid at this time
due to differences in patient
populations, payment policy, and
specific measure calculation details.
One commenter voiced concern that
additional time, testing, and training
may be necessary to ensure measures
are implemented consistently across
different settings that use very different
processes, scales, definitions, and time
frames, to allow data to be comparable
across settings.
One commenter requested that we use
the same set of definitions for
standardized and interoperable
functional assessment data in each PAC
setting. The commenter further stated
that this would mitigate providers
collecting and calculating data for these
measures differently across settings. The
commenter was concerned
discrepancies could result in
unintended consequences with regard to
payment and public reporting.
Response: We agree with the
commenters that the accurate collection
of functional assessment data is
important across all PAC settings.
Providers are required to submit
accurate data to us, and we provide
training and other resources. Providers
should collect data in a manner that fits
with the clinical workflow within their
facility. With regard to the concern that
reporting variability may impact
comparability across facilities, we agree
that comprehensive training is needed
to ensure accuracy of data collection
and interpretation as well as successful
implementation of new measures. As
with previous measures, we will
provide training sessions, training
manuals, Webinars, open door forums,
help desk support, and a Web site that
hosts training information (https://
www.youtube.com/user/CMSHHSgov).
At this time, we are adopting these
measures into the SNF QRP, which is a
pay-for-reporting program, and have not
specified a timeframe for public
reporting of these measures for SNFs.
With regard to the request for
standardized and interoperable
functional assessment data in each PAC
setting, we agree with the commenter
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about the importance of accurate
collection of standardized patient
assessment data across the PAC settings.
The item definitions are the same across
PAC settings, and we continue to work
to harmonize the coding guidance for
the standardized assessment data
elements as we believe that this is key
to the collection of accurate data.
Comment: One commenter supported
our proposal to collect data on the
proposed function quality measures
through the MDS using the QIES ASAP
system.
Response: We appreciate the
commenter’s support.
Final Decision: After careful
consideration of the public comments
received, we are finalizing our proposal
to adopt the four functional outcome
measures, Application of IRF Functional
Outcome Measure: Change in Self-Care
Score for Medical Rehabilitation
Patients (NQF #2633), Application of
IRF Functional Outcome Measure:
Change in Mobility Score for Medical
Rehabilitation Patients (NQF #2634), the
Application of IRF Functional Outcome
Measure: Discharge Self-Care Score for
Medical Rehabilitation Patients (NQF
#2635), the Application of IRF
Functional Outcome Measure: Discharge
Mobility Score for Medical
Rehabilitation Patients (NQF #2636),
beginning with the FY 2020 SNF QRP.
h. Modifications to Potentially
Preventable 30-Day Post-Discharge
Readmission Measure for Skilled
Nursing Facility (SNF) Quality
Reporting Program (QRP)
In the FY 2017 SNF PPS final rule (81
FR 52030 through 52034), we adopted
the Potentially Preventable 30-Day PostDischarge Readmission Measure for SNF
QRP. This measure was developed to
meet section 1899B(d)(1)(C) of the Act,
which calls for measures to reflect allcondition risk-adjusted potentially
preventable hospital readmission rates
for PAC providers, including SNFs.
This measure was specified to be
calculated using 1 year of Medicare FFS
claims data; however, in the FY 2018
SNF PPS proposed rule (82 FR 21057)
we proposed to increase the
measurement period to 2 years of claims
data. The rationale for this change is to
expand the number of SNFs with 25
stays or more, which is the minimum
number of stays that we require for
public reporting. Furthermore, this
modification will align the SNF measure
more closely with other potentially
preventable hospital readmission
measures developed to meet the
IMPACT Act requirements and adopted
for the IRF and LTCH QRPs, which are
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calculated using 2 consecutive years of
data.
We also proposed to update the dates
associated with public reporting of SNF
performance on this measure. In the FY
2017 SNF PPS final rule (81 FR 52030
through 52034), we finalized initial
confidential feedback reports by October
2017 for this measure based on 1
calendar year of claims data from
discharges during CY 2016 and public
reporting by October 2018 based on data
from CY 2017. However, to make these
measure data publicly available by
October 2018, we proposed to shift this
measure from calendar year to fiscal
year, beginning with publicly reporting
on claims data for discharges in fiscal
years 2016 and 2017.
Additional information regarding the
Potentially Preventable 30-Day PostDischarge Readmission Measure for SNF
QRP can be found at https://
www.cms.gov/Medicare/QualityInitiatives-Patient-AssessmentInstruments/NursingHomeQualityInits/
Skilled-Nursing-Facility-QualityReporting-Program/SNF-QualityReporting-Program-Measures-andTechnical-Information.html.
We sought public comment on our
proposal to increase the length of the
measurement period and to update the
public reporting dates for this measure.
A discussion of these comments, along
with our responses, appears below.
Comment: We received several
comments on our proposal to expand
the data reporting period for SNFs from
one year to 2 years for the Potentially
Preventable 30-Day Post-Discharge
Readmission Measure for SNF QRP.
MedPAC and other commenters
supported this proposal because it
would increase the number of SNFs
included in public reporting. Other
commenters expressed support for
aligning the SNF measure with the
potentially preventable hospital
readmission measures we have adopted
for the IRF and LTCH QRPs, which also
use 2 years of data.
Some commenters were concerned
that the greater lag associated with
expanding the reporting period to 2
years would make the measure less
valuable or sensitive to quality
improvement. One commenter was
concerned that publicly reporting
performance data based on 2 years of
data may not accurately reflect the
quality of care that SNFs are currently
furnishing. Some commenters were
opposed to the proposal because it
would not align with measurement
periods used in other SNF quality
measures. One commenter was
specifically opposed to shifting this
measure to a fiscal year cycle because
most SNF data are based on calendar
years, noting that inconsistent time
periods may create confusion. Another
commenter did not oppose the shift to
fiscal year as long as confidential
feedback reports and review and
correction timelines would not be
negatively impacted.
Response: We appreciate commenters’
concerns that increasing the
measurement period from one year to 2
years would create a greater delay
between data collection and public
reporting of this measure. However, we
agree with those commenters that noted
the benefit of increasing the number of
SNFs for public reporting purposes
outweighs the concerns associated with
the data delays. We also agree with
commenters that this change would
better align the SNF measure with the
other PPR measures developed to meet
the requirements of the IMPACT Act.
We also note that changing the public
reporting dates for this measure from
calendar to fiscal year will not impact
providers’ confidential feedback reports
or the length of time they have to review
and correct the data to be made publicly
available.
Final Decision: After careful
consideration of the public comments,
we are finalizing our proposal to
increase the measurement period from 1
year to 2 years for the calculation of the
Potentially Preventable 30-day Post-Post
Discharge Readmission Measure for SNF
QRP measure. We are also finalizing our
proposal to shift from calendar to fiscal
years for public reporting of this
measure.
i. SNF QRP Quality Measures Under
Consideration for Future Years
In the FY 2018 SNF PPS proposed
rule (82 FR 21058), we invited public
comment on the importance, relevance,
appropriateness, and applicability of
each of the quality measures listed in
Table 19 for future years in the SNF
QRP.
TABLE 19—SNF QRP QUALITY MEASURES UNDER CONSIDERATION FOR FUTURE YEARS
NQS Priority
Patient- and Caregiver-Centered Care
Measure .......................................................................
• Application of Percent of Residents Who Self-Report Moderate to Severe Pain.
NQS Priority
Health and Well-Being
Measure .......................................................................
• Application of 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.
Communication and Care Coordination
Measure .......................................................................
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NQS Priority
• Modification of the Discharge to Community-Post Acute Care (PAC) Skilled Nursing
Facility (SNF) Quality Reporting Program (QRP) measure.
We are also considering a measure
focused on pain that relies on the
collection of patient-reported pain data,
and another measure regarding the
Percent of Residents Who Were
Assessed and Appropriately Given the
Seasonal Influenza Vaccine. Finally, we
are considering a measure related to
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patient safety, that is, Patients Who
Received an Antipsychotic Medication.
Commenters submitted the following
comments related to the proposed rule’s
discussion of the SNF QRP Quality
Measures Under Consideration for
Future Years. A discussion of these
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comments, along with our responses,
appears below.
Comment: One commenter supporting
the future measure concept of the
percent of residents who self-report
moderate to severe pain, suggested
inclusion of this measure by FY 2019 at
the latest. Another commenter suggested
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that they do not believe that pain
experience alone should be a quality
measure, expressing that the presence of
pain does not provide enough
information to help an individual’s
overall quality of life improve.
One commenter suggested that a
measure be developed that reflects
patient-centered care pain management
regardless of ability to self-report as a
significant portion of SNF residents are
not able to self-report pain and
suggested using reliable and valid
observational assessment items such as
those in the current MDS 3.0 Section
J0800 and J0850. The commenter
encouraged us to consider incorporating
the standardized observational pain
assessment data elements that are
currently being developed and tested to
fulfill the requirements of the IMPACT
Act. The commenter also urged us to
seek NQF endorsement for any new
measures to be incorporated into the
SNF QRP program. Another commenter
encouraged assessment for
communication about pain rather than
experience of pain without
inadvertently incentivizing the use of
opioid medications in alignment with
proposed changes to HCAHPS. Another
commenter suggested modifying this
measure to reflect the proportion of
residents for which moderate to severe
pain interferes with or prevents
important daily functional tasks and
drive improvements in quality of life.
Response: We appreciate the
comments pertaining to the Application
of Percent of Residents Who Self-Report
Moderate to Severe Pain (Short Stay)
(NQF #0676) measure under
consideration for future implementation
in the SNF QRP. We note that
appropriately assessing pain as an
outcome is important, acknowledge the
importance of avoiding unintended
consequences that may arise from such
assessments, and will take into
consideration the commenters’
recommendations. We would like to
note that our goal is to submit all fully
developed measures to NQF for
consideration of endorsement.
Comment: We received several
comments supporting the development
of a seasonal influenza vaccine measure
appropriate for the SNF population. One
commenter stated that the incidence
and impact of influenza disease is
severe within the population of older
adults in a SNF setting, and stated that
as a result, there is a need for this
measure. One commenter further
suggested that a measure of this type
presents an important opportunity to
promote higher quality and more
efficient health care for Medicare
beneficiaries. One commenter
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recommended that we give due
consideration to the cost of these
services when the costs (for example,
the purchase of the vaccine) of these
services are bundled into the SNF Part
A payment rates. This commenter
supported alignment with ongoing
efforts to collect and report this measure
in the Long-Term Care Hospital Quality
Reporting Program (LTCH QRP).
Further, this commenter suggested CMS
may want to add a pneumococcal
vaccine measure in addition to an
influenza measure.
Response: We acknowledge the
commenters’ support of inclusion of a
seasonal influenza vaccine measure. We
will take all recommendations into
consideration in our ongoing efforts to
identify and propose appropriate
measures for the SNF QRP.
Comment: We received general
support for development of an
antipsychotic medication measure
appropriate for the SNF population. One
commenter expressed support for this
measure concept and suggested
inclusion of the measure by FY 2019 at
the latest. One commenter expressed
support for including most individuals
in the measure regardless of dementia
diagnoses. However, this commenter
further suggested that Food and Drug
Administration (FDA) approved
indications of the medications should
be excluded from this measure. Another
commenter suggested further
development of the measure as there is
no existing baseline measurement.
Another commenter suggested that any
future measure should account for
informed choices by persons with
behavioral and psychotic symptoms of
dementia (BPSD) and their families
regarding the use of antipsychotic
medications for appropriately-used
antipsychotics, even if the medication
does not have an indication approved
by the FDA for their symptoms.
Response: We acknowledge the
support of inclusion of an antipsychotic
measure and note the suggestion
pertaining to the exclusions as well as
the measure accounting for persons with
BPSD. Recommendations will be taken
into consideration in our ongoing efforts
to identify and propose appropriate
measures for the SNF QRP in the future.
Comment: MedPAC suggested that we
consider the adoption of future
measures that can assess providers’
ability to maintain function and prevent
functional decline. MedPAC noted that
the two quality measures for change in
function do not capture whether a
provider can maintain function as
residents with conditions who are not
expected to improve or who are already
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36595
independent are excluded from the four
measures that we are finalizing.
Response: We agree with MedPAC
that future quality measurement work
should include the development of
quality measures that focus on
maintaining function and prevention of
functional decline. We appreciate
MedPAC’s concern regarding the
exclusion of residents who are not
expected to improve due to certain
medical conditions or who are
independent. We would like to point
out that two of the measures we are
adopting in this final rule for the SNF
QRP, Application of the IRF Function
Outcome Measure: Discharge Self-Care
Score for Medical Rehabilitation
Patients (NQF #2635) and Application
of the IRF Function Outcome Measure:
Discharge Mobility Score for Medical
Rehabilitation Patients (NQF #2636),
capture residents who are independent
with function at admission. In that
situation, maintenance of independence
for the section GG self-care or mobility
activities would apply to these
residents.
Comment: One commenter
recommended the addition of a quality
measure of maintenance of functional
status to the SNF QRP to address
requirements of the Jimmo Settlement.
The commenter noted that functional
improvement is not a goal for all
residents receiving rehabilitation; for
some residents, maintaining or slowing
functional decline is a goal.
Response: We appreciate the
commenter’s suggestions, and we will
consider this recommendation in future
measure development.
Comment: One commenter
encouraged us to consider the
importance of instrumental activities of
daily living as a measurement construct
for assessing patient need, monitoring
quality, and affecting care and payment,
stating that instrumental activities of
daily living performance is critical to
maintaining safety and avoiding
readmissions.
Response: We appreciate the
commenter’s suggestions for future
measures and we will consider this
recommendation in future measure
development.
Comment: MedPAC commented that
while the proposed future measures
capture important dimensions of SNF
care, MedPAC prefers that Medicare
hold providers accountable for claimsbased outcome measures. Several
commenters suggested further
development and standardization of
outcome measures to compare and
contrast between PAC settings and to
assess short- and long-term patient
status post injury or illness. One
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commenter suggested moving away
from an emphasis on process measures
toward more outcome-related measures.
Another commenter added that any
additional vaccination measure give due
consideration to the cost of these
services. Others suggested measures
related to consumer satisfaction
following short stay rehabilitation and
discharge home. One commenter
suggested that any patient experience of
care survey for SNFs be economical in
its approach and carefully aligned with
other surveys to reduce duplicative
collection activities. Other commenters
suggested a number of additional
measures for inclusion in the SNF QRP.
One commenter suggested that we
consider developing measures to assess
quality of life and long-term functional
outcomes such as community-oriented
factors including ability to live
independently, return to work (where
appropriate), community participation
and social interaction. Another
commenter suggested workforce related
measures such as staffing quality
metrics from payroll-based journal
staffing and collection such as staff
turnover, nursing staff hours per
resident stay and CNA hours per
resident stay. The commenter further
recommended measures that include
language related to initiating palliative
care and making ethical considerations
regarding continuing or terminating
complex medical care. The commenter
also suggested incorporating
coordination and collaboration on
patient, family, and medical goals of
care as well as assessment of family
members’ and caregivers’ capacity to
assume patient care post-discharge.
Another commenter further
recommended that measures such as
those currently reported on Nursing
Home Compare be used in the interim
until more post-acute care cross-setting
measures are developed.
Response: We appreciate the input
from MedPAC and other commenters for
their suggestions on future measure
concepts as well as on the interim use
of measures currently reported on
Nursing Home Compare. With all
measures, we seek to fulfill the mandate
of the IMPACT Act to align across
settings and will take these comments
into consideration as we further develop
measures for use in the SNF QRP.
(1) IMPACT Act Measure—Possible
Future Update to Measure
Specifications
In the FY 2017 SNF PPS final rule (81
FR 52021 through 52029), we finalized
the Discharge to Community-Post Acute
Care (PAC) Skilled Nursing Facility
(SNF) Quality Reporting Program (QRP)
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measure, which 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. We received public comments (see
81 FR 52025 through 52026)
recommending exclusion of baseline
nursing facility residents from the
measure, as these residents did not live
in the community prior to their SNF
stay. At that time, we highlighted that
using Medicare FFS claims alone, we
were unable to accurately identify
baseline nursing facility residents. We
stated that potential future
modifications of the measure could
include assessment of the feasibility and
impact of excluding baseline nursing
facility residents from the measure
through the addition of patient
assessment-based data. In response to
these public comments, we are
considering a future modification of the
Discharge to Community-PAC SNF QRP
measure, which would exclude baseline
nursing facility residents from the
measure. Further, this measure is
specified to be calculated using one year
of Medicare FFS claims data. We are
considering expanding the measurement
period in the future to two consecutive
years of data to increase SNF sample
sizes and reduce the number of SNFs
with fewer than 25 stays that would
otherwise be excluded from public
reporting. This modification would also
align the measurement period with that
of the discharge to community measures
adopted for the IRF and LTCH Quality
Reporting Programs to meet the
IMPACT Act requirements; both the IRF
and LTCH measures have measurement
periods of two consecutive years.
We sought public comment on these
considerations for Discharge to
Community-PAC SNF QRP measure in
future years of the SNF QRP. A
discussion of these comments, along
with our responses, appears below.
Comment: Multiple commenters
expressed support for excluding
baseline nursing facility residents from
the discharge to community measure as
a potential future measure modification.
Commenters stated that this exclusion
would result in the measure more
accurately portraying quality of care
provided by SNFs, while controlling for
factors outside of SNF control.
Response: We acknowledge the
commenters’ support for the potential
exclusion of baseline nursing facility
residents as a future measure
modification. We will consider their
views and determine whether to
propose to exclude baseline nursing
facility residents from the Discharge to
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Community-PAC SNF QRP measure in
future years of the SNF QRP.
Comment: MedPAC supported
expanding the Discharge to CommunityPAC SNF QRP measurement period
from 1 year to 2 years, acknowledging
that it is important to include as many
providers in public reporting as possible
and that expansion to 2 years is a good
strategy to help include more lowvolume providers in public reporting. A
few commenters opposed expansion of
the measurement period to 2 years,
expressing concern that it decreased the
timeliness of the data and actionability
for providers to drive change in quality
or process improvement. One
commenter expressed concern that the
expansion would misalign the
measurement period with that of other
SNF measures in use, and that inclusion
of older data would decrease sensitivity
to change in quality, particularly for
high volume SNFs. This commenter
stated that a 2-year window would not
accurately reflect recent improvement or
decline in discharge planning practices,
resulting in inaccurate portrayal of the
current quality of care furnished by a
SNF. Another commenter expressed
concern that a two-year measurement
period penalized facilities with adverse
ratings for longer periods of time.
Response: We acknowledge MedPAC
for its support for possible expansion of
the Discharge to Community-PAC SNF
QRP measurement period to 2 years in
future years of the SNF QRP. We would
like to clarify that we did not propose
this change, but are considering it for
future years. We also acknowledge
commenters’ concerns about expanding
the measurement period to 2 years. We
will consider these views and determine
whether to propose expanding the
Discharge to Community-PAC SNF QRP
measurement period from 1 year to 2
years in future years of the SNF QRP.
(2) IMPACT Act Implementation Update
As a result of the input and
suggestions provided by technical
experts at the TEPs held by our measure
developer, and through public
comment, we are engaging in additional
development work for two measures
that would satisfy the domain of
accurately communicating the existence
of and providing for the transfer of
health information and care preferences
when the individual transitions, in
section 1899B(c)(1)(E) of the Act,
including performing additional testing.
The measures under development are:
Transfer of Information at Post-Acute
Care Admission, Start or Resumption of
Care from other Providers/Settings; and
Transfer of Information at Post-Acute
Care Discharge, and End of Care to
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other Providers/Settings. We intend to
specify these measures under section
1899B(c)(1)(E) of the Act no later than
October 1, 2018 and we intend to
propose to adopt them for the FY 2021
SNF QRP, with data collection
beginning on or about October 1, 2019.
Commenters submitted the following
comments related to the proposed rule’s
discussion of the IMPACT Act
Implementation Update. A discussion of
these comments, along with our
responses, appears below.
Comment: One commenter suggested
that we be cautious in our development
of the Transfer of Health Information
measure set and only proceed to
propose and adopt measures that
receive NQF endorsement. This
commenter cited concerns about the
measure development, citing the 2016
MAP PAC/LTC meeting. A commenter
supported our efforts to promote
coordination of care across the care
continuum, and commented that the
transfer of accurate health information—
including resident preferences, care
plan, and other information—is
essential to quality outcomes for
residents. A commenter expressed
appreciation that we are developing
measures that will help facilitate the
accurate communication of a person’s
health information and care preferences
across the continuum of care and
believes that these measures will
facilitate better care coordination and
outcomes. The commenter also
appreciated that we have engaged
providers and consumers in the
development of these measures and
encourages us to develop measures that
represent a balance between the volume
and detail of information exchanged and
reported, and the underlying
administrative burdens the measures
may create. The commenter noted that
the burden is particularly important for
small and rural providers that may have
more challenges with technology-driven
information exchange because health
information technology incentive
programs for hospitals and physicians
have not been extended to SNF
providers.
Response: We appreciate the
comments and feedback on the Transfer
of Health Information measures that are
currently under development. We also
appreciate the recognition that we have
engaged providers and consumers in the
development of these measures. As we
continue to develop these measures, we
will consider this feedback. We would
like to clarify that the measure under
development does not currently require
the adoption of health IT and electronic
means of information transfer. We
intend to re-submit these measures,
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once fully specified and tested, for
review to the MAP PAC/LTC
Workgroup. Further, we plan to submit
the measures to the NQF for
consideration for endorsement when we
believe the measures are ready for NQF
review.
j. Standardized Resident Assessment
Data Reporting for the SNF QRP
(1) Standardized Resident Assessment
Data Reporting for the FY 2019 SNF
QRP
Section 1888(e)(6)(B)(i)(III) of the Act
requires that for fiscal year 2019 and
each subsequent year, SNFs report
standardized resident assessment data
required under section 1899B(b)(1) of
the Act. As we describe in section
III.D.2.g.(1) above, we are finalizing in
this final rule that the current pressure
ulcer measure, Percent of Residents or
Patients with Pressure Ulcers That Are
New or Worsened (Short Stay) (NQF
#0678), will be replaced with the
proposed pressure ulcer measure,
Changes in Skin Integrity Post-Acute
Care: Pressure Ulcer/Injury, beginning
with the FY 2020 SNF QRP. The current
pressure ulcer measure will remain in
the SNF QRP until that time.
Accordingly, for the requirement that
SNFs report standardized resident
assessment data for the FY 2019 SNF
QRP, we proposed that the data
elements used to calculate that measure
meet the definition of standardized
resident assessment data for medical
conditions and co-morbidities under
section 1899B(b)(1)(B)(iv) and that the
successful reporting of that data under
section 1888(e)(6)(B)(i)(II) for
admissions as well as discharges
occurring during fourth quarter CY 2017
would also satisfy the requirement to
report standardized resident assessment
data for the FY 2019 SNF QRP.
The collection of assessment data
pertaining to skin integrity, specifically
pressure related wounds, is important
for multiple reasons. Clinical decision
support, care planning, and quality
improvement all depend on reliable
assessment data collection. Pressure
related wounds represent poor
outcomes, are a serious medical
condition that can result in death and
disability, are debilitating, painful and
are often an avoidable outcome of
medical care.38 39 40 41 42 43 Pressure
38 Casey, G. (2013). ‘‘Pressure ulcers reflect
quality of nursing care.’’ Nurs N Z 19(10): 20–24.
39 Gorzoni, M.L. and S.L. Pires (2011). ‘‘Deaths in
nursing homes.’’ Rev Assoc Med Bras 57(3): 327–
331.
40 Thomas, J.M., et al. (2013). ‘‘Systematic review:
health-related characteristics of elderly hospitalized
adults and nursing home residents associated with
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related wounds are considered health
care acquired conditions.
As we note above, the data elements
needed to calculate the current pressure
ulcer measure are already included on
the MDS and reported for SNFs, and
exhibit validity and reliability for use
across PAC providers. Item reliability
for these data elements was also tested
for the nursing home setting during
implementation of MDS 3.0. Testing
results are from the RAND Development
and Validation of MDS 3.0 project.44
The RAND pilot test of the MDS 3.0 data
elements showed good reliability and is
also applicable to both the IRF–PAI and
the LTCH CARE Data Set because the
data elements tested are the same.
Across the pressure ulcer data elements,
the average gold-standard nurse to goldstandard nurse kappa statistic was
0.905. The average gold-standard nurse
to facility-nurse kappa statistic was
0.937. Data elements used to risk adjust
this quality measure were also tested
under this same pilot test, and the goldstandard to gold-standard kappa
statistic, or percent agreement (where
kappa statistic not available), ranged
from 0.91 to 0.99 for these data
elements. These kappa scores indicate
‘‘almost perfect’’ agreement using the
Landis and Koch standard for strength
of agreement.45
The data elements used to calculate
the current pressure ulcer measure
received public comment on several
occasions, including when that measure
was proposed in the FY 2012 IRF PPS
(76 FR 47876) and IPPS/LTCH PPS
proposed rules (76 FR 51754). Further,
they were discussed in the past by TEPs
held by our measure development
contractor on June 13 and November 15,
2013, and recently by a TEP on July 18,
2016. TEP members supported the
measure and its cross-setting use in
PAC. The report, Technical Expert
Panel Summary Report: Refinement of
the Percent of Patients or Residents with
short-term mortality.’’ J Am Geriatr Soc 61(6): 902–
911.
41 White-Chu, E.F., et al. (2011). ‘‘Pressure ulcers
in long-term care.’’ Clin Geriatr Med 27(2): 241–258.
42 Bates-Jensen, B.M. Quality indicators for
prevention and management of pressure ulcers in
vulnerable elders. Ann Int Med. 2001;135 (8 Part 2),
744–51.
43 Bennet, G, Dealy, C, Posnett, J (2004). The cost
of pressure ulcers in the UK, Age and Aging,
33(3):230–235.
44 Saliba, D., & Buchanan, J. (2008, April).
Development and validation of a revised nursing
home assessment tool: MDS 3.0. Contract No. 500–
00–0027/Task Order #2. Santa Monica, CA: Rand
Corporation. Retrieved from https://
www.cms.hhs.gov/NursingHomeQualityInits/
Downloads/MDS30FinalReport.pdf.
45 Landis, R., & Koch, G. (1977, March). The
measurement of observer agreement for categorical
data. Biometrics 33(1), 159–174.
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Pressure Ulcers that are New or
Worsened (Short-Stay) (NQF #0678)
Quality Measure for Skilled Nursing
Facilities (SNFs), Inpatient
Rehabilitation Facilities (IRFs), LongTerm Care Hospitals (LTCHs), and
Home Health Agencies (HHAs), is
available at https://www.cms.gov/
Medicare/Quality-Initiatives-PatientAssessment-Instruments/Post-AcuteCare-Quality-Initiatives/IMPACT-Act-of2014/IMPACT-Act-Downloads-andVideos.html.
We sought public comment on this
proposal. A discussion of these
comments, along with our responses,
appears below.
Comment: We received many
comments in support of reporting the
data elements already implemented in
the SNF QRP to fulfill the requirement
to report standardized resident
assessment data for the FY 2019 SNF
QRP. Specifically, many commenters
supported the use of data elements used
in calculation of the Percent of
Residents or Patients with Pressure
Ulcers That Are New or Worsened
(Short Stay) (NQF #0678) to fulfill this
requirement.
Response: We appreciate the
commenter’s support of the proposal.
Final Decision: After consideration of
the public comments received, we are
finalizing the proposal that the data
elements currently reported by SNFs to
calculate the current measure, Percent
of Residents or Patients with Pressure
Ulcers That Are New or Worsened
(Short Stay) (NQF #0678), meet the
definition of standardized resident
assessment data for medical conditions
and co-morbidities under section
1899B(b)(1)(B)(iv) of the Act, and that
the successful reporting of that data
under section 1888(e)(6)(B)(i)(II) of the
Act would also satisfy the requirement
to report standardized resident
assessment data under section
1888(e)(6)(B)(i)(III) of the Act.
(2) Standardized Resident Assessment
Data Reporting Beginning With the FY
2020 SNF QRP
In the FY 2018 SNF PPS proposed
rule (82 FR 21059 through 21076), we
described our proposals for the
reporting of standardized resident
assessment data by SNFs beginning with
the FY 2020 SNF QRP. SNFs would be
required to report these data for SNF
admissions at the start of the Medicare
Part A stay and SNF discharges at the
end of the Medicare Part A stay that
occur between October 1, 2018 and
December 31, 2018, with the exception
of two data elements (Hearing and
Vision), which would be required for
SNF admissions at the start of the
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Medicare Part A stay only that occur
between October 1, 2018, and December
31, 2018. Following the initial reporting
year for the FY 2020 SNF QRP,
subsequent years for the SNF QRP
would be based on a full calendar year
of such data reporting.
In selecting the data elements, we
carefully weighed the balance of burden
in assessment-based data collection and
aimed to minimize additional burden
through the utilization of existing data
in the assessment instruments. We also
note that the resident assessment
instruments are considered part of the
medical record, and sought the
inclusion of data elements relevant to
resident care. We also took into
consideration the following factors for
each data element: overall clinical
relevance; ability to support clinical
decisions, care planning and
interoperable exchange to facilitate care
coordination during transitions in care;
and the ability to capture medical
complexity and risk factors that can
inform both payment and quality.
Additionally, the data elements had to
have strong scientific reliability and
validity; be meaningful enough to
inform longitudinal analysis by
providers; had to have received general
consensus agreement for its usability;
and had to have the ability to collect
such data once but support multiple
uses. Further, to inform the final set of
data elements for proposal, we took into
account technical and clinical subject
matter expert review, public comment
and consensus input in which such
principles were applied. We also took
into account the consensus work and
empirical findings from the PAC PRD.
We acknowledge that during the
development process that led to these
proposals, some providers expressed
concern that changes to the MDS to
accommodate standardized resident
assessment data reporting would lead to
an overall increased reporting burden.
However, we note that there is no
additional data collection burden for
standardized data already collected and
submitted on the quality measures.
Comment: Many commenters
expressed significant concerns with
respect to our standardized resident
assessment data proposals. Several
commenters stated that the new
standardized resident assessment data
reporting requirements will impose
significant burden on providers, given
the volume of new standardized
resident assessment data elements that
were proposed to be added to the MDS.
Several commenters noted that the
addition of the proposed standardized
resident assessment data elements
would require hiring more staff,
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retraining staff on revised questions or
coding guidance, and reconfiguring
internal databases and EHRs. Other
commenters expressed concerns about
the gradual but significant past and
future expansion of the MDS through
the addition of standardized resident
assessment data elements and quality
measures, noting the challenge of
coping with ongoing additions and
changes.
Several commenters expressed
concern related to the implementation
timeline in the proposed rule, which
would require SNFs to begin collecting
the proposed standardized resident
assessment data elements in the
timeframe stated in the proposed rule. A
few commenters noted that CMS had
not yet provided sufficient
specifications or educational materials
to support implementation of the new
resident assessments in the proposed
timeline.
Several commenters urged CMS to
delay the reporting of new standardized
resident assessment data elements by at
least one year, and to carefully assess
whether all of the proposed
standardized resident assessment data
elements are necessary under the
IMPACT Act. Commenters suggested
ways to delay the proposals for
standardized resident assessment data
elements in the categories of Cognitive
Function and Mental Status; Special
Services, Treatments, and Interventions;
and Impairments, including allowing
voluntary or limited reporting for a
period of time before making
comprehensive reporting mandatory,
and delaying the beginning of
mandatory data collection for a period
of time. Some commenters
recommended that during the delay,
CMS re-evaluate whether it can require
the reporting of standardized resident
assessment data in a less burdensome
manner.
Response: We understand the
concerns raised by commenters that the
finalization of our standardized resident
assessment data proposals would
require SNFs to spend a significant
amount of resources preparing to report
the data, including updating relevant
protocols and systems and training
appropriate staff. We also recognize that
we can meet our obligation to require
the reporting of standardized resident
assessment data with respect to the
categories described in section
1899B(b)(1)(B) of the Act while
simultaneously being responsive to
these concerns. Therefore, after
consideration of the public comments
we received on these issues, we have
decided that at this time, we will not
finalize the standardized resident
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assessment data elements we proposed
for three of the five categories under
section 1899B(b)(1)(B) of the Act:
Cognitive Function and Mental Status;
Special Services, Treatments, and
Interventions; and Impairments.
Although we believe that the proposed
standardized resident assessment data
elements would promote transparency
around quality of care and price as we
continue to explore reforms to PAC
payment system, the data elements that
we proposed for each of these categories
would have imposed a new reporting
burden on SNFs. We agree that it would
be useful to evaluate further how to best
identify the standardized resident
assessment data that would satisfy each
of these categories; would be most
appropriate for our intended purposes
including payment and measure
standardization; and can be reported by
SNFs in the least burdensome manner.
As part of this effort, we intend to
conduct a national field test that allows
for stakeholder feedback and to consider
how to maximize the time SNFs have to
prepare for the reporting of standardized
resident assessment data in these
categories. We intend to make new
proposals with respect to the categories
described in sections 1899B(b)(1)(B)(ii),
(iii) and (v) of the Act no later than in
the FY 2020 SNF PPS proposed rule.
In this final rule, we are finalizing the
standardized resident assessment data
elements that we proposed to adopt for
the IMPACT Act categories of
Functional Status and Medical
Conditions and Co-Morbidities. Unlike
the standardized resident assessment
data that we are not finalizing, the
standardized resident assessment data
that we proposed for these categories are
already required to calculate the Percent
of Residents or Patients with Pressure
Ulcers That Are New or Worsened (NQF
#0678) quality measure, the Changes in
Skin Integrity Post-Acute Care: Pressure
Ulcer/Injury quality measure (which we
are finalizing in this final rule), and the
Application of Percent of Long-Term
Care Hospital Patients with an
Admission and Discharge Functional
Assessment and a Care Plan That
Addresses Function (NQF #2631)
quality measure (which we finalized in
the FY 2016 SNF PPS final rule). As a
result, we do not believe that finalizing
these proposals creates a new reporting
burden for SNFs or otherwise
necessitates a delay.
Comment: Several commenters
expressed support for the adoption of
standardized resident assessment data
elements. A few commenters expressed
support for standardizing the definitions
as well as the implementation of the
data collection effort. Several
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commenters also supported CMS’ goal
of standardizing the questions and
responses across all PAC settings to help
‘‘enable the data to be interoperable,
allowing it to be shared electronically,
or otherwise between PAC provider
types.’’ Another commenter noted full
support of the IMPACT Act’s goals and
objectives and appreciated CMS’ efforts
to regularly communicate with
stakeholders through various national
provider calls, convening of
stakeholders, and meetings with
individual organizations.
Response: We appreciate the support
of these proposals, but note that for the
reasons explained above, we have
decided at this time to not finalize the
proposals for three of the five categories
under section 1899B(b)(1)(B) of the Act:
Cognitive Function and Mental Status;
Special Services, Treatments, and
Interventions; and Impairments.
Comment: Several commenters stated
that there is insufficient evidence
demonstrating the reliability and
validity of the proposed standardized
resident assessment data elements.
Some commenters stated that the
expanded standardized resident
assessment data reporting requirements
have not yet been adequately tested to
ensure they collect accurate and useful
data in this setting. A few commenters
stated that six of the items that are
currently reported in the MDS would be
expanded to include additional subelements that SNFs would be required
to complete. One of these commenters
stated that CMS’ conclusion that the
collection of these standardized resident
assessment data elements in the SNF
setting would be feasible and the
standardized resident assessment data
elements would result in valid and
reliable data was based on the current
use of these data elements in the MDS
and the testing of these data elements in
the PAC PRD. One commenter stated
that several of the proposed
standardized resident assessment data
elements that had not been adequately
tested were deemed close enough to an
item that had been tested in the PAC
PRD or in other PAC settings and thus
appropriate for implementation.
Response: Our standardized resident
assessment data elements were selected
based on a rigorous multi-stage process
described in the FY 2018 SNF PPS
proposed rule (82 FR 21044). In
addition, we believe that the PAC PRD
testing of many of these data elements
provides good evidence from a large,
national sample of patients and
residents in PAC settings to support the
use of these standardized patient/
resident assessment data elements in
and across PAC settings. However, as
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noted above, we have decided at this
time to not finalize the proposals for
three of the five categories under section
1899B(b)(1)(B) of the Act: Cognitive
Function and Mental Status; Special
Services, Treatments, and Interventions;
and Impairments. Prior to making new
proposals for these categories, we intend
to conduct extensive testing to ensure
that the standardized resident
assessment data elements we select are
reliable, valid and appropriate for their
intended use.
Comment: MedPAC supported the
addition of standardized resident
assessment data elements, but cautioned
that measures, when used for riskadjustment, may be susceptible to
inappropriate manipulation by
providers. MedPAC believed that CMS
may want to consider requiring a
physician signature to attest that the
reported service was reasonable and
necessary and including a statement
adjacent to the signature line warning
that filing a false claim is subject to
treble damages under the False Claims
Act.
Response: We acknowledge
MedPAC’s feedback, and agree with the
importance of data integrity within
resident assessments. We will explore
the suggestions made by MedPAC.
Comment: One commenter noted that
the absence of a single source document
that identifies the MDS data element,
assessment type, allowable item
responses, and item responses that
could negatively impact SNF QRP
performance scores and creates
administrative challenges in keeping up
to date with measure and item changes.
This commenter urged us to provide a
single resource for SNF providers to
identify each individual MDS 3.0 data
element identified by CMS and
applicable to the various measures and
standardized cross-setting data elements
that apply to the SNF QRP. Another
commenter urged us to provide detailed
guidance and training documents that
includes prescriptive coding, similar to
what was done for the MDS. Another
commenter stressed the importance of
timely, appropriate education and
training for providers to ensure that
there is interoperability following full
implementation. Another commenter
also believed that standardized resident
assessment data collected may be
affected by educational level and
professional expertise of the evaluator
and advocated for fully developed riskadjusters.
Response: We acknowledge the
commenters’ feedback with respect to
administrative challenges and the desire
for detailed guidance and training. In
ongoing standardized resident
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assessment data element development
work, we will continue to be mindful of
the administrative challenges that new
mandated assessment items will place
on providers. We agree with the
commenter about the importance of
providing clear coding guidelines for
the proposed standardized resident
assessment data elements for a range of
education levels. We are also committed
to providing comprehensive training
and guidance to providers, for any new
data elements, including standardized
resident assessment data elements, to
ensure the fidelity of the assessment.
Comment: A few commenters sought
clarification on interoperability
requirements, if and how SNF providers
will be required to demonstrate
interoperability, and described potential
challenges to interoperable data
exchange, such as timeframes related to
data submission (for example, 14 days
after discharge for SNFs) and
inconsistencies in how data are
captured. One commenter encouraged
CMS to consider interoperability
standards that promote information
exchange utilizing EHRs and to specify
which data standards are to be used and
how they are to be implemented to
ensure consistency across providers.
The same commenter recommended
that CMS work with EHR vendors and
other IT developers to implement
changes and to consider the time
required for implementing changes
adopted in the final rule, which may
require adopting timelines that are more
extended than what was originally
required. Further, two commenters
urged CMS to develop methods to
incentivize providers who are ‘‘stepping
up’’ and adopting health information
technology (HIT), despite the costs and
the absence of a regulatory requirement
to do so.
Response: We acknowledge
commenters’ concerns regarding
standardization and interoperability of
the proposed standardized resident
assessment data elements to meet
section 1899B(a)(1)(B) of the Act
requirements. We wish to clarify that
implementation of the proposed
standardized resident assessment data
elements is intended to facilitate
interoperability. We acknowledge that
the provision requires that we make
certain resident assessment data
standardized and interoperable to allow
for the exchange of data among PAC
settings and other providers in order to
access longitudinal information which
will facilitate coordinated care and
improved outcomes. While the IMPACT
Act requires that the post-acute resident
assessment instruments be modified so
that certain resident assessment data are
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standardized and interoperable, it does
not require the exchange of electronic
health information by such providers.
We appreciate the comments
surrounding the need for more time for
providers to implement the changes
necessary in response to such
modifications, and have addressed this
topic in our proposals within this
section.
A full discussion of the standardized
resident assessment data elements that
we proposed to adopt for the categories
described in sections 1899B(b)(1)(B)(ii),
(iii) and (v) can be found in the FY 2018
SNF PPS proposed rule (82 FR 21060
through 21076). In light of our decision
to not finalize our proposals with
respect to these categories, we are not
going to address in this final rule the
specific technical comments that we
received on these proposed data
elements. However, we appreciate the
many technical comments we did
receive specific to each of these data
elements, and we will take them into
consideration as we develop new
proposals for these categories. Below we
discuss the comments we received
specific to the standardized resident
assessment data we proposed to adopt,
and are finalizing in this final rule, for
the categories of Functional Status and
Medical Conditions and Co-Morbidities.
a. Standardized Resident Assessment
Data by Category
(1) Functional Status Data
We proposed that the data elements
currently reported by SNFs to calculate
the measure, Application of Percent of
Long-Term Care Hospital Patients with
an Admission and Discharge Functional
Assessment and a Care Plan That
Addresses Function (NQF #2631),
would also meet the definition of
standardized resident assessment data
for functional status under section
1899B(b)(1)(B)(i) of the Act, and that the
successful reporting of that data under
section 1886(m)(5)(F)(i) of the Act
would also satisfy the requirement to
report standardized resident assessment
data under section 1886(m)(5)(F)(ii) of
the Act.
These patient assessment data for
functional status are from the CARE
Item Set. The development of the CARE
Item Set and a description and rationale
for each item is described in a report
entitled ‘‘The Development and Testing
of the Continuity Assessment Record
and Evaluation (CARE) Item Set: Final
Report on the Development of the CARE
Item Set: Volume 1 of 3.’’ 46 Reliability
46 Barbara
Gage et al., ‘‘The Development and
Testing of the Continuity Assessment Record and
Evaluation (CARE) Item Set: Final Report on the
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and validity testing were conducted as
part of CMS’ Post-Acute Care Payment
Reform Demonstration, and we
concluded that the functional status
items have acceptable reliability and
validity. A description of the testing
methodology and results are available in
several reports, including the report
entitled ‘‘The Development and Testing
of the Continuity Assessment Record
And Evaluation (CARE) Item Set: Final
Report On Reliability Testing: Volume 2
of 3’’ 47 and the report entitled ‘‘The
Development and Testing of The
Continuity Assessment Record And
Evaluation (CARE) Item Set: Final
Report on Care Item Set and Current
Assessment Comparisons: Volume 3 of
3.’’ 48 The reports are available on CMS’
Post-Acute Care Quality Initiatives Web
page at https://www.cms.gov/Medicare/
Quality-Initiatives-Patient-AssessmentInstruments/Post-Acute-Care-QualityInitiatives/CARE-Item-Set-and-BCARE.html. For more information about
this quality measure, we refer readers to
the FY 2016 SNF PPS final rule (80 FR
46444 through 46453).
We sought public comment on this
proposal. A discussion of these
comments, along with our responses,
appears below.
Comment: Several commenters
supported the collection of standardized
resident assessment data across PAC
settings to satisfy the IMPACT Act’s
functional status data reporting
requirement. Some commenters
specifically expressed support for our
proposal that data elements used to
calculate Application of Percent of
Long-Term Care Hospital Patients with
an Admission and Discharge Functional
Assessment and a Care Plan that
Addresses Function (NQF #2631) be
used to meet the definition of
standardized resident assessment data
for functional status. One commenter
noted that their support of standardized
resident assessment data was contingent
on not adding to facilities’ costs or
burden.
Response: We appreciate the
commenters’ support of the functional
status standardized resident assessment
data for SNFs. These standardized
resident assessment data have the
potential to facilitate communication
among providers and improve care.
With regard to burden and cost, we
would like to clarify that the data
elements from the quality measure
Application of Percent of Long-Term
Care Hospital Patients with an
Development of the CARE Item Set’’ (RTI
International, 2012).
47 Ibid.
48 Ibid.
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Admission and Discharge Functional
Assessment and a Care Plan that
Addresses Function (NQF #2631) are
data elements that are currently being
collected on the MDS by SNFs, and
therefore, there is no additional burden
or cost associated with this reporting.
Comment: One commenter requested
that we clarify that reporting on the
Discharge Goal items for each mobility
and self-care item in the SNF PPS
admission assessment is for SNF QRP
reporting purposes, and does not require
a care plan to be developed for each
discharge goal.
Response: The proposal to use the
data elements used to calculate the
function process quality measure as
standardized resident assessment data
refers to the admission and discharge
performance self-care and mobility
items. The adopted measure
Application of Percent of Long-Term
Care Hospital Patients with an
Admission and Discharge Functional
Assessment and a Care Plan that
Addresses Function (NQF #2631)
requires that only one goal be reported
for each SNF patient stay, and that the
requirement for that quality measure
remains unchanged. Reporting one goal
on the MDS satisfies the measure
numerator care plan criteria. The SNF
does not need to provide any further
documentation about a resident’s care
plan.
Final Decision: Based on the evidence
provided above, we are finalizing that
the data elements currently reported by
SNFs to calculate the measure,
Application of Percent of Long-Term
Care Hospital Patients with an
Admission and Discharge Functional
Assessment and a Care Plan That
Addresses Function (NQF #2631),
would also meet the definition of
standardized resident assessment data
for functional status under section
1899B(b)(1)(B)(i) of the Act, and that the
successful reporting of that data under
section 1886(m)(5)(F)(i) of the Act
would also satisfy the requirement to
report standardized resident assessment
data under section 1886(m)(5)(F)(ii) of
the Act.
(2) Medical Condition and Comorbidity
Data
We proposed that the data elements
needed to calculate the current measure,
Percent of Residents or Patients with
Pressure Ulcers That Are New or
Worsened (Short Stay) (NQF #0678),
and the proposed measure, Changes in
Skin Integrity Post-Acute Care: Pressure
Ulcer/Injury, meet the definition of
standardized resident assessment data
for medical conditions and comorbidities under section
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1899B(b)(1)(B)(iv) of the Act, and that
the successful reporting of that data
under section 1888(e)(6)(B)(i)(II) of the
Act would also satisfy the requirement
to report standardized resident
assessment data under section
1888(e)(6)(B)(i)(III) of the Act.
‘‘Medical conditions and
comorbidities’’ and the conditions
addressed in the standardized resident
assessment data used in the calculation
and risk adjustment of these measures,
that is, the presence of pressure ulcers,
diabetes, incontinence, peripheral
vascular disease or peripheral arterial
disease, mobility, as well as low body
mass index, are all health-related
conditions that indicate medical
complexity that can be indicative of
underlying disease severity and other
comorbidities.
Specifically, the data elements used
in the measure are important for care
planning and provide information
pertaining to medical complexity.
Pressure ulcers are serious wounds
representing poor healthcare outcomes,
and can result in sepsis and death.
Assessing skin condition, care planning
for pressure ulcer prevention and
healing, and informing providers about
their presence in patient transitions of
care is a customary and best practice.
Venous and arterial disease and diabetes
are associated with low blood flow
which may increase the risk of tissue
damage. These diseases are indicators of
factors that may place individuals at
risk for pressure ulcer development and
are therefore important for care
planning. Low BMI, which may be an
indicator of underlying disease severity,
may be associated with loss of fat and
muscle, resulting in potential risk for
pressure ulcers. Bowel incontinence and
the possible maceration to the skin
associated, can lead to higher risk for
pressure ulcers. In addition, the bacteria
associated with bowel incontinence can
complicate current wounds and cause
local infection. Mobility is an indicator
of impairment or reduction in mobility
and movement which is a major risk
factor for the development of pressure
ulcers. Taken separately and together,
these data elements are important for
care planning, transitions in services
and identifying medical complexities.
In sections III.D.2.g.1. and III.D.2.j.1.
of this final rule, we discuss our
rationale for proposing that the data
elements used in the measures meet the
definition of standardized resident
assessment data. In summary, we
believe that the collection of such
assessment data is important for
multiple reasons, including clinical
decision support, care planning, and
quality improvement, and that the data
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elements assessing pressure ulcers and
the data elements used to risk adjust
showed good reliability. We solicited
stakeholder feedback on the quality
measure, and the data elements from
which it is derived, by means of a
public comment period and TEPs, as
described in section III.D.2.g.1. of this
final rule.
We sought public comment on this
proposal. A discussion of these
comments, along with our responses,
appears below.
Comment: We received support for
the reporting of data elements already
implemented in the SNF QRP to satisfy
the requirement to report standardized
resident assessment data. Specifically,
many commenters supported the use of
data elements used in calculation of the
current measure, Percent of Residents or
Patients with Pressure Ulcers That Are
New or Worsened (Short Stay) (NQF
#0678), or the proposed measure,
Changes in Skin Integrity Post-Acute
Care: Pressure Ulcer/Injury, to fulfill
this requirement.
Response: We appreciate the
comments in support of the proposal,
and agree that these data elements
currently reported by SNFs meet the
definition of standardized resident
assessment data and satisfy the
requirement to report standardized
resident assessment data.
Final Decision: After consideration of
the public comments we received, we
are finalizing as proposed that the data
elements currently reported by SNFs to
calculate the current measure, Percent
of Residents or Patients with Pressure
Ulcers That Are New or Worsened
(Short Stay) (NQF #0678), and the
proposed measure, Changes in Skin
Integrity Post-Acute Care: Pressure
Ulcer/Injury, meet the definition of
standardized resident assessment data
for medical conditions and comorbidities under section
1899B(b)(1)(B)(iv) of the Act, and that
the successful reporting of that data
under section 1888(e)(6)(B)(i)(II) of the
Act would also satisfy the requirement
to report standardized resident
assessment data under section
1888(e)(6)(B)(i)(III) of the Act.
k. Form, Manner, and Timing of Data
Submission Under the SNF QRP
(1) Start Date for Standardized Resident
Assessment Data Reporting by New
SNFs
In the FY 2016 SNF PPS final rule (80
FR 46455), we adopted timing for new
SNFs to begin reporting quality data
under the SNF QRP beginning with the
FY 2018 SNF QRP. We proposed in the
FY 2018 SNF PPS proposed rule (82 FR
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21076) that new SNFs will be required
to begin reporting standardized resident
assessment data on the same schedule.
We sought public comment on the
proposal that new SNFs will be required
to begin reporting standardized resident
assessment data on the same schedule.
A discussion of these comments, along
with our responses, appears below.
Comment: We received a comment in
support of maintaining the same start
date policy for both standardized
resident assessment data and SNF QRP
measures as this creates consistency in
reporting.
Response: We appreciate the
commenter’s support for extending this
policy to the standardized resident
assessment data under the SNF QRP.
Final Decision: We are finalizing that
new SNFs will be required to begin
reporting standardized resident
assessment data on the same schedule
that they are currently required to begin
reporting other quality data under the
SNF QRP.
(2) Mechanism for Reporting
Standardized Resident Assessment Data
Beginning With the FY 2019 SNF QRP
Under our current policy, SNFs report
data by completing applicable sections
of the MDS, and submitting the MDS–
RAI to CMS through the QIESASAP
system. 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/QualityInitiatives-Patient-AssessmentInstruments/NursingHomeQualityInits/
index.html?redirect=/NursingHome
QualityInits/30_NHQIMDS30Technical
Information.asp#TopOfPage. In
addition to the data currently submitted
on quality measures as previously
finalized and discussed in section
III.D.2.f. of this final rule, in the FY
2018 SNF PPS proposed rule (82 FR
21076) we proposed that SNFs would be
required to begin submitting the
proposed standardized resident
assessment data for SNF Medicare
resident admissions and discharges that
occur on or after October 1, 2018 using
the MDS. Details on the modifications
and assessment collection for the MDS
for the proposed standardized resident
assessment data are available at https://
www.cms.gov/Medicare/QualityInitiatives-Patient-AssessmentInstruments/NursingHomeQualityInits/
Skilled-Nursing-Facility-QualityReporting-Program/SNF-QualityReporting-Program-Measures-andTechnical-Information.html.
We sought public comments on this
proposal. A discussion of these
comments, along with our responses,
appears below.
Comment: A commenter expressed
support for maintaining the same data
submission mechanism policy for
submitting both standardized resident
assessment data and data on SNF QRP
measures, as this facilitates consistency
in reporting.
Response: We appreciate the
commenter’s support.
Final Decision: We are finalizing that
beginning with the FY 2019 SNF QRP,
SNFs will be required to begin
submitting standardized resident
assessment data for SNF Medicare
resident admissions and discharges that
occur on or after October 1, 2018 using
the MDS. We note that for the FY 2019
SNF QRP, the standardized resident
data elements are already submitted
using the same (existing) data
submission mechanism.
(3) Schedule for Reporting Standardized
Resident Assessment Data Beginning
With the FY 2019 SNF QRP
Starting with the FY 2019 SNF QRP,
we proposed to apply our current
schedule for the reporting of measure
data to the reporting of standardized
resident assessment data. Under this
proposed policy, except for the first
program year for which a measure is
adopted, SNFs must report data on
measures for SNF Medicare admissions
that occur during the 12-month calendar
year (CY) period that apply to the
program year. For the first program year
for which a measure is adopted, SNFs
are only required to report data on SNF
Medicare admissions that occur on or
after October 1 and discharged from the
SNF up to and including December 31
of the calendar year that applies to that
program year. For example, for the FY
2018 SNF QRP, data on measures
adopted for earlier program years must
be reported for all CY 2016 SNF
Medicare admissions that occur on or
after October 1, 2016 and discharges
that occur on or before December 31,
2016. However, data on newly adopted
measures for the FY 2018 SNF QRP
program year must only be reported for
SNF Medicare admissions and
discharges that occur during the last
calendar quarter of 2016.
Tables 20 and 21 illustrate this policy
using the FY 2019 and FY 2020 SNF
QRP as examples.
TABLE 20—SUMMARY ILLUSTRATION OF INITIAL REPORTING CYCLE FOR NEWLY ADOPTED MEASURE AND STANDARDIZED
RESIDENT ASSESSMENT DATA REPORTING USING CY Q4 DATA *
Data submission quarterly deadlines beginning with FY 2019 SNF
QRP * ∧
Data collection/submission quarterly reporting period *
Q4: CY 2017 10/1/2017–12/31/2017 .......................................................
CY 2017 Q4 Deadline: May 15, 2018.
* We note that submission of the MDS must also adhere to the SNF PPS deadlines.
∧ The term ‘‘FY 2019 SNF QRP’’ means the fiscal year for which the SNF QRP requirements applicable to that fiscal year must be met in order
for a SNF to receive the full market basket percentage when calculating the payment rates applicable to it for that fiscal year.
TABLE 21—SUMMARY ILLUSTRATION OF CALENDAR YEAR QUARTERLY REPORTING CYCLES FOR MEASURE AND
STANDARDIZED RESIDENT ASSESSMENT DATA REPORTING *
Data submission quarterly deadlines beginning with FY 2020 SNF
QRP * ∧
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Data collection/submission quarterly reporting period *
Q1:
Q2:
Q3:
Q4:
CY
CY
CY
CY
2018
2018
2018
2018
1/1/2018–3/31/2018 ...........................................................
4/1/2018–6/30/2018 ...........................................................
7/1/2018–9/30/2018 ...........................................................
10/1/2018–12/31/2018 .......................................................
CY
CY
CY
CY
2018
2018
2018
2018
Q1
Q2
Q3
Q4
Deadline:
Deadline:
Deadline:
Deadline:
August 15, 2018.
November 15, 2018.
February 15, 2019.
May 15, 2019.
* We note that submission of the MDS must also adhere to the SNF PPS deadlines.
∧ The term ‘‘FY 2020 SNF QRP’’ means the fiscal year for which the SNF QRP requirements applicable to that fiscal year must be met in order
for a SNF to receive the full market basket percentage when calculating the payment rates applicable to it for that fiscal year.
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In the FY 2018 SNF PPS proposed
rule (82 FR 21076 through 21077), we
proposed that for the SNF QRP starting
with the 2019 SNF QRP, we would
apply our current schedule for the
reporting of measure data to the
reporting of standardized resident
assessment data. Specifically, we
proposed to apply to the submission of
standardized resident assessment data
our policy that except for the first
program year for which a measure is
adopted, SNFs must report data on
measures for SNF Medicare admissions
that occur during the 12 month calendar
year period that apply to the program
year and that for the first program year
for which a measure is adopted, SNFs
are only required to report data on SNF
Medicare admissions that occur on or
after October 1 and are discharged from
the SNF up to and including December
31 of the calendar year that applies to
the program year. We sought comment
on our proposal to extend our current
policy governing the schedule for
reporting the quality measure data to the
reporting of standardized resident
assessment data beginning with the FY
2019 SNF QRP. A discussion of these
comments, along with our responses,
appears below.
Comment: Commenters supported our
proposal to adopt the same data
reporting schedule for both
standardized resident assessment data
and SNF QRP measure data as this
creates consistency in reporting.
Another commenter added that we
should allow facilities to become
familiar with the assessment and coding
requirements associated with the new
standardized resident assessment data
elements for a period of time before
quality measure reporting begins.
Response: We appreciate commenters’
support to extend this policy to the
standardized resident assessment data
submitted under the SNF QRP. We agree
that comprehensive training is needed
to ensure accurate data collection and to
ensure successful reporting on new
measures that are constructed using the
new data. As with the data collection
required on new assessment data
collection in the past, we will provide
training sessions, training manuals,
webinars, open door forums, help desk
support, and a Web site that hosts
training information and will continue
to provide the training providers may
need to understand item concepts and
coding instructions.
Comment: In light of the additional
data elements being proposed for the
MDS, one commenter recommended
that the reporting data for the purposes
of quality measures for the SNF QRP not
begin at the same time as new items are
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added to the MDS, and requested at
least a 3-month time frame of data
collection with the new items before the
data is collected for use in a quality
measure.
Response: We interpret the comment
to mean that given the new data
elements and need for SNFs to become
familiar with the coding of the new
standardized resident assessment data
elements, the commenter believes that
we should not use the first three months
of data in the calculation of the
measures to be publicly reported. We
acknowledge that SNFs may need time
to transition to new data reporting
requirements. As discussed previously,
data collection on new measures that
are calculated using resident assessment
data begins using a schedule that starts
on October 1 of a given year, we
anticipate using the subsequent
calendar year of data for public
reporting.
Final Decision: After careful
consideration of the public comments,
we are finalizing our proposal to extend
our current policy governing the
schedule for reporting quality measure
data to the standardized resident
assessment data elements beginning
with the FY 2019 SNF QRP.
(4) Schedule for Reporting the Quality
Measures Beginning with the FY 2020
SNF QRP
As discussed in section III.D.2.g. of
this final rule, we are finalizing the
adoption of five quality measures
beginning with the FY 2020 SNF QRP:
(1) Changes in Skin Integrity Post-Acute
Care: Pressure Ulcer/Injury; (2)
Application of IRF Functional Outcome
Measure: Change in Self-Care for
Medical Rehabilitation Patients (NQF
#2633); (3) Application of IRF
Functional Outcome Measure: Change
in Mobility Score for Medical
Rehabilitation Patients (NQF #2634); (4)
Application of IRF Functional Outcome
Measure: Discharge Self-Care Score for
Medical Rehabilitation Patients (NQF
#2635); (5) and Application of IRF
Functional Outcome Measure: Discharge
Mobility Score for Medical
Rehabilitation Patients (NQF #2636). In
the FY 2018 SNF PPS proposed rule (82
FR 21077) we proposed that SNFs
would report data on these measures
using the MDS that is submitted through
the QIES ASAP system. For the FY 2020
SNF QRP, SNFs would be required to
report these data for admissions as well
as discharges that occur between
October 1, 2018 and December 31, 2018.
More information on SNF reporting
using the QIES ASAP system is located
at https://www.cms.gov/Medicare/
Quality-Initiatives-Patient-Assessment-
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Instruments/NursingHomeQualityInits/
index.html?redirect=/NursingHome
QualityInits/30_NHQIMDS30Technical
Information.asp#TopOfPage. Starting in
CY 2019, SNFs would be required to
submit data for the entire calendar year
beginning with the FY 2021 SNF QRP.
We sought public comment on this
proposal. A discussion of these
comments, along with our responses,
appears below.
Comment: Two commenters
supported our proposal that SNFs report
admission and discharge data for the
five quality measures beginning with
the FY 2020 SNF QRP using the QIES
ASAP system.
Response: We thank the commenters
for their support.
Final Decision: We are finalizing our
policy as proposed for the Schedule for
Reporting the Quality Measures
Beginning with the FY 2020 SNF QRP.
(5) Input Sought on Data Reporting
Related to Assessment Based Measures
Through various means of public
input, including that through previous
rules (FY 2016 SNF PPS final rule, 80
FR 46415), public comment on
measures, and the MAP, we received
input suggesting that we expand the
quality measures to include all residents
and patients regardless of payer status
so as to ensure representation of the
quality of the services provided on the
population as a whole, rather than a
subset limited to Medicare. While we
appreciate that many SNF residents are
also Medicare beneficiaries, we agree
that collecting quality data on all
residents in the SNF setting supports
our mission to ensure quality care for all
individuals, including Medicare
beneficiaries. We also agree that
collecting data on all patients provides
the most robust and accurate reflection
of quality in the SNF setting. Accurate
representation of quality provided in
SNFs is best conveyed using data on all
SNF residents, regardless of payer. We
also appreciate that collecting quality
data on all SNF residents regardless of
payer source may create additional
burden. However, we also note that the
effort to separate out SNF residents
covered by other non-FFS Medicare
payers could have clinical and work
flow implications with an associated
burden, and we further appreciate that
it is common practice for SNFs to
collect MDS data on all residents
regardless of payer source. Additionally,
we note that data collected through
MDS for Medicare beneficiaries should
match that beneficiary’s claims data in
certain key respects (for example,
diagnoses and procedures); this makes it
easier for us to evaluate the accuracy of
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reporting in the MDS, such as by
comparing diagnoses at hospital
discharge to diagnoses at the follow-on
SNF admission. However, we would not
have access to such claims data for nonMedicare beneficiaries. Thus, we sought
input on whether we should require
quality data reporting on all SNF
residents, regardless of payer, where
feasible—noting that Part A claims data
are limited to only Medicare
beneficiaries.
We sought comments on this topic. A
discussion of these comments, along
with our responses, appears below.
Comment: We received overwhelming
support from commenters including
MedPAC and others for the expansion of
quality measures to include all residents
regardless of payer. Several commenters
as well as MedPAC expressed the
benefit of enabling comparisons
between FFS beneficiaries and other
users (including beneficiaries enrolled
in Medicare Advantage), expressing that
such data would serve to better inform
beneficiaries on the broader quality of
the entire facility, especially those who
are or will become long-term care
residents of the same facility. MedPAC
also highlighted that while the data
collection activity incurs some cost,
some providers currently assess all
residents routinely. Some commenters
conveyed that data collection on all
payers is more feasible than having to
select only Medicare populations.
Several commenters noted that it is
advantageous for facilities to focus on
quality outcomes for all residents
regardless of payer, and several
commenters noted that having
information on rates for all residents
regardless of payor allows providers to
utilize these measures in system-based
quality improvement initiatives.
One commenter noted a preference for
using claims-based data and urged that
claims-based SNF QRP measures be respecified to allow for this inclusion.
Another commenter highlighted the
value in using readily available MDS
assessment-based data to better
represent facility performance on
measures previously reported using
Medicare Part A claims data only.
Response: We acknowledge support
for this policy from MedPAC and other
commenters. We agree that having such
information from all payers adds value
to data comparisons, allows enhanced
use of assessment data already being
collected on all residents, and further
supports system-wide quality
improvement goals.
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(l) Application of the SNF QRP Data
Completion Thresholds to the
Submission of Standardized Resident
Assessment Data Beginning with the FY
2019 SNF QRP
We have received questions
surrounding the data completion policy
we adopted beginning with the FY 2018
program year, specifically with respect
to how that policy applies to patients
who reside in the SNF for part of an
applicable period, for example, a patient
who is admitted to a SNF during one
reporting period but discharged in
another, or a patient who is assessed
upon admission using one version of the
MDS but assessed at discharge using
another version. We previously
finalized in the FY 2016 SNF PPS final
rule (80 FR 46458) that SNFs must
report all of the data necessary to
calculate the measures that apply to that
program year on at least 80 percent of
the MDS assessments that they submit.
The term ‘‘measures’’ refers to quality
measures, resource use, and other
measures. We also stated, in response to
a comment, that we would consider data
to have been satisfactorily submitted for
a program year if the SNF reported all
of the data necessary to calculate the
measures if the data actually can be
used for purposes of such calculations
(as opposed to, for example, the use of
a dash [-]).
Some stakeholders interpreted our
requirement that data elements be
necessary to calculate the measures to
mean that if a patient is assessed, for
example, using one version of the MDS
at admission and another version of the
MDS at discharge, the two assessments
are included in the pool of assessments
used to determine data completion only
if the data elements at admission and
discharge can be used to calculate the
measures. Our intention, however, was
not to exclude assessments on this basis.
Rather, our intention was solely to
clarify that for purposes of determining
whether a SNF has met the data
completion threshold, we would only
look at the completeness of the data
elements in the MDS for which
reporting is required under the SNF
QRP.
To clarify our intended policy, in the
FY 2018 SNF PPS proposed rule (82 FR
21077 through 21078), we proposed that
for the purposes of determining whether
a SNF has met the data completion
threshold, we would consider whether
the SNF has reported all of the required
data elements applicable to the program
year on at least 80 percent of the MDS
assessments that they submit for that
program year. For example, if a resident
is admitted on December 20, 2017 but
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discharged on January 10, 2018: (1) The
resident’s 5-Day PPS assessment would
be used to determine whether the SNF
met the data completion threshold for
the 2017 reporting period (and
associated program year), and (2) the
discharge assessment would be used to
determine whether the SNF met the data
completion threshold for the 2018
reporting period (and associated
program year). We also clarified in the
FY 2018 SNF PPS proposed rule (82 FR
21078) that some assessment data will
not invoke a response; in those
circumstances, data are not ‘‘missing’’ or
incomplete. For example, in the case of
a resident who does not have any of the
medical conditions in a check all that
apply listing, the absence of a response
indicates that the condition is not
present, and it would be incorrect to
consider the absence of such data as
missing in a threshold determination.
We also proposed to apply this policy
to the submission of standardized
resident assessment data, and to codify
it at § 413.360(b) of our regulations. We
sought comment on these proposals. A
discussion of these comments, along
with our responses, appears below.
Comment: We received a comment
noting the usefulness of a document we
published indicating which data we
would be using to determine
compliance by SNFs beginning with the
FY 2018 SNF QRP. The commenter also
requested that we continue providing
that resource. The commenter also
acknowledged our clarification of which
MDS assessments are included in
compliance determinations when the
resident admission occurs in one
reporting period for the SNF QRP, while
their discharge occurs in a subsequent
reporting period. The commenter
further acknowledged our clarification
that an MDS item will not be considered
as missing data in the circumstances
when no response is necessary.
Another commenter requested
additional explanation and examples
regarding how the threshold compliance
calculation is applied. One commenter
suggested that the 80 percent data
completion threshold finalized in the
SNF PPS FY 2016 final rule is set too
low and requested that, for the FY 2018
payment determination year and
beyond, the data completion threshold
be increased to at least ninety percent.
We also received a comment suggesting
that requiring that SNFs submit data on
100% of all items necessary to calculate
quality measures and all additional
standardized resident assessment data
elements is set too high. They also
expressed that the tracking of dash use,
which is what is used to determine
compliance, is burdensome. Another
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commenter suggested that we omit the
first quarter of required data reporting in
our determination of compliance given
the newness of the reporting. They
further expressed that for FY 2018 SNF
QRP, the Review and Correct reports
that were proved were unavailable for
the SNFs to help them identify if they
were successful in meeting the
compliance threshold.
One commenter did not support the
codification of this proposal in our
regulations with respect to the FY 2019
SNF QRP, and requested that we first
review the results of the initial
implementation of this policy and
propose such codification in the future.
Response: We appreciate the
commenter’s support of the materials
we provided to help SNFs identify the
required MDS data elements for
accurate submission in order to meet the
requirements of the SNF QRP. We have
published the document, Technical
Specifications for Reporting
Assessment-Based Measures for
FY2018, which identifies item
completion specifications for
calculation of missing data rates on our
Web site at https://www.cms.gov/
Medicare/Quality-Initiatives-PatientAssessment-Instruments/
NursingHomeQualityInits/SkilledNursing-Facility-Quality-ReportingProgram/SNF-Quality-ReportingProgram-Measures-and-TechnicalInformation.html and intend to update
this resource document as suggested.
We do not believe that the Review
and Correct Reports would be an
appropriate mechanism for informing
SNFs whether they have complied with
our data completion threshold. This
report is intended to provide SNFs
information related to their overall
quality measure calculations. It will not
provide SNFs with the discrete, data
element level information on what
response was coded for every resident
assessment data element. We refer to the
CMS SNF QRP Training Web site for
detailed information on the Review and
Correct Reports: https://www.cms.gov/
Medicare/Quality-Initiatives-PatientAssessment-Instruments/
NursingHomeQualityInits/SkilledNursing-Facility-Quality-ReportingProgram/SNF-Quality-ReportingProgram-Training.html.
Although the Review and Correct
Reports do not enable SNFs to track the
coding of dashes which is what can lead
to non-compliance, we provide other
reports via the Certification and Survey
Provider Enhanced Reports Reporting
(CASPER) System which SNFs can use
to track their dash use in the assessment
data they have submitted and other
submission information. These reports
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include: Submitter Validation Reports,
Facility Final Validation Reports, Error
Detail by Facility Reports, Activity or
Submission Activity Reports and
Assessment Print Reports. We are also
looking into other mechanisms and
reports that would serve to further assist
SNFs in easily identifying their data
completion thresholds.
To illustrate an example as requested,
if a provider submitted 100 records in
a reporting period and 80% of those
records had all of the standardized
resident assessment data elements that
we require and the data necessary to
calculate the measures used in the SNF
QRP, the SNF would meet our
compliance determination.
We currently believe that the
completion of all of the required data
elements on at least 80 percent of all
required assessments is a fair criterion
for a new program and is consistent
with other post-acute care programs.
Regarding the suggestion that we not
consider the initial quarter of data
reporting by SNFs on new data that is
required, we have analyzed the first
quarter of data reporting and found that
most SNFs were successful in their data
submission. We appreciate that SNFs
seek to track their compliance rates and
the burden that may be associated with
their tracking of such data submission.
However, we believe that ensuring the
submission of accurate data is an
inherent responsibility of the SNF. We
note that the use of dashes, which is
what can lead to a determination of noncompliance, should be rare in that the
assessment data collected is required
and the expectation is that SNFs
perform these assessments on their
residents for not only data reporting
purposes for the SNF QRP, but also for
other purposes as well. As has been
noted, overall dash use by SNFs is
already low. That said, the reports we
provide can assist in a SNF’s tracking of
their dash rates and we will evaluate
other types of reports that can assist.
Final Decision: We are finalizing our
proposal to apply the threshold levels as
proposed, to extend this policy to the
submission of standardized resident
assessment data, and to codify the
requirement at § 413.360(b) of our
regulations.
m. SNF QRP Data Validation
Requirements
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,
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36605
while allowing us to establish
estimations of the accuracy of SNF QRP
data.
n. SNF QRP Submission Exception and
Extension Requirements
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
SNF QRP. We did not propose any
changes to the SNF QRP requirements
that we adopted in these final rules.
However, in the FY 2018 SNF PPS
proposed rule (82 FR 21078) we
proposed to codify the SNF QRP
Submission Exception and Extension
Requirements at new § 413.360(c).
We remind readers that, in the FY
2016 SNF PPS final rule (80 FR 46459
through 46460) we stated that SNF’s
must request an exception or extension
by submitting a written request along
with all supporting documentation to
CMS via email to the SNF Exception
and Extension mailbox at
SNFQRPReconsiderations@cms.hhs.gov.
We further stated that exception or
extension requests sent to CMS through
any other channel would not be
considered as a valid request for an
exception or extension from the SNF
QRP’s reporting requirements for any
payment determination. To be
considered, a request for an exception or
extension must contain all of the
requirements as outlined on our Web
site at https://www.cms.gov/Medicare/
Quality-Initiatives-Patient-AssessmentInstruments/NursingHomeQualityInits/
Skilled-Nursing-Facility-QualityReporting-Program/SNF-QRReconsideration-and-Exception-andExtension.html. We sought public
comments on our proposal to codify the
SNF QRP submission exception and
extension requirements. A discussion of
these comments, along with our
responses, appears below.
Comment: A few commenters did not
support codification of the SNF QRP
Submission Exception and Extension
Requirements until one SNF QRP
program year has been completed.
Response: Our proposal to codify
existing policy in our regulations was
technical in nature and would have no
effect on its existing applicability and
enforceability. To the extent that the
commenter was asking us to delay the
effective date of this policy, we did not
propose such a delay, and we believe
that SNFs will benefit from having this
process available to them in the event
that they experience an extraordinary
circumstance during the FY 2018
program year.
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Final Decision: After considering the
comments we received, we are codifying
the SNF QRP submission exception and
extension requirements at § 413.360(c)
of our regulations.
o. SNF QRP Submission
Reconsideration and Appeals
Procedures
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 beginning
with the FY 2018 SNF QRP. We did not
propose any changes to these
procedures in the FY 2018 SNF PPS
proposed rule (82 FR 21078). However,
we proposed to codify the SNF QRP
Reconsideration and Appeals
procedures at new § 413.360(d). Under
these procedures, a SNF must follow a
defined process to file a request for
reconsideration if it believes that a
finding of noncompliance with the
reporting requirements for the
applicable fiscal year is erroneous, and
the SNF can file a request for
reconsideration only after it has been
found to be noncompliant. To be
considered, a request for a
reconsideration must contain all of the
elements outlined on our Web site at
https://www.cms.gov/Medicare/QualityInitiatives-Patient-AssessmentInstruments/NursingHomeQualityInits/
Skilled-Nursing-Facility-QualityReporting-Program/SNF-QRReconsideration-and-Exception-andExtension.html. We stated that we
would not review any reconsideration
request that is not accompanied by the
necessary documentation and evidence,
and that the request should be emailed
to CMS at the following email address:
SNFQRPReconsiderations@cms.hhs.gov.
We further stated that reconsideration
requests sent to CMS through any other
channel would not be considered.
We sought public comments on our
proposal to codify the SNF QRP
reconsideration and appeals procedures.
A discussion of these comments, along
with our responses, appears below.
Comment: Several commenters did
not support the codification of SNF QRP
Submission Reconsideration and
Appeals Procedures until at least the FY
2018 SNF QRP program year has been
completed.
Response: Our proposal to codify
existing policy in our regulations was
technical in nature and would have no
effect on its existing applicability and
enforceability. To the extent that the
commenter was asking us to delay the
effective date of this policy, we did not
propose such a delay, and we believe
that SNFs will benefit from having this
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process available to them in the event
that they wish to seek reconsideration
during the FY 2018 program year.
Final Decision: After considering the
comments, we are finalizing our
decision to codify the SNF QRP
submission reconsideration and appeals
requirements at new § 413.360(d) of our
regulations.
p. Policies Regarding Public Display of
Measure Data for the SNF QRP
Section 1899B(g) of the Act requires
the Secretary to establish procedures for
the public reporting of SNFs’
performance, including the performance
of individual SNFs, on the quality
measures specified under section (c)(1)
and resource use and other measures
specified under section (d)(1) of the Act
(collectively, IMPACT Act measures)
beginning not later than 2 years after the
specified application date under section
1899B(a)(2)(E) of the Act. This is
consistent with the process applied
under section 1886(b)(3)(B)(viii)(VII) of
the Act, which refers to the public
display and review requirements for the
Hospital Inpatient Quality Reporting
(IQR) Program. For a more detailed
discussion about the provider’s
confidential review process prior to
public display of measures, we refer
readers to the FY 2017 SNF PPS final
rule (81 FR 52045 through 52048).
In the FY 2018 SNF PPS proposed
rule, pending the availability of data, we
proposed to publicly report data in CY
2018 for the following 3 assessmentbased measures: (1) Application of
Percent of Long-Term Care Hospital
(LTCH) Patients With an Admission and
Discharge Functional Assessment and a
Care Plan That Addresses Function
(NQF #2631); (2) Percent of Residents or
Patients with Pressure Ulcers That Are
New or Worsened (NQF #0678); and (3)
Application of Percent of Residents
Experiencing One or More Falls with
Major Injury (NQF #0674). Data
collection for these 3 assessment-based
measures began on October 1, 2016. We
proposed to display data for the
assessment-based measures based on
rolling quarters of data, and we would
initially use discharges from January 1,
2016 through December 31, 2016.
In addition, we proposed to publicly
report 3 claims-based measures for: (1)
Medicare Spending Per Beneficiary-PAC
SNF QRP; (2) Discharge to CommunityPAC SNF QRP; and (3) Potentially
Preventable 30-Day Post-Discharge
Readmission Measure for SNF QRP.
These measures were adopted for the
SNF QRP in the FY 2017 SNF PPS rule
to be based on data from one calendar
year. As previously adopted in the FY
2017 SNF PPS final rule (81 FR 52045
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through 52047), confidential feedback
reports for these 3 claims-based
measures will be based on data
collected for discharges beginning
January 1, 2016 through December 31,
2016. However, our current proposal
revises the dates for public reporting
and we proposed to transition from
calendar year to fiscal year to make
these measure data publicly available by
October 2018.
For the Medicare Spending Per
Beneficiary-PAC SNF QRP and
Discharge to Community-PAC SNF QRP
measures, we proposed public reporting
beginning in calendar year 2018 based
on data collected from discharges
beginning October 1, 2016, through
September 30, 2017 and rates will be
displayed based on one fiscal year of
data. For the Potentially Preventable 30day Post-Discharge Readmission
Measure for SNF QRP, we also proposed
to increase the years of data used to
calculate this measure from one year to
2 years and to update the associated
reporting dates. These proposed
revisions to the Potentially Preventable
30-Day Post-Discharge Readmission
Measure for SNF QRP will result in the
data being publicly reported with
discharges beginning October 1, 2015,
through September 30, 2017 and rates
will be displayed based on two
consecutive fiscal years of data.
Also, we proposed to discontinue the
public display of data on the
assessment-based measure ‘‘Percent of
Residents or Patients with Pressure
Ulcers That Are New or Worsened
(Short Stay) (NQF #0678)’’ and to
replace it with a modified version of the
measure entitled ‘‘Changes in Skin
Integrity Post-Acute Care: Pressure
Ulcer/Injury’’ from the SNF QRP by
October 2020.
For the assessment-based measures,
Application of Percent of Long-Term
Care Hospital (LTCH) Patients With an
Admission and Discharge Functional
Assessment and a Care Plan That
Addresses Function (NQF #2631);
Percent of Residents or Patients with
Pressure Ulcers That Are New or
Worsened (NQF #0678); and
Application of Percent of Residents
Experiencing One or More Falls with
Major Injury (NQF #0674), to ensure the
statistical reliability of the measures, we
proposed to assign SNFs with fewer
than 20 eligible cases during a
performance period to a separate
category: ‘‘The number of cases/resident
stays is too small to report’’. If a SNF
had fewer than 20 eligible cases, then
the SNF’s performance would not be
publicly reported for the measure for
that performance period.
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For the claims-based measures
Medicare Spending Per Beneficiary-PAC
SNF QRP; Discharge to Community-PAC
SNF QRP; and Potentially Preventable
30-Day Post-Discharge Readmission
Measure for SNF QRP, we proposed to
assign SNFs with fewer than 25 eligible
cases during a performance period to a
separate category: ‘‘The number of
cases/resident stays is too small to
report,’’ to ensure the statistical
reliability of the measures. If a SNF had
fewer than 25 eligible cases, the SNF’s
performance would not be publicly
reported for the measure for that
performance period. For Medicare
Spending Per Beneficiary-PAC SNF QRP
we proposed to assign SNFs with fewer
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than 20 eligible cases during a
performance period to a separate
category: ‘‘The number of cases/resident
stays is too small to report’’ to ensure
the statistical reliability of the measure.
If a SNF has fewer than 20 eligible
cases, the SNF’s performance would not
be publicly reported for the measure for
that performance period.
TABLE 22—SUMMARY OF PROPOSED MEASURES FOR CY 2018 PUBLIC DISPLAY
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Proposed Measures:
Percent of Residents or Patients with Pressure Ulcers that Are New or Worsened (Short Stay) (NQF #0678).
Application of Percent of Residents Experiencing One or More Falls with Major Injury (Long Stay) (NQF #0674).
Application of Percent of Long-Term Care Hospital (LTCH) Patients With an Admission and Discharge Functional Assessment and a Care
Plan That Addresses Function (NQF #2631).
Potentially Preventable 30-Day Post-Discharge Readmission Measure for SNF QRP.
Discharge to Community—(PAC) SNF QRP.
Medicare Spending Per Beneficiary (PAC) SNF QRP.
We invited public comment on the
proposal for the public display of these
three assessment-based measures and
three claims-based measures, and the
replacement of ‘‘Percent of Residents or
Patients with Pressure Ulcers That Are
New or Worsened (Short Stay) (NQF
#0678)’’ with a modified version of the
measure, ‘‘Changes in Skin Integrity
Post-Acute Care: Pressure Ulcer/Injury’’
described above. A discussion of these
comments, along with our responses,
appears below.
Comment: A commenter requested
that we consider aligning the public
reporting periods and provider
deadlines across PAC settings and other
CMS programs.
Response: We are working to achieve
alignment where possible. For example,
with respect to the following 3
assessment-based measures: (1)
Application of Percent of Long-Term
Care Hospital (LTCH) Patients With an
Admission and Discharge Functional
Assessment and a Care Plan That
Addresses Function (NQF #2631); (2)
Percent of Residents or Patients with
Pressure Ulcers That Are New or
Worsened (NQF #0678); and (3)
Application of Percent of Residents
Experiencing One or More Falls with
Major Injury (NQF #0674), we intend to
initially report data using discharges
from January 1, 2017 through December
31, 2017 for the public display of data,
which aligns with the IRF and LTCH
QRPs.
Comment: A commenter supported
the proposed minimum denominator
requirements for public display.
Response: We appreciate the
commenter’s support.
Comment: A few commenters
supported the public display of
assessment-based measures based on
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rolling quarters since it reflects more
recent SNF quality performance.
Response: We appreciate the
commenters’ support.
Final Decision: After consideration of
the public comments we received, we
are finalizing that we intend to begin
publicly reporting in 2018 the following
assessment-based measures based on the
availability of data: (1) ‘‘Application of
Percent of Long-Term Care Hospital
(LTCH) Patients With an Admission and
Discharge Functional Assessment and a
Care Plan That Addresses Function
(NQF #2631); (2) Percent of Residents or
Patients with Pressure Ulcers That Are
New or Worsened (NQF #0678); and (3)
Application of Percent of Residents
Experiencing One or More Falls with
Major Injury (NQF #0674), as well as the
following claims-based measures: (1)
‘‘Medicare Spending Per BeneficiaryPAC SNF QRP; (2) Discharge to
Community-PAC SNF QRP; and (3)
Potentially Preventable 30-Day PostDischarge Readmission Measure for SNF
QRP. In addition, we will discontinue
the public reporting of data on the
assessment-based measure: ‘‘Percent of
Residents or Patients with Pressure
Ulcers That Are New or Worsened
(Short Stay) (NQF #0678)’’ by October
2020.
q. Mechanism for Providing
Confidential Feedback Reports to SNFs
Section 1899B(f) of the Act requires
the Secretary to provide confidential
feedback reports to PAC providers on
their performance on the measures
specified under subsections (c)(1) and
(d)(1) of section 1899B of the Act,
beginning 1 year after the specified
application date that applies to such
measures and PAC providers. In the FY
2017 SNF PPS final rule (81 FR 52046
through 52048), we finalized processes
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to provide SNFs the opportunity to
review their data and information using
confidential feedback reports that will
enable SNFs to review their
performance on the measures required
under the SNF QRP. Information on
how to obtain these and other reports
available to the SNF QRP can be found
at https://www.cms.gov/Medicare/
Quality-Initiatives-Patient-AssessmentInstruments/NursingHomeQualityInits/
Skilled-Nursing-Facility-QualityReporting-Program/SNF-QualityReporting-Program-Spotlights-andAnnouncements.html. We did not
propose any changes to this policy but
received comments, which are
discussed below.
Comment: A few commenters
requested more granular residentspecific data in the reports.
Response: Resident level data will be
available in the CASPER QM reports.
Comment: A commenter suggested
that we provide confidential feedback
reports to SNFs prior to the time that we
publicly display their quality measure
data.
Response: Before publicly displaying
measure scores, providers have several
opportunities to review their facilityand resident-level data to ensure the
accuracy of quality measure scores. Two
separate confidential feedback reports
will be provided, in addition to Review
and Correct reports, for providers to
review their single quarter and aggregate
quality measure scores, respectively.
The confidential feedback reports are
the QM facility- and resident-level
reports that will be available to
providers beginning in fall 2017, which
is prior to public display, and contain
quality measure information for a single
reporting period. The facility-level QM
reports will provide information such as
the numerator, denominator, facility
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observed percent, facility adjusted
percent, and national average. The
resident-level QM reports will contain
individual resident data and provide
information related to which residents
were included in the quality measures.
The Review and Correct reports,
currently available to SNFs, provide
aggregate performance for up to the past
four full quarters as the data are
available. The reports contain
information on assessment based
measures performance at the facilitylevel and observed rates. The reports
also display data correction deadlines
and whether the data correction period
is open or closed. Please refer to the
SNF QRP Web site for information from
the training on the Review and Correct
reports: https://www.cms.gov/Medicare/
Quality-Initiatives-Patient-AssessmentInstruments/NursingHomeQualityInits/
Skilled-Nursing-Facility-QualityReporting-Program/SNF-QualityReporting-Program-Training.html.
Finally, the Provider Preview reports
will be available beginning in the
summer of 2018. Provider Preview
reports are available about 5 months
after the end of each reporting period.
They contain facility-level quality
measure data results and will contain
information such as the numerator,
denominator, facility observed percent,
facility adjusted percent, and national
average. Providers will have 30 days
upon receiving the Provider Preview
reports via their CASPER system folders
to review their data. We note at that
point in time providers are no longer
able to correct the underlying data in
these reports. At this point, the data
correction period has ended so
providers are not able to correct the
underlying data in these reports.
3. Skilled Nursing Facility Value-Based
Purchasing Program (SNF VBP)
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a. Background
Section 215 of the Protecting Access
to Medicare Act of 2014 (PAMA) (Pub.
L. 113–93) authorized the SNF VBP
Program (the ‘‘Program’’) by adding
sections 1888(g) and (h) to the Act. As
a prerequisite to implementing the SNF
VBP Program, in the FY 2016 SNF PPS
final rule (80 FR 46409 through 46426)
we adopted an all-cause, all-condition
hospital readmission measure, as
required by section 1888(g)(1) of the
Act. In the FY 2017 SNF PPS final rule
(81 FR 51986 through 52009), we
adopted an all-condition, risk-adjusted
potentially preventable hospital
readmission measure for SNFs, as
required by section 1888(g)(2) of the
Act. In this final rule, we are finalizing
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proposals related to the Program’s
implementation.
Section 1888(h)(1)(B) of the Act
requires that the SNF VBP Program
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 towards
transforming how care is paid for,
moving increasingly towards 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). We also refer readers to the FY
2017 SNF PPS final rule (81 FR 51986
through 52009) for discussion of the
policies that we adopted related to the
potentially preventable hospital
readmission measure, scoring, and other
topics.
In this rule, we are finalizing
requirements for the SNF VBP Program,
as well as codifying some of those
requirements at § 413.338, including
certain definitions, the process for
making value-based incentive payments,
and limitations on review.
We received several general
comments on the SNF VBP Program. We
note that we did not receive any
comments specific to the proposed
regulation text. A discussion of the
general comments that we received,
along with our responses, appears
below.
Comment: One commenter urged us
to seek the statutory authority to
broaden the scope of the SNF VBP
Program to include other post-acute care
outcome measures beyond measures of
readmissions.
Response: We thank the commenter
for this suggestion.
Comment: One commenter suggested
that we authorize the inclusion of
certified peer specialists in value-based,
patient-centered treatment, as well as
transition teams assigned to nursing
home patients with mental illness or
substance use disorders who might
benefit in recovery from a return to
community-based services. The
commenter stated that peer support
specialists’ work could result in savings
to the Medicare Program due to reduced
rehospitalizations and from reduced
medical expenditures for recurring
medical conditions.
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Response: We appreciate the
comment. We will consider whether
peer support specialists could play a
role providing technical assistance to
SNFs to help them reduce avoidable
hospital readmissions through our
collaboration with the CMS Quality
Innovation and Improvement Network.
Comment: One commenter suggested
that we analyze the New York State
Nursing Home Quality Initiative, which
the commenter stated incorporates
quality, compliance and efficiency with
a focus on potentially avoidable
hospitalizations. While the initiative is
limited to long-stay Medicaid patients,
the commenter stated that it presents
several important lessons for the SNF
VBP Program. The commenter
specifically pointed to the need to
structure measures narrowly for
participating facilities, regional
adjustments, and detailed information
that the commenter believes must be
provided to participating facilities. The
commenter also stated that potentially
avoidable hospitalizations are the most
important factor, and that incentive
payments must be large enough and
close enough to the performance period
to maximize improvement.
Response: The New York State
Nursing Home Quality Initiative ‘‘is an
annual quality and performance
evaluation project to improve the
quality of care for residents in
Medicaid-certified nursing facilities
across New York State.’’ 49 The initiative
scores Medicaid-certified nursing
facilities in the state on previous
performance and awards up to 100
points for performance on measures of
quality, compliance, and efficiency. The
initiative also incorporates deficiencies
cited during the health inspection
survey process and creates an overall
score for each facility that forms the
basis for a quintile ranking. We
appreciate the commenter’s suggestion
that we consider the New York
initiative’s results and lessons and we
agree that it may be instructive for our
continuing SNF VBP Program
development. As the commenter noted,
its basis in long-stay Medicaid patients
differs somewhat from the SNF VBP
Program’s focus on shorter-stay
Medicare patients. However, as the
commenter notes, the initiative provides
detailed information to participating
facilities, a goal that we believe we are
now meeting by providing patient-level
information to SNF VBP Program
participants. We also believe that the
SNF VBP Program is, as the commenter
49 See https://www.health.ny.gov/health_care/
medicaid/redesign/nursing_home_quality_
initiative.
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suggests, narrowly constructed due to
its focus on measures of hospital
readmissions, and while we have not
considered regional adjustments in the
SNF VBP Program to date, we will
consider if such adjustments are
appropriate in the future.
Comment: One commenter questioned
whether the SNF VBP Program’s statute
actually limits the Program to the
specified measures of readmissions, or
whether other indicators could be
included in performance scoring. The
commenter suggested that, at a
minimum, we should coordinate our
approach and goals between SNF VBP,
SNF QRP, and the Staffing Data
Collection initiative. Another
commenter suggested that we consider
additional quality measures for the
Program, potentially including measures
drawn from Nursing Home Compare,
the NH VBP demonstration, or the SNF
QRP. The commenter also specifically
suggested that we measure turnover as
a percentage of nursing staff, total CNA
hours per patient day, and total licensed
nursing hours per patient day. The
commenter stated that these measures
can be integrated into SNF VBP because
the payroll-based journal staffing
information collection system has been
operational since July 2016. The
commenter also stated that several
studies have positively correlated a
higher staffing level with higher care
quality and outcomes, and stated that
such metrics will encourage SNFs to
invest in their staffs.
Response: We interpret sections
1888(h)(2)(A) and (B) of the Act to only
allow us to include in the Program first
the readmission measure specified
under section 1888(g)(1), and then in its
place, the readmission measure
specified under section 1888(g)(2) of the
Act. We will continue our collaborative
effort with the SNF QRP and Nursing
Home Compare programs to align our
readmission measure to the fullest
extent feasible and practicable. Our
collaborative focus area across these
programs is to improve the quality of
care and reduce hospital readmissions.
We thank the commenters for this
feedback.
b. Measures
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(1) Background
For background on the measures in
the SNF VBP Program, we refer readers
to the FY 2016 SNF PPS final rule (80
FR 46419), where we finalized the
Skilled Nursing Facility 30-Day AllCause Readmission Measure (SNFRM)
(NQF #2510) that we will use for the
SNF VBP Program. We also refer readers
to the FY 2017 SNF PPS final rule (81
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FR 51987 through 51995), where we
finalized the Skilled Nursing Facility
30-Day Potentially Preventable
Readmission Measure (SNFPPR) that we
will use for the SNF VBP Program
instead of the SNFRM as soon as
practicable.
(2) Request for Comment on Measure
Transition
Section 1886(h)(2)(B) of the Act
requires us to apply the SNFPPR to the
SNF VBP Program instead of the
SNFRM ‘‘as soon as practicable.’’ We
intend to propose a timeline for
replacing the SNFRM with the SNFPPR
in future rulemaking, after we have had
a sufficient opportunity to analyze the
potential effects of this replacement on
SNFs’ measured performance. We
believe we must approach the decision
about when it is practicable to replace
the SNFRM thoughtfully, and we
continue to welcome public feedback on
when it is practicable to replace the
SNFRM with the SNFPPR.
In the FY 2017 SNF PPS final rule (81
FR 51995), we summarized the public
comments we received in response to
our request for when we should begin
to measure SNFs on their performance
on the SNFPPR instead of the SNFRM.
Commenters’ views were mixed; one
suggested that we replace the SNFRM
immediately, while others requested
that we wait until the SNFPPR receives
NQF endorsement, or that we allow
SNFs to receive and understand their
SNFPPR data for at least 1 year prior to
beginning to use it. Another commenter
suggested that we decline to use the
SNFPPR until the measure receives
additional support from the Measure
Application Partnership and is the
subject of additional public comment.
We would like to thank stakeholders
for their input on this issue. We believe
the first opportunity to replace the
SNFRM with the SNFPPR would be the
FY 2021 program year, which would
give SNFs experience with the SNFRM
and other measures of readmissions
such as those adopted under the SNF
QRP. However, we have not yet
determined if it would be practicable to
replace the SNFRM at that time. We
intend to continue to analyze SNF
performance on the SNFPPR in
comparison to the SNFRM and assess
how the replacement of the SNFRM
with the SNFPPR will affect the quality
of care provided to Medicare
beneficiaries.
In the FY 2018 SNF PPS proposed
rule, we sought public comments on
when we should replace the SNFRM
with the SNFPPR, particularly in light
of our proposal (discussed further in
this section) to adopt performance and
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baseline periods based on the federal FY
rather than on the calendar year. A
discussion of these comments, along
with our responses, appears below.
Comment: Several commenters
supported transitioning to the SNFPPR
beginning with the FY 2021 program
year as long as the measure has received
NQF endorsement. Commenters stated
that the measure’s importance to the
program necessitates thorough vetting,
including NQF endorsement, and agreed
that waiting until FY 2021 provides
SNFs with the opportunity to gain
experience with the SNFRM prior to the
measure transition. One commenter
requested that we provide a timeline for
when the measure will replace the
SNFRM.
Response: We appreciate the
feedback, and we intend to submit the
SNFPPR to NQF for consideration of
endorsement as soon as possible. We
will address the replacement of the
SNFRM with the SNFPPR in future
rulemaking.
Comment: One commenter expressed
continued concern about the SNFPPR,
stating that we should conduct
additional testing and analysis of the
measure before implementing it in the
Program. The commenter specifically
requested that we await full
endorsement by NQF, and if we intend
to proceed with its implementation, that
we provide SNFPPR performance
information in our quarterly reports to
SNFs.
Response: As we noted above, we
intend to submit the SNFPPR to NQF for
consideration of endorsement as soon as
possible. We also intend to provide
SNFs with SNFPPR performance
information in their quarterly reports
prior to future replacement of the
SNFRM. We intend to update affected
stakeholders on timing in future
rulemaking.
Comment: One commenter supported
adoption of the SNFPPR and did not
have any objection to transitioning the
Program to the SNFPPR in FY 2021. The
commenter also suggested that we
consider including additional measures
in the Program to cover other relevant
quality improvement topics, such as
resource use and functional outcomes.
Response: As we discussed above, we
interpret sections 1888(h)(2)(A) and (B)
of the Act to only allow us to include
in the Program first the readmission
measure specified under section
1888(g)(1) of the Act, and then in its
place, the readmission measure
specified under section 1888(g)(2) of the
Act. We intend to provide SNF’s with
SNFPPR rates prior to the replacement
for SNF’s to learn more about the
measure and incorporate into their
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quality improvement and care
transitions efforts to reduce
readmissions. We also intend to further
analyze the SNFPPR prior to replacing
the SNFRM for any association with
social risk factors, in collaboration with
the Assistant Secretary for Planning and
Evaluation. We intend to update
stakeholders on this analysis in future
rulemaking.
Comment: One commenter supported
transitioning the Program to the
SNFPPR in FY 2021, if not sooner, and
requested additional information on
why we believe that FY 2021 is the first
opportunity to transition the Program
from the SNFRM.
Response: As we discussed in the FY
2018 SNF PPS proposed rule (82 FR
21080), we concluded that FY 2021
would be the first opportunity to replace
the SNFRM with the SNFPPR because
we believe that giving SNFs two
Program years’ experience with the
SNFRM will provide them with
valuable experience with measures of
readmissions that will be helpful for
their quality improvement efforts
generally and with their specific efforts
to improve their scores under the SNF
VBP Program. To expand on that point,
we did not believe it would be helpful
to SNFs’ quality improvement efforts to
adopt a quality measure for a single
year, then to replace that measure after
that 1 year, particularly because the
Program is limited by statute to a single
measure at a time. We viewed that
instability in the Program’s quality
metrics as undesirable and unnecessary.
We are also concerned that transitioning
the Program too quickly could prove
confusing for SNFs and for affected
patients.
We also intend to provide SNFs with
their SNFPPR rates prior to the
replacement so that they have an
opportunity to learn more about the
measure and incorporate that
information into their quality
improvement and care transitions efforts
to reduce readmissions. We also intend
to further analyze the SNFPPR prior to
replacing the SNFRM for any
association with social risk factors, in
collaboration with the Assistant
Secretary for Planning and Evaluation.
We intend to update stakeholders on
this analysis in future rulemaking.
Comment: One commenter
recommended that we transition the
Program to the SNFPPR no sooner than
FY 2021 to allow sufficient time for
SNFs to adjust to the measure’s
implementation.
Response: We agree that SNFs need
time to adjust to transitions under the
Program, which is why we sought
comment in the FY 2017 SNF PPS
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proposed rule on this topic and again
sought comment in the FY 2018 SNF
PPS proposed rule. We will consider the
commenter’s feedback as we determine
when it is practicable to transition the
Program to the SNFPPR.
We thank the commenters for this
feedback and will take it into
consideration in the future. We also
received a number of unsolicited
comments on the SNF VBP Program
measures. The comments, together with
our responses, appear below.
Comment: One commenter expressed
concern about our use of measures of
readmissions in the Program. The
commenter was particularly concerned
that these measures place non-profit
facilities at a disadvantage compared to
their for-profit competitors because nonprofits take all patients, including highrisk and high-acuity level patients. The
commenter also stated that the
measures’ risk adjustment
methodologies do not fully capture the
additional effort needed to treat these
patients in the SNF setting, such as the
risk of patient non-compliance with
medical direction after discharge. The
commenter requested that we provide
additional transparency into claimsbased quality measures in order to
improve providers’ understanding of
their calculations and methodologies.
Response: We thank the commenter
for this feedback, but we disagree with
their concern. As we discussed in the
FY 2016 SNF PPS final rule (80 FR
46418), we believe that the risk
adjustment model that we have adopted
for the SNFRM will ensure that SNFs
serving more complex patient
populations will not be penalized
inadvertently under the Program. As we
discussed in the FY 2017 SNF PPS final
rule (81 FR 51993), we have also
specified the SNF Potentially
Preventable Readmissions Measure for
the Program, and that measure estimates
the risk-standardized rate of unplanned,
potentially preventable hospital
readmissions for Medicare FFS
beneficiaries. The comprehensive
claims-based risk-adjustment model that
the measure employs takes into account
demographic and eligibility
characteristics, principal diagnoses,
types of surgery or procedure from the
prior short-term hospital stay,
comorbidities, length of stay and ICU/
CCU utilization from the immediately
prior short-term hospital stay, and
number of admissions in the year
preceding the SNF admission. We
continue to believe that the measures’
risk adjustment methodologies
appropriately adjust for factors beyond
SNFs’ control. We will carefully
monitor the Program’s effects on SNFs’
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measured performance and on care
quality, and will work with SNFs to
provide as much assistance as possible
with their efforts to improve on the
Program’s measures. For additional
information on the SNFRM’s calculation
and methodology, we refer readers to
the SNFRM Technical Report available
on our Web site at https://www.cms.gov/
Medicare/Quality-Initiatives-PatientAssessment-Instruments/
NursingHomeQualityInits/Downloads/
SNFRM-Technical-Report-3252015.pdf.
For additional information on the
SNFPPR’s calculation and methodology,
we refer readers to the SNFPPR
Technical Report available on our Web
site at https://www.cms.gov/Medicare/
Quality-Initiatives-Patient-AssessmentInstruments/Value-Based-Programs/
Other-VBPs/SNFPPR-TechnicalReport.pdf.
Comment: Two commenters suggested
that we consider removing readmissions
from the measure when they are
associated with events unrelated to SNF
care, such as car accidents or disease
outbreaks.
Response: We note that the SNF VBP
Program’s statute requires that the
measure specified under section
1888(g)(1) of the Act must be an ‘‘allcause all-condition hospital
readmission’’ measures, which we
specified as the SNFRM (NQF #2510).
We previously addressed this issue in
detail in the FY 2016 SNF PPS Final
Rule (80 FR 46412 through 46413). We
explained that the SNFRM has been risk
adjusted for case-mix to account for
differences in patient populations. The
goal of risk adjustment is to account for
these differences so that providers who
treat sicker or more vulnerable patient
populations are not unnecessarily
penalized for factors that are outside of
their control. Regarding hospitalizations
due to other incidents unrelated to SNF
care such as car accidents and nonpreventable disease outbreaks, we note
that these events are random and would
not be likely to cluster in certain SNFs
over time; thus they would not result in
systematic bias in the measure.
Comment: One commenter suggested
that we factor the expansion of managed
care into our measure development
process, noting that many states are
rapidly expanding managed care
offerings for both Medicare and
Medicaid patients. The commenter
suggested that we consider
consolidating quality measure
requirements between Medicare and
Medicaid to minimize the burden on
participating providers, and suggested
that we promote best practices in
quality improvement as widely as
possible.
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Response: The measures that we have
adopted for the Program are based on
Medicare claims, and are thus restricted
to Medicare fee-for-service beneficiaries.
We believe that policy to be appropriate
given the Program’s focus on Medicare
fee-for-service payments. From our
collaboration with the Quality
Innovation and Improvement Networks,
we also believe that many of the care
transitions and quality improvement
strategies used by SNFs are broadly
applicable to reduce readmissions for
Medicaid and managed-care patients.
We will consider methods to monitor
managed-care performance in the future,
and welcome commenters’ input on that
topic.
Comment: One commenter urged us
to refine and test the SNFPPR further
before adopting it for the Program. The
commenter was also concerned about
our use of differing measures within the
same service line, noting that the rehospitalization measure currently in use
in the Nursing Home Five-Star Quality
Rating differs from the SNFPPR. The
commenter stated that our longer-term
goal should be to align the SNF VBP
measure with other relevant
hospitalization measures such as those
used in VBP programs developed under
Medicaid waivers.
Response: We thank the commenter
for the suggestion. We wish to clarify
that we are conducting additional
testing on the SNFPPR measure, in
preparation to submit that measure to
NQF for endorsement consideration. We
wish to clarify that the rehospitalization measure reported on
Nursing Home Compare is not a
measure of potentially preventable
readmissions, as required by PAMA. We
agree that aligning measures across
Programs, when feasible, may reduce
provider confusion.
Comment: One commenter discussed
the length of the readmission window
for both the SNFRM (NQF #2510) and
the SNFPPR. The commenter urged us
to extend the readmission window to
include the entire SNF stay and a set
period after discharge from the SNF.
Response: We believe that the length
of the readmission windows for the
SNFRM and SNFPPR is appropriate
because they are harmonized with
measures used in the hospital setting.
We note also that a longer readmission
window, such as 90-days, would make
it difficult to ensure that potentially
preventable readmissions occurring up
to 90 days after prior hospital discharge
are attributable to the SNF care
received. We refer readers to the FY
2017 SNF PPS Final Rule (81 FR 51993)
for additional details concerning the
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length of the readmission window for
SNF VBP Program measures.
We thank commenters for their
feedback.
(3) Updates to the Skilled Nursing
Facility 30-Day All-Cause Readmission
Measure (NQF#2510)
Since finalizing the SNFRM for use in
the SNF VBP Program, we have
continued to conduct analyses using
more recent data, as well as to make
some necessary non-substantive
measure refinements. Results of this
work and all refinements are detailed in
a Technical Report Supplement that is
available on the following CMS Web site
at https://www.cms.gov/Medicare/
Quality-Initiatives-Patient-AssessmentInstruments/Value-Based-Programs/
Other-VBPs/SNF-VBP.html.
We did not receive any public
comments on this topic.
(4) Accounting for Social Risk Factors in
the SNF VBP Program
We understand that social risk factors
such as income, education, race and
ethnicity, employment, disability,
community resources, and social
support (certain factors of which are
also sometimes referred to as
socioeconomic status (SES) factors or
socio-demographic status (SDS) factors)
play a major role in health. One of our
core objectives is to improve beneficiary
outcomes including reducing health
disparities, and we want to ensure that
all beneficiaries, including those with
social risk factors, receive high quality
care. In addition, we sought to ensure
that the quality of care furnished by
providers and suppliers is assessed as
fairly as possible under our programs
while ensuring that beneficiaries have
adequate access to excellent care.
We have been reviewing reports
prepared by the Office of the Assistant
Secretary for Planning and Evaluation
(ASPE) 50 and the National Academies
of Sciences, Engineering, and Medicine
on the issue of accounting for social risk
factors in CMS’s value-based purchasing
and quality reporting programs, and
considering options on how to address
the issue in these programs. On
December 21, 2016, ASPE submitted a
Report to Congress on a study it was
required to conduct under section 2(d)
of the Improving Medicare Post-Acute
Care Transformation (IMPACT) Act of
2014. The study analyzed the effects of
50 Office of the Assistant Secretary for Planning
and Evaluation. 2016. Report to Congress: Social
Risk Factors and Performance Under Medicare’s
Value-Based Purchasing Programs. Available at
https://aspe.hhs.gov/pdf-report/report-congresssocial-risk-factors-and-performance-undermedicares-value-based-purchasing-programs.
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certain social risk factors in Medicare
beneficiaries on quality measures and
measures of resource use used in one or
more of nine Medicare value- based
purchasing programs, including the SNF
VBP Program.51 The report also
included considerations for strategies to
account for social risk factors in these
programs. In a January 10, 2017 report
released by The National Academies of
Sciences, Engineering, and Medicine,
that body provided various potential
methods for measuring and accounting
for social risk factors, including
stratified public reporting.52
As noted in the FY 2017 IPPS/LTCH
PPS final rule, the NQF has undertaken
a 2-year trial period in which certain
new measures, measures undergoing
maintenance review, and measures
endorsed with the condition that they
enter the trial period can be assessed to
determine whether risk adjustment for
selected social risk factors is appropriate
for these measures. This trial entails
temporarily allowing inclusion of social
risk factors in the risk-adjustment
approach for these measures. At the
conclusion of the trial, NQF will issue
recommendations on the future
inclusion of social risk factors in risk
adjustment for these quality measures,
and we will closely review its findings.
The SNF VBP section of ASPE’s
report examined the relationship
between social risk factors and
performance on the 30-day SNF
readmission measure for beneficiaries in
SNFs. Findings indicated that
beneficiaries with social risk factors
were more likely to be re-hospitalized
but that this effect was significantly
smaller when the measure’s risk
adjustment variables were applied
(including adjustment for age, gender,
and comorbidities), and that the effect of
dual enrollment disappeared. In
addition, being at a SNF with a high
proportion of beneficiaries with social
risk factors was associated with an
increased likelihood of readmissions,
regardless of a beneficiary’s social risk
factors.
As we continue to consider the
analyses and recommendations from
these reports and await the results of the
NQF trial on risk adjustment for quality
measures, we are continuing to work
with stakeholders in this process. As we
51 Office of the Assistant Secretary for Planning
and Evaluation. 2016. Report to Congress: Social
Risk Factors and Performance Under Medicare’s
Value-Based Purchasing Programs. Available at
https://aspe.hhs.gov/pdf-report/report-congresssocial-risk-factors-and-performance-undermedicares-value-based-purchasing-programs.
52 National Academies of Sciences, Engineering,
and Medicine. 2017. Accounting for social risk
factors in Medicare payment. Washington, DC: The
National Academies Press.
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have previously communicated, we are
concerned about holding providers to
different standards for the outcomes of
their patients with social risk factors
because we do not want to mask
potential disparities or minimize
incentives to improve the outcomes for
disadvantaged populations. Keeping
this concern in mind, while we sought
input on this topic previously, we again
sought public comment on whether we
should account for social risk factors in
the SNF VBP Program, and if so, what
method or combination of methods
would be most appropriate for
accounting for social risk factors.
Examples of methods include:
Adjustment of the payment adjustment
methodology under the SNF VBP
Program; adjustment of provider
performance scores (for instance,
stratifying providers based on the
proportion of their patients who are
dual eligible); confidential reporting of
stratified measure rates to providers;
public reporting of stratified measure
rates; risk adjustment of measures as
appropriate based on data and evidence;
and redesigning payment incentives (for
instance, rewarding improvement for
providers caring for patients with social
risk factors or incentivizing providers to
achieve health equity). While we
consider whether and to what extent we
currently have statutory authority to
implement one or more of the abovedescribed methods, we sought
comments on whether any of these
methods should be considered, and if
so, which of these methods or
combination of methods would best
account for social risk factors in the SNF
VBP Program.
In addition, we sought public
comment on which social risk factors
might be most appropriate for stratifying
measure scores and/or potential risk
adjustment of a particular measure.
Examples of social risk factors include,
but are not limited to, dual eligibility/
low-income subsidy, race and ethnicity,
and geographic area of residence. We
are seeking comments on which of these
factors, including current data sources
where this information would be
available, could be used alone or in
combination, and whether other data
should be collected to better capture the
effects of social risk. We will take
commenters’ input into consideration as
we continue to assess the
appropriateness and feasibility of
accounting for social risk factors in the
SNF VBP Program. We note that any
such changes would be proposed
through future notice-and-comment
rulemaking.
We look forward to working with
stakeholders as we consider the issue of
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accounting for social risk factors and
reducing health disparities in CMS
programs. Of note, implementing any of
the above methods would be taken into
consideration in the context of how this
and other CMS programs operate (for
example, data submission methods,
availability of data, statistical
considerations relating to reliability of
data calculations, among others), and
we also welcome comment on
operational considerations. CMS is
committed to ensuring that its
beneficiaries have access to and receive
excellent care, and that the quality of
care furnished by providers and
suppliers is assessed fairly in CMS
programs.
Commenters submitted the following
comments related to the proposed rule’s
discussion of the Accounting for Social
Risk Factors in the SNF VBP Program.
A discussion of these comments, along
with our responses, appears below.
Comment: Many commenters
encouraged us to incorporate social risk
factors adjustments in various forms,
including stratifying providers into peer
groups. Commenters stated that we
should require measure developers to
incorporate SDS data elements testing in
risk adjustment models and suggested
that we consider adjusting measures for
dual-eligible status as well as education
level, limited English proficiency, and
living alone, among other possible
factors. Some commenters suggested
that we examine the Program’s effects
on specialty populations such as
children and residents that are
ventilator-dependent, patients receiving
dialysis, or patients living with HIV/
AIDS. Other commenters suggested that
we use IMPACT Act measure data to
risk-adjust measures and provider
performance scores. One commenter
suggested that we consider a
stratification approach similar to that
proposed for the Hospital Readmissions
Reduction Program.
Other commenters encouraged us to
incorporate into our future policies the
findings both from NQF’s
sociodemographics trial and from
ASPE’s report. One commenter noted
that the ASPE report found that
provider-level factors are more powerful
predictors of readmissions than
beneficiary-level factors, and that highdual SNFs were among the best
performers on the readmission measure
examined. The commenter stated that
these results alone do not suggest a need
for risk adjustment, but suggested again
that we examine NQF’s results before
determining whether or not risk
adjustment is appropriate in the
Program, and further suggested that
incorporating SES variables into the
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measures’ risk-adjustment model could
embed health disparities, create biases
in reporting, undermine system-based
approaches to providing high-quality
care, and create care access problems.
Another commenter noted that adjusting
for social risk factors could negatively
affect providers and facilities in regions
where social risk factors are higher, but
cautioned that adjusting for such factors
may increase health disparities by
essentially masking them.
One commenter suggested that we
consider developing readmission
measures or statistical approaches to
report quality performance specifically
for beneficiaries with social risk factors.
The commenter noted that high social
risk beneficiaries are substantially more
likely to be re-hospitalized, and that
beneficiaries at SNFs serving a high
proportion of beneficiaries with social
risk factors are also more likely to be rehospitalized. The commenter stated that
these findings suggest that the
SNFPPR’s outcomes could vary
significantly due to factors beyond the
SNF’s control.
Response: We appreciate all the
comments and interest in this topic. As
we have previously stated, we are
concerned about holding providers to
different standards for the outcomes of
their patients with social risk factors,
because we do not want to mask
potential disparities or minimize
incentives to improve outcomes for
disadvantaged populations. We believe
that the path forward should incentivize
improvements in health outcomes for
disadvantaged populations while
ensuring that beneficiaries have access
to excellent care. We intend to consider
all suggestions as we continue to assess
each measure and the overall program.
We appreciate that some commenters
recommended risk adjustment as a
strategy to account for social risk
factors, while others stated a concern
that risk adjustment could minimize
incentives and reduce efforts to address
disparities for patients with social risk
factors. We intend to conduct further
analyses on the impact of strategies such
as measure-level risk adjustment and
stratifying performance scoring to
account for social risk factors including
the options suggested by commenters. In
addition, we appreciate the
recommendations from the commenters
about consideration of specific social
risk factor variables and will work to
determine the feasibility of collecting
these patient-level variables. As we
consider the feasibility of collecting
patient-level data and the impact of
strategies to account for social risk
factors through further analysis, we will
continue to evaluate the reporting
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burden on providers. Future proposals
would be made after further research
and continued stakeholder engagement.
We thank commenters for their
feedback. We will take it into account in
future rulemaking.
c. FY 2020 Performance Standards
We refer readers to the FY 2017 SNF
PPS final rule (81 FR 51995 through
51998) for a summary of the statutory
provisions governing performance
standards under the SNF VBP Program
and our finalized performance standards
policy, as well as the numerical values
for the achievement threshold and
benchmark for the FY 2019 program
year. We also responded to public
comments on these policies in that final
rule.
In the proposed rule (82 FR 21081
through 21802), we proposed estimated
performance standards for the FY 2020
SNF VBP Program based on the FY 2016
36613
MedPAR files including a 3-month runout period. We stated our intention to
include the final numerical values of the
performance standards in the final rule.
We have displayed the estimated
performance standards’ numerical
values from the proposed rule in Table
23. As we have done previously, we
have inverted the SNFRM rates in Table
23 so that higher values represent better
performance.
TABLE 23—ESTIMATED FY 2020 SNF VBP PROGRAM PERFORMANCE STANDARDS
Achievement
threshold
Measure ID
Measure description
SNFRM ............................................
SNF 30-Day All-Cause Readmission Measure (NQF #2510) ..................
We sought public comments on these
estimated achievement threshold and
benchmark values. A discussion of these
comments, along with our responses,
appears below.
Comment: One commenter supported
our performance standards methodology
in general. The commenter was
concerned, however, that continually
rewarding lower readmission rates may
not be in the best interests of SNF
patients. The commenter suggested that
we explore identifying an optimal
readmission rate.
Response: Our statistically based
benchmark is intended to set an
empirically based performance standard
of top performing SNFs as an achievable
goal for all SNFs during the
performance period. We recognize that
this benchmark might not be an optimal
readmission rate as suggested by the
commenter due to performance gaps
between current and optimal care, but
the intent of the Program’s incentives is
to encourage SNFs to improve the care
they provide. We also caution that
establishing a single optimal
readmission rate may not be feasible for
a nationwide quality program affecting
care for millions of Medicare
beneficiaries. We intend to carefully
monitor the Program’s effects on
readmission rates and on care quality,
and if warranted, will revisit the
performance standards methodology in
future rulemaking.
In this final rule, we are providing the
finalized numerical values of the
achievement threshold and the
0.80218
Benchmark
0.83721
benchmark for the FY 2020 program
year. We note that the values have not
changed since we published the
proposed rule.
Additionally, as discussed further
below, we are finalizing baseline and
performance periods for the FY 2020
program year based on the federal fiscal
year rather than the calendar year as we
had finalized for the FY 2019 program
year. The numerical values for the
achievement threshold and benchmark
in Table 24 reflect this final policy by
using FY 2016 claims data. As we have
done in prior rulemaking, we have
inverted the SNFRM rates in Table 24 so
that higher values represent better
performance.
TABLE 24—FINAL FY 2020 SNF VBP PROGRAM PERFORMANCE STANDARDS
Achievement
threshold
Measure ID
Measure description
SNFRM ............................................
SNF 30-Day All-Cause Readmission Measure (NQF #2510) ..................
After consideration of the public
comments that we received, we are
finalizing the performance standards for
the FY 2020 SNF VBP Program as
proposed.
d. FY 2020 Performance Period and
Baseline Period
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(1) Background
We refer readers to the FY 2016 SNF
PPS final rule (80 FR 46422) for a
discussion of the considerations that we
took into account when specifying
performance periods for the SNF VBP
Program. Based on those considerations,
as well as public comments received,
we adopted CY 2017 as the performance
period for the FY 2019 SNF VBP
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Program, with a corresponding baseline
period of CY 2015.
(2) FY 2020 Policies
As we stated in the proposed rule (82
FR 21082), we continue to believe that
a 12-month performance and baseline
period are appropriate for the Program,
and we are concerned about the
operational challenges of linking the 12month periods to the calendar year.
Specifically, the allowance of an
approximately 90-day claims run out
period following the last date of
discharge, coupled with the length of
time needed to calculate the measure
rates using multiple sources of claims
needed for statistical modeling,
determine achievement and
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0.80218
Benchmark
0.83721
improvement scores, allow SNFs to
review their measure rates, and
determine the amount of payment
adjustments could risk delay in meeting
requirement at section 1888(h)(7) of the
Act to notify SNFs of their value-based
incentive payment percentages not later
than 60 days prior to the fiscal year
involved.
We therefore considered what policy
options we had to mitigate this risk and
ensure that we comply with the
statutory deadline to notify SNFs of
their payment adjustments under the
Program.
We continue to believe that a 12month performance and baseline period
provide a sufficiently reliable and valid
data set for the SNF VBP Program. We
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also continue to believe that, where
possible and practicable, the baseline
and performance period should be
aligned in length and in months
included in the selections. Taking those
considerations and beliefs into account,
we proposed to adopt FY 2018 (October
1, 2017, through September 30, 2018) as
the performance period for the FY 2020
SNF VBP Program, with FY 2016
(October 1, 2015, through September 30,
2016) as the baseline period for
purposes of calculating performance
standards and measuring improvement.
We noted that this proposed policy,
would, if finalized, give us an additional
3 months between the conclusion of the
performance period and the 60-day
notification deadline prescribed by
section 1888(h)(7) of the Act to
complete the activities described above.
We are aware that making this
transition from the calendar year to the
FY will result in our measuring SNFs on
their performance during Q4 of 2017
(October 1, 2017, through December 31,
2017) for both the FY 2019 program year
and the FY 2020 program year. During
the FY 2019 program year, that quarter
will fall at the end of the finalized
performance period (January 1, 2017,
through December 31, 2017), while
during the FY 2020 program year, that
quarter will fall at the beginning of the
proposed performance period (October
1, 2017, through September 30, 2018).
We believe that, on balance, this overlap
in data is more beneficial than the
alternative. We considered proposing
not to use that quarter of measured
performance during the FY 2020
program year, but, as a result, we would
be left with fewer than 12 months of
data with which to score SNFs under
the program. As we have stated, we
believe it is important to use 12 months
of data to avoid seasonality issues and
to assess SNFs fairly. We therefore
believe that meeting these operational
challenges, in total, outweighs any cost
to SNFs associated with including a
single quarter’s SNFRM data in their
SNF performance scores twice.
However, as an alternative, we
requested comments on whether or not
we should instead consider adopting for
the FY 2020 Program a one-time, threequarter performance period of January 1,
2018, through September 30, 2018, and
a one-time, three-quarter baseline period
of January 1, 2016 through September
30, 2016 to avoid the overlap in
performance period quarters that we
describe above. We believe this option
could provide us with sufficiently
reliable SNFRM data for purposes of the
Program’s scoring while ensuring that
SNFs are not scored on the same quality
measure data in successive Program
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years. However, we noted that the
shorter measurement period could
result in lower denominator counts and
seasonal variations in care, as well as
disparate effects of cold weather months
on SNFs’ care could also create
variations in quality measurement, and
could potentially disproportionately
affect SNFs in different areas of the
country. Under this alternative, we
would resume a 12-month performance
and baseline period beginning with the
FY 2021 program year.
We sought public comments on our
proposal and alternative. In addition, as
we continue considering potential
policy changes once we replace the
SNFRM with the SNFPPR, we also
sought comment on whether we should
consider other potential performance
and baseline periods for that measure.
We specifically sought comments on
whether we should attempt to align the
SNF VBP Program’s performance and
baseline periods with other CMS valuebased purchasing programs, such as the
Hospital VBP Program or Hospital
Readmissions Reduction Program,
which could mean proposing to adopt
performance and baseline periods that
run from July 1st to June 30th. A
discussion of these comments, along
with our responses, appears below.
Comment: Some commenters
supported our proposed performance
and baseline periods for the FY 2020
Program, acknowledging that the onequarter overlap may be unavoidable and
agreeing with us that a three-quarter
performance period would not be
appropriate. Commenters also stated
that it is not necessary to align the SNF
VBP Program’s performance periods
with other VBP programs.
Response: We thank the commenters
for their support and feedback.
Comment: Some commenters
expressed concern about the SNF VBP
Program’s shift from calendar year to
fiscal year measurement periods while
the SNF QRP has proposed the reverse.
Commenters were concerned that this
lack of alignment between the two
programs could be confusing for
providers.
Response: As described above, the
SNF VBP Program’s shift from calendar
year to fiscal year measurement periods
is logistically necessary to meet the
statutory deadlines for the program.
CMS will take all necessary steps to
minimize any potential confusion
among providers.
Comment: One commenter opposed
our proposal to maintain 12-month
performance and baseline periods while
shifting to fiscal year reporting periods,
and stated that we should instead use a
one-time three-quarter baseline and
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performance period for the FY 2020
Program year. Another commenter
recommended that we use only 9
months for the performance and
baseline periods for FY 2019 and FY
2020, and then beginning with FY 2021,
consider aligning the reporting periods
to other VBP programs that run from
July 1 to June 30 of each year. The
commenter noted that making this
change would result in a six-month
overlap as opposed to the 3-month
overlap under the proposal, with the
result being that the change would
occur over 2 years.
Response: We thank the commenters
for this feedback. However, as we
described in the proposed rule, we are
concerned that a shorter performance
period than a 12-month period could
result in lower denominator counts and
seasonal variations in care, which could
disproportionately affect SNFs in
different regions of the country. Our
analysis of 9 and 12 month SNFRM
denominator size reveals that these
issues are sufficiently mitigated by the
commenters’ suggestion, and we
continue to believe that a one-quarter
overlap in performance periods between
FY 2019 and FY 2020 is an acceptable
compromise to make this transition to
performance and baseline periods
centered on the federal fiscal year.
Additionally, we believe that using a
full year of claims data to calculate
performance on the measures ensures
that the variation found among SNF
performance is due to real differences in
care delivery between SNFs, and not
within-facility variation due to issues
such as seasonality. Based on our
SNFRM denominator analysis, we do
not believe that using a 9-month
performance period would provide us
with sufficiently reliable data for a
performance year, and given the
Program’s focus on a single quality
measure, we do not believe scoring
insufficiently reliable quality measure
data to be a practical policy.
After consideration of the public
comments that we have received, we are
finalizing the performance and baseline
period for the FY 2020 SNF VBP
Program as proposed.
e. SNF VBP Performance Scoring
We refer readers to the FY 2017 SNF
PPS final rule (81 FR 52000 through
52005) for a detailed discussion of the
scoring methodology that we have
finalized for the Program, along with
responses to public comments on our
policies and examples of scoring
calculations.
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(1) Rounding Clarification for SNF VBP
Scoring
In the FY 2017 SNF PPS final rule (81
FR 52001), we adopted formulas for
scoring SNFs on achievement and
improvement. The final step in these
calculations is rounding the scores to
the nearest whole number.
As we have continued examining
SNFRM data, we have identified a
concern related to that rounding step.
Specifically, we are concerned that
rounding SNF performance scores to the
nearest whole number is insufficiently
precise for purposes of establishing
value-based incentive payments under
the Program. Rounding scores in this
manner has the effect of producing
significant numbers of tie scores, since
SNFs have between 0 and 100 points
available under the Program, and we
estimate that more than 15,000 SNFs
will participate in the Program. As
discussed further in this section, the
exchange function methodology that we
proposed to adopt is most easily
implemented when we are able to
differentiate precisely among SNF
performance scores to provide each SNF
with a unique value-based incentive
payment percentage.
We therefore proposed to change the
rounding policy from that previously
finalized for SNF VBP Program scoring
methodology, and instead to award
points to SNFs using the formulas that
we adopted in last year’s rule by
rounding the results to the nearest tenthousandth of a point. Using significant
digits terminology, we proposed to use
no more than five significant digits to
the right of the decimal point when
calculating SNF performance scores and
subsequently calculating value-based
incentive payments.
We view this policy change as
necessary to ensure that the Program
scores SNFs as precisely as possible and
to ensure that value-based incentive
payments reflect SNF performance
scores as accurately as possible.
We sought public comments on this
proposal. A discussion of these
comments, along with our responses,
appears below.
Comment: Some commenters
supported our proposal to round SNF
performance scores to the fifth
significant digit, noting that the step is
necessary to avoid ties and that it will
have only minor financial impacts.
Response: We thank the commenters
for their support.
Comment: Several commenters
cautioned that we should not
implement policy changes merely to
ensure more differentiation among
providers.
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Response: We thank the commenters
for their support. We agree with the
commenters that we should not
implement policy changes solely to
ensure more differentiation, but we
view this policy as necessary in order to
ensure that SNF performance scores are
accurate. We will also consider this
caution as we adopt policies in future
rulemaking.
Comment: One commenter opposed
our proposal to round SNF performance
scores to the nearest ten-thousandth of
a point, stating that scoring in this
manner is ‘‘too narrow.’’ The
commenter recommended instead that
we round scores to the nearest tenth of
a point.
Response: We thank the commenter
for this feedback, but we believe that
rounding scores to the nearest tenth of
a point would still result in numerous
scoring ties due to the estimated 15,000
SNFs that will participate in the
Program. We believe that the rounding
policy we have proposed ensures that
we have sufficient precision to calculate
performance scores under the program.
Comment: One commenter suggested
that if our proposed change to the
rounding policy for SNF performance
scores results in SNFs with nearly
identical readmission rates receiving
materially different VBP payment
amounts, we should consider revising
the methodology.
Response: We thank the commenter
and agree. Our expectation is that the
additional precision will not
significantly affect SNFs’ payment
amounts when they have nearly
identical SNF performance scores, but
we will monitor this issue carefully.
After consideration of the public
comments that we have received, we are
finalizing that we will round the SNF
performance scores to the fifth
significant digit.
(2) Policies for Facilities With Zero
Readmissions During the Performance
Period
In our analyses of historical SNFRM
data, we identified a unit imputation
issue associated with certain SNFs’
measured performance. Specifically, we
found that a small number of facilities
had zero readmissions during the
applicable performance period. An
observed readmission rate of zero is a
desirable outcome; however, due to riskadjustment and the statistical approach
used to calculate the measure, outlier
values are shifted towards the mean,
particularly for smaller SNFs. As a
result, observed readmission rates of
zero result in risk-standardized
readmission rates that are greater than
zero. Analysis conducted by our
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measure development contractor
revealed that it may be possible—
although rare—for SNFs with zero
readmissions to receive a negative
value-based incentive payment
adjustment. We are concerned that
assigning a net negative value-based
incentive payment to a SNF that
achieved zero readmissions during the
applicable performance period would
not support the Program’s goals.
We considered our policy options for
SNFs that could be affected by this
issue, including excluding SNFs with
zero readmissions from the Program
entirely to ensure that they are not
unduly harmed by being assigned a nonzero RSRR by the measure’s finalized
methodology. However, because the
Program’s statute requires us to include
all SNFs in the Program, we do not
believe we have the authority to exclude
any SNFs from the payment withhold
and from value-based incentive
payments. We also considered
proposing to replace SNF performance
scores for those SNFs in this situation
with the median SNF performance
score. But because we must pay SNFs
ranked in the lowest 40 percent less
than the amount they would otherwise
be paid in the absence of the SNF VBP,
we do not believe that assigning these
SNFs the median performance rate on
the applicable measure would
necessarily protect them from receiving
net negative value-based incentive
payments.
We are considering different policy
options to ensure that SNFs achieving
zero readmissions among their patient
populations during the performance
period do not receive a negative
payment adjustment. We intend to
address this topic in future rulemaking,
and we request public comments on
what accommodations, if any, we
should employ to ensure that SNFs
meeting our quality goals are not
penalized under the Program. We
specifically sought comments on the
form this potential accommodation
should take. A discussion of these
comments, along with our responses,
appears below.
Comment: Some commenters
expressed concerns about the risk
adjustment methodology employed to
calculate the measures, particularly for
SNFs with zero readmissions during the
applicable period. Commenters noted
that the statistical approach employed
by the measures means that SNFs with
low volume or zero readmissions during
the applicable period could receive a
worse risk-standardized readmission
rate, which could hide true differences
in performance and may dampen SNFs’
incentives to improve. Commenters
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suggested that we consider expanding
the performance periods for SNFs with
low volume to mitigate these effects.
Other commenters suggested that we
consider returning the full 2 percentage
points withheld from SNFs’ Medicare
payments when those SNFs have zero
readmissions during the applicable
period, provide a rolling average
readmission rate, or stratify readmission
rates and value-based incentive
payments by facility size.
Response: We intend to address this
topic in future rulemaking, and will take
these suggestions into account at that
time.
Comment: One commenter believed
that we should develop an exceptions
policy for SNFs in special
circumstances, and recommended that
under this policy, we return affected
SNFs’ entire payment withhold and not
assign public rankings or scores. The
commenter recommended that we offer
this exception to SNFs based on a small
denominator size of fewer than 25 cases
rather than zero readmissions. The
commenter noted that a small
denominator size would likely capture
SNFs with zero readmissions and would
ensure that low-volume SNFs do not
stack at the top of the Program’s ranking
and harm non-zero denominator
facilities’ standing.
Response: We thank the commenter
for this feedback and will take it into
account in future rulemaking.
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We thank the commenters for their
feedback, and will take it into account
in the future.
(3) Request for Comments on
Extraordinary Circumstances Exception
Policy
In other value-based purchasing
programs, such as the Hospital VBP
Program (see 78 FR 50704 through
50706), as well as several of our quality
reporting programs, we have adopted
Extraordinary Circumstances Exceptions
policies intended to allow participating
facilities to receive administrative relief
from program requirements due to
natural disasters or other circumstances
beyond the facility’s control that may
affect the facility’s ability to provide
high-quality health care.
We are considering whether this type
of policy would be appropriate for the
SNF VBP Program. We intend to address
this topic in future rulemaking. We
therefore sought public comments on
whether we should implement such a
policy, and if so, the form the policy
should take. If we propose such a policy
in the future, our preference would be
to align it with the Extraordinary
Circumstances Exception policy
adopted under our other quality
programs. A summary of the public
comments that we received, along with
our responses, appears below.
Comment: Some commenters stated
their belief that we should adopt an
Extraordinary Circumstances Exception
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policy to provide administrative relief to
SNFs suffering from circumstances
beyond their control, and recommended
that we align the policy with the
Hospital VBP Program. Other
commenters suggested that we consider
adopting the same exception process as
has been adopted under the SNF QRP.
Response: We thank the commenters
for their suggestions, and will take it
into consideration if we decide to
propose an Extraordinary Circumstances
Exception policy in future rulemaking.
f. SNF Value-Based Incentive Payments
(1) Exchange Function
We refer readers to the FY 2017 SNF
PPS final rule (81 FR 52005 through
52006) for discussion of four possible
exchange functions that we considered
adopting to translate SNFs’ performance
scores into value-based incentive
payments. We created new graphical
representations of the four functions
that we have considered in the past—
linear, cube, cube root, and logistic—
and presented those updated
representations in the proposed rule (82
FR 21084). We noted that the actual
exchange functions’ forms and slopes
will vary depending on the distributions
of SNFs’ performance scores from the
FY 2019 performance period, and
wished to emphasize that these
representations are presented solely for
the reader’s clarity as we discussed our
exchange function policy.
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We have continued examining
historical SNFRM data while
considering our policy options for this
program. We have attempted to assess
how each of the four possible exchange
functions that we set out in the FY 2017
SNF PPS final rule, as well as potential
variations, would affect SNFs’ incentive
payments under the Program. We
specifically considered the effects of the
statutory constraints on the Program’s
value-based incentive payments and our
belief that to create an effective
incentive payment program, SNFs’
value-based incentive payments must be
widely distributed to reward higher
performing SNFs through increased
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payment and to make reduced payments
to lower performing SNFs. We also
considered our desire to avoid
unintended consequences of the
Program’s incentive payments,
particularly since the Program is limited
by statute to using a single measure at
a time, and our view that an equitable
distribution of value-based incentive
payments would be most appropriate to
ensure that all SNFs, including SNFs
serving at-risk populations, could
potentially qualify for incentive
payments.
In our view, important factors when
adopting an exchange function include
the number of SNFs that receive more
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in value-based incentive payments than
the number of SNFs for which a
reduction is applied to their Medicare
payments, as well as the incentive for
SNFs to reduce hospital readmissions.
We hold this view because we believe
that the Program will be most effective
at encouraging SNFs to improve the
quality of care that they provide to
Medicare beneficiaries if SNFs have the
opportunity to earn incentives, rather
than simply avoid penalties, through
high performance on the applicable
quality measure. We also believe that
SNFs must have incentives to reduce
hospital readmissions for their patients
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no matter where their performance lies
in comparison to their peers.
Taking those considerations into
account, we analyzed the four exchange
functions on which we have previously
sought comment—linear, cube, cube
root, and logistic—as well as variations
of those exchange functions. We scored
SNFs using historical SNFRM data and
modeled SNFs’ value-based incentive
payments using each of the functions in
turn. We evaluated the distribution of
value-based incentive payments that
resulted from each function, as well as
the number of SNFs with positive
payment adjustments and the valuebased incentive payment percentages
that resulted from each function. We
also evaluated the functions’ results for
the statutory requirements in section
1888(h)(5)(C)(ii) of the Act, including
the requirements in subclause (I) that
the percentage be based on the SNF
performance score for each SNF, in
subclause (II) that the application of all
such percentages results in an
appropriate distribution, and in items
(aa), (bb), and (cc) of subclause (II),
specifying that SNFs with the highest
rankings receive the highest value-based
incentive payment amounts, that SNFs
with the lowest rankings receive the
lowest value-based incentive payment
amounts, and that the SNFs in the
lowest 40 percent of the ranking receive
a lower payment rate than would
otherwise apply.
In our analyses of the four baseline
functions, we found that the logistic
function maximized the number of
SNFs with positive payment
adjustments among SNFs measured
using the SNFRM. We also found that
the logistic function best fulfills the
requirement that the SNFs in the lowest
40 percent of the ranking receive a
lower payment rate than would
otherwise apply, resulted in an
appropriate distribution of value-based
incentive payment percentages, and
fulfilled the other statutory
requirements described in this final
rule. Specifically, we noted that the
logistic function provided a broad range
of SNFs with net-positive value-based
incentive payments, and while it did
not provide the highest value-based
incentive payment percentage to the top
performers of all the functions, we
viewed the number of SNFs with
positive payment adjustments as a more
important consideration than the
highest value-based incentive payment
percentages being awarded.
We also considered alignment of VBP
payment methodologies across fee-forservice Medicare VBP programs,
including the Hospital VBP program
and Quality Payment Program (QPP).
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We recognize that aligning payment
methodologies would help stakeholders
that use VBP payment information
across care settings better understand
the SNF VBP payment methodology.
Both the Hospital VBP program and
QPP use some form of a linear exchange
function for payment. Three key
program aspects that facilitate the use of
a linear exchange function are the
programs’ number of measures, measure
weights, and correlation across program
measures. These three aspects in
tandem contribute to the approximately
normal distribution of scores expected
in the Hospital VBP program and QPP.
No single measure is the key driver that
might ‘‘tilt’’ scores to a non-normal
distribution. Since both programs are
required to be budget neutral, our
modeling estimates that scores translate
into an approximately equal number of
providers with positive payment
adjustments and providers receiving a
net payment reduction.
In contrast, the SNF VBP payment
adjustment is driven, in part, by two
specific SNF VBP statutory
requirements: The program’s use of a
single measure; and the requirement
that the total amount of value-based
incentive payments for all SNFs in a
fiscal year be between 50 and 70 percent
of the total amount of reductions to
payments for that fiscal year, as
estimated by the Secretary. Our analysis
of the linear exchange function showed
that more SNFs would receive a net
payment reduction than a payment
incentive because the total amount
available for incentive payments in a
fiscal year is limited to between 50 and
70 percent of the total amount of the
reduction to SNF payments for that
fiscal year. The linear exchange function
also results in the provision of a net
payment reduction to a higher
percentage of SNFs that exceeded the
50th percentile of national performance,
relative to the logistic payment function.
We believe that these findings are
unique to the SNF VBP program,
relative to other fee-for-service Medicare
programs, because of the limitation on
the total amount that we can use for
incentive payments, coupled with the
use of a single measure and the
corresponding scoring distribution.
In addition to the four baseline
functions described further above, we
considered adjusting the linear function
to be able to make positive payment
adjustments to a greater number of
SNFs. Specifically, we tested an
alternative where we reduced the
baseline linear function by 20 percent,
then redistributed the resulting funds to
the middle 40 percent of SNFs. We
found that the use of this linear function
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with adjustment would enable us to
make a positive payment adjustment to
a slightly greater number of SNFs than
we would be able to make using the
logistic function. However, we were
concerned with the additional
complexity involved in implementing
this type of two-step adjustment to the
linear exchange function.
Taking all of these considerations into
account, we proposed to adopt a logistic
function for the FY 2019 SNF VBP
Program and subsequent years. Under
this policy, we would:
1. Estimate Medicare spending on
SNF services for the FY 2019 payment
year;
2. Estimate the total amount of
reductions to SNFs’ adjusted Federal
per diem rates for that year, as required
by statute;
3. Calculate the amount realized
under the payback percentage policy
(discussed further below);
4. Order SNFs by their SNF
performance scores; and
5. Assign a value-based incentive
payment multiplier to each SNF that
corresponds to a point on the logistic
exchange function that corresponds to
its SNF performance score.
As we discussed in the proposed rule
(82 FR 21085), we would model the
logistic exchange function in such a
form that the estimated total amount of
value-based incentive payments equals
not more than 60 percent of the amounts
withheld from SNFs’ claims. While the
function’s specific form would also
depend on the distribution of SNF
performance scores during the
performance period, the formula that we
used to construct the logistic exchange
function and that we proposed to use for
FY 2019 program calculations is:
where xi is the SNF’s performance score.
We sought public comments on this
proposal, and in particular, on whether
a linear function with adjustment would
alternatively be feasible for the SNF
VBP Program, potentially beginning
with FY 2019. A discussion of these
comments, along with our responses,
appears below.
Comment: Some commenters
supported the logistic exchange
function, agreeing that it best
incentivizes SNFs to improve
continuously and allows for the greatest
number of SNFs to receive net-positive
payments. The commenters also agreed
that the linear function with adjustment
could create confusion, and requested
that we provide an example calculation
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of a provider’s payment multiplier in
the final rule.
Response: We thank the commenters
for their support and feedback. In
response to the commenters’ request for
an example, we can provide two
hypothetical examples of SNFs’
performance scores based on historical
performance data and historical
Medicare spending that would be
subject to the Program. We would like
to emphasize that the actual multipliers
that will result from the calculation of
the logistic exchange function for the FY
2019 Program year will depend on the
distribution of SNF performance scores
that result from the performance period
as well as estimated Medicare spending
subject to the Program for the FY 2019
payment year, and thus SNFs should
not expect to receive the example
multipliers below if their FY 2019 SNF
performance scores approximate either
of these examples.
A SNF with a baseline period SNFRM
rate of 0.16980, which inverts to
0.83020, and a performance period
SNFRM rate of 0.19989, which inverts
to 0.80011, would, according to the
formulas that we have adopted in
previous regulations, receive 20.56057
points for achievement and 0 points for
improvement since its measured
performance declined. The higher of
those two values is 20.56057, and that
value would become the SNF’s
performance score. Based on the
distribution of historical performance in
the data sets that we analyzed, that SNF
performance score translates into a
value-based incentive payment
multiplier of 0.150052 percent, which
would be applied after the application
of the 2% reduction required by section
1888(h)(6)(B).
Conversely, a SNF with a baseline
period SNFRM rate of 0.18842, which
inverts to 0.81158, and a performance
period SNFRM rate of 0.17384, which
inverts to 0.82616, would, according to
the formulas that we have adopted in
previous regulations, receive 70.23616
points for achievement and 4.78908
points for improvement. The higher of
those two values is 70.23616, and that
value would become the SNF’s
performance score. Based on the
distribution of historical performance in
the data sets that we analyzed, that SNF
performance score translates into a
value-based incentive payment
multiplier of 2.64944 percent, which
would be applied after the application
of the 2 percent reduction required by
section 1888(h)(6)(B) of the Act.
Comment: Two commenters requested
additional details on the analyses that
we conducted to reach the proposed
policy, and also requested that we detail
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how the future transition to the SNFPPR
would influence the distribution of
incentive payments. One commenter
suggested that we perform a ‘‘dry run’’
with the proposed methodology and
provide confidential feedback reports to
SNFs with the results.
Response: We thank the commenters
for this feedback. We will consider
providing a dry run or other additional
information prior to the planned
summer 2018 dissemination of Fiscal
Year 2019 payment reports that will
notify SNFs of the adjustments to their
Medicare payments as required by
section 1888(h)(7) of the Act. We also
wish to inform the commenters that
SNFs received confidential feedback
reports with their calendar year 2015
baseline period readmission rates, as
captured by the SNFRM, in early 2017.
We continue to analyze the potential
effects of the Program’s transition to the
SNFPPR, and we intend to provide
additional details on the resulting
distribution of value-based incentive
payments in the future.
Comment: One commenter requested
that we provide a scaling factor that we
would use to ensure that payouts equate
to 60 percent of the total amount
withheld from SNFs’ Medicare
payments. The commenter also
recommended that we not consider the
cube exchange function, noting that it
would result in extremely high payouts
to top providers who may be outliers,
and suggested that we provide the slope
of each alternative function listed in the
rule.
Response: We thank the commenter
for the feedback on the exchange
function form, and we agree with the
commenter that the cube function
results in an undesirable distribution of
incentive payments to SNFs. As
discussed further below, we are
finalizing the logistic exchange function
for the FY 2019 Program.
In response to the commenter’s
request that we provide the scaling
factor that we would use to ensure that
value-based incentive payments under
the Program equal the 60 percent
payback percentage that we proposed
and are finalizing in this final rule, we
note that the distribution of incentive
payments provided under the Program
depends entirely on the distribution of
SNFs’ performance on the applicable
measure during the baseline and
performance periods. We are unable to
provide a scaling factor for the FY 2019
program year at this time because the
performance period (CY 2017) has not
concluded yet, though we may consider
doing so after the performance period
has concluded. We intend to provide
additional detail on the distribution of
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SNF performance scores and the
resulting value-based incentive payment
percentages, potentially including the
scaling factor, in the future.
After consideration of the public
comments that we have received, we are
finalizing the logistic exchange function
as proposed.
(2) Payback Percentage
Section 1888(h)(6)(A) of the Act
requires the Secretary to reduce the
adjusted federal per diem rate
determined under section 1888(e)(4)(G)
of the Act otherwise applicable to a SNF
for services furnished by that SNF
during a fiscal year by the applicable
percent (which, under section
1888(h)(6)(B) of the Act is 2 percent for
FY 2019 and succeeding fiscal years) to
fund the value-based incentive
payments for that fiscal year. Section
1888(h)(5)(C)(ii)(III) of the Act further
specifies that the total amount of valuebased incentive payments under the
Program for all SNFs in a fiscal year
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 that fiscal year under the
Program, as estimated by the Secretary.
Thus, we must decide what percentage
of the total amount of the reductions to
payments for a fiscal year we will pay
as value-based incentive payments to
SNFs based on their performance under
the Program for that fiscal year.
As with our exchange function policy
described in this final rule, we view the
important factors when specifying a
payback percentage to be the number of
SNFs that receive a positive payment
adjustment, the marginal incentives for
all SNFs to reduce hospital
readmissions and make broad-based
care quality improvements, and the
Medicare Program’s long-term
sustainability through the additional
estimated Medicare trust fund savings.
We intend for the proposed payback
percentage to appropriately balance
these factors. We analyzed the
distribution of value-based incentive
payments using historical data, focusing
on the full range of available payback
percentages.
Taking these considerations into
account, we proposed that the total
amount of funds that would be available
to pay as value-based incentive
payments in a fiscal year would be 60
percent of the reductions to payments
otherwise applicable to SNF Medicare
payments for that fiscal year, as
estimated by the Secretary. We believe
that 60 percent is the most appropriate
payback percentage to balance the
considerations described in the
proposed rule.
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We noted that we intend to closely
monitor the effects of the payback
percentage policy on Medicare
beneficiaries, on participating SNFs,
and on their measured performance. We
also stated that we intend to consider
proposing to adjust the payback
percentage in future rulemaking. In our
consideration, we would include the
Program’s effects on readmission rates,
potential unintended consequences of
SNF care to beneficiaries included in
the measure, and SNF profit margins.
Since the SNF VBP Program is a new,
single measure value-based purchasing
program and will continue to evolve as
we implement it—including, for
example, changing from the SNFRM to
the SNFPPR as required by statute—we
stated that we intend to evaluate its
effects carefully.
We noted also that the Medicare
Payment Advisory Commission’s
research has shown that for-profit SNFs’
average Medicare margins are
significantly positive,53 though not-forprofit SNFs’ average Medicare margins
are substantially lower, and we
requested comment on the extent to
which that should be considered in our
policy. We also recognized that there is
some evidence that not-for-profit SNFs
tend to perform better on measures of
hospital readmissions than for-profit
SNFs,54 and we requested comment on
whether our proposed payback
percentage appropriately balances
Medicare’s long-term sustainability with
the need to provide strong incentives for
quality improvement to top-performing
but lower-margin SNFs.
We sought public comments on this
proposal. A discussion of these
comments, along with our responses,
appears below.
Comment: Several commenters
recommended that we finalize a 70
percent payback percentage, stating that
the largest possible incentive pool will
have a larger impact on changing
practices and will provide a softer
landing for participating providers.
Commenters were also concerned that
the actual payback percentage may be
different than 60 percent if our forecast
turns out to be erroneous, and suggested
that we instead calculate confidence
53 Medicare Payment Advisory Commission,
March 2017 Report to the Congress, ch. 8: Skilled
nursing facility services, Table 8–6. https://
medpac.gov/docs/default-source/reports/mar17_
entirereport.pdf.
54 Neuman MD, Wirtalla C, Werner RM.
Association Between Skilled Nursing Facility
Quality Indicators and Hospital Readmissions.
JAMA. 2014;312(15):1542–1551. doi:10.1001/
jama.2014.13513. Retrieved from https://
jamanetwork.com/journals/jama/fullarticle/
1915609.
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intervals around the payback
percentage.
Other commenters stated that the
greatest percentage of dollars should be
made available to facilities that invest in
their staffs and are therefore top
performers, noting also that MedPAC
analysis shows that top performers are
not enjoying large margins on their
Medicare business, and that a larger
incentive pool would provide more
incentive dollars to high-performing
SNFs. Commenters also stated that the
Medicare Trust Fund will benefit from
reduced hospital spending resulting
from lower readmission rates.
Some commenters recommended that
we adopt a 70 percent payback
percentage and that we use the other 30
percent of amounts withheld from
SNFs’ Medicare payments to fund
quality improvement initiatives. One
commenter cited the reduction to SNF
PPS rates to fund physician payments,
significant MDS changes that will drive
staffing and training costs, and the
possible revamping of the RUG
methodology, as rationale for selecting
the maximum possible payback
percentage under the Program. The
commenter stated that these changes
mean that CMS should not make any
additional funding reductions beyond
those absolutely required.
Response: We thank the commenters
for this feedback. Section
1888(h)(5)(C)(ii)(III) of the Act provides
that the total amount of value-based
incentive payments for all skilled
nursing facilities in a fiscal year must be
greater than or equal to 50 percent, but
not greater than 70 percent of the total
amount of the reductions to SNFs’
Medicare payments for that fiscal year,
as estimated by the Secretary. We are
confident that our payback percentage
can be implemented accurately, based
on our experience estimating the total
amount available for value-based
incentive payments under the Hospital
Value Based Purchasing program. We
intend to utilize a similar methodology
for the SNF VBP Program by using the
most currently available historic SNF
claims to estimate the pool of available
funds, the finalized payback percentage
and corresponding withhold percentage,
and the finalized payment exchange
function. It is important to note that the
50 to 70 percent range is based on
national Medicare spending using the
entire population of about 15,000 SNF
claims data, and that large data set
means that we are able to estimate the
payment exchange function that applies
the finalized withhold and payback
percentage with a high degree of
accuracy.
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In response to comments that we
finalize 70 percent as the payback
percentage for the Program, we intended
for the proposed payback percentage to
balance several policy considerations,
including the number of SNFs that
receive a positive payment adjustment,
the marginal incentives for SNFs to
reduce hospital readmissions and make
broad-based care quality improvements,
and the long-term financial
sustainability of the Medicare Program.
We do not believe that finalizing a 70
percent payback percentage
appropriately balances those factors,
particularly the Medicare Program’s
long-term sustainability, because it
results in significantly higher Medicare
spending under the Program in a
provider sector already experiencing
significantly positive Medicare margins.
We believe that the other policies we are
finalizing in this final rule, including
the logistic exchange function, ensure
that we provide strong incentives for
quality improvement to SNFs within the
constraints imposed by the SNF VBP
Program’s statute.
We intend to carefully monitor the
Program’s effects on SNFs’ care quality
improvement efforts and providers’
Medicare margins. We would also like
to clarify that the savings realized from
the Program (that is, the 30 to 50 percent
of the amounts withheld from SNFs’
claims) are not authorized to be
distributed separately for quality
improvement initiatives, and are instead
retained in the Medicare Trust Fund
and used for other Medicare Program
purposes authorized by statute.
Comment: One commenter stated that
it is unnecessary to adjust the payback
percentage based on facility ownership
type, stating that the data do not support
differential treatment among SNFs.
Response: We thank the commenter
for this feedback. However, we would
like to clarify that we did not propose
to adjust the payback percentage based
on facility ownership type. We will
monitor the Program’s effects on SNFs
carefully.
Comment: Two commenters requested
that we provide additional information
regarding the empirical modeling used
to inform our proposed policies,
including the proposed 60 percent
payback percentage. The commenters
stated that the explanations we
provided in the proposed rule do not
provide sufficient transparency into our
decision-making.
Response: We believe that we released
sufficient information in the proposed
rule to give commenters enough
information to submit meaningful
comments on our selection of the 60
percent payback proposal, including the
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considerations that we took into account
when developing our proposed policy
(82 FR 21086) and the detailed
analytical results that we presented in
the proposed rule’s regulatory impact
analysis (82 FR 21094 through 21095).
However, we are in the process of
compiling additional empirical
modeling information and intend to
make that information available to the
public on the CMS.gov Web site no later
than November 2017.
Comment: One commenter stated that
CMS should redistribute the full amount
withheld from SNFs’ claims in incentive
payments rather than 50 to 70 percent.
The commenter also stated that the
requirement that the bottom 40 percent
of SNFs not be eligible for incentive
payments is unfair, and requested that
we provide details on the funds not
being redistributed to SNFs.
Response: We thank the commenter
for this feedback. However, the
requirements that the total amount
available for value-based incentive
payments in a fiscal year be greater than
or equal to 50 percent, but not greater
than 70 percent, as well as the
requirement that the SNFs ranked in the
lowest 40 percent receive a payment
rate for services furnished during a
fiscal year that less than the payment
rate they would have received otherwise
for that fiscal year, are statutory in
origin. As a result, we do not believe we
have the discretion to redistribute the
full amount withheld from SNFs’ claims
as incentive payments or to pay SNFs in
the bottom 40 percent the same or a
higher rate than they would have
otherwise received in the absence of the
Program.
In response to the commenter’s
question about funds not being
redistributed to SNFs (that is, the 30 to
50 percent of SNFs’ Medicare payments
remaining after the payment withhold is
determined), as we stated above, those
funds are not authorized to be
distributed separately for quality
improvement initiatives, and are instead
retained in the Medicare Trust Fund
and used for other Medicare Program
purposes authorized by statute.
Comment: Commenter agreed in
general with our view that the Program
will be most effective if it offers
incentive payments to SNFs rather than
payment penalties.
Response: We believe that the policies
we are finalizing in this final rule,
including the payback percentage and
the use of the logistical exchange
function, will enable us to offer
incentive payments to a broad number
of SNFs while balancing that
consideration with the Medicare
Program’s long-term sustainability.
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After consideration of the public
comments that we received, we are
finalizing the payback percentage for the
FY 2019 SNF VBP program as 60
percent of the total amount of the
reduction to SNFs’ Medicare payments
for that fiscal year, as estimated by the
Secretary. We will set the exchange
function such that we remit 60 percent
of the estimated total amount withheld
from SNFs’ Medicare payments as
value-based incentive payments, though
each individual SNF’s value-based
incentive payment percentage will vary
according to its SNF performance score.
g. SNF VBP Reporting
(1) Confidential Feedback Reports
We refer readers to the FY 2017 SNF
PPS final rule (81 FR 52006 through
52007) for discussion of our intention to
use the QIES system CASPER files to
fulfill the requirement in section
1888(g)(5) of the Act that we provide
quarterly confidential feedback reports
to SNFs on their performance on the
Program’s measures. We also responded
in that final rule to public comments on
the appropriateness of the QIES system.
We provided SNFs with a test report
in September 2016, followed by data on
SNFs’ CY 2013 performance on the
SNFRM in December 2016 and SNFs’
CY 2014 performance on the SNFRM in
March 2017. We then provided SNFs
with their CY 2015 performance on the
SNFRM in June 2017, along with a
supplemental workbook providing
patient-level data. We intend to
continue providing SNFs with their
performance data each quarter as
required by the statute.
We sought feedback from SNFs on the
contents of the quarterly reports and
what additional elements, if any, we
should consider including that would
be useful for quality improvement
efforts. We specifically sought comment
on what patient-level data would be
most helpful to SNFs if they were to
request such data from us as part of
their quality improvement efforts. A
discussion of these comments, along
with our responses, appears below.
Comment: Several commenters
expressed their view that specific
facility-level and patient-level data
elements should be provided in
quarterly confidential feedback reports.
Other commenters expressed support
for both the facility level and patient
identifiers that we are providing. One
commenter suggested that dual
eligibility status for patients be provided
in quarterly confidential feedback
reports. Another commenter requested
that we provide additional information
in our quarterly confidential feedback
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reports, including national benchmarks
used to calculate achievement and
improvement scores, peer ranking
information, and SNF-specific trend
data and top causes of readmission. This
commenter also requested that quarterly
confidential feedback reports contain
the SNF VBP Program measure
calculated using 12 rolling months of
data, and that we update such
calculations quarterly. Lastly, one
commenter requested that reports be
provided more frequently than
quarterly.
Response: We are currently providing
many patient-level indicators to SNFs as
part of the quarterly reports process, and
since we began that reporting during the
public comment period on the proposed
rule, we believe some commenters may
have erroneously believed that we did
not intend to provide patient-level data.
June 2017 quarterly confidential
feedback reports and supplemental
workbooks included the following
patient-level data: Patient identifiers
(Health Insurance Claim Number
[HICN], Sex, Age); Index SNF
information (admission/discharge dates,
discharge status code); Prior proximal
hospital information CMS Certification
Number [CCN], admission/discharge
dates, principal diagnosis); Readmission
hospital information (CCN, admission/
discharge dates, principal diagnosis);
and SNFRM risk-adjustment factors.
The following facility-level information
is also included: Number of Eligible
Stays, Number of Unplanned
Readmissions, Observed Readmission
Rate, Predicted Number of
Readmissions, Expected Number of
Readmissions, Standardized Risk Ratio
(SRR), National Average Readmission
Rate, RSRR. We will take the
commenter’s request to report patient’s
dual eligibility status under
consideration for future reports.
We intend to publish performance
standards for each program year in the
SNF PPS final rule, and we intend to
provide peer ranking information to
SNFs as it becomes available. We
believe that providing the SNF VBP
program measure rate calculations using
12 rolling months of data updated
quarterly would create confusion among
providers regarding which of these rates
would be used to calculate value-based
incentive payments for a specific
program year. We strive to provide
information that is as user-friendly as
possible and will take the commenter’s
request for SNF-specific trend data and
top causes of readmission under
consideration. Finally, while we
appreciate the need for frequent
updates, monthly reports containing
this information are not logistically
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feasible at this time. However, we
continue to look for ways in which we
may provide this information more
frequently in the future.
We thank the commenters for this
feedback.
(2) Review and Corrections Process:
Phase Two
In the FY 2017 SNF PPS final rule (81
FR 52007 through 52009), we adopted a
two-phase review and corrections
process for SNFs’ quality measure data
that will be made public under section
1888(g)(6) of the Act and SNF
performance information that will be
made public under section 1888(h)(9) of
the Act. We explained that we would
accept corrections to the quality
measure data used to calculate the
measure rates that is included in any
SNF’s quarterly confidential feedback
report, and also that we would provide
SNFs with an annual confidential
feedback report containing the
performance information that will be
made public. We detailed the process
for requesting Phase One corrections
and finalized a policy whereby we
would accept Phase One corrections to
SNFs’ quarterly reports through March
31 following the report’s issuance via
the CASPER system.
In the proposed rule (82 FR 21086
through 21087), we proposed additional
specific requirements for the Phase Two
review and correction process that we
are finalizing in this final rule.
Specifically, we proposed to limit Phase
Two correction requests to the SNF’s
performance score and ranking because
all SNFs would have already had the
opportunity to correct their quality
measure data through the Phase One
corrections process.
We also proposed to provide these
reports to SNFs at least 60 days prior to
the FY involved. SNFs will not be
allowed to request corrections to their
value-based incentive payment
adjustments. However, we stated that
we will make confirming corrections to
a SNF’s value-based incentive payment
adjustment if a SNF successfully
requests a correction to its SNF
performance score.
As with Phase One, we proposed that
Phase Two correction requests must be
submitted to the SNFVBPinquiries@
cms.hhs.gov mailbox, and must contain
the following information:
• SNF’s CMS Certification Number
(CCN);
• SNF Name;
• The correction requested and the
SNF’s basis for requesting the
correction.
Specifically, the SNF must identify
the error for which it is requesting
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correction, and explain the reason for
requesting the correction. The SNF must
also submit documentation or other
evidence, if available, supporting the
request. As noted above, corrections
requested during Phase Two will be
limited to SNFs’ performance score and
ranking. However, we noted that the
SNFVBPinquiries@cms.hhs.gov mailbox
cannot receive secured email messages.
If any SNF believes it needs to submit
patient-sensitive information as part of
a correction request, we requested that
the SNF contact us at the mailbox to
arrange a secured transfer.
We further proposed that SNFs must
make any correction requests no later
than 30 days following the date of our
posting of their annual SNF
performance score report via the QIES
system CASPER files. For example, if
we post the reports on August 1, 2017,
SNFs must review these reports and
submit any correction requests by 11:59
p.m. Eastern Standard Time on August
31, 2017 (or the next business day, if the
30th day following the date of the
posting is a weekend or federal holiday).
We stated that we would not consider
any requests for corrections to SNF
performance scores or rankings that are
received after this deadline.
We proposed to review all timely
Phase Two correction requests that we
receive and provide responses to SNFs
that have requested corrections as soon
as practicable. We also proposed to
issue an updated SNF performance
score report to any SNF that requests a
correction with which we agree, and if
necessary, to update any public postings
on Nursing Home Compare and valuebased incentive payment percentages, as
applicable.
We sought public comments on this
proposed Phase Two corrections
process. A discussion of these
comments, along with our responses,
appears below.
Comment: Some commenters
recommended that SNFs be provided
access to the information used to
calculate their SNFRM scores and
estimate their payment adjustment
factors based on the payment exchange
function. Commenters stated that SNFs’
may wish to replicate their SNF VBP
performance scores as closely as
possible, and requested that SNFs
receive their predicted and expected
readmission rates, national average
readmission rates, and RSRRs for both
the baseline and performance periods,
as well as the cut points used to
determine performance standards.
Commenters explained that such
information will help SNFs be more
confident about their final payment
adjustments as well as to understand
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what they need to do to improve their
SNFRM scores and payment
adjustments.
Response: We thank the commenters
for this feedback. While it is correct that
SNFs cannot calculate their own riskstandardized readmission rates because
such a calculation would require
national stay-level data, including riskadjustment information, we believe that
the additional patient-level and facilitylevel information that we are now
providing to SNFs (as discussed further
above) along with their quarterly reports
will be useful to SNFs with their quality
improvement efforts. We also provide
SNFs with their predicted and expected
readmission rates, national average
readmission rates, and RSRRs in their
quarterly confidential feedback reports
and supplemental workbooks. We
welcome commenters’ continued
feedback on the contents of the
supplemental workbooks containing
facility-level and patient-level data that
accompany the quarterly confidential
feedback reports.
Comment: One commenter requested
that we provide Phase Two scoring
reports to SNFs as soon as possible if we
elect to change from calendar year to
fiscal year performance periods to
ensure that SNFs have sufficient time to
review those reports and submit
correction requests.
Response: We thank the commenter
for this suggestion, and we will strive to
provide SNF performance score reports
to SNFs as quickly as possible. We note,
however, that it is time consuming for
us to complete the tasks necessary to
ensure that the information contained in
the performance score reports is
accurate. At this time, we do not believe
we can feasibly provide SNF
performance score reports prior to the
statutorily-required deadline described
in section 1888(h)(7) of the Act that
SNFs be notified of the adjustments to
their Medicare payments as a result of
the Program. We will consider future
improvements if information technology
and claims processing improvements
allow for earlier dissemination of this
information to SNFs.
Comment: One commenter supported
our review and correction policies in
general, but was unsure how a SNF
could challenge its SNF performance
score or ranking since SNFs do not
receive patient-level data, and requested
that we make such data available to
SNFs. The commenter noted that
additional information could be useful
to SNFs, including their predicted
readmission rate, their expected
readmission rate, the national average,
the SNF’s baseline and performance
period rates, the SNF’s ranking, and the
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achievement and improvement
thresholds.
Response: Our intention is to provide
SNFs with the patient level data and
associated data elements that the
commenter suggests in the SNF
performance score reports scheduled for
delivery next year, though we note, as
stated above, that we are now providing
patient-level data in SNFs’ quarterly
confidential feedback reports. We
welcome commenters’ continued
feedback on those data and any other
elements that may be helpful to SNFs
with their quality improvement efforts.
After consideration of the public
comments that we received, we are
finalizing the Phase Two review and
corrections process, as proposed.
(3) SNF VBP Program Public Reporting
We refer readers to the FY 2017 SNF
PPS final rule (81 FR 52009) for
discussion of the statutory requirements
governing the public reporting of SNFs’
performance information under the SNF
VBP Program. We also sought and
responded to public comments on
issues that we should take into account
when posting performance information
on Nursing Home Compare or a
successor Web site.
We proposed to begin publishing SNF
performance information under the SNF
VBP Program on Nursing Home
Compare not later than October 1, 2017.
We stated that we would only publish
performance information for which
SNFs have had the opportunity to
review and submit corrections. We
sought comments on this proposal. A
discussion of these comments, along
with our responses, appears below.
Comment: One commenter supported
posting SNF performance scores on
Nursing Home Compare, but opposed
posting quality measure performance
scores, including achievement/
improvement scores. The commenter
stated that achievement and
improvement scores are not required by
statute to be publicly posted and could
be confusing to the public. The
commenter also noted that the
Program’s quality measures differ from
those already posted on Nursing Home
Compare, and stated that having
multiple rehospitalization rates would
not be ideal.
Response: We thank the commenter
for this feedback. We note that section
1888(g)(6) of the Act directs the
Secretary to make SNF-specific
information available to the public,
including information on measure-level
performance, and we will consider the
commenter’s views as we develop our
plans for public reporting of SNF VBP
data in the future.
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Comment: Commenter requested that
we clarify our intentions for public
reporting of SNF VBP information on
Nursing Home Compare, wondering if
this information will replace the current
readmission rate information and
definitions on the site or if SNF VBP
information will be added to the site’s
current content. The commenter also
expressed frustration that CMS is using
multiple definitions of readmissions for
different programs, and suggested that
we align our efforts.
Response: We intend to publish SNF
VBP performance information on
Nursing Home Compare or a successor
Web site as directed by the SNF VBP
Program’s statute. We are cognizant of
the possibility for confusion, and we
intend to align our efforts as much as
possible across programs, including
giving providers sufficient information
to aid them in distinguishing between
the readmission measures on Nursing
Home Compare.
Comment: Commenter encouraged us
to publish as much information as
possible on Nursing Home Compare,
including readmissions rates,
achievement and improvement points,
SNF performance scores, rankings, and
payment adjustments. The commenter
noted that many of these data points are
available for the Hospital VBP and
Readmissions Reduction Programs, and
noted that the public should expect the
same transparency for SNFs.
Response: We thank the commenter
for this feedback and will take it into
consideration as we continue
developing our public reporting plans.
After consideration of the public
comments that we have received, we are
finalizing our public reporting policy as
proposed.
(4) Ranking of SNFs’ Performance
We refer readers to the FY 2017 SNF
PPS final rule (81 FR 52009) for
discussion of the statutory requirement
that we rank SNFs based on their
performance on the Program. In that
rule, we discussed the statutory
requirements to order SNF performance
scores from low to high and publish
those rankings on both the Nursing
Home Compare and QualityNet Web
sites, and to publish the ranking after
August 1, 2018, when performance
scores and value-based incentive
payment adjustments will be made
available to SNFs. We intend to publish
the ranking for each program year once
performance scores and value-based
incentive payment adjustments are
made available to SNFs.
Having considered those statutory
requirements, we proposed to rank
SNFs for the FY 2019 program year and
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36623
to publish the ranking after August 1,
2018. We further proposed that the
ranking include the following data
elements:
• Rank,
• Provider ID,
• Facility name,
• Address,
• Baseline period (CY 2015) riskstandardized readmission rate,
• Performance period (CY 2017) riskstandardized readmission rate,
• Achievement score,
• Improvement score, and
• SNF performance score.
We believe that these data elements
will provide consumers and other
stakeholders with the necessary
information to evaluate SNFs’
performance under the program,
including each component of the SNF
performance score, including both
achievement and improvement. We
sought public comments on these
proposals. We stated in the proposed
rule that we would address rankings for
future program years in subsequent
rulemaking. A discussion of these
comments, along with our responses,
appears below.
Comment: One commenter stated its
belief that we must publish the FY 2019
program ranking not later than August
1, 2018, rather than after August 1 as we
described in the proposed rule. The
commenter noted that publishing the
ranking by that date will provide all
stakeholders with sufficient time to
review the ranking prior to the fiscal
year.
Response: Section 1888(h)(9) of the
Act does not provide a specific deadline
for public reporting of SNF performance
scores and the ranking for a given fiscal
year. Our intention in stating that we
would publish the ranking after August
1, 2018, was only to communicate that
we would publish the ranking publicly
after SNFs have been notified of their
SNF performance scores, value-based
incentive payment percentages, and
ranking as required by section
1888(h)(7) of the Act, which must take
place not later than 60 days prior to the
fiscal year involved.
After consideration of the public
comments, we are finalizing the SNF
VBP Program’s ranking policies as
proposed.
4. Survey Team Composition
a. Background
To participate in the Medicare and
Medicaid programs, long term care
facilities, including skilled nursing
facilities (SNFs) in Medicare and
nursing facilities (NFs) in Medicaid,
must be certified as meeting Federal
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participation requirements, which are
specified in 42 CFR part 483. Section
1864(a) of the Act authorizes the
Secretary to enter into agreements with
state survey agencies to determine
whether SNFs meet the federal
participation requirements for Medicare
and section 1902(a)(33)(B) of the Act
provides for state survey agencies to
perform the same survey tasks for NFs
participating or seeking to participate in
the Medicaid program. Surveys are
performed directly by us and also under
contract for certain surveys. The results
of these surveys are used by us and the
Medicaid state agency as the basis for a
determination to enter into, deny, or
terminate a provider agreement with the
facility, or to impose an enforcement
remedy or remedies on a facility, as
appropriate, for failure to be in
substantial compliance with federal
participation requirements. To assess
compliance with federal participation
requirements, surveyors conduct onsite
inspections (surveys) of facilities. In the
survey process, surveyors gather
evidence and directly observe the actual
provision of care and services to
residents and the effect or possible
effects of that care, or lack thereof, to
assess whether the care provided meets
the assessed needs of individual
residents.
Sections 1819(g) and 1919(g) of the
Act, and corresponding regulations at 42
CFR part 488, subpart E, specify the
requirements for the types and
periodicity of surveys that are to be
performed for each facility. Specifically,
sections 1819(g)(2) and 1919(g)(2) of the
Act reference standard, special, and
extended surveys. Sections 1819(g)(2)(E)
and 1919(g)(2)(E) of the Act specify that
surveys under section 1819(g)(2) of the
Act in general must consist of a
multidisciplinary team of professionals,
including a registered nurse. In
addition, the statutory requirements
governing the investigation of
complaints and for monitoring on-site a
SNF’s or NF’s compliance with
participation requirements are found in
sections 1819(g)(4) and 1919(g)(4) of the
Act and § 488.332.
These sections specify that a
specialized team, including an attorney,
an auditor, and appropriate health care
professionals may be maintained and
utilized in the investigation of
complaints for the purpose of
identifying, surveying, gathering and
preserving evidence, and carrying out
appropriate enforcement actions against
SNFs and NFs, respectively.
Consistent with the statutory
provisions noted above, two separate
regulations directly address survey team
composition. Section 488.314, Survey
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Teams, reflects the statutory language
under sections 1819(g)(2)(E)(i) and
1919(g)(2)(E)(i) of the Act, and states
that ‘‘[s]urvey teams must be conducted
by an interdisciplinary team of
professions, which must include a
registered nurse.’’ Section 488.332,
Investigation of Complaints of
Violations and Monitoring of
Compliance, reflects the statutory
language under sections 1819(g)(4) and
1919(g)(4) of the Act, and states that the
state survey agency may use a
specialized team, which may include an
attorney, auditor, and appropriate
health professionals, but not necessarily
a registered nurse, to investigate
complaints and conduct on-site
monitoring. A survey conducted to
monitor on-site a SNF’s or NF’s
compliance with participation
requirements, such as a revisit survey to
determine whether a noncompliant
facility has achieved substantial
compliance, is also subject to the
provisions of § 488.332, and not
§ 488.314.
Section 488.308(e) also addresses
complaint investigations, but as
currently written, it combines special
surveys, which are authorized under
sections 1819(g)(2)(A)(iii)(II) and
1919(g)(2)(A)(iii)(II) of the Act, with the
requirements associated with the
investigations of complaints, which are
governed by sections 1819(g)(4) and
1919(g)(4) of the Act. In the statute,
‘‘special surveys’’ are referenced at
sections 1819(g)(2)(A)(iii)(II) and
1919(g)(2)(A)(iii)(II) of the Act, while
the investigation of complaints is
referenced at sections 1819(g)(4) and
1919(g)(4) of the Act.
The regulations as currently written
do not clearly indicate which survey
team requirement applies to complaint
surveys. The language at § 488.314
could be broadly interpreted to cover
the survey team composition for all
surveys, including those used to
investigate a complaint. Such an
interpretation, however, would ignore
the provisions of § 488.332, which allow
a state survey agency to utilize a
specialized investigative team that does
not necessarily include a registered
nurse to survey a facility in connection
with a complaint investigation. The
placement of surveys to investigate a
complaint together with special surveys
under § 488.308(e) further places into
question which survey team
requirement applies to complaint
surveys. However, CMS’ State
Operations Manual (SOM) (Internet
Only Manual Pub. 100–07) notes that
‘‘Section 488.332 provides the Federal
regulatory basis for the investigation of
complaints about nursing homes,’’ thus
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indicating CMS’ view that provisions
related to survey team composition in
§ 488.332 apply to complaint surveys.
See SOM, Ch. 5, Section 5300; see also
SOM, Ch. 7, Sections 7203.5 and
7205.2(3); SOM, Appendix P, II.B.4A.
The lack of clarity as to which
regulatory provision, that is, § 488.314
or § 488.332, applies to the survey team
composition related to the investigation
of complaints has been the cause of
recent administrative litigation. We thus
believe that regulatory changes are
needed to clarify that only surveys
conducted under sections 1819(g)(2)
and 1919(g)(2) of the Act are subject to
the requirement at § 488.314 that a
survey team consist of an
interdisciplinary team that must include
a registered nurse. Complaint surveys
and surveys related to on-site
monitoring, including revisit surveys,
are subject to the requirements of
sections 1819(g)(4) and 1919(g)(4) of the
Act and § 488.332, which allow the state
survey agency to use a specialized
investigative team that may include
appropriate health care professionals
but need not include a registered nurse.
b. Major Provisions
We proposed to make changes to
§§ 488.30, 488.301, 488.308, and
488.314 to clarify the regulatory
requirements for team composition for
surveys conducted for investigating a
complaint and to align regulatory
provisions for investigation of
complaints with the statutory
requirements found in sections 1819
and 1919 of the Act.
(a) Proposed revision of the definition
of ‘‘complaint survey’’ under § 488.30 to
add a provision stating that the
requirements of sections 1819(g)(4) and
1919(g)(4) of the Act and § 488.332
apply to complaint surveys.
(b) Proposed revision of the definition
of ‘‘abbreviated standard survey’’ under
§ 488.301 to clarify that abbreviated
standard surveys conducted to
investigate a complaint or to conduct
on-site monitoring to verify compliance
with participation requirements are
subject to the requirements of § 488.332.
(c) Proposed relocation of the
requirements included in § 488.308(e)(2)
and (3) related to surveys conducted to
investigate a complaint from under the
heading ‘‘Special Surveys’’ to a new
paragraph (f), titled ‘‘Investigations of
Complaints.’’
(d) Proposed revision of the language
at § 488.314(a)(1) to specify that the
team composition requirements at
§ 488.314(a)(1) apply only to surveys
under sections 1819(g)(2) and 1919(g)(2)
of the Act.
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Commenters submitted the following
comments related to the proposed rule’s
discussion of the Survey Team
Composition. A discussion of these
comments, along with our responses,
appears below.
Comment: We received one comment
supporting our proposal and the
commenter agreed with our clarification
on the survey team composition. The
commenter further stated that states
should be able to determine the
composition of the survey team based
on the complaint received and the
purpose of the revisit to determine
compliance.
Response: We want to thank the
commenter for their support of our
clarifications to the survey team
composition. We agree that the states
should be able to determine which
professional would be most appropriate
based on the complaint received, such
as a registered nurse for clinical
concerns, a dietitian for dietary
concerns, or a pharmacist for
medication issues for example.
Comment: We received several
comments recommending us to consider
adding a Registered Nurse (RN) to all
survey teams. Multiple commenters
stated that an RN should be the
individual to investigate any alleged
incident. Another commenter stated that
they believed statutory language is clear
that a survey team must include a
registered professional nurse, and that
the citation of clinical violations should
be observed and made by a registered
professional nurse. One commenter
recommended that we add a
requirement for a psychosocial
professional to be on each team in
addition to a registered nurse. One
commenter also recommended that in
addition to having an RN on the survey
team, the team should also include an
additional professional based on the
complaint type.
Response: We appreciate the feedback
from the commenters regarding the
suggestion to have an RN on all surveys
or to add a psychosocial professional to
the team, but the proposed change to the
language regarding survey team
composition is not to change the
composition of survey teams, but to
clarify the requirement that survey
teams conducted by an interdisciplinary
team of professionals, including a
registered nurse applies only to surveys
under sections 1819(g)(2) and 1919(g)(2)
of the Act and does not apply to
complaint surveys in which the
appropriate professional would be used
to conduct the investigation based on
the type of allegation.
Comment: One commenter stated that
they disagreed with our interpretation of
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its statutory authority. The commenter
stated that they believed statutory
requirement for a registered nurse on
this team is clear and that the statute
draws no distinction between a
complaint survey and a standard survey.
The commenter further stated that
citations of clinical violations should be
observed and confirmed or dismissed by
a registered professional nurse based
upon his or her clinical judgment.
Response: The preamble to the
proposed rule states that the proposed
change is to clarify the requirement that
survey teams conducted by an
multidisciplinary team of professionals,
including a registered nurse, applies
only to surveys described under
sections 1819(g)(2) and 1919(g)(2) of the
Act and does not apply to the
investigation of complaints. The
authority for complaint surveys arises
under sections 1819(g)(4) and 1919(g)(4)
of the Act, which authorizes the State
survey agency to use a specialized team,
which includes appropriate healthcare
professionals that may or may not, if not
required, include a registered nurse, for
purposes of, among other things,
‘‘surveying’’ noncompliant facilities. As
discussed in the preamble, we believe
these clarifying changes are consistent
with the statutory provisions of sections
1819(g)(2) and (g)(4) and 1919(g)(2) and
(g)(4) of the Act, as well as our long
standing interpretation of the statute, as
expressed in the implementation of
current regulations at §§ 488.314 and
488.332 and the State Operations
Manual (‘‘SOM’’). We believe that if we
were to require a registered nurse on all
surveys including those that are meant
to investigate complaint allegations, it
would place an undue burden on the
resources of state survey agencies and
render the statutory language under
sections 1819(g)(4) and 1919(g)(4) of the
Act as meaningless. In addition, as
previously mentioned, we believe that
the statute enables us to determine
which professional would be most
appropriate to investigate complaint
allegations based on the nature of the
complaint allegation received.
Comment: We received one comment
requesting a revision based on the
decision at DAB No. CR4670 (2016)
(H.H.S.), 2016 WL 499224, in which an
Administrative Law Judge provided an
interpretation of the survey composition
provisions in the statute and current
regulations.
Response: We appreciate the
commenter’s reference to this case,
however the ALJ decision is currently
being reviewed by the Departmental
Appeals Board Appellate Division and
therefore we cannot comment on this
case at this time.
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36625
Based on the comments received, we
are proceeding with the finalization of
our proposal without any changes.
5. Correction of the Performance Period
for the National Healthcare Safety
Network (NHSN) Healthcare Personnel
(HCP) Influenza Vaccination
Immunization Reporting Measure in the
End-Stage Renal Disease (ESRD) Quality
Incentive Program (QIP) for Payment
Year (PY) 2020
In the CY 2017 ESRD PPS final rule
(81 FR 77834), we finalized that the
performance period for the NHSN
Healthcare Personnel Influenza
Vaccination Reporting Measure for
Payment Year (PY) 2020 would be from
October 1, 2016, through March 31,
2017 (81 FR 77915). We proposed to
revise that performance period so that it
aligns with the schedule we previously
set for this measure. Specifically, we
previously finalized that for the PY 2018
ESRD QIP, the performance period for
this measure would be from October, 1,
2015 through March 31, 2016, which is
consistent with the length of the 2015–
2016 influenza season (79 FR 66209),
and that for the PY 2019 ESRD QIP, the
performance period for this measure
would be from October, 1, 2016 through
March 31, 2017, which is consistent
with the length of the 2016- 2017
influenza season (80 FR 69059 through
69060). Maintaining the performance
period we finalized in the CY 2017
ESRD PPS final rule would result in
scoring facilities on the same data twice,
and would not be consistent with our
intended schedule to collect data on the
measure in successive influenza
seasons. Therefore, we proposed to
revise the performance period for the
NHSN HCP Influenza Vaccination
Reporting Measure for the PY 2020
ESRD QIP. Specifically, we proposed
that for the PY 2020 ESRD QIP, the
performance period for this measure
would be October 1, 2017, through
March 31, 2018, which is consistent
with the length of the 2017–2018
influenza season.
We sought comments on this
proposal. A discussion of these
comments, along with our responses,
appears below.
Comment: Commenters were
generally supportive of our proposal to
set the performance period as October 1,
2017 through March 31, 2018 because it
is consistent with the length of the
2017–2018 influenza season, however
they stated that to be truly consistent
with the influenza season and the
standard practice of administering the
vaccine, the performance period for the
measure should be aligned with the
CDC’s recommendations that
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vaccination occur as early as possible to
protect against infection. They stated
that without including the phrase ‘‘or
when the vaccine becomes available,’’
the measure penalizes facilities that
provide the vaccine as soon as it
becomes available in August or
September. One commenter also stated
that not making this change could place
patients at increased risk early in the
influenza season.
Response: As stated in the CY 2015
ESRD PPS final rule (79 FR 66207) in
response to a commenter who was
concerned about whether vaccinations
received before October 1 would qualify
under this measure, ‘‘the performance
period for the denominator (the number
of healthcare personnel working in a
facility) is from October 1 through
March 31. However, the numerator
measurement (vaccination status)
includes vaccines obtained ‘as soon as
the vaccine is available.’ As a result, a
Healthcare Personnel (HCP) working at
the facility as of October 1 who was
vaccinated in September would be
considered vaccinated for the
performance period under this
measure’’ (79 FR 66207). As a result,
facilities will not be penalized for
providing the vaccine as soon as it
becomes available and patients will not
be placed at an increased risk at any
point during the influenza season due to
the vaccination status of HCPs working
in the facility.
After carefully considering the
comments received we are finalizing the
Performance Period for the NHSN HCP
Influenza Vaccination Reporting
Measure for the ESRD QIP for Payment
Year 2020 as proposed.
IV. Collection of Information
Requirements
Under the Paperwork Reduction Act
of 1995 (PRA) (44 U.S.C. 3501 et seq.),
we are required to publish a 60-day
notice in the Federal Register and
solicit public comment before a
collection of information requirement is
submitted to the Office of Management
and Budget (OMB) for review and
approval.
To fairly evaluate whether an
information collection should be
approved by OMB, PRA section
3506(c)(2)(A) requires that we solicit
comment on the following issues:
• The need for the information
collection and its usefulness in carrying
out the proper functions of our agency.
• The accuracy of our burden
estimates.
• The quality, utility, and clarity of
the information to be collected.
• Our effort to minimize the
information collection burden on the
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affected public, including the use of
automated collection techniques.
We solicited public comment in the
FY 2018 SNF PPS proposed rule on
each of the section 3506(c)(2)(A)required issues for the following
information collection requirements
(ICRs).
A. Information Collection Requirements
(ICRs)
1. ICRs Regarding the SNF VBP Program
As discussed in the FY 2016 SNF PPS
final rule (80 FR 46473) and the FY
2017 SNF PPS final rule (81 FR 52049
through 52050), we have specified
claims-based measures to fulfill the SNF
VBP Program’s requirements. As
required by the SNF VBP Program’s
statute, we will score SNFs’
performance on these measures in order
to make value-based incentive payments
to SNFs beginning in FY 2019.
In this final rule, we are finalizing
additional policies for the SNF VBP
Program, including performance
standards and performance/baseline
periods for the FY 2020 Program year,
an exchange function for the FY 2019
Program year, and administrative
requirements related to review and
correction of performance information
to be made public. None of these
requirements result in any additional
information collections or reporting
burden associated with the Program.
Additionally, because claims-based
measures are calculated based on claims
figures that are already submitted to the
Medicare program for payment
purposes, there is no additional
respondent burden associated with data
collection or submission for either the
SNFRM or SNFPPR measures. Thus,
there is no additional reporting burden
associated with the SNF VBP Program’s
measures finalized in this rule.
2. ICRs Regarding the Potentially
Preventable 30-Day Post-Discharge
Readmission Measure
This rule modifies the Potentially
Preventable 30-Day Post-Discharge
Readmission Measure by increasing the
length of the measurement period and
updating the confidential feedback and
public reporting dates, as described in
section III.D.2.h. Because this is a
claims-based measure, no data
collection beyond Medicare claims
submitted by SNFs for the furnishing of
SNF covered services are required for
the calculation of this measure. We
believe the SNF QRP burden estimate is
unaffected by the modifications of this
measure as the modifications have no
impact on any of the claims-based
reported data fields.
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3. ICRs Exempt From the PRA
As discussed in this final rule, we are
adopting five new measures beginning
with the FY 2020 SNF QRP (see section
III.D.2.g). The five new measures being
finalized are: (1) Changes in Skin
Integrity Post-Acute Care: Pressure
Ulcer/Injury; (2) Application of the IRF
Functional Outcome Measure: Change
in Self-Care Score for Medical
Rehabilitation Patients (NQF #2633); (3)
Application of IRF Functional Outcome
Measure: Change in Mobility Score for
Medical Rehabilitation Patients (NQF
#2634); (4) Application of IRF
Functional Outcome Measure: Discharge
Self-Care Score for Medical
Rehabilitation Patients (NQF #2635);
and (5) Application of IRF Functional
Outcome Measure: Discharge Mobility
Score for Medical Rehabilitation
Patients (NQF #2636). The measures
must be collected by SNFs and reported
to CMS using the Resident Assessment
Instrument, Minimum Data Set (MDS).
These measures will be calculated
using data elements that are included in
the MDS. The data elements are discrete
questions and response codes that
collect information on a SNF patient’s
health status, preferences, goals and
general administrative information. To
view the MDS, with the finalized data
elements, we refer to the reader to
https://www.cms.gov/Medicare/QualityInitiatives-Patient-AssessmentInstruments/NursingHomeQualityInits/
Skilled-Nursing-Facility-QualityReporting-Program/SNF-QualityReporting-Program-Measures-andTechnical-Information.html.
This rule also finalizes that SNFs
would be required to report certain
standardized resident assessment data
beginning with the FY 2019 SNF QRP
(see section III.D.2.j.). We are finalizing
our definition of the term ‘‘standardized
resident assessment data’’ as patient
assessment questions and response
options that are identical in all four PAC
assessment instruments, and to which
identical standards and definitions
apply. The standardized resident
assessment data are intended to be
shared electronically among PAC
providers and will otherwise enable the
data to be comparable for various
purposes, including the development of
cross-setting quality measures and to
inform payment models that take into
account patient characteristics rather
than setting.
Under section 1899B(m) of the Act,
the Paperwork Reduction Act does not
apply to the specific changes in the
collections of information described in
this final rule. These changes to the
collections of information are being
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finalized under section 2(a) of the
IMPACT Act, which added new section
1899B to the Act. That section requires
SNFs to report standardized resident
assessment data, data on quality
measures, and data on resource use and
other measures. All of this data must,
under section 1899B(a)(1)(B) of the Act,
be standardized and interoperable to
allow for its exchange among PAC
providers and other providers and the
use by such providers to provide access
to longitudinal information to facilitate
coordinated care and improved
Medicare beneficiary outcomes. Section
1899B(a)(1)(C) of the Act requires us to
modify the MDS to allow for the
submission of quality measure data and
standardized resident assessment data
to enable its comparison across SNFs
and other providers. We are, however,
setting out the burden as a courtesy to
advise interested parties of the proposed
actions’ time and costs and for reference
refer to section V.A of this final rule of
the regulatory impact analysis (RIA).
The requirement and burden will be
submitted to OMB for review and
approval when the modifications to the
MDS have achieved standardization and
are no longer exempt from the
requirements under section 1899B(m) of
the Act.
For the new measure ‘‘Changes in
Skin Integrity Post-Acute Care: Pressure
Ulcer/Injury’’ (NQF #2633) the items
used to calculate this measure are
already present on the MDS, so the
adoption of this measure will not
require SNFs to report any new data
elements. In addition, we are removing
some data elements related to pressure
ulcers that have been identified as
duplicative. Taking these final policies
together, we estimate that there will be
a 1.5 minute reduction in clinical staff
time needed to report the pressure ulcer
measure data. We are also removing 9
additional data elements from the MDS
3.0. The removal of these data elements
from the skin integrity section of the
MDS provide a reduction in burden
with data reporting by SNFs and
therefore serve as offsets to the SNF
QRP. These removals are: Date of oldest
Stage 2 pressure ulcer; three items
pertaining to the dimensions of an
unhealed pressure ulcer; the most
severe tissue type for any pressure ulcer;
and four data elements pertaining to
healed pressure ulcers. We estimate that
the data elements we are removing will
reduce overall reporting burden from
the assessments, constituting a
reduction of an additional 7 minutes of
clinical staff time per stay which
provide a reduction in burden with data
reporting by SNFs. Taken together, we
are removing a total of 12 data elements
from the skin integrity section of the
MDS. Based on the data provided in
Table 25 of this final rule, and
estimating 2,886,336 discharges from
15,447 SNFs annually, we also estimate
that the total cost of reporting these data
will reduce overall reporting burden for
the assessments from what was
proposed constituting a total reduction
of 8.5 minutes of clinical staff time per
stay or $1,837 per SNF annually, or
$28,377,493 for all SNFs annually. We
believe that the MDS items will be
completed by registered nurses (BLS
Occupation Code: 29–1141) at $69.40/
hr 55 including overhead and fringe
benefits.
For the four functional outcome
measures (NQF: #2633, #2634, #2635,
and #2636) that we are finalizing in this
final rule, we note that although some
of the data elements needed to calculate
these measures are currently included
on the MDS, other data elements need
to be added to the MDS. As a result, we
estimate that reporting these measures
will require an additional 9 minutes of
nursing and therapy staff time to report
data on admission and 5.5 minutes of
nursing and therapy time to report data
on discharge, for a total of 14.5
additional minutes per stay. We
estimate that the additional MDS items
36627
we are finalizing will be completed by
Registered Nurses for approximately 7
percent of the time. Occupational
Therapists (BLS Occupation Code: 29–
1122) at $80.50/hr including overhead
and fringe benefits for approximately 41
percent of the time, and Physical
Therapists (BLS Occupation Code: 29–
1123) at $83.86/hr including overhead
and fringe benefits for approximately 52
percent of the time. Individual
providers determine the staffing
resources necessary. With 2,886,336
discharges from 15,447 SNFs annually,
we estimate that the reporting of the
four functional outcome measures
would impose on SNFs an additional
burden of 697,531 total hours (2,886,336
discharges × 14.5 min/60) or 45.16
hours per SNF (697,531 hr/15,447
SNFs). Of the 14.5 minutes per stay, 1
minute of that time is for a Registered
Nurse, 3.5 minutes is for an
Occupational Therapist, and 4.5
minutes is for a Physical Therapist for
a total of 9 minutes are required for
admission. For discharge, 2.5 minutes
are for an Occupational Therapist, and
3 minutes for a Physical Therapist for a
total of 5.5 minutes. For one stay we
estimate a cost of $19.69 or, in
aggregate, an annual cost of
$56,829,551. Per SNF, we estimate an
annual cost of $3,679. A summary of
these estimates is provided in Table 25.
We are not finalizing our proposal to
adopt 1 new standardized resident
assessment data elements with respect
to SNF admissions and 11 new
standardized resident assessment data
elements with respect to SNF
discharges. This results in a reduction to
the burden that we estimated in the
proposed rule. We refer readers to the
proposed rule (82 FR 21091 through
21092) for a discussion of our burden
estimates for these proposals. Our
updated estimate is provided in Table
25 (Revised Calculation of Burden), and
results in a final estimated burden for
the SNF QRP of $28,452,058.
TABLE 25—REVISED CALCULATION OF BURDEN
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QRP QM
Data
elements
Aggregate
annual hours
all
SNFs
Minutes
Hours per
SNF
annually
Dollars per
stay
Aggregate
annual cost
all SNFs
Annual cost
per SNF
Functional Outcome
Measures ..................
Changes in Skin Integrity .............................
18
14.5
697,531
45.16
$ 19.69
$ 56,829,551
$ 3,679
(12)
(8.5)
(408,898)
(26.47)
(9.83)
(28,377,493)
(1,837)
Total ......................
6
6
288,633
18.69
9.86
28,452,058
1,842
55 U.S. Bureau of Labor Statistics, May 2016
National Occupational Employment and Wage
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Estimates (see https://www.bls.gov/oes/current/oes_
nat.htm).
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We received the following public
comments on our collection of
information estimates.
Comment: A few commenters
expressed concern about the
administrative burden imposed by the
SNF QRP, specifically referring to the
volume and the pace of data collection
that is required by the implementation
of the SNF QRP.
Response: We appreciate the
commenters’ concerns regarding burden
due to changes to the SNF QRP as a
result of the fulfillment of the
requirements of the IMPACT Act. We
appreciate the importance of avoiding
undue burden on providers and will
continue to evaluate and avoid any
unnecessary burden associated with the
implementation of the SNF QRP. We
will continue to work with stakeholders
to explore ways to minimize and
decrease burden as our mutual goal is to
focus on improving patient care.
Finally, in response to stakeholders’
concerns regarding burden, we have
decided not to finalize a number of the
proposed standardized resident
assessment data elements. This results
in a reduction to the burden estimate
that appeared in the proposed rule.
V. Economic Analyses
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A. Regulatory Impact Analysis
1. Introduction
We have examined the impacts of this
final 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), the Congressional
Review Act (5 U.S.C. 804(2)), and
Executive Order 13771 on Reducing
Regulation and Controlling Regulatory
Costs (January 30, 2017). 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
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Executive Order 12866. Accordingly, we
have prepared a regulatory impact
analysis (RIA) as further discussed
below.
Executive Order 13771, titled
Reducing Regulation and Controlling
Regulatory Costs, was issued on January
30, 2017. This final rule is considered
an EO 13771 regulatory action. Details
on the estimated costs of this rule can
be found in the preceding and
subsequent analyses.
2. Statement of Need
This final rule updates the FY 2017
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 on
these issues.
3. Overall Impacts
This final rule sets forth updates of
the SNF PPS rates contained in the SNF
PPS final rule for FY 2017 (81 FR
51970). Based on the above, we estimate
that the aggregate impact is an increase
of $370 million in payments to SNFs in
FY 2018, resulting from the SNF market
basket update to the payment rates, as
required by section 1888(e)(5)(B)(iii) of
the Act. We would note that this
estimate is different from the estimated
impact of $390 million provided in the
FY 2018 SNF PPS proposed rule (82 FR
21016, 21093), as we relied on an
updated SNF baseline spending figure
for the final rule which reflect baseline
spending from the FY 2018 President’s
budget, as opposed to that used in the
proposed rule which was based on the
Mid-session review of the FY 2017
President’s budget.
We would note that 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
events that may occur within the
assessed impact time period.
In accordance with sections
1888(e)(4)(E) and 1888(e)(5) of the Act,
if not for the enactment of section 411(a)
of MACRA (as discussed in section
III.B.2. of this final rule), we would
update the FY 2017 payment rates by a
factor equal to the market basket index
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percentage change adjusted by the MFP
adjustment to determine the payment
rates for FY 2018. As discussed
previously, section 1888(e)(5)(B)(iii) of
the Act establishes a special rule for FY
2018 requiring the market basket
percentage used to update the federal
SNF PPS rates to be equal to 1.0 percent.
The impact to Medicare is included in
the total column of Table 25. In
updating the SNF PPS rates for FY 2018,
we made a number of standard annual
revisions and clarifications mentioned
elsewhere in this final 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
final rule applies to SNF PPS payments
in FY 2018. Accordingly, the analysis of
the impact of the annual update that
follows only describes the impact of this
single year. Furthermore, in accordance
with the requirements of the Act, we
will publish a rule or notice for each
subsequent FY that will provide for an
update to the payment rates and include
an associated impact analysis.
We estimate the impact for the SNF
QRP based on 15,447 SNFs in FY 2016
which had a total of 2,886,336 Medicare
covered discharges for Medicare fee for
service beneficiaries. This would equate
to 288,633 total added hours or 18.69
hours per SNF annually. We anticipate
that the additional MDS items we
finalized will be completed by
Registered Nurses (RN), Occupational
Therapists (OT), and/or Physical
Therapists (PT), depending on the item.
Individual providers determine the
staffing resources necessary. We
obtained mean hourly wages for these
staff from the U.S. Bureau of Labor
Statistics’ May 2016 National
Occupational Employment and Wage
Estimates (https://www.bls.gov/oes/
current/oes_nat.htm), and to account for
overhead and fringe benefits, we have
doubled the mean hourly wage.
Estimated impacts for the SNF QRP
are based on analysis discussed in
section III.D.2. of this final rule. For the
8.5 minute reduction in burden
associated with the new pressure ulcer
measure and the removal of duplicative
pressure ulcer data elements and data
elements no longer being used, and the
additional 14.5 additional minutes of
burden for the functional outcome
measures, the overall cost associated
with finalized changes to the SNF QRP
is $28,452,058.
4. Detailed Economic Analysis
The FY 2018 SNF PPS payment
impacts appear in Table 26. Using the
most recently available data, in this case
FY 2016, we apply the current FY 2017
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wage index and labor-related share
value to the number of payment days to
simulate FY 2017 payments. Then,
using the same FY 2016 data, we apply
the FY 2018 wage index and laborrelated share value to simulate FY 2018
payments. We tabulate the resulting
payments according to the
classifications in Table 26 (for example,
facility type, geographic region, facility
ownership), and compare the simulated
FY 2017 payments to the simulated FY
2018 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 6
rows show the effects on facilities split
by hospital-based, freestanding, urban,
and rural categories. The next 19 rows
show the effects on facilities by urban
versus rural status by census region. The
last 3 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
36629
percent; however, there are
distributional effects of the change.
• The fourth column shows the effect
of all of the changes on the FY 2018
payments. The update of 1.0 percent is
constant for all providers and, though
not shown individually, is included in
the total column. It is projected that
aggregate payments will increase by 1.0
percent, assuming facilities do not
change their care delivery and billing
practices in response.
As illustrated in Table 26, the
combined effects of all of the changes
vary by specific types of providers and
by location. For example, due to
changes finalized in this rule, providers
in the urban Pacific region could
experience a 1.5 percent increase in FY
2018 total payments.
TABLE 26—PROJECTED IMPACT TO THE SNF PPS FOR FY 2018
Number of
facilities
FY 2018
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:
Profit .....................................................................................................................................
Non-profit ..............................................................................................................................
Government ..........................................................................................................................
Update
wage data
(%)
Total
change
(%)
15,468
11,008
4,460
518
10,490
577
3,883
0.0
0.1
¥0.6
0.2
0.1
¥0.7
¥0.6
1.0
1.1
0.4
1.2
1.1
0.3
0.4
791
1,487
1,867
2,121
551
919
1,339
511
1,417
5
0.2
0.4
¥0.2
0.0
¥0.6
0.7
0.1
¥0.2
0.5
¥2.0
1.2
1.4
0.8
1.0
0.4
1.7
1.1
0.8
1.5
¥1.0
137
215
502
937
528
1,076
738
228
99
1.4
¥0.5
¥0.7
¥1.1
¥0.9
¥0.4
¥0.6
¥0.3
0.1
2.5
0.5
0.3
¥0.1
0.1
0.6
0.4
0.7
1.1
1,045
10,822
3,601
¥0.3
0.0
0.0
0.7
1.0
1.0
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Note: The Total column includes the 1.0 percent market basket increase required by section 1888(e)(5)(B)(iii) of the Act. Additionally, we
found no SNFs in rural outlying areas.
5. Estimated Impacts for the SNF QRP
We estimate the impact for the SNF
QRP based on 15,447 SNFs in FY 2016
which had a total of 2,886,336 Medicare
covered discharges for Medicare fee for
service beneficiaries. This would equate
to 288,633 total added hours or 18.69
hours per SNF annually. We anticipate
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that the additional MDS items we
finalized will be completed by
Registered Nurses (RN), Occupational
Therapists (OT), and/or Physical
Therapists (PT), depending on the item.
Individual providers determine the
staffing resources necessary. We
obtained mean hourly wages for these
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Sfmt 4700
staff from the U.S. Bureau of Labor
Statistics’ May 2016 National
Occupational Employment and Wage
Estimates (https://www.bls.gov/oes/
current/oes_nat.htm), and to account for
overhead and fringe benefits, we have
doubled the mean hourly wage.
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Estimated impacts for the SNF QRP
are based on analysis discussed in
section III.D.2. of this final rule. For the
8.5 minute reduction in burden
associated with the new pressure ulcer
measure and the removal of duplicative
pressure ulcer data elements and data
elements no longer being used, and the
additional 14.5 additional minutes of
burden for the functional outcome
measures, the overall cost associated
with finalized changes to the SNF QRP
is $28,452,058.
TABLE 27—REVISED CALCULATION OF COST PER QUALITY MEASURE
QRP QM
Data
elements
Aggregate
annual hours
all SNFs
Minutes
Hours per
SNF annually
Dollars
per stay
Aggregate
annual cost
all SNFs
Annual
cost per
SNF
Functional Outcome
Measures ..................
Changes in Skin Integrity .............................
18
14.5
697,531
45.16
$19.69
$56,829,551
$3,679
(12)
(8.5)
(408,898)
(26.47)
(9.83)
(28,377,493)
(1,837)
Total ......................
6
6
288,633
18.69
9.86
28,452,058
1,842
6. Estimated Impacts for the SNF VBP
Program
Estimated impacts of the FY 2019
SNF VBP Program are based on
historical data that appear in Table 28.
We modeled SNFs’ performance under
the Program using SNFRM data from CY
2013 as the baseline period and CY 2015
as the performance period.
Additionally, we modeled a logistic
exchange function with a payback
percentage of 60 percent, as discussed
further in the preamble to this final rule.
As illustrated in Table 28, the effects
of the SNF VBP Program vary by
specific types of providers and by
location. For example, we estimate that
rural SNFs perform better on the
SNFRM, on average, compared to urban
SNFs. Similarly, we estimate that nonprofit SNFs perform better on the
SNFRM compared to for-profit SNFs,
and that government-owned SNFs
perform better still. We also estimate
that smaller SNFs (measured by bed
size) tend to perform better, on average,
compared to larger SNFs. (We note that
the risk-standardized readmission rates
presented below are not inverted; that
is, lower rates represent better
performance).
These differences in performance on
the SNFRM result in differences in
value-based incentive payment
percentages computed by the Program.
For example, we estimate that, at the
proposed 60 percent payback
percentage, SNFs in urban areas would
receive a 1.161 percent incentive
multiplier, on average, in FY 2019,
while SNFs in rural areas would receive
a slightly higher incentive multiplier of
1.227 percent, on average. Additionally,
SNFs in the smallest 25 percent as
measured by bed size would receive an
incentive multiplier of 1.203 percent, on
average, while SNFs in the 2nd quartile
as measured by bed size would receive
an incentive multiplier of 1.166 percent,
on average. We note that the multipliers
that we have listed in Table 27 are
applied to SNFs’ adjusted Federal per
diem rates after application of the 2
percent reduction to those rates required
by statute.
TABLE 28—ESTIMATED FY 2019 SNF VBP PROGRAM IMPACTS
Number of
facilities
Category
Criterion
Group .............................
Total .....................................................................
Urban ...................................................................
Rural ....................................................................
Total .....................................................................
01=Boston ...........................................................
02=New York .......................................................
03=Philadelphia ...................................................
04=Atlanta ...........................................................
05=Chicago .........................................................
06=Dallas .............................................................
07=Kansas City ...................................................
08=Denver ...........................................................
09=San Francisco ...............................................
10=Seattle ...........................................................
Total .....................................................................
01=Boston ...........................................................
02=New York .......................................................
03=Philadelphia ...................................................
04=Atlanta ...........................................................
05=Chicago .........................................................
06=Dallas .............................................................
07=Kansas City ...................................................
08=Denver ...........................................................
09=San Francisco ...............................................
10=Seattle ...........................................................
Total .....................................................................
Urban by Region ...........
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Rural by Region .............
Ownership Type ............
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15,746
11116
4,630
11,116
808
922
1,132
1,890
2,330
1,379
666
323
1,325
341
4,630
145
94
287
918
1,127
814
801
284
68
92
15,746
RSRR
(mean)
Mean
incentive
multiplier
(60% payback)
(%)
Percent of
proposed
payback
0.19061
0.18790
0.18293
1.218
1.161
1.227
100.0
83.5
16.5
0.18734
0.18848
0.18611
0.19291
0.18728
0.19131
0.18764
0.17831
0.18518
0.17634
1.165
1.116
1.307
1.025
1.213
0.920
1.109
1.644
1.174
1.765
5.978
10.590
10.295
12.443
16.248
6.126
2.815
2.879
12.107
3.983
0.17458
0.17746
0.18145
0.18633
0.18156
0.18676
0.18459
0.17596
0.16620
0.17488
1.648
1.435
1.231
1.011
1.361
0.926
1.291
1.570
1.650
1.569
1.009
0.409
1.431
3.363
4.662
1.824
1.575
0.883
0.706
0.670
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TABLE 28—ESTIMATED FY 2019 SNF VBP PROGRAM IMPACTS—Continued
Category
Number of
facilities
Criterion
RSRR
(mean)
Mean
incentive
multiplier
(60% payback)
(%)
Percent of
proposed
payback
Government .........................................................
Profit ....................................................................
Non-Profit .............................................................
1,096
10,973
3,677
0.17844
0.18864
0.18225
1.240
1.113
1.364
4.601
71.137
24.260
1st Quartile: .........................................................
2nd Quartile: ........................................................
3rd Quartile: .........................................................
4th Quartile: .........................................................
3,986
3,937
3,887
3,938
0.17935
0.18646
0.19009
0.19000
1.203
1.166
1.148
1.204
13.393
19.738
26.388
40.481
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No. of Beds.
7. Regulatory Review Costs
If regulations impose administrative
costs on private entities, such as the
time needed to read and interpret this
final rule, we should estimate the cost
associated with regulatory review. Due
to the uncertainty involved with
accurately quantifying the number of
entities that will review the rule, we
assume that the total number of unique
commenters on the published proposed
rule will be the number of reviewers of
this final rule. We acknowledge that this
assumption may understate or overstate
the costs of reviewing this final rule. It
is possible that not all commenters
reviewed the proposed rule in detail,
and it is also possible that some
reviewers chose not to comment on the
proposed rule. For these reasons we
thought that the number of comments
received on the proposed rule would be
a fair estimate of the number of
reviewers of this final rule.
We also recognize that different types
of entities are in many cases affected by
mutually exclusive sections of this final
rule, and therefore for the purposes of
our estimate we assume that each
reviewer reads approximately 50
percent of the rule.
Using the wage information from the
BLS for medical and health service
managers (Code 11–9111), we estimate
that the cost of reviewing this rule is
$105.16 per hour, including overhead
and fringe benefits (https://www.bls.gov/
oes/current/oes_nat.htm) Assuming an
average reading speed, we estimate that
it would take approximately 4 hours for
the staff to review half of this final rule.
For each SNF that reviews the rule, the
estimated cost is $421 (4 hours ×
$105.16). Therefore, we estimate that
the total cost of reviewing this
regulation is $103,987 ($421 × 247
reviewers).
8. Alternatives Considered
As described in this section, we
estimate that the aggregate impact for
FY 2018 under the SNF PPS is an
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increase of $370 million in payments to
SNFs, resulting from the SNF market
basket update to the payment rates, as
required by section 1888(e)(5)(B)(iii) of
the Act.
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 base payment rates under
the SNF PPS, and does not provide for
the use of any alternative methodology.
It specifies that the base year cost data
to be used for computing the SNF PPS
payment rates must be from FY 1995
(October 1, 1994, through September 30,
1995). In accordance with the statute,
we also incorporated a number of
elements into the SNF PPS (for example,
case-mix classification methodology, a
market basket index, a wage index, and
the urban and rural distinction used in
the development or adjustment of the
federal rates). Further, section
1888(e)(4)(H) of the Act specifically
requires us to disseminate the payment
rates for each new FY through the
Federal Register, and to do so before the
August 1 that precedes the start of the
new FY; accordingly, we are not
pursuing alternatives for this process.
9. Accounting Statement
As required by OMB Circular A–4
(available online at https://
obamawhitehouse.archives.gov/omb/
circulars_a004_a-4/) in Table 29, we
have prepared an accounting statement
showing the classification of the
expenditures associated with the
provisions of this final rule for FY 2018.
Table 29 provides our best estimate of
the possible changes in Medicare
payments under the SNF PPS as a result
of the policies in this final rule, based
on the data for 15,468 SNFs in our
database and the cost for the SNF QRP
of implementing the IMPACT Act.
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TABLE 29—ACCOUNTING STATEMENT:
CLASSIFICATION OF ESTIMATED EXPENDITURES, FROM THE 2017 SNF
PPS FISCAL YEAR TO THE 2018
SNF PPS FISCAL YEAR
Category
Annualized Monetized
Transfers.
From Whom To
Whom?
Transfers
$370 million.*
Federal Government
to SNF Medicare
Providers.
FY 2018 Cost to Updating the Quality
Reporting Program
Cost for SNFs to
Submit Data for the
Quality Reporting
Program**.
$29 million.
* The net increase of $370 million in transfer
payments is a result of the market basket increase of $370 million.
** Costs associated with the submission of
data for the quality reporting program will
occur in 2018 and likely continue in the future
years.
10. Conclusion
This final rule sets forth updates of
the SNF PPS rates contained in the SNF
PPS final rule for FY 2017 (81 FR
51970). Based on the above, we estimate
the overall estimated payments for SNFs
in FY 2018 are projected to increase by
$370 million, or 1.0 percent, compared
with those in FY 2017. We estimate that
in FY 2018 under RUG–IV, SNFs in
urban and rural areas will experience,
on average, a 1.1 percent increase and
0.4 percent increase, respectively, in
estimated payments compared with FY
2017. Providers in the rural New
England region will experience the
largest estimated increase in payments
of approximately 2.5 percent. Providers
in the urban Outlying region will
experience the largest estimated
decrease in payments of 1.0 percent.
Additionally, § 488.314 regarding
survey team composition implements
section 1819(g)(4) of the Act and
provides that States may maintain and
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utilize a specialized team that need not
include a registered nurse for the
investigation of complaints. Section
1919 of the Act contains the same
statutory language as applicable to
nursing facilities (NFs). Part 488 was
originally established under the
authority of sections 1819 and 1919 of
the Act, which were added by the
Omnibus Budget Reconciliation Act of
1987 (OBRA 87, Pub. L. 100–203,
enacted on December 22, 1987) and
further amendments to OBRA 87 by
subsequent 1988, 1989, and 1990
legislation.
Sections 4204(b) and 4214(d) of
OBRA 87 pertain to SNFs and NFs,
respectively, and provide for a waiver of
PRA requirements for the regulations
that implement the OBRA 87
requirements. The provisions of OBRA
87 that exempt agency actions to collect
information from states or facilities
relevant to survey and enforcement
activities from the PRA are not timelimited.
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
a larger firm with which they may be
affiliated. As a result, we estimate
approximately 97 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/contracting/
getting-started-contractor/make-sureyou-meet-sba-size-standards). In
addition, approximately 23 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 final rule sets forth updates of
the SNF PPS rates contained in the SNF
PPS final rule for FY 2017 (81 FR
51970). Based on the above, we estimate
that the aggregate impact for FY 2018 is
an increase of $370 million in payments
to SNFs, resulting from the SNF market
basket update to the payment rates.
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While it is projected in Table 26 that
most providers will 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 2018 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. In their March 2017 Report to
Congress (available at https://
medpac.gov/docs/default-source/
reports/mar17_medpac_ch8.pdf),
MedPAC states that Medicare covers
approximately 11 percent of total
patient days in freestanding facilities
and 21 percent of facility revenue
(March 2017 MedPAC Report to
Congress, 202). 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 26. As indicated in
Table 25, the effect on facilities is
projected to be an aggregate positive
impact of 1.0 percent for FY 2018. 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
final rule will not have a significant
impact on a substantial number of small
entities for FY 2018.
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 604 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 final rule affects 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 will be similar to
the impact on SNF providers overall.
Moreover, as noted in previous SNF PPS
final rules (most recently, the one for FY
2017 (81 FR 51970)), the category of
small rural hospitals is included within
the analysis of the impact of this final
rule on small entities in general. As
indicated in Table 25, the effect on
facilities for FY 2018 is projected to be
an aggregate positive impact of 1.0
percent. As the overall impact on the
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industry as a whole is less than the 3 to
5 percent threshold discussed above, the
Secretary has determined that this final
rule does not have a significant impact
on a substantial number of small rural
hospitals for FY 2018.
C. Unfunded Mandates Reform Act
Analysis
Section 202 of the Unfunded
Mandates Reform Act of 1995 also
requires that agencies assess anticipated
costs and benefits before issuing any
rule whose mandates require spending
in any 1 year of $100 million in 1995
dollars, updated annually for inflation.
In 2017, that threshold is approximately
$148 million. This final rule will
impose no mandates on state, local, or
tribal governments or on the private
sector.
D. Federalism Analysis
Executive Order 13132 establishes
certain requirements that an agency
must meet when it issues a final rule
that imposes substantial direct
requirement costs on state and local
governments, preempts state law, or
otherwise has federalism implications.
This final rule has no substantial direct
effect on state and local governments,
preempt state law, or otherwise have
federalism implications.
E. Congressional Review Act
This 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 final rule
was reviewed by the Office of
Management and Budget.
List of Subjects
42 CFR Part 409
Health facilities, Medicare.
42 CFR Part 411
Diseases, Medicare, Reporting and
recordkeeping requirements.
42 CFR Part 413
Health facilities, Diseases, Medicare,
Reporting and recordkeeping
requirements.
42 CFR part 424
Emergency medical services, Health
facilities, Health professions, Medicare,
Reporting and recordkeeping
requirements.
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Federal Register / Vol. 82, No. 149 / Friday, August 4, 2017 / Rules and Regulations
42 CFR Part 488
Administrative practice and
procedure, Health facilities, Medicare,
Reporting and recordkeeping
requirements.
For the reasons set forth in the
preamble, the Centers for Medicare &
Medicaid Services amends 42 CFR
chapter IV as set forth below:
PART 409—HOSPITAL INSURANCE
BENEFITS
1. The authority citation for part 409
continues to read as follows:
■
Authority: Secs. 1102 and 1871 of the
Social Security Act (42 U.S.C. 1302 and
1395hh).
Basic requirements.
Posthospital SNF care, including
SNF-type care furnished in a hospital or
CAH that has a swing-bed approval, is
covered only if the beneficiary meets the
requirements of this section and only for
days when he or she needs and receives
care of the level described in § 409.31.
A beneficiary in an SNF is also
considered to meet the level of care
requirements of § 409.31 up to and
including the assessment reference date
for the 5-day assessment prescribed in
§ 413.343(b) of this chapter, when
correctly assigned one of the case-mix
classifiers that CMS designates for this
purpose as representing the required
level of care. For the purposes of this
section, the assessment reference date is
defined in accordance with § 483.315(d)
of this chapter, and must occur no later
than the eighth day of posthospital SNF
care.
*
*
*
*
*
PART 411—EXCLUSIONS FROM
MEDICARE AND LIMITATIONS ON
MEDICARE PAYMENT
3. The authority citation for part 411
continues to read as follows:
■
Authority: Secs. 1102, 1860D–1 through
1860D–42, 1871, and 1877 of the Social
Security Act (42 U.S.C. 1302, 1395w–101
through 1395w–152, 1395hh, and 1395nn).
4. Section 411.15 is amended by
revising paragraph (p)(3)(iii) to read as
follows:
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■
§ 411.15 Particular services excluded from
coverage.
*
*
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*
*
(p) * * *
(3) * * *
(iii) The beneficiary receives
outpatient services from a Medicare-
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PART 413—PRINCIPLES OF
REASONABLE COST
REIMBURSEMENT; PAYMENT FOR
END–STAGE RENAL DISEASE
SERVICES; PROSPECTIVELY
DETERMINED PAYMENT RATES FOR
SKILLED NURSING FACILITIES;
PAYMENT FOR ACUTE KIDNEY
INJURY DIALYSIS
5. The authority citation for part 413
continues to read as follows:
■
2. Section 409.30 is amended by
revising the introductory text to read as
follows:
■
§ 409.30
participating hospital or CAH (but only
for those services that CMS designates
as being beyond the general scope of
SNF comprehensive care plans, as
required under § 483.21(b) of this
chapter); or
*
*
*
*
*
Authority: 42 U.S.C. 1302; 42 U.S.C.
1395d(d); 42 U.S.C. 1395f(b); 42 U.S.C.
1395g; 42 U.S.C. 1395l(a), (i), and (n); 42
U.S.C. 1395x(v); 42 U.S.C. 1395hh; 42 U.S.C.
1395rr; 42 U.S.C. 1395tt; 42 U.S.C. 1395ww;
sec. 124 of Public Law 106–113, 113 Stat.
1501A–332; sec. 3201 of Public Law 112–96,
126 Stat. 156; sec. 632 of Public Law 112–
240, 126 Stat. 2354; sec. 217 of Public Law
113–93, 129 Stat. 1040; sec. 204 of Public
Law 113–295, 128 Stat. 4010; and sec. 808 of
Public Law 114–27, 129 Stat. 362.
6. The heading for part 413 is revised
to read as set forth above.
■ 7. Section 413.333 is amended by
revising the definition of ‘‘Resident
classification system’’ to read as follows:
■
§ 413.333
Definitions.
*
*
*
*
*
Resident classification system means
a system for classifying SNF residents
into mutually exclusive groups based on
clinical, functional, and resource-based
criteria. For purposes of this subpart,
this term refers to the current version of
the resident classification system, as set
forth in the annual publication of
Federal prospective payment rates
described in § 413.345.
*
*
*
*
*
■ 8. Section 413.337 is amended by
adding paragraph (d)(4) to read as
follows:
§ 413.337 Methodology for calculating the
prospective payment rates.
*
*
*
*
*
(d) * * *
(4) Penalty for failure to report quality
data. For fiscal year 2018 and
subsequent fiscal years—
(i) In the case of a SNF that does not
meet the requirements in § 413.360, for
a fiscal year, the SNF market basket
index percentage change for the fiscal
year (as specified in paragraph (d)(1)(v)
of this section, as modified by any
applicable forecast error adjustment
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36633
under paragraph (d)(2) of this section,
reduced by the MFP adjustment
specified in paragraph (d)(3) of this
section, and as specified for FY 2018 in
section 1888(e)(5)(B)(iii) of the Act), is
further reduced by 2.0 percentage
points.
(ii) The application of the 2.0
percentage point reduction specified in
paragraph (d)(4)(i) of this section to the
SNF market basket index percentage
change may result in such percentage
being less than zero for a fiscal year, and
may result in payment rates for that
fiscal year being less than such payment
rates for the preceding fiscal year.
(iii) Any 2.0 percentage point
reduction applied pursuant to paragraph
(d)(4)(i) of this section will apply only
to the fiscal year involved and will not
be taken into account in computing the
payment amount for a subsequent fiscal
year.
*
*
*
*
*
■ 9. Section 413.338 is added to read as
follows:
§ 413.338 Skilled nursing facility valuebased purchasing.
(a) Definitions. As used in this
section:
(1) Achievement threshold (or
achievement performance standard)
means the 25th percentile of SNF
performance on the SNF readmission
measure during the baseline period for
a fiscal year.
(2) Adjusted Federal per diem rate
means the payment made to SNFs under
the skilled nursing facility prospective
payment system (as described under
section 1888(e)(4)(G) of the Act).
(3) Applicable percent means for FY
2019 and subsequent fiscal years, 2.0
percent.
(4) Baseline period means the time
period used to calculate the
achievement threshold, benchmark and
improvement threshold that apply for a
fiscal year.
(5) Benchmark means, for a fiscal
year, the arithmetic mean of the top
decile of SNF performance on the SNF
readmission measure during the
baseline period for that fiscal year.
(6) Logistic exchange function means
the function used to translate a SNF’s
performance score on the SNF
readmission measure into a value-based
incentive payment percentage.
(7) Improvement threshold (or
improvement performance standard)
means an individual SNF’s performance
on the SNF readmission measure during
the applicable baseline period.
(8) Performance period means the
time period during which performance
on the SNF readmission measure is
calculated for a fiscal year.
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(9) Performance standards are the
levels of performance that SNFs must
meet or exceed to earn points under the
SNF VBP Program for a fiscal year, and
are announced no later than 60 days
prior to the start of the performance
period that applies to the SNF
readmission measure for that fiscal year.
(10) Ranking means the ordering of
SNFs based on each SNF’s performance
score under the SNF VBP Program for a
fiscal year.
(11) SNF readmission measure means,
for a fiscal year, the all-cause allcondition hospital readmission measure
(SNFRM) or the all-condition riskadjusted potentially preventable
hospital readmission rate (SNFPPR)
specified by CMS for application in the
SNF Value-Based Purchasing Program.
(12) Performance score means the
numeric score ranging from 0 to 100
awarded to each SNF based on its
performance under the SNF VBP
Program for a fiscal year.
(13) SNF Value-Based Purchasing
(VBP) Program means the program
required under section 1888(h) of the
Social Security Act.
(14) Value-based incentive payment
amount is the portion of a SNF’s
adjusted Federal per diem rate that is
attributable to the SNF VBP Program.
(15) Value-based incentive payment
adjustment factor is the number that
will be multiplied by the adjusted
Federal per diem rate for services
furnished by a SNF during a fiscal year,
based on its performance score for that
fiscal year, and after such rate is
reduced by the applicable percent.
(b) Applicability of the SNF VBP
Program. The SNF VBP Program applies
to SNFs, including facilities described
in section 1888(e)(7)(B).
(c) Process for reducing the adjusted
Federal per diem rate and applying the
value-based incentive payment
adjustment factor under the SNF VBP
Program—(1) General. CMS will make
value-based incentive payments to each
SNF based on its performance score for
a fiscal year under the SNF VBP
Program under the requirements and
conditions specified in this paragraph.
(2) Value-based incentive payment
amount—(i) Total amount available for
a fiscal year. The total amount available
for value-based incentive payments for
a fiscal year is equal to 60 percent of the
total amount of the reduction to the
adjusted SNF PPS payments for that
fiscal year, as estimated by CMS.
(ii) Calculation of the value-based
incentive payment amount. The valuebased incentive payment amount is
calculated by multiplying the adjusted
Federal per diem rate by the valuebased incentive payment adjustment
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factor, after the adjusted Federal per
diem rate has been reduced by the
applicable percent.
(iii) Calculation of the value-based
incentive payment adjustment factor.
The value-based incentive payment
adjustment factor is calculated by
estimating Medicare spending under the
skilled nursing facility prospective
payment system to estimate the total
amount available for value-based
incentive payments, ordering SNFs by
their SNF performance scores, then
assigning an adjustment factor value for
each performance score subject to the
limitations set by the exchange function.
(iv) Reporting of adjustment to SNF
payments. CMS will inform each SNF of
the value-based incentive payment
adjustment factor that will be applied to
its adjusted Federal per diem rate for
services furnished during a fiscal year at
least 60 days prior to the start of that
fiscal year.
(d) Performance scoring under the
SNF VBP Program. (1) CMS will award
points to SNFs based on their
performance on the SNF readmission
measure applicable to a fiscal year
during the performance period
applicable to that fiscal year as follows:
(i) CMS will award from 1 to 99
points for achievement to each SNF
whose performance meets or exceeds
the achievement threshold but is less
than the benchmark.
(ii) CMS will award from 0 to 90
points for improvement to each SNF
whose performance exceeds the
improvement threshold but is less than
the benchmark.
(iii) CMS will award 100 points to a
SNF whose performance meets or
exceeds the benchmark.
(2) The highest of the SNF’s
achievement, improvement and
benchmark score will be the SNF’s
performance score for the fiscal year.
(e) Confidential feedback reports and
public reporting. (1) Beginning October
1, 2016, CMS will provide quarterly
confidential feedback reports to SNFs
on their performance on the SNF
readmission measure. SNFs will have
the opportunity to review and submit
corrections for this data by March 31st
following the date that CMS provides
the reports. Any such correction
requests must be accompanied by
appropriate evidence showing the basis
for the correction.
(2) Beginning not later than 60 days
prior to each fiscal year, CMS will
provide SNF performance score reports
to SNFs on their performance under the
SNF VBP Program for a fiscal year. SNFs
will have the opportunity to review and
submit corrections to their SNF
performance scores and ranking
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contained in these reports for 30 days
following the date that CMS provides
the reports. Any such correction
requests must be accompanied by
appropriate evidence showing the basis
for the correction.
(3) CMS will publicly report the
information described in paragraphs
(e)(1) and (2) of this section on the
Nursing Home Compare Web site.
(f) Limitations on review. There is no
administrative or judicial review of the
following:
(1) The methodology used to
determine the value-based incentive
payment percentage and the amount of
the value-based incentive payment
under section 1888(h)(5) of the Act.
(2) The determination of the amount
of funding available for value-based
incentive payments under section
1888(h)(5)(C)(ii)(III) of the Act and the
payment reduction under section
1888(h)(6) of the Act.
(3) The establishment of the
performance standards under section
1888(h)(3) of the Act and the
performance period.
(4) The methodology developed under
section 1888(h)(4) of the Act that is used
to calculate SNF performance scores
and the calculation of such scores.
(5) The ranking determinations under
section 1888(h)(4)(B) of the Act.
■ 10. Section 413.345 is revised to read
as follows:
§ 413.345 Publication of Federal
prospective payment rates.
CMS publishes information pertaining
to each update of the Federal payment
rates in the Federal Register. This
information includes the standardized
Federal rates, the resident classification
system that provides the basis for casemix adjustment, and the factors to be
applied in making the area wage
adjustment. This information is
published before May 1 for the fiscal
year 1998 and before August 1 for the
fiscal years 1999 and after.
■ 11. Section 413.360 is added to
subpart J to read as follows:
§ 413.360 Requirements under the Skilled
Nursing Facility (SNF) Quality Reporting
Program (QRP).
(a) Participation start date. Beginning
with the FY 2018 program year, a SNF
must begin reporting data in accordance
with paragraph (b) of this section 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, which
designates the SNF as operating in the
Certification and Survey Provider
Enhanced Reports (CASPER) system.
For purposes of this section, a program
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year is the fiscal year in which the
market basket percentage described in
§ 413.337(d) is reduced by two
percentage points if the SNF does not
report data in accordance with
paragraph (b) of this section.
(b) Data submission requirement. (1)
Except as provided in paragraph (c) of
this section, and for a program year,
SNFs must submit to CMS data on
measures specified under sections
1899B(c)(1) and 1899B(d)(1) of the
Social Security Act and standardized
resident assessment data in accordance
with section 1899B(b)(1) of the Social
Security Act, in the form and manner,
and at a time, specified by CMS.
(2) CMS will consider a SNF to have
complied with paragraph (b)(1) of this
section for a program year if the SNF
reports: 100 percent of the required data
elements on at least 80 percent of the
MDS assessments submitted for that
program year.
(c) Exception and extension requests.
(1) A SNF may request and CMS may
grant exceptions or extensions to the
reporting requirements under paragraph
(b) of this section for one or more
quarters, when there are certain
extraordinary circumstances beyond the
control of the SNF.
(2) A SNF may request an exception
or extension within 90 days of the date
that the extraordinary circumstances
occurred by sending an email to
SNFQRPReconsiderations@cms.hhs.gov
that contains all of the following
information:
(i) SNF CMS Certification Number
(CCN).
(ii) SNF Business Name.
(iii) SNF Business Address.
(iv) CEO or CEO-designated personnel
contact information including name,
telephone number, title, email address,
and mailing address. (The address must
be a physical address, not a post office
box.)
(v) SNF’s reason for requesting the
exception or extension.
(vi) Evidence of the impact of
extraordinary circumstances, including,
but not limited to, photographs,
newspaper, and other media articles.
(vii) Date when the SNF believes it
will be able to again submit SNF QRP
data and a justification for the proposed
date.
(3) Except as provided in paragraph
(c)(4) of this section, CMS will not
consider an exception or extension
request unless the SNF requesting such
exception or extension has complied
fully with the requirements in this
paragraph (c).
(4) CMS may grant exceptions or
extensions to SNFs without a request if
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it determines that one or more of the
following has occurred:
(i) An extraordinary circumstance
affects an entire region or locale.
(ii) A systemic problem with one of
CMS’s data collection systems directly
affected the ability of a SNF to submit
data in accordance with paragraph (b) of
this section.
(d) Reconsideration. (1) SNFs that do
not meet the requirement in paragraph
(b) of this section for a program year
will receive a letter of non-compliance
through the Quality Improvement and
Evaluation System Assessment
Submission and Processing (QIES–
ASAP) system, as well as through the
United States Postal Service. A SNF
may request reconsideration no later
than 30 calendar days after the date
identified on the letter of noncompliance.
(2) Reconsideration requests must be
submitted to CMS by sending an email
to SNFQRPReconsiderations@
cms.hhs.gov containing all of the
following information:
(i) SNF CCN.
(ii) SNF Business Name.
(iii) SNF Business Address.
(iv) CEO or CEO-designated personnel
contact information including name,
telephone number, title, email address,
and mailing address. (The address must
be a physical address, not a post office
box.)
(v) CMS identified reason(s) for noncompliance stated in the noncompliance letter.
(vi) Reason(s) for requesting
reconsideration, including all
supporting documentation.
(3) CMS will not consider a
reconsideration request unless the SNF
has complied fully with the
requirements in paragraph (d)(2) of this
section.
(4) CMS will make a decision on the
request for reconsideration and provide
notice of the decision to the SNF
through the QIES–ASAP system and via
letter sent through the United States
Postal Service.
(e) Appeals. A SNF that is dissatisfied
with CMS’ decision on a request for
reconsideration may file an appeal with
the Provider Reimbursement Review
Board (PRRB) under 42 CFR part 405,
subpart R.
PART 424—CONDITIONS FOR
MEDICARE PAYMENT
12. The authority citation for part 424
continues to read as follows:
■
Authority: Secs. 1102 and 1871 of the
Social Security Act (42 U.S.C. 1302 and
1395hh).
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§ 424.20
36635
[Amended]
13. In § 424.20—
a. Amend paragraph (a)(1)(ii) by
removing the phrase ‘‘to one of the
Resource Utilization Groups
designated’’ and adding in its place the
phrase ‘‘one of the case-mix classifiers
that CMS designates’’; and
■ b. Amend paragraph (e)(2)(ii)(B)(2) by
removing the reference ‘‘§ 483.40(e)’’
and adding in its place the reference
‘‘§ 483.30(e)’’.
■
■
PART 488—SURVEY, CERTIFICATION,
AND ENFORCEMENT PROCEDURES
14. The authority citation for part 488
continues to read as follows:
■
Authority: Secs. 1102, 1128l, 1864, 1865,
1871 and 1875 of the Social Security Act,
unless otherwise noted (42 U.S.C 1302,
1320a–7j, 1395aa, 1395bb, 1395hh) and
1395ll.
15. Section 488.30(a) is amended by
revising the definition of ‘‘Complaint
surveys’’ to read as follows:
■
§ 488.30 Revisit user fee for revisit
surveys.
(a) * * *
Complaint surveys means those
surveys conducted on the basis of a
substantial allegation of noncompliance,
as defined in § 488.1. The requirements
of sections 1819(g)(4) and 1919(g)(4) of
the Social Security Act and § 488.332
apply to complaint surveys.
*
*
*
*
*
■ 16. Section 488.301 is amended by
revising the definition of ‘‘Abbreviated
standard survey’’ to read as follows:
§ 488.301
Definitions.
*
*
*
*
*
Abbreviated standard survey means a
survey other than a standard survey that
gathers information primarily through
resident-centered techniques on facility
compliance with the requirements for
participation. An abbreviated standard
survey may be premised on complaints
received; a change of ownership,
management, or director of nursing; or
other indicators of specific concern.
Abbreviated standard surveys
conducted to investigate a complaint or
to conduct on-site monitoring to verify
compliance with participation
requirements are subject to the
requirements of § 488.332. Other
premises for abbreviated standard
surveys would follow the requirements
of § 488.314.
*
*
*
*
*
■ 17. In § 488.308—
■ a. Redesignate paragraphs (e)(2) and
(3) as paragraphs (f)(1) and (2);
■ b. Reserve paragraph (e)(2);
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c. Add a paragraph heading for new
paragraph (f); and
■ d. Revise newly redesignated
paragraph (f)(1) introductory text.
The addition and revision read as
follows:
■
§ 488.308
Survey frequency.
*
*
*
*
(e) * * *
(2) [Reserved]
*
*
*
*
*
(f) Investigation of complaints. (1) The
survey agency must review all
complaint allegations and conduct a
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standard or an abbreviated survey to
investigate complaints of violations of
requirements by SNFs and NFs if its
review of the allegation concludes
that—
*
*
*
*
*
■ 18. Section 488.314 is amended by
revising paragraph (a)(1) to read as
follows:
§ 488.314
Survey teams.
(a) * * *
(1) Surveys under sections 1819(g)(2)
and 1919(g)(2) of the Social Security Act
must be conducted by an
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interdisciplinary team of professionals,
which must include a registered nurse.
*
*
*
*
*
Dated: July 26, 2017.
Seema Verma,
Administrator, Centers for Medicare &
Medicaid Services.
Dated: July 27, 2017.
Thomas E. Price,
Secretary, Department of Health and Human
Services.
[FR Doc. 2017–16256 Filed 7–31–17; 4:15 pm]
BILLING CODE 4120–01–P
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Agencies
[Federal Register Volume 82, Number 149 (Friday, August 4, 2017)]
[Rules and Regulations]
[Pages 36530-36636]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2017-16256]
[[Page 36529]]
Vol. 82
Friday,
No. 149
August 4, 2017
Part II
Department of Health and Human Services
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Centers for Medicare & Medicaid Services
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42 CFR Parts 409, 411, 413, 424, and 488
Medicare Program; Prospective Payment System and Consolidated Billing
for Skilled Nursing Facilities for FY 2018, SNF Value-Based Purchasing
Program, SNF Quality Reporting Program, Survey Team Composition, and
Correction of the Performance Period for the NHSN HCP Influenza
Vaccination Immunization Reporting Measure in the ESRD QIP for PY 2020;
Final Rule
Federal Register / Vol. 82 , No. 149 / Friday, August 4, 2017 / Rules
and Regulations
[[Page 36530]]
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DEPARTMENT OF HEALTH AND HUMAN SERVICES
Centers for Medicare & Medicaid Services
42 CFR Parts 409, 411, 413, 424, and 488
[CMS-1679-F]
RIN 0938-AS96
Medicare Program; Prospective Payment System and Consolidated
Billing for Skilled Nursing Facilities for FY 2018, SNF Value-Based
Purchasing Program, SNF Quality Reporting Program, Survey Team
Composition, and Correction of the Performance Period for the NHSN HCP
Influenza Vaccination Immunization Reporting Measure in the ESRD QIP
for PY 2020
AGENCY: Centers for Medicare & Medicaid Services (CMS), HHS.
ACTION: Final rule.
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SUMMARY: This final rule updates the payment rates used under the
prospective payment system (PPS) for skilled nursing facilities (SNFs)
for fiscal year (FY) 2018. It also revises and rebases the market
basket index by updating the base year from 2010 to 2014, and by adding
a new cost category for Installation, Maintenance, and Repair Services.
The rule also finalizes revisions to the SNF Quality Reporting Program
(QRP), including measure and standardized resident assessment data
policies and policies related to public display. In addition, it
finalizes policies for the Skilled Nursing Facility Value-Based
Purchasing Program that will affect Medicare payment to SNFs beginning
in FY 2019. The final rule also clarifies the regulatory requirements
for team composition for surveys conducted for investigating a
complaint and aligns regulatory provisions for investigation of
complaints with the statutory requirements. The final rule also
finalizes the performance period for the National Healthcare Safety
Network (NHSN) Healthcare Personnel (HCP) Influenza Vaccination
Reporting Measure included in the End-Stage Renal Disease (ESRD)
Quality Incentive Program (QIP) for Payment Year 2020.
DATES: These regulations are effective on October 1, 2017.
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.
Michelle King, (410) 786-3667, for information related to skilled
nursing facility quality reporting program.
James Poyer, (410) 786-2261, for information related to the skilled
nursing facility value-based purchasing program.
Delia Houseal, (410) 786-2724, for information related to the end-
stage renal disease quality incentive program.
Rebecca Ward, (410) 786-1732 and Caecilia Blondiaux, (410) 786-
2190, for survey type definitions.
SUPPLEMENTARY INFORMATION:
Availability of Certain Tables Exclusively Through the Internet on the
CMS Web site
As discussed in the FY 2014 SNF PPS final rule (78 FR 47936),
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 final 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
II. Background on SNF PPS
A. Statutory Basis and Scope
B. Initial Transition for the SNF PPS
C. Required Annual Rate Updates
III. Analysis and Responses to Public Comments on the FY 2018 SNF
PPS Proposed Rule
A. General Comments on the FY 2018 SNF PPS Proposed Rule
B. SNF PPS Rate Setting Methodology and FY 2018 Update
1. Federal Base Rates
2. SNF Market Basket Update
3. Case-Mix Adjustment
4. Wage Index Adjustment
5. Adjusted Rate Computation Example
C. Additional Aspects of the SNF PPS
1. SNF Level of Care--Administrative Presumption
2. Consolidated Billing
3. Payment for SNF-Level Swing-Bed Services
D. Other Issues
1. Revising and Rebasing the SNF Market Basket Index
2. Skilled Nursing Facility (SNF) Quality Reporting Program
(QRP)
3. Skilled Nursing Facility Value-Based Purchasing Program (SNF
VBP)
4. Survey Team Composition
5. Correction of the Performance Period for the National
Healthcare Safety Network (NHSN) Healthcare Personnel (HCP)
Influenza Vaccination Immunization Reporting Measure in the End-
Stage Renal Disease (ESRD) Quality Incentive Program (QIP) for
Payment Year (PY) 2020
IV. Collection of Information Requirements
V. Economic Analyses
Regulation Text
Acronyms
In addition, because of the many terms to which we refer by acronym
in this final rule, we are listing these abbreviations and their
corresponding terms in alphabetical order below:
AIDS Acquired Immune Deficiency Syndrome
ALJ Administrative Law Judge
ARD Assessment reference date
BBA Balanced Budget Act of 1997, Public Law 105-33
BBRA Medicare, Medicaid, and SCHIP Balanced Budget Refinement Act of
1999, Public Law 106-113
BIPA Medicare, Medicaid, and SCHIP Benefits Improvement and
Protection Act of 2000, Public Law 106-554
CAH Critical access hospital
CARE Continuity Assessment Record and Evaluation
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
DTI Deep tissue injuries
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
ICD-10-CM International Classification of Diseases, 10th Revision,
Clinical Modification
IGI IHS Global Inc.
IMPACT Improving Medicare Post-Acute Care Transformation Act of
2014, Public Law 113-185
IPPS Inpatient prospective payment system
IRF Inpatient Rehabilitation Facility
[[Page 36531]]
IRF-PAI Inpatient Rehabilitation Facility Patient Assessment
Instrument
LTC Long-term care
LTCH Long-term care hospital
MACRA Medicare Access and CHIP Reauthorization Act of 2015, Public
Law 114-10
MAP Measures Application Partnership
MDS Minimum data set
MFP Multifactor productivity
MMA Medicare Prescription Drug, Improvement, and Modernization Act
of 2003, Public Law 108-173
MSA Metropolitan statistical area
NF Nursing facility
NQF National Quality Forum
OASIS Outcome and Assessment Information Set
OBRA 87 Omnibus Budget Reconciliation Act of 1987, Public Law 100-
203
OMB Office of Management and Budget
PAC Post-acute care
PAMA Protecting Access to Medicare Act of 2014, Public Law 113-93
PPS Prospective Payment System
PQRS Physician Quality Reporting System
QIES Quality Improvement and 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, Public Law 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
SNF Skilled nursing facility
SNF PMR Skilled Nursing Facility Payment Models Research
SNF QRP Skilled Nursing Facility Quality Reporting Program
SNF VBP Skilled Nursing Facility Value-Based Purchasing Program
SNFPPR Skilled Nursing Facility Potentially Preventable Readmission
Measure
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, Public Law 104-4
VBP Value-based purchasing
I. Executive Summary
A. Purpose
This final rule updates the SNF prospective payment rates for FY
2018 as required under section 1888(e)(4)(E) of the Social Security Act
(the Act). It also responds to section 1888(e)(4)(H) of the Act, which
requires the Secretary to provide for publication in the Federal
Register, before the August 1 that precedes the start of each fiscal
year (FY), certain specified information relating to the payment update
(see section II.C. of this final rule). This final rule also finalizes
updates to the requirements for the Skilled Nursing Facility Quality
Reporting Program (SNF QRP), additional policies for the Skilled
Nursing Facility Value-Based Purchasing Program (SNF VBP), and
clarification of requirements related to survey team composition and
investigation of complaints under Sec. Sec. 488.30, 488.301, 488.308,
and 488.314. The final rule also finalizes one proposal related to the
performance period for the National Healthcare Safety Network (NHSN)
Healthcare Personnel (HCP) Influenza Vaccination Reporting Measure
included in the End-Stage Renal Disease (ESRD) Quality Incentive
Program (QIP).
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 final rule reflect an update to the
rates that we published in the SNF PPS final rule for FY 2017 (81 FR
51970), which reflects the SNF market basket update, as required by
section 1888(e)(5)(B)(iii) of the Act for FY 2018. Additionally, in
section III.B.1. of this final rule, we are finalizing our proposal to
revise and rebase the market basket index for FY 2018 and subsequent
FYs by updating the base year from 2010 to 2014, and by adding a new
cost category for Installation, Maintenance, and Repair Services. We
are also finalizing additional polices, measures and data reporting
requirements for the Skilled Nursing Facility Quality Reporting Program
(SNF QRP) and requirements for the SNF VBP Program, including an
exchange function to translate SNF performance scores calculated using
the program's scoring methodology into value-based incentive payments.
We are also clarifying the regulatory requirements for team
composition for surveys conducted for the purposes of investigating a
complaint and on-site monitoring of compliance, and to align the
regulatory provisions for special surveys and investigation of
complaints with the statute. The changes clarify that the requirement
for an interdisciplinary team that must include a registered nurse is
applicable to surveys conducted under sections 1819(g)(2) and
1919(g)(2) of the Act, and not to those surveys conducted to
investigate complaints or to monitor compliance on-site under sections
1819(g)(4) and 1919(g)(4) of the Act. Revising the regulatory language
under Sec. Sec. 488.30, 488.301, 488.308, and 488.314 to correspond to
the statutory requirements found in sections 1819(g) and 1919(g) of the
Act will add clarity to these requirements by making them more
explicit. We are also revising the performance period for the National
Healthcare Safety Network (NHSN) Healthcare Personnel (HCP) Influenza
Vaccination Reporting Measure included in the End-Stage Renal Disease
(ESRD) Quality Incentive Program (QIP) for PY 2020.
C. Summary of Cost and Benefits
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Provision Description Total transfers
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FY 2018 SNF PPS payment rate update.... The overall economic impact of
this final rule is an
estimated increase of $370
million in aggregate.
FY 2018 Cost to Updating the SNF The overall cost for SNFs to
Quality Reporting Program. submit data for the SNF
Quality Reporting Program for
the provisions in this final
rule is ($29 million).
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II. Background on SNF PPS
A. Statutory Basis and Scope
As amended by section 4432 of the Balanced Budget Act of 1997 (BBA,
Pub. L. 105-33, enacted on August 5, 1997), section 1888(e) of the Act
provides for the implementation of a PPS for SNFs. This methodology
uses prospective, case-mix adjusted per diem payment rates applicable
to all covered SNF services defined in section 1888(e)(2)(A) of the
Act. The SNF PPS is effective for cost reporting periods beginning on
or after July 1, 1998, and covers all costs of furnishing covered SNF
services (routine, ancillary, and capital-related costs) other than
costs associated with approved educational activities and bad debts.
Under section 1888(e)(2)(A)(i) of the Act, covered SNF services include
post-hospital extended care services for which benefits are provided
under Part A, as well as those items and services (other than a small
number of excluded services, such as physicians' 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_04152015.pdf.
[[Page 36532]]
Section 215(a) of the Protecting Access to Medicare Act of 2014
(PAMA, Pub. L. 113-93, enacted on April 1, 2014) added a new section
1888(g) to the Act, which requires the Secretary to specify an all-
cause all-condition hospital readmission measure and an all-condition
risk-adjusted potentially preventable hospital readmission measure for
the SNF setting. Additionally, section 215(b) of PAMA added a new
section 1888(h) to the Act, which requires the Secretary to implement a
VBP program for SNFs. Finally, section 2(a) of the Improving Medicare
Post-Acute Care Transformation Act of 2014 (IMPACT Act, Pub. L. 113-
185, enacted on October 6, 2014) added a new section 1899B to the Act
that, among other things, requires SNFs to report standardized resident
assessment data, data on quality measures, and data on resource use and
other measures. In addition, section 2(c)(4) of the IMPACT Act added a
new section 1888(e)(6) to the Act, which requires the Secretary to
implement a quality reporting program for SNFs.
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
2017 (81 FR 51970, August 5, 2016). 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
final rule provides the required annual updates to the per diem payment
rates for SNFs for FY 2018.
III. Analysis and Responses to Public Comments on the FY 2018 SNF PPS
Proposed Rule
In response to the publication of the FY 2018 SNF PPS proposed
rule, we received 247 public comments from individuals, providers,
corporations, government agencies, private citizens, trade
associations, and major organizations. The following are brief
summaries of each proposed provision, a summary of the public comments
that we received related to that proposal, and our responses to the
comments.
A. General Comments on the FY 2018 SNF PPS Proposed Rule
In addition to the comments we received on specific proposals
contained within the proposed rule (which we address later in this
final rule), commenters also submitted the following, more general,
observations on the SNF PPS and SNF care generally. A discussion of
these comments, along with our responses, appears below.
Comment: One commenter requested that we instruct the Medicare
Administrative Contractors to refrain from denying coverage and payment
for SNF Part B claims for physiatrists visiting residents in SNFs. The
commenter goes on to state their concerns regarding the potential for
variability in coverage across contractors.
Response: With regard to our instructing the contractors to refrain
from denying coverage or payment for SNF claims related to physiatrists
visits under Part B, this comment is outside the scope of this final
rule. However, we will forward these comments to the appropriate
division within CMS for consideration. With regard to the potential for
variability among contractors, we will continue to educate the
contractors to ensure compliance with all federal guidance and
regulations.
Comment: One commenter requested that we consider including
recreational therapy time provided to SNF residents by recreational
therapists as part of the calculation of the resident's RUG-IV therapy
classification or as part of determining the number of restorative
nursing services provided to the resident.
Response: We appreciate the commenter raising this issue, but we do
not believe there is sufficient evidence at this time regarding the
efficacy of recreational therapy interventions or, more notably, data
which would substantiate a determination of the effect on payment of
such interventions, as such services were not considered separately, as
were physical, occupational and speech-language pathology services,
when RUG-IV was being developed. That being said, we would note that
Medicare Part A originally paid for institutional care in various
provider settings, including SNF, on a reasonable cost basis, but now
makes payment using PPS methodologies, such as the SNF PPS. To the
extent that one of these SNFs furnished recreational therapy to its
inpatients under the previous, reasonable cost methodology, the cost of
the services would have been included in the base payments when SNF PPS
payment rates were derived. Under the PPS methodology, Part A makes a
comprehensive payment for the bundled package of items and services
that the facility furnishes during the course of a Medicare-covered
stay. This package encompasses nearly all services that the beneficiary
receives during the course of the stay--including any medically
necessary recreational therapy--and payment for such services is
included within the facility's comprehensive SNF PPS payment for the
covered Part A stay itself.
B. SNF PPS Rate Setting Methodology and FY 2018 Update
1. 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
[[Page 36533]]
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.
2. SNF Market Basket Update
a. 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. In the SNF
PPS final rule for FY 2014 (78 FR 47939 through 47946), we revised and
rebased the market basket index, which included updating the base year
from FY 2004 to FY 2010. For FY 2018, as discussed in section III.D.1.
of this final rule, we are rebasing and revising the SNF market basket,
updating the base year from FY 2010 to 2014.
The SNF market basket index is used to compute the market basket
percentage change that is used to update the SNF federal rates on an
annual basis, as required by section 1888(e)(4)(E)(ii)(IV) of the Act.
This market basket percentage update is adjusted by a forecast error
correction, if applicable, and then further adjusted by the application
of a productivity adjustment as required by section 1888(e)(5)(B)(ii)
of the Act and described in section III.B.2.d. of this final rule. For
FY 2018, the growth rate of the 2014-based SNF market basket is
estimated to be 2.6 percent, which is based on the IHS Global Inc.
(IGI) second quarter 2017 forecast with historical data through first
quarter 2017.
However, we note that section 411(a) of the Medicare Access and
CHIP Reauthorization Act of 2015 (MACRA, Pub. L. 114-10, enacted on
April 16, 2015) amended section 1888(e) of the Act to add section
1888(e)(5)(B)(iii) of the Act. Section 1888(e)(5)(B)(iii) of the Act
establishes a special rule for FY 2018 that requires the market basket
percentage, after the application of the productivity adjustment, to be
1.0 percent. In accordance with section 1888(e)(5)(B)(iii) of the Act,
we will use a market basket percentage of 1.0 percent to update the
federal rates set forth in this final rule. In section III.B.2.e. of
this final rule, we discuss the specific application of the MACRA-
specified market basket adjustment to the forthcoming annual update of
the SNF PPS payment rates. In addition, in section III.D.2. of this
final rule, we discuss the 2 percent reduction applied to the market
basket update for those SNFs that fail to submit measures data as
required by section 1888(e)(6)(A) of the Act.
b. 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.
Absent the addition of section 1888(e)(5)(B)(iii) of the Act, added by
section 411(a) of MACRA, we would have used the percentage change in
the SNF market basket index to compute the update factor for FY 2018.
Based on the revision and rebasing of the SNF market basket discussed
in section III.D.1. of this final rule, this factor is based on the IGI
second quarter 2017 forecast (with historical data through the first
quarter 2017) of the FY 2018 percentage increase in the 2014-based SNF
market basket index reflecting routine, ancillary, and capital-related
expenses. As discussed in sections III.B.2.c. and III.B.2.d. of this
final rule, this market basket percentage change would have been
reduced by the applicable forecast error correction (as described in
Sec. 413.337(d)(2)) and by the MFP adjustment as required by section
1888(e)(5)(B)(ii) of the Act. As noted previously, section
1888(e)(5)(B)(iii) of the Act, added by section 411(a) of the MACRA,
requires us to use a 1.0 percent market basket percentage instead of
the estimated 2.6 percent market basket percentage, adjusted as
described below, to adjust the SNF PPS federal rates for FY 2018.
Additionally, as discussed in section II.B. of this final 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.
c. 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 2016 (the most recently available FY for which there is
final data), the estimated increase in the market basket index was 2.3
percentage points, while the actual increase for FY 2016 was 2.3
percentage points, resulting in the actual increase being the same as
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 2018 market
basket percentage change of 2.6 percent would not have been adjusted to
account for the forecast error correction. Table 1 shows the forecasted
and actual market basket amounts for FY 2016.
[[Page 36534]]
Table 1--Difference Between the Forecasted and Actual Market Basket Increases for FY 2016
----------------------------------------------------------------------------------------------------------------
Forecasted FY
Index 2016 Increase Actual FY 2016 FY 2016
* Increase ** difference
----------------------------------------------------------------------------------------------------------------
SNF.......................................................... 2.3 2.3 0.0
----------------------------------------------------------------------------------------------------------------
* Published in Federal Register; based on second quarter 2015 IGI forecast (2010-based index).
** Based on the second quarter 2017 IGI forecast, with historical data through the first quarter 2017 (2010-
based index).
d. Multifactor Productivity Adjustment
Section 1888(e)(5)(B)(ii) of the Act, as added by section 3401(b)
of the Patient Protection and Affordable Care Act (Affordable Care Act,
Pub. L. 111-148, enacted on March 23, 2010) requires that, in FY 2012
and in subsequent FYs, the market basket percentage under the SNF PPS
(as described in section 1888(e)(5)(B)(i) of the Act) is to be reduced
annually by the multifactor productivity (MFP) adjustment described in
section 1886(b)(3)(B)(xi)(II) of the Act. Section 1886(b)(3)(B)(xi)(II)
of the Act, in turn, defines the MFP 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 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.
(1) 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) of the Act (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 being
less than such payment rates for the preceding fiscal year.
If not for the enactment of section 411(a) of the MACRA, the FY
2018 update would include a calculation of the MFP adjustment as the
10-year moving average of changes in MFP for the period ending
September 30, 2018, which is estimated to be 0.6 percent. Also, if not
for the enactment of section 411(a) of the MACRA, consistent with
section 1888(e)(5)(B)(i) of the Act and Sec. 413.337(d)(2), the market
basket percentage for FY 2018 for the SNF PPS would be based on IGI's
second quarter 2017 forecast of the SNF market basket update, which is
estimated to be 2.6 percent. In accordance with section
1888(e)(5)(B)(ii) of the Act (as added by section 3401(b) of the
Affordable Care Act) and Sec. 413.337(d)(3), this market basket
percentage would then be reduced by the MFP adjustment (the 10-year
moving average of changes in MFP for the period ending September 30,
2018) of 0.6 percent, which would be calculated as described above and
based on IGI's second quarter 2017 forecast. Absent the enactment of
section 411(a) of MACRA, the resulting MFP-adjusted SNF market basket
update would have been equal to 2.0 percent, or 2.6 percent less 0.6
percentage point. However, as discussed above, section
1888(e)(5)(B)(iii) of the Act, added by section 411(a) of the MACRA,
requires us to apply a 1.0 percent positive market basket adjustment in
determining the FY 2018 SNF payment rates set forth in this final rule,
without regard to the market basket update as adjusted by the MFP
adjustment described above.
e. Market Basket Update Factor for FY 2018
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 2018 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, 2016, through September 30,
2017 to the average market basket level for the period of October 1,
2017, through September 30, 2018. This process yields a percentage
change in the 2014-based SNF market basket of 2.6 percent.
As further explained in section III.B.2.c. of this final 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 2016 SNF market basket percentage change and the
actual FY 2016 SNF market basket percentage change (FY 2016 is the most
recently available FY for which there is historical data) did not
exceed the 0.5 percentage point threshold, the FY 2018 market basket
percentage change of 2.6 percent would not have been adjusted by the
forecast error correction.
If not for the enactment of section 411(a) of the MACRA, the SNF
market basket for FY 2018 would be determined in accordance with
section 1888(e)(5)(B)(ii) of the Act, which 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
[[Page 36535]]
September 30, 2018) of 0.6 percent, as described in section III.B.2.d.
of this final rule. Thus, absent the enactment of MACRA, the resulting
net SNF market basket update would equal 2.0 percent, or 2.6 percent
less the 0.6 percentage point MFP adjustment. We note that our policy
has been that, if more recent data become available (for example, a
more recent estimate of the SNF market basket and/or MFP adjustment),
we would use such data, if appropriate, to determine the SNF market
basket percentage change, labor-related share relative importance,
forecast error adjustment, and MFP adjustment in the SNF PPS final
rule.
Commenters submitted the following comments related to the proposed
rule's discussion of the market basket update factor for FY 2018. A
discussion of these comments, along with our responses, appears below.
Comment: We received a number of comments in relation to applying
the FY 2018 market basket update factor in the determination of the FY
2018 unadjusted federal per diem rates, with some commenters supporting
its application in determining the FY 2018 unadjusted per diem rates,
while others opposed its application. In their March 2017 report
(available at https://medpac.gov/docs/default-source/reports/mar17_medpac_ch8.pdf) and in their comment on the FY 2018 SNF PPS
proposed rule, MedPAC recommended that we eliminate the market basket
update for SNFs altogether for FY 2018 and FY 2019 and implement
revisions to the SNF PPS. A few commenters also encouraged us to
consider the ``gap'' between the customary market basket update, as
reflected in the MFP-adjusted market basket update factor described
above and the MACRA-required 1.0 percentage point market basket update.
Response: We appreciate all of the comments received on the
proposed market basket update for FY 2018. In response to those
comments opposing the application of the FY 2018 market basket update
factor in determining the FY 2018 unadjusted federal per diem rates
(specifically, MedPAC's proposal to eliminate the market basket update
for SNFs), we note that under sections 1888(e)(4)(E)(ii)(IV) and
(e)(5)(B) of the Act, we are required to update the unadjusted federal
per diem rates each fiscal year by the SNF market basket percentage
change, as reduced by the MFP adjustment, and that, under section
1888(e)(5)(B)(iii) of the Act (as added by section 411(a) of MACRA),
for FY 2018, that update must be 1.0 percentage point.
With regard to those comments on the ``gap'' between the standard
market basket update and the MACRA-required update, we appreciate these
commenters' concerns, but we are required in section 1888(e)(5)(B)(iii)
of the Act, as added by section 411(a) of MACRA, to apply the 1.0
percentage point update factor for FY 2018.
Comment: One commenter requested that we engage in an ongoing
dialogue with the commenter's association on their market basket
research, which would serve to inform us and support any analogous CMS
reform efforts.
Response: We appreciate the commenter's review of the market basket
and interest in continued dialogue regarding their research. The
commenter is encouraged to submit any research to CMSDNHS@cms.hhs.gov.
Comment: One commenter stated that we have the statutory authority
to implement geographically-specific updates associated with state and/
or regional minimum wage laws. The commenter requested that such
updates be made at the Core-Based Statistical Area (CBSA) levels.
Response: We would note that any increases in wages resulting from
state and/or regional minimum wage laws are likely to be reflected in
data used to create the SNF PPS wage index. Therefore, we believe such
standards are already taken into account in the calculation of the SNF
PPS wage index to the extent that these laws have an impact on wages.
Accordingly, after considering the comments received, for the
reasons specified in this final rule and in the FY 2018 SNF PPS
proposed rule (82 FR 21017 through 21019), we are finalizing the FY
2018 market basket factor of 1.0 percent, as required by section 411(a)
of MACRA. Historically, we have 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 from one year to
the next. However, section 1888(e)(5)(B)(iii) of the Act, as added by
section 411(a) of the MACRA, requires us to use a market basket
percentage of 1.0 percent, after application of the MFP adjustment to
adjust the federal rates for FY 2018. Under section 1888(e)(5)(B)(iii)
of the Act, the market basket percentage increase used to determine the
federal rates set forth in this final rule will be 1.0 percent for FY
2018. Tables 2 and 3 reflect the updated components of the unadjusted
federal rates for FY 2018, prior to adjustment for case-mix.
Table 2--FY 2018 Unadjusted Federal Rate Per Diem Urban
----------------------------------------------------------------------------------------------------------------
Nursing--case- Therapy--case- Therapy--non-
Rate component mix mix case-mix Non-case-mix
----------------------------------------------------------------------------------------------------------------
Per Diem Amount............................. $177.26 $133.52 $17.59 $90.47
----------------------------------------------------------------------------------------------------------------
Table 3--FY 2018 Unadjusted Federal Rate Per Diem Rural
----------------------------------------------------------------------------------------------------------------
Nursing--case- Therapy--case- Therapy-- non-
Rate component mix mix case-mix Non-case-mix
----------------------------------------------------------------------------------------------------------------
Per Diem Amount............................. $169.34 $153.96 $18.79 $92.14
----------------------------------------------------------------------------------------------------------------
In addition, we note that section 1888(e)(6)(A)(i) of the Act
provides that, beginning in FY 2018, SNFs that fail to submit data, as
applicable, in accordance with sections 1888(e)(6)(B)(i)(II) and (III)
of the Act for a fiscal year will receive a 2.0 percentage point
reduction to their market basket update for the fiscal year involved,
after application of section 1888(e)(5)(B)(ii) of the Act (the MFP
adjustment) and section 1888(e)(5)(B)(iii) of the Act (the 1 percent
market basket increase for FY 2018) (for additional information on the
SNF QRP, including the statutory authority and the selected measures,
we refer readers to section III.D.2. of this final rule). In addition,
section 1888(e)(6)(A)(ii) of the Act states that application of the 2.0
percentage point reduction (after application of section
1888(e)(5)(B)(ii) and (iii) of the Act) may result in the market basket
index
[[Page 36536]]
percentage change being less than 0.0 for a fiscal year, and may result
in payment rates for a fiscal year being less than such payment rates
for the preceding fiscal year. Section 1888(e)(6)(A)(iii) of the Act
further specifies that the 2.0 percentage point reduction is applied in
a noncumulative manner, so that any reduction made under section
1888(e)(6)(A)(i) of the Act shall apply only for the fiscal year
involved, and the Secretary shall not take into account such reduction
in computing the payment amount for a subsequent fiscal year. We did
not receive any comments specifically on the market basket reduction
under the SNF QRP and any comments on the SNF QRP more broadly are
discussed in section III.D.2 of this final rule.
3. 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
through 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 III.C.1.
of this final rule, the clinical orientation of the case-mix
classification system supports the SNF PPS's use of an administrative
presumption that considers a beneficiary's initial case-mix
classification to assist in making certain SNF level of care
determinations. Further, because the MDS is used as a basis for
payment, as well as a clinical assessment, we have provided extensive
training on proper coding and the time frames for MDS completion in our
Resident Assessment Instrument (RAI) Manual. For an MDS to be
considered valid for use in determining payment, the MDS assessment
must be completed in compliance with the instructions in the RAI Manual
in effect at the time the assessment is completed. For payment and
quality monitoring purposes, the RAI Manual consists of both the Manual
instructions and the interpretive guidance and policy clarifications
posted on the appropriate MDS Web site at https://www.cms.gov/Medicare/Quality-Initiatives-Patient-Assessment-Instruments/NursingHomeQualityInits/MDS30RAIManual.html.
In addition, we note that section 511 of the Medicare Prescription
Drug, Improvement, and Modernization Act of 2003 (MMA, Pub. L. 108-173,
enacted December 8, 2003) 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
only 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 time being.
For the limited number of SNF residents that qualify for this add-
on, there is a significant increase in payments. For example, using FY
2015 data (which still used ICD-9-CM coding), we identified fewer than
5085 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 2018, an urban
facility with a resident with AIDS in RUG-IV group ``HC2'' would have a
case-mix adjusted per diem payment of $443.08 (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 $1,010.22.
Under section 1888(e)(4)(H) of the Act, each update of the payment
rates must include the case-mix classification methodology applicable
for the upcoming FY. The FY 2018 payment rates set forth in this final
rule reflect the use of the RUG-IV case-mix classification system from
October 1, 2017, through September 30, 2018. We list the case-mix
adjusted RUG-IV payment rates for FY 2018, 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
applies 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).
[[Page 36537]]
Table 4--RUG-IV Case-Mix Adjusted Federal Rates and Associated Indexes--Urban
--------------------------------------------------------------------------------------------------------------------------------------------------------
Nursing Therapy Non-case mix Non-case mix
RUG-IVcategory Nursing index Therapy index component component therapy comp component Total rate
--------------------------------------------------------------------------------------------------------------------------------------------------------
RUX..................................... $2.67 $1.87 $473.28 $249.68 .............. $90.47 $813.43
RUL..................................... 2.57 1.87 455.56 249.68 .............. 90.47 795.71
RVX..................................... 2.61 1.28 462.65 170.91 .............. 90.47 724.03
RVL..................................... 2.19 1.28 388.20 170.91 .............. 90.47 649.58
RHX..................................... 2.55 0.85 452.01 113.49 .............. 90.47 655.97
RHL..................................... 2.15 0.85 381.11 113.49 .............. 90.47 585.07
RMX..................................... 2.47 0.55 437.83 73.44 .............. 90.47 601.74
RML..................................... 2.19 0.55 388.20 73.44 .............. 90.47 552.11
RLX..................................... 2.26 0.28 400.61 37.39 .............. 90.47 528.47
RUC..................................... 1.56 1.87 276.53 249.68 .............. 90.47 616.68
RUB..................................... 1.56 1.87 276.53 249.68 .............. 90.47 616.68
RUA..................................... 0.99 1.87 175.49 249.68 .............. 90.47 515.64
RVC..................................... 1.51 1.28 267.66 170.91 .............. 90.47 529.04
RVB..................................... 1.11 1.28 196.76 170.91 .............. 90.47 458.14
RVA..................................... 1.10 1.28 194.99 170.91 .............. 90.47 456.37
RHC..................................... 1.45 0.85 257.03 113.49 .............. 90.47 460.99
RHB..................................... 1.19 0.85 210.94 113.49 .............. 90.47 414.90
RHA..................................... 0.91 0.85 161.31 113.49 .............. 90.47 365.27
RMC..................................... 1.36 0.55 241.07 73.44 .............. 90.47 404.98
RMB..................................... 1.22 0.55 216.26 73.44 .............. 90.47 380.17
RMA..................................... 0.84 0.55 148.90 73.44 .............. 90.47 312.81
RLB..................................... 1.50 0.28 265.89 37.39 .............. 90.47 393.75
RLA..................................... 0.71 0.28 125.85 37.39 .............. 90.47 253.71
ES3..................................... 3.58 .............. 634.59 .............. $17.59 90.47 742.65
ES2..................................... 2.67 .............. 473.28 .............. 17.59 90.47 581.34
ES1..................................... 2.32 .............. 411.24 .............. 17.59 90.47 519.30
HE2..................................... 2.22 .............. 393.52 .............. 17.59 90.47 501.58
HE1..................................... 1.74 .............. 308.43 .............. 17.59 90.47 416.49
HD2..................................... 2.04 .............. 361.61 .............. 17.59 90.47 469.67
HD1..................................... 1.60 .............. 283.62 .............. 17.59 90.47 391.68
HC2..................................... 1.89 .............. 335.02 .............. 17.59 90.47 443.08
HC1..................................... 1.48 .............. 262.34 .............. 17.59 90.47 370.40
HB2..................................... 1.86 .............. 329.70 .............. 17.59 90.47 437.76
HB1..................................... 1.46 .............. 258.80 .............. 17.59 90.47 366.86
LE2..................................... 1.96 .............. 347.43 .............. 17.59 90.47 455.49
LE1..................................... 1.54 .............. 272.98 .............. 17.59 90.47 381.04
LD2..................................... 1.86 .............. 329.70 .............. 17.59 90.47 437.76
LD1..................................... 1.46 .............. 258.80 .............. 17.59 90.47 366.86
LC2..................................... 1.56 .............. 276.53 .............. 17.59 90.47 384.59
LC1..................................... 1.22 .............. 216.26 .............. 17.59 90.47 324.32
LB2..................................... 1.45 .............. 257.03 .............. 17.59 90.47 365.09
LB1..................................... 1.14 .............. 202.08 .............. 17.59 90.47 310.14
CE2..................................... 1.68 .............. 297.80 .............. 17.59 90.47 405.86
CE1..................................... 1.50 .............. 265.89 .............. 17.59 90.47 373.95
CD2..................................... 1.56 .............. 276.53 .............. 17.59 90.47 384.59
CD1..................................... 1.38 .............. 244.62 .............. 17.59 90.47 352.68
CC2..................................... 1.29 .............. 228.67 .............. 17.59 90.47 336.73
CC1..................................... 1.15 .............. 203.85 .............. 17.59 90.47 311.91
CB2..................................... 1.15 .............. 203.85 .............. 17.59 90.47 311.91
CB1..................................... 1.02 .............. 180.81 .............. 17.59 90.47 288.87
CA2..................................... 0.88 .............. 155.99 .............. 17.59 90.47 264.05
CA1..................................... 0.78 .............. 138.26 .............. 17.59 90.47 246.32
BB2..................................... 0.97 .............. 171.94 .............. 17.59 90.47 280.00
BB1..................................... 0.90 .............. 159.53 .............. 17.59 90.47 267.59
BA2..................................... 0.70 .............. 124.08 .............. 17.59 90.47 232.14
BA1..................................... 0.64 .............. 113.45 .............. 17.59 90.47 221.51
PE2..................................... 1.50 .............. 265.89 .............. 17.59 90.47 373.95
PE1..................................... 1.40 .............. 248.16 .............. 17.59 90.47 356.22
PD2..................................... 1.38 .............. 244.62 .............. 17.59 90.47 352.68
PD1..................................... 1.28 .............. 226.89 .............. 17.59 90.47 334.95
PC2..................................... 1.10 .............. 194.99 .............. 17.59 90.47 303.05
PC1..................................... 1.02 .............. 180.81 .............. 17.59 90.47 288.87
PB2..................................... 0.84 .............. 148.90 .............. 17.59 90.47 256.96
PB1..................................... 0.78 .............. 138.26 .............. 17.59 90.47 246.32
PA2..................................... 0.59 .............. 104.58 .............. 17.59 90.47 212.64
PA1..................................... 0.54 .............. 95.72 .............. 17.59 90.47 203.78
--------------------------------------------------------------------------------------------------------------------------------------------------------
[[Page 36538]]
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 $452.14 $287.91 .............. $92.14 $832.19
RUL..................................... 2.57 1.87 435.20 287.91 .............. 92.14 815.25
RVX..................................... 2.61 1.28 441.98 197.07 .............. 92.14 731.19
RVL..................................... 2.19 1.28 370.85 197.07 .............. 92.14 660.06
RHX..................................... 2.55 0.85 431.82 130.87 .............. 92.14 654.83
RHL..................................... 2.15 0.85 364.08 130.87 .............. 92.14 587.09
RMX..................................... 2.47 0.55 418.27 84.68 .............. 92.14 595.09
RML..................................... 2.19 0.55 370.85 84.68 .............. 92.14 547.67
RLX..................................... 2.26 0.28 382.71 43.11 .............. 92.14 517.96
RUC..................................... 1.56 1.87 264.17 287.91 .............. 92.14 644.22
RUB..................................... 1.56 1.87 264.17 287.91 .............. 92.14 644.22
RUA..................................... 0.99 1.87 167.65 287.91 .............. 92.14 547.70
RVC..................................... 1.51 1.28 255.70 197.07 .............. 92.14 544.91
RVB..................................... 1.11 1.28 187.97 197.07 .............. 92.14 477.18
RVA..................................... 1.10 1.28 186.27 197.07 .............. 92.14 475.48
RHC..................................... 1.45 0.85 245.54 130.87 .............. 92.14 468.55
RHB..................................... 1.19 0.85 201.51 130.87 .............. 92.14 424.52
RHA..................................... 0.91 0.85 154.10 130.87 .............. 92.14 377.11
RMC..................................... 1.36 0.55 230.30 84.68 .............. 92.14 407.12
RMB..................................... 1.22 0.55 206.59 84.68 .............. 92.14 383.41
RMA..................................... 0.84 0.55 142.25 84.68 .............. 92.14 319.07
RLB..................................... 1.50 0.28 254.01 43.11 .............. 92.14 389.26
RLA..................................... 0.71 0.28 120.23 43.11 .............. 92.14 255.48
ES3..................................... 3.58 .............. 606.24 .............. 18.79 92.14 717.17
ES2..................................... 2.67 .............. 452.14 .............. 18.79 92.14 563.07
ES1..................................... 2.32 .............. 392.87 .............. 18.79 92.14 503.80
HE2..................................... 2.22 .............. 375.93 .............. 18.79 92.14 486.86
HE1..................................... 1.74 .............. 294.65 .............. 18.79 92.14 405.58
HD2..................................... 2.04 .............. 345.45 .............. 18.79 92.14 456.38
HD1..................................... 1.60 .............. 270.94 .............. 18.79 92.14 381.87
HC2..................................... 1.89 .............. 320.05 .............. 18.79 92.14 430.98
HC1..................................... 1.48 .............. 250.62 .............. 18.79 92.14 361.55
HB2..................................... 1.86 .............. 314.97 .............. 18.79 92.14 425.90
HB1..................................... 1.46 .............. 247.24 .............. 18.79 92.14 358.17
LE2..................................... 1.96 .............. 331.91 .............. 18.79 92.14 442.84
LE1..................................... 1.54 .............. 260.78 .............. 18.79 92.14 371.71
LD2..................................... 1.86 .............. 314.97 .............. 18.79 92.14 425.90
LD1..................................... 1.46 .............. 247.24 .............. 18.79 92.14 358.17
LC2..................................... 1.56 .............. 264.17 .............. 18.79 92.14 375.10
LC1..................................... 1.22 .............. 206.59 .............. 18.79 92.14 317.52
LB2..................................... 1.45 .............. 245.54 .............. 18.79 92.14 356.47
LB1..................................... 1.14 .............. 193.05 .............. 18.79 92.14 303.98
CE2..................................... 1.68 .............. 284.49 .............. 18.79 92.14 395.42
CE1..................................... 1.50 .............. 254.01 .............. 18.79 92.14 364.94
CD2..................................... 1.56 .............. 264.17 .............. 18.79 92.14 375.10
CD1..................................... 1.38 .............. 233.69 .............. 18.79 92.14 344.62
CC2..................................... 1.29 .............. 218.45 .............. 18.79 92.14 329.38
CC1..................................... 1.15 .............. 194.74 .............. 18.79 92.14 305.67
CB2..................................... 1.15 .............. 194.74 .............. 18.79 92.14 305.67
CB1..................................... 1.02 .............. 172.73 .............. 18.79 92.14 283.66
CA2..................................... 0.88 .............. 149.02 .............. 18.79 92.14 259.95
CA1..................................... 0.78 .............. 132.09 .............. 18.79 92.14 243.02
BB2..................................... 0.97 .............. 164.26 .............. 18.79 92.14 275.19
BB1..................................... 0.90 .............. 152.41 .............. 18.79 92.14 263.34
BA2..................................... 0.70 .............. 118.54 .............. 18.79 92.14 229.47
BA1..................................... 0.64 .............. 108.38 .............. 18.79 92.14 219.31
PE2..................................... 1.50 .............. 254.01 .............. 18.79 92.14 364.94
PE1..................................... 1.40 .............. 237.08 .............. 18.79 92.14 348.01
PD2..................................... 1.38 .............. 233.69 .............. 18.79 92.14 344.62
PD1..................................... 1.28 .............. 216.76 .............. 18.79 92.14 327.69
PC2..................................... 1.10 .............. 186.27 .............. 18.79 92.14 297.20
PC1..................................... 1.02 .............. 172.73 .............. 18.79 92.14 283.66
PB2..................................... 0.84 .............. 142.25 .............. 18.79 92.14 253.18
PB1..................................... 0.78 .............. 132.09 .............. 18.79 92.14 243.02
PA2..................................... 0.59 .............. 99.91 .............. 18.79 92.14 210.84
PA1..................................... 0.54 .............. 91.44 .............. 18.79 92.14 202.37
--------------------------------------------------------------------------------------------------------------------------------------------------------
[[Page 36539]]
4. 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 proposed to continue
this practice for FY 2018, 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 2018, the updated wage data are for hospital cost
reporting periods beginning on or after October 1, 2013 and before
October 1, 2014 (FY 2014 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. More specifically, we believe
auditing all SNF cost reports, similar to the process used to audit
inpatient hospital cost reports for purposes of the Inpatient
Prospective Payment System (IPPS) wage index, would place a burden on
providers in terms of responding to documented audit requests. We also
believe that adopting such an approach would require a significant
commitment of resources by CMS and the Medicare Administrative
Contractors, potentially far in excess of those required under the IPPS
given that there are nearly five times as many SNFs as there are
hospitals. Therefore, while we continue to believe that the development
of such an audit process could improve SNF cost reports in such a
manner as to permit us to establish a SNF-specific wage index, we do
not regard an undertaking of this magnitude as being feasible within
the current level of programmatic resources.
In addition, we proposed 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 2018 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 stated in the proposed rule we would use
the average wage index from all contiguous Core-Based Statistical Areas
(CBSAs) as a reasonable proxy. For FY 2018, there are no rural
geographic areas that do not have hospitals, and thus, we stated that
this methodology would not be applied. For rural Puerto Rico, we stated
that 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 stated 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 stated 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 2018,
the only urban area without wage index data available is CBSA 25980,
Hinesville-Fort Stewart, GA. The wage index applicable to FY 2018 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.
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 https://www.whitehouse.gov/omb/bulletins_b03-04, 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 1-
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.
In the FY 2015 SNF PPS final rule (79 FR 45644 through 45646), we
finalized changes to the SNF PPS wage index based on the newest OMB
delineations, as described in OMB Bulletin No. 13-01, beginning in FY
2015, including a 1-year transition with a blended wage index for FY
2015. 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).
Subsequently, 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. 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 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 wage index applicable
to FY 2018 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.
Once calculated, we stated in the proposed rule 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
[[Page 36540]]
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; Professional fees: Labor-related; Administrative and
Facilities Support Services; All other--Labor-Related Services; and a
proportion of Capital-Related expenses. Effective beginning FY 2018, as
discussed in section III.D.1. of the proposed rule, we proposed to
revise the labor-related share to reflect the relative importance of
the 2014-based SNF market basket cost weights for the following cost
categories: Wages and Salaries; Employee Benefits; Professional fees:
Labor-related; Administrative and Facilities Support services;
Installation, Maintenance, and Repair 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 2018. 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 2018 than the base year weights
from the SNF market basket. The methodology for calculating the labor-
related portion for FY 2018 is discussed in section III.D.1. of this
final rule and the labor-related share is provided in Table 15.
We invited public comments on these proposals. A discussion of the
comments we received, along with our responses, appear below.
Comment: One commenter expressed concern with what appears to be a
precipitous drop in the New Bern, North Carolina (CBSA 35100) wage
index. The commenter noted that in the SNF PPS final rule for 2017, the
wage index for this CBSA was 0.8539, but that in the FY 2018 SNF PPS
proposed rule, this value had dropped to 0.5988. The commenter requests
that the information used to determine the wage indexes be reviewed
prior to the release of the final rule.
Response: We appreciate the commenter's concern regarding the
decrease in the wage index for CBSA 35100. There is a wage data
verification and correction process which is discussed in the Inpatient
Prospective Payment System (IPPS) proposed and final rules each year.
The most recent discussion appears in the FY 2018 IPPS proposed rule
(82 FR 19899 through 19900. 19911 through 19915). Based on the final
wage data for FY 2018, the wage index for CBSA 35100 has been updated
to 0.8277, which is only a slight decrease compared to the FY 2017
value.
Comment: Several commenters recommend that we continue exploring
potential approaches to establish a SNF-specific wage index either by
modifying the use of current hospital wage data by eliminating certain
job categories specific to hospitals only, or by utilizing collected
SNF-specific wage data only. More specifically, these commenters
suggest that a SNF-specific wage index could benefit from weighting it
by occupational mix data for SNFs, allowing for a rural floor policy,
and by implementation of a reclassification system.
Response: We appreciate the commenters raising these concerns
regarding the use of the hospital wage index data under the SNF PPS,
and the commenter's recommendation to continue exploring potential
approaches for collecting SNF-specific wage data to establish a SNF-
specific wage index. However, we note that, consistent with the
preceding discussion in this final rule as well as our previous
responses to these recurring comments (most recently published in the
FY 2017 SNF PPS final rule (81 FR 51979 through 51980)), developing
such a wage index would require a resource-intensive audit process
similar to that used for IPPS hospital data, to improve the quality of
the SNF cost report data in order for it to be used as part of this
analysis. We would further note that as this audit process is quite
extensive in the case of approximately 3,300 hospitals, it would be
significantly more so in the case of approximately 15,000 SNFs. As
discussed above, we believe auditing all SNF cost reports, similar to
the process used to audit inpatient hospital cost reports for purposes
of the Inpatient Prospective Payment System (IPPS) wage index, would
place a burden on providers in terms of recordkeeping and completion of
the cost report worksheet. We also believe that adopting such an
approach would require a significant commitment of resources by CMS and
the Medicare Administrative Contractors, potentially far in excess of
those required under the IPPS given that there are nearly five times as
many SNFs as there are hospitals. Therefore, while we continue to
review all available data and contemplate the potential methodological
approaches for a SNF-specific wage index in the future, we continue to
believe that in the absence of the appropriate SNF-specific wage data,
using the pre-reclassified hospital inpatient wage data (without the
occupational mix adjustment) is appropriate and reasonable for the SNF
PPS.
Further, we appreciate these commenters' suggestion that we modify
the current hospital wage data used to construct the SNF PPS wage index
to reflect the SNF environment more accurately by eliminating certain
job categories specific to hospitals only. While we consider whether or
not such an approach may constitute an interim step in the process of
developing a SNF-specific wage index, we would note that other provider
types also use the hospital wage index as the basis for their
associated wage index. As such, we believe that such a recommendation
should be part of a broader discussion of wage index reform across
Medicare payment systems.
We note that section 315 of BIPA authorized us to establish a
geographic reclassification procedure that is specific to SNFs, only
after collecting the data necessary to establish a SNF-specific wage
index that is based on data from nursing homes. However, to date this
has been infeasible 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. To the extent we are able to develop and
implement a SNF-specific wage index in the future, we may consider at
that time whether it would be appropriate to implement a
reclassification system and an occupational mix adjustment, as
suggested by commenters.
As it relates to the suggestion that we adopt a rural floor policy
with a SNF-specific wage index, we do not believe it would be prudent
to adopt such a policy under the SNF PPS. As we stated in the FY 2016
SNF PPS final rule (80 FR 46401), MedPAC has recommended eliminating
the rural floor policy (which actually sets a floor for urban
hospitals) from the calculation of the IPPS wage index (see, for
example, Chapter 3 of MedPAC's March 2013 Report to Congress on
Medicare Payment Policy, available at https://medpac.gov/docs/default-source/reports/mar13_ch03.pdf, which notes on page 65 that in 2007,
MedPAC had ``. . . recommended eliminating these special wage index
adjustments and adopting a new wage index system to avoid geographic
inequities that can occur due to current wage index policies (Medicare
Payment Advisory Commission 2007b.'') As we stated in the FY 2016 SNF
PPS final
[[Page 36541]]
rule, if we were to adopt the rural floor under the SNF PPS, we believe
that the SNF PPS wage index could become vulnerable to problems similar
to those that MedPAC identified in its March 2013 Report to Congress.
Accordingly, after considering the comments received and for the
reasons discussed previously in this section and in the FY 2018 SNF PPS
proposed rule (82 FR 21022 through 21026), we are finalizing the FY
2018 wage index adjustment and related policies as proposed in the FY
2018 SNF PPS proposed rule. For FY 2018, the updated wage data are for
hospital cost reporting periods beginning on or after October 1, 2013
and before October 1, 2014 (FY 2014 cost report data). As noted above,
the wage index applicable to FY 2018 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. Tables 6 and 7 show the
RUG-IV case-mix adjusted federal rates for FY 2018 by labor-related and
non-labor-related components.
Table 6--RUG-IV Case-Mix Adjusted Federal Rates for Urban SNFs by Labor and Non-Labor Component
----------------------------------------------------------------------------------------------------------------
Non-labor
RUG-IV category Total rate Labor portion portion
----------------------------------------------------------------------------------------------------------------
RUX............................................................. $813.43 $575.91 $237.52
RUL............................................................. 795.71 563.36 232.35
RVX............................................................. 724.03 512.61 211.42
RVL............................................................. 649.58 459.90 189.68
RHX............................................................. 655.97 464.43 191.54
RHL............................................................. 585.07 414.23 170.84
RMX............................................................. 601.74 426.03 175.71
RML............................................................. 552.11 390.89 161.22
RLX............................................................. 528.47 374.16 154.31
RUC............................................................. 616.68 436.61 180.07
RUB............................................................. 616.68 436.61 180.07
RUA............................................................. 515.64 365.07 150.57
RVC............................................................. 529.04 374.56 154.48
RVB............................................................. 458.14 324.36 133.78
RVA............................................................. 456.37 323.11 133.26
RHC............................................................. 460.99 326.38 134.61
RHB............................................................. 414.90 293.75 121.15
RHA............................................................. 365.27 258.61 106.66
RMC............................................................. 404.98 286.73 118.25
RMB............................................................. 380.17 269.16 111.01
RMA............................................................. 312.81 221.47 91.34
RLB............................................................. 393.75 278.78 114.98
RLA............................................................. 253.71 179.63 74.08
ES3............................................................. 742.65 525.80 216.85
ES2............................................................. 581.34 411.59 169.75
ES1............................................................. 519.30 367.66 151.64
HE2............................................................. 501.58 355.12 146.46
HE1............................................................. 416.49 294.87 121.62
HD2............................................................. 469.67 332.53 137.14
HD1............................................................. 391.68 277.31 114.37
HC2............................................................. 443.08 313.70 129.38
HC1............................................................. 370.40 262.24 108.16
HB2............................................................. 437.76 309.93 127.83
HB1............................................................. 366.86 259.74 107.12
LE2............................................................. 455.49 322.49 133.00
LE1............................................................. 381.04 269.78 111.26
LD2............................................................. 437.76 309.93 127.83
LD1............................................................. 366.86 259.74 107.12
LC2............................................................. 384.59 272.29 112.30
LC1............................................................. 324.32 229.62 94.70
LB2............................................................. 365.09 258.48 106.61
LB1............................................................. 310.14 219.58 90.56
CE2............................................................. 405.86 287.35 118.51
CE1............................................................. 373.95 264.76 109.19
CD2............................................................. 384.59 272.29 112.30
CD1............................................................. 352.68 249.70 102.98
CC2............................................................. 336.73 238.40 98.33
CC1............................................................. 311.91 220.83 91.08
CB2............................................................. 311.91 220.83 91.08
CB1............................................................. 288.87 204.52 84.35
CA2............................................................. 264.05 186.95 77.10
CA1............................................................. 246.32 174.39 71.93
BB2............................................................. 280.00 198.24 81.76
BB1............................................................. 267.59 189.45 78.14
BA2............................................................. 232.14 164.36 67.78
BA1............................................................. 221.51 156.83 64.68
PE2............................................................. 373.95 264.76 109.19
PE1............................................................. 356.22 252.20 104.02
PD2............................................................. 352.68 249.70 102.98
[[Page 36542]]
PD1............................................................. 334.95 237.14 97.81
PC2............................................................. 303.05 214.56 88.49
PC1............................................................. 288.87 204.52 84.35
PB2............................................................. 256.96 181.93 75.03
PB1............................................................. 246.32 174.39 71.93
PA2............................................................. 212.64 150.55 62.09
PA1............................................................. 203.78 144.28 59.50
----------------------------------------------------------------------------------------------------------------
Table 7--RUG-IV Case-Mix Adjusted Federal Rates for Rural SNFs by Labor and Non-Labor Component
----------------------------------------------------------------------------------------------------------------
Non-labor
RUG-IV category Total rate Labor portion portion
----------------------------------------------------------------------------------------------------------------
RUX............................................................. $832.19 $589.19 $243.00
RUL............................................................. 815.25 577.20 238.05
RVX............................................................. 731.19 517.68 213.51
RVL............................................................. 660.06 467.32 192.74
RHX............................................................. 654.83 463.62 191.21
RHL............................................................. 587.09 415.66 171.43
RMX............................................................. 595.09 421.32 173.77
RML............................................................. 547.67 387.75 159.92
RLX............................................................. 517.96 366.72 151.24
RUC............................................................. 644.22 456.11 188.11
RUB............................................................. 644.22 456.11 188.11
RUA............................................................. 547.70 387.77 159.93
RVC............................................................. 544.91 385.80 159.11
RVB............................................................. 477.18 337.84 139.34
RVA............................................................. 475.48 336.64 138.84
RHC............................................................. 468.55 331.73 136.82
RHB............................................................. 424.52 300.56 123.96
RHA............................................................. 377.11 266.99 110.12
RMC............................................................. 407.12 288.24 118.88
RMB............................................................. 383.41 271.45 111.96
RMA............................................................. 319.07 225.90 93.17
RLB............................................................. 389.26 275.60 113.66
RLA............................................................. 255.48 180.88 74.60
ES3............................................................. 717.17 507.76 209.41
ES2............................................................. 563.07 398.65 164.42
ES1............................................................. 503.80 356.69 147.11
HE2............................................................. 486.86 344.70 142.16
HE1............................................................. 405.58 287.15 118.43
HD2............................................................. 456.38 323.12 133.26
HD1............................................................. 381.87 270.36 111.51
HC2............................................................. 430.98 305.13 125.85
HC1............................................................. 361.55 255.98 105.57
HB2............................................................. 425.90 301.54 124.36
HB1............................................................. 358.17 253.58 104.59
LE2............................................................. 442.84 313.53 129.31
LE1............................................................. 371.71 263.17 108.54
LD2............................................................. 425.90 301.54 124.36
LD1............................................................. 358.17 253.58 104.59
LC2............................................................. 375.10 265.57 109.53
LC1............................................................. 317.52 224.80 92.72
LB2............................................................. 356.47 252.38 104.09
LB1............................................................. 303.98 215.22 88.76
CE2............................................................. 395.42 279.96 115.46
CE1............................................................. 364.94 258.38 106.56
CD2............................................................. 375.10 265.57 109.53
CD1............................................................. 344.62 243.99 100.63
CC2............................................................. 329.38 233.20 96.18
CC1............................................................. 305.67 216.41 89.26
CB2............................................................. 305.67 216.41 89.26
CB1............................................................. 283.66 200.83 82.83
CA2............................................................. 259.95 184.04 75.91
CA1............................................................. 243.02 172.06 70.96
BB2............................................................. 275.19 194.83 80.36
BB1............................................................. 263.34 186.44 76.90
BA2............................................................. 229.47 162.46 67.01
BA1............................................................. 219.31 155.27 64.04
[[Page 36543]]
PE2............................................................. 364.94 258.38 106.56
PE1............................................................. 348.01 246.39 101.62
PD2............................................................. 344.62 243.99 100.63
PD1............................................................. 327.69 232.00 95.69
PC2............................................................. 297.20 210.42 86.78
PC1............................................................. 283.66 200.83 82.83
PB2............................................................. 253.18 179.25 73.93
PB1............................................................. 243.02 172.06 70.96
PA2............................................................. 210.84 149.27 61.57
PA1............................................................. 202.37 143.28 59.09
----------------------------------------------------------------------------------------------------------------
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 2018 (federal rates
effective October 1, 2017), we stated in the proposed rule that we
would apply an adjustment to fulfill the budget neutrality requirement.
We stated 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 2017 to the weighted average wage adjustment factor for
FY 2018. For this calculation, we stated we would use the same FY 2016
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. We proposed a budget
neutrality factor of 1.0003. We did not receive any comments regarding
our proposed budget neutrality calculation. Thus, we are finalizing the
budget neutrality methodology as proposed. The final budget neutrality
factor for FY 2018 is 1.0013. We note that this is different from the
budget neutrality factor provided in the FY 2018 SNF PPS proposed rule
(82 FR 21026) due to an updated wage index file and updated claims file
used to calculate the budget neutrality factor.
5. Adjusted Rate Computation Example
Using the hypothetical SNF XYZ, Table 8 shows the adjustments made
to the federal per diem rates to compute the provider's actual per diem
PPS payment for FY 2018. We derive the Labor and Non-labor columns from
Table 6. The wage index used in this example is based on the FY 2018
SNF PPS wage index, which may be found in Table A available on the CMS
Web site at https://www.cms.gov/Medicare/Medicare-Fee-for-Service-Payment/SNFPPS/WageIndex.html. As illustrated in Table 8, SNF XYZ's
total PPS payment for FY 2018 would equal $47,596.42.
TABLE 8--Adjusted Rate Computation Example SNF XYZ: Located in Frederick, MD (Urban CBSA 43524) Wage Index: 0.9863
[See Wage Index in Table A] \1\
--------------------------------------------------------------------------------------------------------------------------------------------------------
Adjusted Adjusted Percent Medicare
RUG-IVgroup Labor Wage index labor Non-labor rate adjustment days Payment
--------------------------------------------------------------------------------------------------------------------------------------------------------
RVX............................................. $512.61 0.9863 $505.59 $211.42 $717.01 $717.01 14 $10,038.14
ES2............................................. 411.59 0.9863 405.95 169.75 575.70 575.70 30 17,271.00
RHA............................................. 258.61 0.9863 255.07 106.66 361.73 361.73 16 5,787.68
CC2 *........................................... 238.40 0.9863 235.13 98.33 333.46 760.29 10 7,602.90
BA2............................................. 164.36 0.9863 162.11 67.78 229.89 229.89 30 6,896.70
-------------------------
........... ........... ........... ........... ........... ........... 100 47,596.42
--------------------------------------------------------------------------------------------------------------------------------------------------------
* 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.
C. Additional Aspects of the SNF PPS
1. 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.B.3. of this final 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 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 5-day, Medicare-required assessment are
automatically classified as meeting the SNF level of care
[[Page 36544]]
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 final rule, we continue to designate the upper 52
RUG-IV groups for purposes of this administrative presumption,
consisting of all groups encompassed by the following RUG-IV
categories:
Rehabilitation plus Extensive Services.
Ultra High Rehabilitation.
Very High Rehabilitation.
High Rehabilitation.
Medium Rehabilitation.
Low Rehabilitation.
Extensive Services.
Special Care High.
Special Care Low.
Clinically Complex.
However, we note that this administrative presumption policy does
not supersede the SNF's responsibility to ensure that its decisions
relating to level of care are appropriate and timely, including a
review to confirm that the services prompting the beneficiary's
assignment to one of the upper 52 RUG-IV groups (which, in turn, serves
to trigger the administrative presumption) are themselves medically
necessary. As we explained in the FY 2000 SNF PPS final rule (64 FR
41667), the administrative presumption:
. . . is itself rebuttable in those individual cases in which
the services actually received by the resident do not meet the basic
statutory criterion of being reasonable and necessary to diagnose or
treat a beneficiary's condition (according to section 1862(a)(1) of
the Act). Accordingly, the presumption would not apply, for example,
in those situations in which a resident's assignment to one of the
upper . . . groups is itself based on the receipt of services that
are subsequently determined to be not reasonable and necessary.
Moreover, we want to stress the importance of careful monitoring
for changes in each patient's condition to determine the continuing
need for Part A SNF benefits after the ARD of the 5-day assessment.
In connection with the administrative level of care presumption, in
the FY 2018 SNF PPS proposed rule (82 FR 21027), we proposed to amend
the existing regulations text at Sec. 413.345 by removing the
parenthetical phrase ``(including the designation of those specific
Resource Utilization Groups under the resident classification system
that represent the required SNF level of care, as provided in Sec.
409.30 of this chapter)'' that currently appears in the second sentence
of Sec. 413.345. We stated in the proposed rule that the deletion of
the current reference to publishing such material annually in the
Federal Register, along with the specific reference to ``Resource
Utilization Groups,'' would serve to conform the text of these
regulations more closely to that of the corresponding statutory
language at section 1888(e)(4)(H)(ii) of the Act, which refers in more
general terms to the applicable ``case mix classification system.''
Moreover, we noted in the proposed rule that the recurring
announcements in the Federal Register of the administrative
presumption's designated groups as part of each annual update of the
SNF PPS rates has in actual practice proven to be largely a formality,
resulting in exactly the same designated groups repetitively being
promulgated routinely year after year. Accordingly, we proposed instead
to disseminate this standard description of the administrative
presumption's designated groups exclusively through the SNF PPS Web
site, and to announce such designations in rulemaking only in the event
that we are actually proposing to make changes in them.
Along with this proposed revision, we also proposed to make
appropriate conforming revisions in other portions of the regulations
text (82 FR 21027). Specifically, we proposed to remove from the
introductory text of Sec. 409.30, the parenthetical phrase ``(in the
annual publication of Federal prospective payment rates described in
Sec. 413.345 of this chapter)'' for the same reasons we proposed to
remove the parenthetical phrase from Sec. 413.345, as discussed in the
proposed rule and in this final rule above. In addition, we proposed to
replace the phrase to ``one of the Resource Utilization Groups that is
designated'' in Sec. 409.30's introductory text with the phrase ``one
of the case-mix classifiers CMS designates'' to conform more closely
with the statutory language in section 1888(e)(4)(G) and (H) of the
Act, which refers in more general terms to the ``resident
classification system'' or ``case mix classification system,'' and to
clarify that ``CMS'' makes these designations. Additionally, we
proposed to revise Sec. 409.30 to reflect more clearly our
longstanding policy that the assignment of a designated case-mix
classifier would serve to trigger the administrative presumption only
when that assignment is itself correct. As we noted in the FY 2000 SNF
PPS final rule (64 FR 41667, July 30, 1999), ``. . . 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.'' We also proposed to make similar conforming
revisions in the ``resident classification system'' definition that
currently appears in Sec. 413.333 to replace ``Resource Utilization
Groups'' with ``resident classification system'', as well as in the
material in Sec. 424.20(a)(1)(ii) on SNF level of care certifications
to replace the phrase ``one of the Resource Utilization Groups
designated'' with ``one of the case-mix classifiers that CMS
designates,'' in both cases to conform more closely with the statutory
language in section 1888(e)(4)(G) and (H) of the Act, as discussed in
the proposed rule (82 FR 21027) and in this final rule, which refers in
more general terms to the ``resident classification system'' or ``case
mix classification system,'' and to clarify in Sec. 424.20(a)(1)(ii)
that ``CMS'' designates these case-mix classifiers. Finally, regarding
Sec. 424.20, we proposed to revise paragraph (e)(2)(ii)(B)(2) by
updating its existing cross-reference to the provision at Sec.
483.40(e) on delegating physician tasks in SNFs, which was recently
redesignated as new Sec. 483.30(e) under the revised long-term care
facility requirements for participation (81 FR 68861, October 4, 2016).
Finally, we proposed to remove the word ``Optional'' from the title of
42 CFR part 413 (82 FR 21098), as this is an obsolete reference to an
optional prospective payment methodology for low-volume SNFs that
predated the SNF PPS and is no longer in effect.
Commenters submitted the following comments on our proposals
described above related to the SNF Level of Care--Administrative
Presumption aspects of the SNF PPS. A discussion of these comments,
along with our responses, appears below.
Comment: We received a comment about our proposed revisions to
Sec. Sec. 413.333 and 413.345 that would result in removing the term
``Resource Utilization Groups,'' and in Sec. 413.333, utilizing the
term ``resident
[[Page 36545]]
classification system'' in its place. The commenter interpreted our use
of the term ``resident classification system'' in this context as
referring specifically to the Resident Classification System, Version I
(RCS-I), the particular case-mix classification model that is currently
under development as discussed in our advance notice of proposed
rulemaking with comment (CMS-1686-ANPRM, 82 FR 20980, May 4, 2017).
Based on that assumption, the commenter expressed the view that it
would be premature and confusing to adopt terminology referencing a
particular model that has not been finalized at this point.
Response: We wish to clarify that our use of the term ``resident
classification system'' in this context refers solely to a case-mix
classification system in the generic sense, and not to the particular
model discussed in the ANPRM, which we will continue to refer to as the
Resident Classification System, Version I (or RCS-I). We note that the
term ``resident classification system'' in the more generic sense has
long been utilized as such in the existing regulations at Sec.
413.333, and that our proposed changes were not intended to restrict
the regulations text to any one particular type of classification
system, but rather, to do the opposite by removing the existing,
specific references to the RUG model. As we noted in the proposed rule
(82 FR 21027), such revisions would actually serve to conform the
regulations text ``. . . more closely with the statutory language in
section 1888(e)(4)(G) and (H) of the Act, . . . which refers in more
general terms to the `resident classification system' . . .'' (emphasis
added). Accordingly, we are revising these portions of the regulations
text as proposed, as discussed in this final rule.
Comment: One commenter inquired about our proposed clarification in
Sec. 409.30 which, similar to the existing regulations at Sec.
424.20(a)(1)(ii), would specify that a resident qualifies for the level
of care presumption only when ``correctly'' assigned to one of the
case-mix classifiers designated for this purpose. In explaining the
reason for this clarification in the proposed rule (82 FR 21027), we
cited a prior discussion of the presumption in the FY 2000 final rule
(64 FR 41667, July 30, 1999), which had noted that ``. . . 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.'' The commenter questioned whether, in
this scenario, the resident's assignment to a RUG that turns out to be
incorrect would result in disqualifying the resident from SNF coverage
altogether. The commenter also requested clarification in the wording
of a portion of Sec. 30.1 of the Medicare Benefit Policy Manual
(MBPM), Chapter 8 that discusses how services furnished during the
prior hospital stay are to be coded on the resident assessment.
Response: Regarding the scenario discussed above (in which the
services that triggered a given RUG assignment on the initial
assessment are found to be not reasonable and necessary), if the
resident is then reassigned to a different RUG that is itself
designated as meeting the level of care presumption, the resident
would, in fact, still qualify for the presumption on that basis, as the
end result of the reassignment would be that the resident has been
``correctly assigned'' to one of the designated RUGs on that
assessment. Alternatively, if the reassignment is to one of the less
intensive RUGs that is not designated as meeting the presumption, the
resident would still receive an individual level of care determination
using the existing administrative criteria. Finally, regarding the
request to clarify the MBPM instructions on coding procedures, we
believe this comment is beyond the scope of this rule. As we noted in
the FY 2002 SNF PPS final rule, ``. . . specific operational
instructions (such as those describing the details of particular
billing procedures) are beyond the scope of the SNF PPS final rule''
(66 FR 39588, July 31, 2001). However, we will forward this comment to
the appropriate component within CMS for consideration.
After consideration of the comments received, for the reasons
discussed above and in the FY 2018 SNF PPS proposed rule (82 FR 21026
through 21027), we are finalizing, without modification, our proposed
revisions to Sec. Sec. 409.30, 413.333, 413.345, 424.20(a)(1)(ii) and
(e)(2)(ii)(B)(2), and our revision to the title of 42 CFR part 413 as
discussed in this final rule. In addition, as we proposed, we will
henceforth disseminate the standard description of the administrative
presumption's designated groups exclusively through the SNF PPS Web
site, and will announce such designations in rulemaking only in the
event that we are actually proposing to make changes in them.
2. 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 (MAC) 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_04152015.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
[[Page 36546]]
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, the amendments enacted in
section 103 of the BBRA do not 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 is consistent with 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 the FY 2018 SNF PPS proposed rule (82 FR 21028), we
specifically invited 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
stated that we may consider excluding a particular service if it meets
our criteria for exclusion as specified above. We also requested that
commenters 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, we stated in the proposed rule that, 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, 2017). 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.
In the proposed rule, we noted that one category of services which
consolidated billing excludes under Sec. 411.15(p)(3) consists of
certain exceptionally intensive types of outpatient hospital services.
As we explained in the FY 2000 SNF PPS final rule, this exclusion
applies to ``. . . those types of outpatient hospital services that we
specifically identify as being beyond the scope of SNF care plans
generally'' (64 FR 41676, July 30, 1999, emphasis added). As discussed
in the FY 2018 SNF PPS proposed rule (82 FR 21028), to further clarify
this longstanding policy noted above that the outpatient hospital
exclusion applies solely to those services that we specifically
designate for this purpose, we proposed to revise Sec.
411.15(p)(3)(iii) to state this more explicitly. In addition, we note
that recent revisions in the long-term care facility requirements for
participation (81 FR 68858, October 4, 2016) have moved the
comprehensive care plan regulations from their previous location at
Sec. 483.20(k) to a new, redesignated Sec. 483.21(b); accordingly, we
proposed to make a conforming revision in the existing cross-reference
to that provision that appears in Sec. 411.15(p)(3)(iii).
We did not receive any public comments on our proposed revisions to
Sec. 411.15(p)(3)(iii). Therefore, for the reasons discussed in this
final rule and in the FY 2018 SNF PPS proposed rule, we are finalizing
our revisions to Sec. 411.15(p)(3)(iii) as proposed, without
modification.
Commenters submitted the following comments related to the proposed
rule's discussion of the consolidated billing aspects of the SNF PPS. A
discussion of these comments, along with our responses, appears below.
Comment: One commenter suggested that, rather than specifying those
particular items and services that are excluded from SNF consolidated
billing, CMS should comprehensively identify the full range of items
and services that are subject to this provision.
Response: We note that the online listing by HCPCS code of those
services that are excluded from consolidated billing (in the annual
updates that are posted at https://www.cms.gov/Medicare/Billing/SNFConsolidatedBilling/) follows the overall structure of the
statutory provision itself. This statutory provision, in turn,
specifies in section 1888(e)(2)(A)(ii) through (iv) of the Act those
particular services that are excluded from it, so that any services not
so specified would remain subject to the provision (this follows the
similar structure that was originally established in the hospital
bundling provision at section 1862(a)(14) of the Act, which served as
the model for SNF consolidated billing). As discussed in the General
Explanation of the Major Categories (available online at https://www.cms.gov/Medicare/Billing/SNFConsolidatedBilling/Downloads/2017-General-Explanation.pdf), one exception to this overall pattern
involves the administrative carve-out from SNF consolidated billing
under 42 CFR 411.15(p)(3)(iii) for ambulatory surgical services
performed in the outpatient hospital setting (Major Category I.F):
Inclusions, rather than exclusions, are given in this one case,
because of the great number of surgery procedures that are excluded
and can only be safely performed in a hospital operating room
setting. It is easier to automate edits around the much shorter list
of inclusions under this category, representing minor procedures
that can be performed in the SNF itself (emphasis in the original).
Comment: We received a number of comments regarding the statutory
exclusion from consolidated billing for certain high-intensity
chemotherapy drugs and the administrative exclusion for certain high-
intensity outpatient hospital services. One commenter in particular
expressed continuing dissatisfaction with what it characterized as
CMS's ``inadequate regulatory action'' in modifying the consolidated
billing requirement to
[[Page 36547]]
reflect the introduction of expensive new drugs, and the expanded
provision of outpatient services in nonhospital settings. The commenter
cited as examples some previous comments that it had submitted during
the FY 2004 rulemaking cycle, in which it had recommended the exclusion
of certain additional chemotherapy drugs, and the expansion of the
existing administrative exclusion for certain high-intensity outpatient
hospital services to encompass freestanding (nonhospital) settings as
well. Regarding the latter recommendation, the commenter indicated that
to date, CMS has not revisited this ``site of service'' rule.
Response: Regarding the commenter's previous recommendation during
the FY 2004 rulemaking cycle for additional chemotherapy exclusions,
our response in the FY 2004 final rule (68 FR 46060, August 4, 2003)
explained that ``. . . most of the chemotherapy drugs . . . mentioned
by commenters were considered for exclusion under the BBRA, but were
not adopted by the Congress in the BBRA list of excluded items and
services.'' As further explained in several subsequent rulemaking
cycles (most recently, in the FY 2016 final rule (80 FR 46407, August
4, 2015)),
. . . our position has always been that the BBRA's discretionary
authority to exclude codes within certain designated service
categories applies solely to codes that were created subsequent to
the BBRA's enactment, and not to those codes that were already in
existence as of July 1, 1999 (the date that the legislation itself
uses as the reference point for identifying the codes that it
designates for exclusion). As we explained in the FY 2010 final rule
(74 FR 40354), this position reflects the assumption that if a
particular code was already in existence as of that date but not
designated for exclusion, this meant that it was intended to remain
within the SNF PPS bundle, subject to the BBRA Conference Report's
provision for a GAO review of the code set that was conducted the
following year (H.R. Rep. 106-479 at 854 (1999) (Conf. Rep.)).
Further, we note that we have indeed continued to solicit
recommendations periodically for additional exclusions within those
specified service categories (such as chemotherapy services) for which
the law authorizes us to do so, and we have, in fact, adopted those
recommendations to the extent that the recommended services meet the
applicable criteria for exclusion.
With regard to the administrative exclusion for high-intensity
outpatient hospital services, we note that we not only addressed this
issue in the FY 2004 final rule itself (68 FR 46061, August 4, 2003)
but, as discussed below, we have revisited it repeatedly in subsequent
rulemaking in response to the recurring public comments that we have
received on the issue since that time. For example, the FY 2014 final
rule (78 FR 47957 through 47958, August 6, 2013) cited the explanation
in numerous previous rules (along with Medicare Learning Network (MLN)
Matters article SE0432, available online at https://www.cms.gov/Outreach-and-Education/Medicare-Learning-Network-MLN/MLNMattersArticles/Downloads/SE0432.pdf) that ``. . . the rationale for
establishing this exclusion was to address those types of services that
are so far beyond the normal scope of SNF care that they require the
intensity of the hospital setting in order to be furnished safely and
effectively'' (emphasis in the original), and also noted that when the
Congress enacted the consolidated billing exclusion for certain RHC and
FQHC services in section 410 of the MMA, the accompanying legislative
history's description of present law directly acknowledged the
hospital-specific nature of this exclusion. In addition, the FY 2012
final rule (76 FR 48532, August 8, 2011) indicated that ever since its
inception, this exclusion was intended to be hospital-specific: It
cited the applicable discussion in the May 12, 1998 interim final rule
(63 FR 26298), which explained that this exclusion was created within
the context of the concurrent development of a new PPS specifically for
outpatient hospital services, reflecting the need ``. . . to delineate
the respective areas of responsibility for the SNF under the
Consolidated Billing provision, and for the hospital under the
outpatient bundling provision, with regard to these services.'' This
point was further reinforced in the subsequent final rule for FY 2000
(64 FR 41676, July 30, 1999), which noted that
. . . a key concern underlying the development of the consolidated
billing exclusion of certain outpatient hospital services
specifically involves the need to distinguish those services that
comprise the SNF bundle from those that will become part of the
outpatient hospital bundle that is currently being developed in
connection with the outpatient hospital PPS. Accordingly, we are not
extending the outpatient hospital exclusion from consolidated
billing to encompass any other, freestanding settings.
Finally, the FY 2010 final rule (74 FR 40355, August 11, 2009),
while acknowledging that advances in medical technology over time may
make it feasible to perform such high-intensity outpatient services
more widely in nonhospital settings, then went on to cite the FY 2006
final rule in noting that such a development ``. . . would not argue in
favor of excluding the nonhospital performance of the service from
consolidated billing, . . . but rather, would call into question
whether the service should continue to be excluded from consolidated
billing at all, even when performed in the hospital setting'' (70 FR
45049, August 4, 2005).
Comment: One commenter reiterated a recommendation made in previous
rulemaking cycles to exclude the oral chemotherapy drug
Revlimid[supreg] (lenalidomide).
Response: We note that a discussion of our decision not to adopt
the exclusion recommendations regarding this drug appears in the final
rule for FY 2015 (79 FR 45641 through 45642, August 5, 2014), which was
also referenced in the FY 2017 final rule (81 FR 51985, August 5, 2016)
as well.
Comment: Several commenters reiterated the same set of comments
that they had submitted previously during last year's rulemaking cycle,
which had noted the importance of continuing to exclude certain
customized prosthetic devices from consolidated billing, and urged
expanding that exclusion to encompass orthotics as well. These
commenters had also recommended the following four HCPCS codes for
exclusion: L5010--Partial foot, molded socket, ankle height, with toe
filler; L5020--Partial foot, molded socket, tibial tubercle height,
with toe filler; L5969--Addition, endoskeletal ankle-foot or ankle
system, power assist, includes any type motor(s); and L5987--All lower
extremity prosthesis, shank foot system with vertical loading pylon.
One of the commenters now noted in addition that although our previous
response in the FY 2017 final rule (81 FR 51986, August 5, 2016) had
indicated that code L5969 ``. . . actually appears already on the
exclusion list under Major Category III.D. (`Customized Prosthetic
Devices'), where this particular L code has, in fact, been listed ever
since its initial assignment in January 2014,'' the commenter has been
unable to locate this code on the list of exclusions in the 2017 Annual
Part B MAC Update.
Response: We refer to the previous discussion in the FY 2017 final
rule (81 FR 51986, August 5, 2016) regarding our decision not to adopt
the recommendations for excluding orthotics and HCPCS codes L5010,
L5020, and L5987. In addition, while that final rule was correct in
noting that ever since its initial assignment, code L5969 has appeared
as an exclusion under Major Category III.D. (``Customized Prosthetic
Devices'') in the Annual Part A MAC Update, this
[[Page 36548]]
particular code was inadvertently omitted from the corresponding
exclusion list in File 1 of the Annual Part B MAC Update. We appreciate
being apprised of the omission, and will take the necessary steps to
rectify this oversight.
Comment: One commenter made reference to high-cost medications that
are currently not excluded from consolidated billing, and requested
guidance in this context regarding the applicable policy on residents
being requested to supply their own medications to minimize the cost to
the nursing home.
Response: In terms of Medicare payment, with limited exceptions
(such as certain specified, high-intensity chemotherapy drugs),
medications that are required during the course of a Medicare-covered
SNF stay are included within the SNF's bundled per diem payment for the
covered stay itself, which the SNF is required under the terms of its
provider agreement to accept as payment in full (see section
1866(a)(1)(A)(i) of the Act and the implementing regulations at Sec.
489.21(a)). Further, Sec. 489.20(s) requires the SNF to furnish these
bundled services either directly with its own resources, or under an
``arrangement'' in which the SNF itself accepts the professional and
financial responsibility for the arranged-for services (see the
discussion of arrangements that appears in Sec. 409.3 and in Sec.
10.3 of the Medicare General Information, Eligibility, and Entitlement
Manual, Chapter 5). Section 489.21(h) further indicates that even if an
SNF fails to furnish directly or make arrangements for such a service,
the beneficiary is not to bear the financial liability for the service.
3. 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, SNF-level
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 final 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/. We
received no comments on this aspect of the proposed rule.
D. Other Issues
1. Revising and Rebasing the SNF Market Basket Index
Section 1888(e)(5)(A) of the Act requires the Secretary to
establish a market basket index that reflects the 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 in section III.B. of this rule, to update the SNF PPS per
diem rates and to determine the labor-related share on an annual basis.
The SNF market basket is a fixed-weight, Laspeyres-type price
index. A Laspeyres price index measures the change in price, over time,
of the same mix of goods and services purchased in the base period. Any
changes in the quantity or mix of goods and services (that is,
intensity) purchased over time relative to a base period are not
measured.
The index itself is constructed in three steps. First, a base
period is selected (in the FY 2018 SNF PPS proposed rule (82 FR 21029),
the proposed base period was 2014) and total base period expenditures
are estimated for a set of mutually exclusive and exhaustive spending
categories with the proportion of total costs that each category
represents being calculated. These proportions are called cost or
expenditure weights. Second, each expenditure category is matched to an
appropriate price or wage variable, referred to as a price proxy. In
nearly every instance, these price proxies are derived from publicly
available statistical series that are published on a consistent
schedule (preferably at least on a quarterly basis). Finally, the
expenditure weight for each cost category is multiplied by the level of
its respective price proxy. The sum of these products (that is, the
expenditure weights multiplied by their price levels) for all cost
categories yields the composite index level of the market basket in a
given period. Repeating this step for other periods produces a series
of market basket levels over time. Dividing an index level for a given
period by an index level for an earlier period produces a rate of
growth in the input price index over that timeframe.
Effective for cost reporting periods beginning on or after July 1,
1998, we revised and rebased our 1977 routine costs input price index
and adopted a total expenses SNF input price index using FY 1992 as the
base year. In the FY 2002 SNF PPS final rule (66 FR 39582), we rebased
and revised the market basket to a base year of FY 1997. In the FY 2008
SNF PPS final rule (72 FR 43425), we rebased and revised the market
basket to a base year of FY 2004. In the FY 2014 SNF PPS final rule (78
FR 47939), we last revised and rebased the SNF market basket, which
included updating the base year from FY 2004 to FY 2010. For FY 2018,
we proposed (82 FR 21029) to rebase the market basket to reflect 2014
Medicare-allowable total cost data (routine, ancillary, and capital-
related) from freestanding SNFs and to revise applicable cost
categories and price proxies used to determine the market basket. We
proposed to maintain our policy of using data from freestanding SNFs,
which represent 93 percent of the total SNFs shown in Table 26. We
believe using freestanding MCR data, as opposed to the hospital-based
SNF MCR data, for the proposed cost weight calculation is most
appropriate because of the complexity of hospital-based data and the
representativeness of the freestanding data. Hospital-based SNF
expenses, are embedded in the hospital cost report. Any attempt to
incorporate data from hospital-based facilities requires more complex
calculations and assumptions regarding the ancillary costs related to
the hospital-based SNF unit. We believe the use of freestanding SNF
cost report
[[Page 36549]]
data is technically appropriate for reflecting the cost structures of
SNFs serving Medicare beneficiaries.
We proposed to use 2014 as the base year as we believe that the
2014 Medicare cost reports represented the most recent, complete set of
Medicare cost report (MCR) data available to develop cost weights for
SNFs at the time of rulemaking. The 2014 Medicare cost reports are for
cost reporting periods beginning on and after October 1, 2013 and
before October 1, 2014. While these dates appear to reflect fiscal year
data, we note that a Medicare cost report that begins in this timeframe
is generally classified as a ``2014 cost report.'' For example, we
found that of the available 2014 Medicare cost reports for SNFs,
approximately 7 percent had an October 1, 2013 begin date,
approximately 70 percent of the reports had a January 1, 2014 begin
date, and approximately 12 percent had a July 1, 2014 begin date. For
this reason, and for the reasons explained below, we proposed to define
the base year of the market basket as ``2014-based'' instead of ``FY
2014-based''.
Specifically, we proposed to develop cost category weights for the
2014-based SNF market basket in two stages. First, we proposed to
derive eight major expenditures or cost weights from the 2014 MCR data
(CMS Form 2540-10) for freestanding SNFs: Wages and Salaries; Employee
Benefits; Contract Labor; Pharmaceuticals; Professional Liability
Insurance; Home Office Contract Labor; Capital-related; and a residual
``All Other''. With the exception of the Home Office Contract Labor
cost weight, these are the same cost categories calculated using the
2010 MCR data for the FY 2010-based SNF market basket. We provided a
detailed discussion of our proposal to use the 2014 MCR data to
determine the Home Office Contract Labor cost weight in section
IV.A.1.a of the proposed rule and in section III.D.1.a of this final
rule. The residual ``All Other'' category would reflect all remaining
costs that are not captured in the other seven cost categories. Second,
we proposed to divide the residual ``All Other'' cost category into
subcategories using U.S. Department of Commerce Bureau of Economic
Analysis' (BEA) 2007 Benchmark Input-Output (I-O) ``use table before
redefinitions, purchaser's value'' for the Nursing and Community Care
Facilities industry (NAICS 623A00) aged forward to 2014 using price
changes. Furthermore, we proposed to continue to use the same overall
methodology as was used for the FY 2010-based SNF market basket to
develop the capital related cost weights of the 2014-based SNF market
basket. We note that we are no longer referring to the market basket as
a ``FY 2014-based'' market basket and instead refer to the market
basket as simply ``2014-based.'' We proposed this change in naming
convention for the market basket because the base year cost weight data
for the proposed market basket do not reflect strictly fiscal year
data. For example, the 2014-based SNF market basket uses Medicare cost
report data and other government data that reflects fiscal year 2014,
calendar year 2014, and state fiscal year 2014 expenses to determine
the base year cost weights. Given that it is based on a mix of
classifications of 2014 data, we proposed to refer to the market basket
simply as ``2014-based'' as opposed to a ``FY 2014-based'' or ``CY
2014-based''.
We refer readers to the FY 2018 SNF PPS proposed rule (82 FR 21029
through 21041) for a complete discussion of our proposals and
associated rationale related to revising and rebasing the SNF market
basket. We received a number of comments on the proposed revising and
rebasing of the SNF market basket. A discussion of these comments, with
our responses, appears throughout this section.
Comment: Several commenters supported the rebasing and revising of
the SNF market basket from base year 2010 to base year 2014, stating
that the weights for calculating the market basket update should
reflect the most up-to-date cost data available. Other commenters
requested that we meet with certain health care association
representatives before we move forward with the proposed rebasing of
the SNF market basket for FY 2018.
Response: We appreciate the commenters' support to rebase the
market basket to 2014. We believe that it is reasonable and appropriate
to rebase the market basket to 2014 as we believe this reflects the
most complete and up-to-date cost data available. We note that we are
available to meet with interested parties upon request to discuss their
research and ideas for future rebasings.
Comment: Several commenters requested that we align the rebasing
schedule of the SNF market basket with the acute inpatient hospital
market basket rebasing schedule. They claimed that updating the SNF
market basket schedule will improve the accuracy of the SNF market
basket updates, particularly since the SNF wage index is directly
linked to the hospital wage index. One commenter requested we provide
information on ways to work collaboratively with the industry to
develop an alternative approach to the SNF market basket methodology
and to more appropriately update weights using more current data on a
rolling basis. The commenter requested an explanation of why a chained
index, which updates cost weights on a continual basis is not employed
instead of a fixed-weight index approach.
Response: We appreciate the commenters' suggestion to align the
rebasing schedule of the SNF market basket with the acute inpatient
hospital market basket rebasing schedule. As discussed in the FY 2006
IPPS final rule (70 FR 47407), in accordance with section 404 of Public
Law 108-173, we established a rebasing frequency of every four years
for the IPPS hospital market basket. We last rebased the SNF market
basket four years ago, reflecting a FY 2010 base year, in the FY 2014
SNF PPS final rule (78 FR 47939). We will continue to monitor the major
cost share weights derived from the Medicare cost reports to evaluate
whether a rebasing of the SNF market basket is necessary and may
consider rebasing the SNF market basket consistent with the IPPS
rebasing schedule.
In regards to the use of a fixed-weight index approach, we have
found that healthcare provider cost share weights do not change
substantially on an annual basis and, therefore, the use of a Laspeyres
index formula, with base year weights updated on a regular basis (such
as every few years), is technically appropriate for the CMS market
baskets. In a 2008 paper,\1\ the CMS Office of the Actuary (OACT)
investigated the impact of using an alternative price index formula on
the inpatient hospital market basket and concluded that market basket
rebasings more frequent than every 5 years would not result in any
significant changes in update factors. This study also found that the
use of an alternative index formula, such as a Paasche, Fisher, or
Tornqvist, would not lead to an appreciable change to the results.
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\1\ https://www.cms.gov/Research-Statistics-Data-and-Systems/Statistics-Trends-and-Reports/MedicareProgramRatesStats/Downloads/alternativeindexweights.pdf.
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a. Development of Cost Categories and Weights
i. Use of Medicare Cost Report Data To Develop Major Cost Weights
To create a market basket that is representative of freestanding
SNF providers serving Medicare patients and to help ensure accurate
major cost weights (which is the percent of total Medicare allowable
costs, as defined below), we proposed to apply edits to remove
reporting errors and outliers. Specifically, the SNF Medicare cost
[[Page 36550]]
reports used to calculate the market basket cost weights excluded any
providers that reported costs less than or equal to zero for the
following categories: Total facility costs; total operating costs;
Medicare general inpatient routine service costs; and Medicare PPS
payments. The final sample used included roughly 96 percent of those
providers who submitted a Medicare cost report for 2014.
Additionally, for each of the major cost weights, except the Home
Office Contract Labor cost weight (Wages and Salaries, Employee
Benefits, Contract Labor, Pharmaceuticals, Professional Liability
Insurance, and Capital-related Expenses) the data were trimmed to
remove outliers (a standard statistical process) by: (1) Requiring that
major expenses (such as Wages and Salaries costs) and total Medicare-
allowable costs are greater than zero; and (2) excluding the top and
bottom five percent of the major cost weight (for example, Wages and
Salaries costs as a percent of total Medicare-allowable costs).
We note that in the FY 2018 SNF PPS proposed rule, we mistakenly
referenced that we used the same trimming methodology for the Home
Office Contract Labor cost weight that we used for the other major cost
weights (a top and bottom five percent trimming methodology).
For the Home Office Contract Labor cost weight, we applied a one
percent top-only trimming methodology. This allowed all providers'
Medicare-allowable costs to be included, even if their home office
contract labor costs were zero. We believe, as the Medicare cost report
data (Worksheet S2 line 45) indicate, that not all SNF providers have a
Home Office. Providers without a Home Office can incur these expenses
directly by having their own staff, for which the costs would be
included in the Wages and Salaries and Benefits cost weights.
Alternatively, providers without a Home Office could also purchase
related services from external contractors for which these expenses
would be captured in the residual ``All-Other'' cost weight. We believe
this one percent top-only trimming methodology is appropriate as it
addresses outliers while allowing providers with zero Home Office
Contract Labor costs to be included in the Home Office Contract Labor
cost weight calculation. If we applied both top and bottom five percent
trimming methodology we would exclude providers who have zero Home
Office Contract Labor costs.
The major cost weight trimming process is done for each cost weight
individually and, therefore, providers excluded from one cost weight
calculation are not automatically excluded from other cost weight
calculations. These were the same types of edits utilized for the FY
2010-based SNF market basket (with the exception of the Home Office
Contract Labor cost weight which was not broken out using Medicare Cost
Reports for the FY 2010 based SNF market basket), as well as other PPS
market baskets (including but not limited to IPPS market basket and HHA
market basket). We believe this trimming process improves the accuracy
of the data used to compute the major cost weights by removing possible
data misreporting.
Finally, the final weights of the proposed 2014-based SNF market
basket were based on weighted means. For example, the final Wages and
Salaries cost weight after trimming is equal to the sum of total
Medicare-allowable wages and salaries divided by the sum of total
Medicare-allowable costs. This methodology is consistent with the
methodology used to calculate the FY 2010-based SNF market basket cost
weights and other PPS market basket cost weights.
As stated above, the major cost weights of the 2014-based SNF
market basket were derived from 2014 MCR data that is reported on CMS
Form 2540-10, effective for freestanding SNFs with a cost reporting
period beginning on or after December 1, 2010. The major cost weights
for the FY 2010-based SNF market basket were derived from the 2010 MCR
data that is reported on CMS Form 2540-96. CMS Form 2540-96 was
effective for freestanding SNFs with cost reporting periods beginning
on and after October 1, 1997. The OMB control number for both Form
2549-10 and Form 2540-96 is 0938-0463.
For all of the cost weights, we proposed to use Medicare allowable-
total costs as the denominator (that is, Wages and Salaries cost weight
= Wages and Salaries costs divided by Medicare-allowable total costs).
Medicare-allowable total costs were proposed to be equal to total costs
(after overhead allocation) from Worksheet B part 1, column 18, for
lines 30, 40 through 49, 51, 52, and 71 plus Medicaid drug costs as
defined below. We also proposed to include estimated Medicaid drug
costs in the pharmacy cost weight, as well as the denominator for total
Medicare-allowable costs. This is the same methodology used for the FY
2010-based SNF market basket and the FY 2004-based SNF market basket.
The inclusion of Medicaid drug costs was finalized in the FY 2008 SNF
PPS final rule (72 FR 43425 through 43430), and for the same reasons
set forth in that final rule, we proposed to continue to use this
methodology in the 2014-based SNF market basket.
We proposed that for the 2014-based SNF market basket we obtain
costs for one new major cost category from the Medicare cost reports
that was not used in the FY 2010-based SNF market basket--Home Office
Contract Labor Costs.
We described the detailed methodology for obtaining costs for each
of the eight major cost categories in section V.A.1.a. of the FY 2018
SNF PPS proposed rule (82 FR 21030) and below in section III.D.1.a. of
this rule. The methodology used is similar to the methodology used in
the FY 2010-based SNF market basket, as described in the FY 2014 SNF
PPS final rule (78 FR 47940 through 47942).
(1) Wages and Salaries: To derive Wages and Salaries costs for the
Medicare-allowable cost centers, we proposed first to calculate total
unadjusted wages and salaries costs as reported on Worksheet S-3, part
II, column 3, line 1. We then proposed to remove the wages and salaries
attributable to non-Medicare-allowable cost centers (that is, excluded
areas), as well as a portion of overhead wages and salaries
attributable to these excluded areas. Excluded area wages and salaries
were equal to wages and salaries as reported on Worksheet S-3, part II,
column 3, lines 3, 4, and 7 through 11 plus nursing facility and non-
reimbursable salaries from Worksheet A, column 1, lines 31, 32, 50, and
60 through 63.
Overhead wages and salaries are attributable to the entire SNF
facility; therefore, we proposed to include only the proportion
attributable to the Medicare-allowable cost centers. We proposed to
estimate the proportion of overhead wages and salaries that is
attributable to the non-Medicare-allowable costs centers (that is,
excluded areas) by multiplying the ratio of excluded area wages and
salaries (as defined above) to total wages and salaries as reported on
Worksheet S-3, part II, column 3, line 1 by total overhead wages and
salaries as reported on Worksheet S3, Part III, column 3, line 14. We
used a similar methodology to derive wages and salaries costs in the FY
2010-based SNF market basket.
(2) Employee Benefits: We proposed Medicare-allowable employee
benefits to be equal to total benefits as reported on Worksheet S-3,
part II, column 3, lines 17 through 19 minus non-Medicare-allowable
(that is, excluded area) employee benefits and minus a portion of
overhead benefits attributable
[[Page 36551]]
to these excluded areas. Non-Medicare-allowable employee benefits were
derived by multiplying total excluded wages and salaries (as defined
above in the `Wages and Salaries' section) times the ratio of total
benefit costs as reported on Worksheet S-3, part II, column 3, lines 17
through 19 to total wages and salary costs as reported on Worksheet S3,
part II, column 3, line 1. Likewise, the portion of overhead benefits
attributable to the excluded areas was derived by multiplying overhead
wages and salaries attributable to the excluded areas (as defined in
the `Wages and Salaries' section) times the ratio of total benefit
costs to total wages and salary costs (as defined above). We used a
similar methodology in the FY 2010-based SNF market basket.
(3) Contract Labor: We proposed to derive Medicare-allowable
contract labor costs from Worksheet S-3, part II, column 3, line 17. We
note that in the FY 2018 SNF PPS proposed rule (82 FR 21030), we
mistakenly referenced line 17. These costs are actually reported in
Worksheet S-3, part II, column 3, line 14 as per the CMS Form 2540-10
instructions (which reflects costs for contracted direct patient care
services, that is, nursing, therapeutic, rehabilitative, or diagnostic
services furnished under contract rather than by employees and
management contract services). We note that the processing of the data
was correct. We used Worksheet S-3, part II, column 3, line 14 in our
analysis. Our written description in the proposed rule of the line we
used was, however, incorrect.
(4) Pharmaceuticals: We proposed to calculate pharmaceuticals costs
using the non-salary costs from the Pharmacy cost center (Worksheet B,
part I, column 0, line 11 less Worksheet A, column 1, line 11) and the
Drugs Charged to Patients' cost center (Worksheet B, part I, column 0,
line 49 less Worksheet A, column 1, line 49). Since these drug costs
were attributable to the entire SNF and not limited to Medicare-
allowable services, we proposed to adjust the drug costs by the ratio
of Medicare-allowable pharmacy total costs (Worksheet B, part I, column
11, for lines 30, 40 through 49, 51, 52, and 71) to total pharmacy
costs from Worksheet B, part I, column 11, line 11. Worksheet B, part I
allocates the general service cost centers, which are often referred to
as ``overhead costs'' (in which pharmacy costs are included) to the
Medicare-allowable and non-Medicare-allowable cost centers. This
adjustment was made for those providers who reported Pharmacy cost
center expenses. Otherwise, we assumed the non-salary Drugs Charged to
Patients costs were Medicare-allowable.
Second, similar to the FY 2010-based SNF market basket, we proposed
to continue to adjust the drug expenses reported on the MCR to include
an estimate of total Medicaid drug costs, which are not represented in
the Medicare-allowable drug cost weight. Similar to the FY 2010-based
SNF market basket, we estimated Medicaid drug costs based on data
representing dual-eligible Medicaid beneficiaries. Medicaid drug costs
were estimated by multiplying Medicaid dual-eligible drug costs per day
times the number of Medicaid days as reported in the Medicare-allowable
skilled nursing cost center (Worksheet S3, part I, column 5, line 1) in
the SNF MCR. Medicaid dual-eligible drug costs per day (where the day
represents an unduplicated drug supply day) were estimated using a
sample of 2014 Part D claims for those dual-eligible beneficiaries who
had a Medicare SNF stay during the year. Medicaid dual-eligible
beneficiaries would receive their drugs through the Medicare Part D
benefit, which would work directly with the pharmacy and, therefore,
these costs would not be represented in the Medicare SNF MCRs. A random
twenty percent sample of Medicare Part D claims data yielded a Medicaid
drug cost per day of $19.62. We note that the FY 2010-based SNF market
basket also relied on data from the Part D claims, which yielded a
dual-eligible Medicaid drug cost per day of $17.39 for 2010.
Provided below are summaries of the comments we received related to
the Pharmaceuticals cost category, as well as our responses.
Comment: One commenter was concerned with the lower Pharmaceuticals
cost weight in the 2014-based SNF market basket compared to the 2010-
based SNF market basket. They were unable to explain the decrease given
their experience with annual pharmaceutical price increases and the
introduction of new pharmaceuticals.
Several commenters also had specific concerns regarding the
methodology utilized to determine the Pharmaceuticals cost weight. The
commenters stated that the vast majority of SNFs did not report costs
on the cost report line for the ``Pharmacy'' department. They stated
that only a small number of SNFs have in-house Pharmacies and that
those SNFs were used as a proxy for the pharmaceutical costs for all
SNFs; one commenter requested an alternative method.
Several commenters were also concerned by the addition of estimated
Part D medication costs to the ``Drugs Charged to Patients'' data
reported on Row 49 of the cost report. The commenter questioned why
this type of ``gross up'' was not, as far as they could tell, applied
to any of the other ancillary cost centers.
Response: The methodology used to determine the cost weights in the
2014-based SNF market basket and 2010-based SNF market basket is the
same. The change in the Pharmaceuticals cost weight in the 2014-based
SNF market basket (7.3 percent) from the FY 2010-based SNF market
basket (7.9 percent) is a function of the growth rate of pharmaceutical
expenses relative to other components of the market basket over this
time period. Our own internal analysis shows increasing drug costs from
FY 2010 to FY 2014; however, during this time period, pharmaceutical
costs increased at a slower rate than other components of the market
basket--such as capital and contract labor expenses. This relative
comparison resulted in a decrease in the Pharmaceuticals cost weight of
0.6 percentage point between the FY 2010-based SNF market basket and
2014-based SNF market basket (7.9 percent to 7.3 percent) while the
capital cost weight increased 0.5 percentage point (7.4 percent to 7.9
percent) and contract labor grew 1.3 percentage points (5.5 percent to
6.8 percent). It is also important to consider that the increase in
pharmaceutical costs over this period reflects changes in both the
price of prescription drugs, proxied by the Producer Price Index for
Prescription Drugs, as well the quantity and intensity of
prescriptions. Our analysis of the data shows that the decrease in the
Pharmaceuticals cost weight was consistent, in aggregate, across urban
and rural status SNFs as well as across for-profit, government, and
nonprofit ownership type SNFs.
As stated above and in the FY 2018 SNF PPS proposed rule (82 FR
21030 through 21031), we proposed to calculate pharmaceutical costs
using the non-salary costs reported in the Pharmacy cost center
(Worksheet B, part I, column 0, line 11 less Worksheet A, column 1,
line 11) and the Drugs Charged to Patients' cost center (Worksheet B,
part I, column 0, line 49 less Worksheet A, column 1, line 49),
hereafter referred to as total MCR drug costs. Since these drug costs
were attributable to the entire SNF and not limited to Medicare-
allowable services, we proposed to adjust the drug costs by the ratio
of Medicare-allowable pharmacy total costs (Worksheet B, part I, column
11, for lines 30, 40 through 49, 51, 52, and 71) to total pharmacy
[[Page 36552]]
costs (Worksheet B, part I, column 11, line 11).
We understand the commenter's concern regarding the adjustment to
the total MCR drug costs using the Pharmacy cost center as only 20
percent of providers reported Pharmacy cost center expenses. We are
clarifying that the adjustment was only applied to those 20 percent of
providers who reported Pharmacy costs. We assumed that all of the drug
costs were Medicare-allowable for the remaining 80 percent of
providers. We added a clarifying sentence in the Pharmacy cost weight
calculation of this final rule. Applying this adjustment had only a
marginal impact on the drug cost weight (lowering it by only 0.1
percentage point). As a sensitivity, we also derived an alternative by
using the ratio of Skilled Nursing Facility days (as reported on
Worksheet S3, part 1, column 7 line 1) to Total Facility days. This
would result in a Pharmaceuticals cost weight of 7.1 percent compared
to the 2014-based cost weight of 7.3 percent.
As stated in the proposed rule (82 FR 21031), the 2014-based SNF
market basket included an adjustment to the drug expenses reported on
the MCR to include an estimate of total Medicaid drug costs, which are
not represented in the Medicare-allowable drug cost weight. As stated
above, the 2014-based SNF market basket reflects total Medicare
allowable costs (that is, total costs for all payers for those services
reimbursable under the SNF PPS). For the FY 2006-based SNF market
basket (72 FR 43426), commenters noted that the total pharmaceutical
costs reported on the MCR did not include pharmaceutical costs for
dual-eligible Medicaid patients as these were directly reimbursed by
Medicaid. Since all of the other cost category weights reflect Medicaid
patients (including the compensation costs for dispersing these drugs),
we made an adjustment to include these drug expenses. The
pharmaceutical cost weight using only 2014 MCR data without any
adjustments is 3.0 percent, compared to the proposed Pharmaceuticals
cost weight (including the adjustment for Medicaid dual-eligible drug
costs) of 7.3 percent.
Comment: One commenter requested further explanation on how Part D
drug costs were incorporated into the Pharmaceuticals cost weight. They
questioned how the 20 percent sample was selected and the rationale for
selecting this population to estimate non-SNF Medicaid drug costs. They
questioned if there were analytics to support these decisions and also
requested clarification for why the drug costs for patients with a SNF
stay would be comparable to patients in a nursing facility that had not
had a hospitalization during the year. They also questioned whether the
Part D claims were matched to the SNF stay and if Part D claims for the
SNF stay were excluded. They further questioned which cost variables in
Part D claims were used, how the costs per day were calculated and the
rationale for producing this estimate.
Response: As stated previously in this section, the 2014-based SNF
market basket reflects total Medicare allowable costs (that is, total
costs for all payers for those services reimbursable under the SNF
PPS). For the FY 2006-based SNF market basket (72 FR 43426), commenters
noted that the total pharmaceutical costs reported on the MCR did not
include pharmaceutical costs for dual-eligible Medicaid patients as
these were directly reimbursed by Medicaid. Since all of the other cost
category weights reflect Medicaid patients (including the compensation
costs for dispensing these drugs), we made an adjustment to include
these Medicaid drug expenses so the market basket cost weights would be
calculated consistently.
For the 2014-based SNF market basket, as stated in the FY 2018 SNF
PPS proposed rule (82 FR 21031), we estimated Medicaid drug costs by
multiplying Medicaid dual-eligible drug costs per day times the number
of Medicaid days as reported in the Medicare-allowable skilled nursing
facility cost center (Worksheet S3, part I, column 5, line 1) on the
SNF MCR. The Medicaid dual-eligible drug costs per day (where the day
represents an unduplicated drug supply day) were estimated using a
random 20 percent sample of 2014 Part D claims for those dual-eligible
beneficiaries who had a Medicare SNF stay during the year. We believe
this sample is a reasonable proxy for total drug costs per day for
Medicaid patients residing in a skilled nursing unit under a Medicaid
stay. Our analysis of the Part D claims data shows that dual-eligible
beneficiaries have higher drug costs per day than ``non-duals'' and
that dual-eligible beneficiaries who have had a SNF Part A stay during
the year have higher drug costs per day ($19.62) compared to those
dual-eligible beneficiaries with no SNF Part A stay during the year
($14.82).
The total drug costs per unduplicated day represented all drug
costs incurred during the 2014 calendar year for those dual-eligible
beneficiaries with a SNF Medicare stay during that 2014 calendar year.
Therefore, they include drug costs incurred during the Medicaid SNF
stay occurring in the 2014 calendar year. The total drug costs from the
Part D claims includes the drug ingredient cost, the dispensing fee,
vaccine administration fee and sales tax. We used a 20 percent sample
of Part D claims (approximately 287 million claims) where claims were
randomly selected based on the beneficiary ID number.
Comment: One commenter stated that they see an increase in the
number of Veterans being served by SNFs. They further stated that
Medicare patients, if they were admitted to a non-VA nursing home,
would use their Medicare benefit. However, in a VA home, the commenter
claimed that the patient would use their VA benefit which covers the
drug costs--and not the nursing home. The commenter concluded that
there would be many drug costs that are not represented on the cost
report that traditionally would have been. The commenter requested
clarification on how we will address this challenge.
Response: We appreciate the commenter raising this concern. We
believe the current methodology and resulting Pharmaceutical cost
weight is reasonable, in part because VA costs would not have a
significant impact on the market basket cost weights (according to the
CMS National Health Expenditure Accounts, VA spending accounted for
roughly 3 percent of total Nursing Care Facilities and Continuing Care
Retirement Communities expenditures in 2014). However, in the future we
plan to monitor this issue in more depth to ensure the market basket is
adequately capturing the appropriate costs.
(5) Professional Liability Insurance: We proposed to calculate the
professional liability insurance costs from Worksheet S-2 of the MCRs
as the sum of premiums; paid losses; and self-insurance (Worksheet S-2,
column 1 through 3, line 41).
Provided below are summaries of the comments we received related to
the Professional Liability Insurance cost category, as well as our
responses.
Comment: One commenter stated that we should calculate a weight for
professional liability insurance considering other data sources. As an
example, the commenter provided a link to AHCA's Aon Professional
Liability Study stating that the 2016 report documents a significant
and continual increase in professional liability costs.
Response: We thank the commenter for providing the link to this
study. As stated in the FY 2018 SNF proposed rule (82 FR 21031), the
professional liability insurance cost weight is derived using data from
Worksheet S-2
[[Page 36553]]
of the Medicare Cost Reports. These data represent the sum of premiums,
paid losses, and self-insurance (Worksheet S-2, column 1 through 3,
line 41). We continue to believe that using these data submitted by
SNFs on the Medicare cost report represent the best data source to
derive the professional liability insurance cost weight. We will
continue to evaluate other data sources, including the study provided
by the commenter, to obtain additional information regarding
professional liability insurance costs for SNFs.
(6) Capital-Related: We proposed to derive the Medicare-allowable
capital-related costs from Worksheet B, part II, column 18 for lines
30, 40 through 49, 51, 52, and 71.
(7) Home Office Contract Labor Costs: We proposed to calculate
Medicare-allowable home office contract labor costs by multiplying
total home office contract labor costs (as reported on Worksheet S3,
part 2, column 3, line 16) times the ratio of Medicare-allowable
operating costs (Medicare-allowable total costs less Medicare-allowable
capital costs) to total operating costs (equal to Worksheet B, part I,
column 18, line 100 less Worksheet B, part I, column 0, line 1 and 2).
(8) All Other (residual): We proposed to calculate the ``All
Other'' cost weight as a residual, calculated by subtracting the major
cost weights (Wages and Salaries, Employee Benefits, Contract Labor,
Pharmaceuticals, Professional Liability Insurance, Home Office Contract
Labor, and Capital-Related) from 100.
Provided below are summaries of the general comments we received
related to the major cost category weights, as well as our responses.
Comment: One commenter noted that the decrease in cost weights
related to wages, benefits, contract labor, and pharmaceuticals from FY
2010 to the proposed base year of 2014 did not reflect, in any way,
their experience. For geographic locations that have a large proportion
of staff whose wages and benefits are driven by collective bargaining
agreements, such as the NY metropolitan area where providers have seen
regular cost increases over the 4 years, the commenter claimed that the
decrease in cost weight does not make sense.
Response: The purpose of the SNF market basket is to measure the
price inflation facing average SNFs serving Medicare beneficiaries at
the national level. A change in the Wages and Salaries cost weight is a
function of the growth rate of Wages and Salaries expenses relative to
other components of the market basket, based on data directly supplied
to CMS by SNFs. We would further note that differences in wage and
wage-related costs among geographic regions are accounted for by the
application of the wage index.
Comment: One commenter requested we show the numerators and
denominators for the calculation of each weight so that it is possible
to comment on any bias that may be introduced by exclusions.
Response: We disagree with the commenter's suggestion that we
should provide the numerators and denominators for the calculation as
we do not believe this would allow commenters to determine whether any
bias may be introduced by exclusions. Rather, we believe that the
detailed description of the data (specifically the Medicare cost report
worksheet fields) and trimming methodologies allow the commenter to
evaluate the bias. Specifically, commenters are able to evaluate the
accuracy and reasonableness of the Medicare cost report worksheet
fields. They are also able to replicate the results and then compare
the trimmed cost share weight samples to the national average
distribution of total costs. We reiterate that in deriving the proposed
SNF cost weights, we used a similar trimming methodology for each of
the major cost weights, with the exception of the Home Office Contract
Labor cost weight as discussed earlier in this final rule (as we
explained, for the Home Office Contract Labor cost weight, we used an
alternative methodology). Our review of the trimmed samples for each of
the major cost weights (Wages and Salaries, Employee Benefits, Contract
Labor, Professional Liability, Home Office Contract Labor,
Pharmaceuticals and Capital) resulted in a total cost distribution that
was similar to the cost distribution of the untrimmed sample when
compared by urban/rural status, ownership-type (for-profit, nonprofit,
or government) and then by census region. We would further note that,
as stated above, the trimming of the individual cost weights was done
independently of each other, in an effort to produce the most
representative data for each of the major cost weights. Finally, we
would note that the 5 percent trim is the same methodology used to
derive cost share weights (with the exception of the Home Office
Contract Labor cost weight) for other CMS market baskets.
Comment: One commenter questioned whether it is time to possibly
make some revisions to Worksheet A of the Medicare SNF cost report.
They provided suggested additional cost categories that they believe
would help construct a more accurate market basket and to account for
regional fluctuations (for example, utility costs, property insurance
rates, etc).
Response: The commenter's specific detailed recommendations for
changes to the Medicare cost report are outside the scope of the FY
2018 SNF PPS proposed rule. However, we appreciate and will consider
the commenter's suggestion to capture additional information on the SNF
Medicare cost report for possible future use in the SNF market basket.
Comment: One commenter had several questions on the methodology
used to develop the major cost weights of the 2014-based SNF market
basket. The commenter specifically questioned our trimming methods and
whether we excluded partial-year cost reports (that is, providers with
cost report data of less than 12 months). They also stated there was no
information provided regarding the treatment of missing data in the
cost report fields and that zero and missing data do not have the same
meaning. They further stated that missing data was high for certain
weights with over 40 percent of cost reports having missing values for
professional liability insurance, over 70 percent of cost reports
having missing values in home office contract labor costs, and over 80
percent having missing values in the Pharmacy cost center used to
determine the Pharmaceuticals cost weight.
Response: We appreciate the commenter's review of the methodology
used to develop the 2014-based SNF market basket. We made no edits to
remove providers with partial cost reporting periods and, therefore,
they were included in the initial set of cost reports. In response to
this comment, we examined the impact of excluding those providers that
reported costs for a period of fewer than 270 days (representing about
\3/4\ of the cost reporting year) and, similar to the commenter's
finding, found that its impact on the major cost weights was minimal
with less than 0.1 percentage point in absolute terms. Given its small
impact, we do not believe it is necessary to revise the 2014-based SNF
market basket to reflect the exclusion of reports with a partial cost
reporting period; however, we will consider the merits of this edit for
future rebasings.
In regards to the commenter's request for information on the
treatment of missing data in the cost report fields, CMS receives
Medicare cost report data via the Electronic Cost Reporting file from
the Medicare Administrative Contractor. These files do not have missing
values for numeric fields; therefore, fields are zero or greater. The
[[Page 36554]]
public-use files provided on the CMS Web site, however, convert the
zero values to missing or null.
We recognize the commenter's concern of providers' reporting zero
Professional Liability and Pharmaceutical costs. As stated, in the FY
2018 SNF PPS proposed rule (82 FR 21030), for each of the major cost
weights, except for Home Office Contract Labor as discussed above,
(that is (Wages and Salaries, Employee Benefits, Contract Labor,
Pharmaceuticals, Professional Liability Insurance, Home Office Contract
Labor, and Capital-related Expenses) the data were trimmed to remove
outliers (a standard statistical process) by first requiring that major
expenses and total Medicare-allowable costs are greater than zero. For
these major cost weights (Wages and Salaries, Employee Benefits,
Contract Labor, Professional Liability, Capital and Pharmaceuticals),
we believe that providers should incur these expenses to provide SNF
services to beneficiaries. Therefore, cost reports with zero costs for
major expenses (except Home Office Contract Labor costs) were excluded
from the market basket cost weight calculation before trimming the top
and bottom five percent. We note, as stated in the proposed rule, the
trimming method is done for each cost weight individually and,
therefore, providers excluded from one cost weight calculation are not
automatically excluded from other cost weight calculations. This
methodology allows us to use the largest possible sample of providers
that report expenses for any given category.
However, as discussed earlier, we do not believe, as the Medicare
cost report data (Worksheet S2, line 45) indicates, that all SNF
providers will have a Home Office and then will also ``purchase''
services from their home office. Rather, providers can incur these
expenses directly by having their own staff, for which the costs would
be included in the Wages and Salaries and Benefits cost weights, or be
purchased from contractors that are not directly affiliated with SNF,
for which these expenses would be captured in the residual ``All-
Other'' cost weight. Therefore, as discussed above, for the Home Office
Contract Labor cost weight, we instead applied a one percent top
trimming methodology but allowed all providers' Medicare-allowable
costs to be included, even if their home office contract labor costs
were zero.
Also, we included all data for subcategories of the major cost
weights, except Home Office Contract Labor costs, (such as excluded
area salaries component of the Wages and Salaries costs) even if they
are zero as we believe it is reasonable for some of these specific
costs to not be applicable to some providers. We must rely on the data
that are submitted by providers and always encourage providers to fill
out the cost report forms using the most accurate and complete data
available to them.
Comment: One commenter made note of their inability to replicate
all of the proposed cost weights using the methodology provided in the
proposed rule. Specifically, the commenter was unable to replicate the
Contract Labor cost weight and Home Office Contract Labor cost weight.
Response: We appreciate the commenter's review of our methodology
and their replication efforts. We note that in the FY 2018 SNF PPS
proposed rule, we made an error in the description of which Medicare
cost report line is used to determine the Medicare allowable contract
labor costs. The proposed rule stated that Medicare allowable contract
labor costs would be equal to Worksheet S-3, part II, column 3, line
17, which reflects costs for contracted direct patient care services,
that is, nursing, therapeutic, rehabilitative, or diagnostic services
furnished under contract, rather than by employees and management
contract services. These Medicare allowable contract labor costs are
actually reported in Worksheet S-3, part II, column 3, line 14 as per
the CMS Form 2540-10 instructions. We note that the processing of the
data was correct, and we appropriately used Worksheet S-3, part II,
column 3, line 14, but our written description of the line used was
not. We apologize for any confusion and have corrected this
typographical error in this final rule.
As stated above, in the FY 2018 SNF PPS proposed rule, we
mistakenly indicated that we used the same trimming methodology for the
Home Office Contract Labor cost weight that we used for the other major
cost weights (a top and bottom five percent trimming method). For the
Home Office Contract Labor cost weight we applied a one percent top-
only trimming methodology. This trimming methodology allowed all
providers' Medicare-allowable costs to be included, even if their home
office contract labor costs were zero. We believe this one percent
trimming methodology is appropriate for the Home Office Contract Labor
cost weight as it addresses outliers while allowing providers with zero
Home Office Contract Labor costs to be included in the Home Office
Contract Labor cost weight calculation. Applying a five percent top and
bottom trimming methodology would exclude providers who have zero Home
Office Contract Labor costs.
After consideration of the public comments we received, for the
reasons discussed above and in the FY 2018 SNF PPS proposed rule, we
are finalizing the major cost weights as proposed, without
modification. Table 9 below shows the major cost categories and their
respective cost weights as derived from the Medicare cost reports for
this final rule.
Table 9--Major Cost Categories as Derived From the Medicare Cost Reports
------------------------------------------------------------------------
Final 2014-
Major cost categories based FY 2010-based
------------------------------------------------------------------------
Wages and Salaries...................... 44.3 46.1
Employee Benefits....................... 9.3 10.5
Contract Labor.......................... 6.8 5.5
Pharmaceuticals......................... 7.3 7.9
Professional Liability Insurance........ 1.1 1.1
Home Office Contract Labor *............ 0.7 n/a
Capital-related......................... 7.9 7.4
All other (residual).................... 22.6 21.5
------------------------------------------------------------------------
* Home office contract labor costs were included in the residual ``All
Other'' cost weight of the FY 2010-based SNF market basket.
[[Page 36555]]
The Wages and Salaries and Employee Benefits cost weights as
calculated directly from the Medicare cost reports decreased by 1.8 and
1.2 percentage points, respectively, while the Contract Labor cost
weight increased 1.3 percentage points between the FY 2010-based SNF
market basket and 2014-based SNF market basket. The decrease in the
Wages and Salaries occurred among most cost centers and in aggregate
for the General Service (overhead) and Inpatient Routine Service cost
centers, which together account for about 80 percent of total facility
costs.
As we did for the FY 2010-based SNF market basket (78 FR 26452), we
proposed to allocate contract labor costs to the Wages and Salaries and
Employee Benefits cost weights based on their relative proportions
under the assumption that contract labor costs are comprised of both
wages and salaries and employee benefits. The contract labor allocation
proportion for wages and salaries is equal to the Wages and Salaries
cost weight as a percent of the sum of the Wages and Salaries cost
weight and the Employee Benefits cost weight. Using the 2014 Medicare
cost report data, this percentage is 83 percent; therefore, we proposed
to allocate approximately 83 percent of the Contract Labor cost weight
to the Wages and Salaries cost weight and 17 percent to the Employee
Benefits cost weight. For the FY 2010-based SNF market basket, the
wages and salaries to employee benefit ratio was 81/19 percent.
We did not receive public comments on our proposed allocation of
contract labor costs to Wages and Salaries and Employee Benefits. For
the reasons discussed above and in the FY 2018 SNF PPS proposed rule,
we are finalizing the allocation methodology and percentages as
proposed, without modification. Table 10 below shows the Wages and
Salaries and Employee Benefits cost weights after contract labor
allocation for the FY 2010-based SNF market basket and the 2014-based
SNF market basket.
Table 10--Wages and Salaries and Employee Benefits Cost Weights After
Contract Labor Allocation
------------------------------------------------------------------------
Final 2014-
Major cost categories based market FY 2010-based
basket market basket
------------------------------------------------------------------------
Wages and Salaries...................... 50.0 50.6
Employee Benefits....................... 10.5 11.5
------------------------------------------------------------------------
ii. Derivation of the Detailed Operating Cost Weights
To further divide the ``All Other'' residual cost weight estimated
from the 2014 Medicare cost report data into more detailed cost
categories, we proposed to use the 2007 Benchmark I-O ``Use Tables/
Before Redefinitions/Purchaser Value'' for Nursing and Community Care
Facilities industry (NAICS 623A00), published by the Census Bureau's
Bureau of Economic Analysis (BEA). These data are publicly available at
the following Web site: https://www.bea.gov/industry/io_annual.htm. The
BEA Benchmark I-O data are generally scheduled for publication every 5
years with the most recent data available for 2007. The 2007 Benchmark
I-O data are derived from the 2007 Economic Census and are the building
blocks for BEA's economic accounts. Therefore, they represent the most
comprehensive and complete set of data on the economic processes or
mechanisms by which output is produced and distributed.\2\ BEA also
produces Annual I-O estimates. However, while based on a similar
methodology, these estimates reflect less comprehensive and less
detailed data sources and are subject to revision when benchmark data
become available. Instead of using the less detailed Annual I-O data,
we proposed to inflate the 2007 Benchmark I-O data aged forward to 2014
by applying the annual price changes from the respective price proxies
to the appropriate market basket cost categories that are obtained from
the 2007 Benchmark I-O data. We repeated this practice for each year.
We then calculated the cost shares that each cost category represents
of the 2007 data inflated to 2014. These resulting 2014 cost shares
were applied to the ``All Other'' residual cost weight to obtain the
detailed cost weights for the proposed 2014-based SNF market basket.
For example, the cost for Food: Direct Purchases represents 13.7
percent of the sum of the ``All Other'' 2007 Benchmark I-O Expenditures
inflated to 2014. Therefore, the Food: Direct Purchases cost weight
represents 3.1 percent of the proposed 2014-based SNF market basket's
``All Other'' cost category (0.137 x 22.6 percent = 3.1 percent). For
the FY 2010-based SNF market basket (78 FR 26456), we used the same
methodology utilizing the 2002 Benchmark I-O data (aged to FY 2010).
---------------------------------------------------------------------------
\2\ https://www.bea.gov/papers/pdf/IOmanual_092906.pdf.
---------------------------------------------------------------------------
Using this methodology, we proposed to derive 21 detailed SNF
market basket operating cost category weights from the proposed 2014-
based SNF market basket ``All Other'' residual cost weight (22.6
percent). These categories are: (1) Fuel: Oil and Gas; (2) Electricity;
(3) Water and Sewerage; (4) Food: Direct Purchases; (5) Food: Contract
Services; (6) Chemicals; (7) Medical Instruments and Supplies; (8)
Rubber and Plastics; (9) Paper and Printing Products; (10) Apparel;
(11) Machinery and Equipment; (12) Miscellaneous Products; (13)
Professional Fees: Labor-Related; (14) Administrative and Facilities
Support Services; (15) Installation, Maintenance, and Repair Services;
(16) All Other: Labor-Related Services; (17) Professional Fees:
Nonlabor-Related; (18) Financial Services; (19) Telephone Services;
(20) Postage; and (21) All Other: Nonlabor-Related Services.
We note that the machinery and equipment expenses are for equipment
that is paid for in a given year and not depreciated over the asset's
useful life. Depreciation expenses for movable equipment are reflected
in the capital component of the proposed 2014-based SNF market basket
(described in section V.A.1.c. of the proposed rule (82 FR 21032) and
section III.D.1.c. of this final rule).
We would also note that for ease of reference we proposed to rename
the Nonmedical Professional Fees: Labor-Related and Nonmedical
Professional Fees: Nonlabor-related cost categories (as labeled in the
FY 2010-based SNF market basket) to be Professional Fees: Labor-Related
and Professional Fees: Nonlabor-Related in the 2014-based SNF market
basket. These cost categories still represent the same nonmedical
professional fees that were included in the FY 2010-based SNF
[[Page 36556]]
market basket, which we describe in section V.A.4. of the proposed rule
(82 FR 21039) and section III.D.1.d. of this final rule.
For the 2014-based SNF market basket, we proposed to include a
separate cost category for Installation, Maintenance, and Repair
Services to proxy these costs by a price index that better reflects the
price changes of labor associated with maintenance-related services.
Previously these costs were included in the All Other: Labor-Related
Services category of the FY 2010-based SNF market basket.
Provided below are summaries of the comments we received regarding
the derivation of the detailed operating cost weights, as well as our
responses.
Comment: Several commenters believe a SNF cost distribution study
from 2007 is out-of-date and not likely to represent the distribution
of cost in 2014 or going forward. For example, according to the
commenter, operational changes driven by the Requirements of
Participation will have substantial impacts. The commenter stated that
the function of a market basket is to update SNF payment based on real
changes in cost over time. The commenter claimed that the use of a
static 2007 study is inconsistent with the fundamental intent of the
market basket. The commenter requested information regarding how CMS
could gather more current data on SNF costs.
Response: To further divide the ``All Other'' residual cost weight
of 22.6 percent into more detailed cost categories, we proposed to use
the 2007 Benchmark I-O for Nursing and Community Care Facilities
industry (NAICS 623A00). For each of the detailed expenses (such as
food: Direct purchase), we inflate the 2007 expense to 2014 using the
relevant price proxies. The resulting 2014 cost shares based on these
inflated expenses were applied to the ``All Other'' residual cost
weight to obtain the detailed cost weights for the 2014-based SNF
market basket.
Thus, our methodology does in fact reflect changes in expenses from
2007 to 2014, but is based on the assumption that the change in
quantities over this period is equal to the change in prices. We
believe this is a reasonable assumption as it is consistent with
historical data which shows the cost shares changing over time. We
believe this is a better methodology for developing the market basket
rather than keeping the shares fixed between 2007 and 2014 or proxying
the ``All Other'' residual by an aggregate index such as the CPI All-
Items, which would not reflect the unique cost structures of SNFs.
It is not until late 2018, when BEA is expected to release 2012
Benchmark I-O data, that we will be able to determine whether the
growth in quantities for these specific costs grew similarly to prices
over this period, as we currently assume in the market basket. We will
evaluate these data and consider its inclusion for the development of
the SNF market basket in the future.
After consideration of the public comments we received, for the
reasons discussed above and in the FY 2018 SNF PPS proposed rule, we
are finalizing the detailed operating cost weights and methodology for
deriving such weights as proposed, without modification.
iii. Derivation of the Detailed Capital Cost Weights
Similar to the FY 2010-based SNF market basket, we proposed to
further divide the Capital-related cost weight into: Depreciation,
Interest, Lease and Other Capital-related cost weights.
We proposed to calculate the depreciation cost weight (that is,
depreciation costs excluding leasing costs) using depreciation costs
from Worksheet S-2, column 1, lines 20 and 21. Since the depreciation
costs reflect the entire SNF facility (Medicare and non-Medicare-
allowable units), we proposed to use total facility capital costs as
the denominator. This methodology assumes that the depreciation of an
asset is the same regardless of whether the asset was used for Medicare
or non-Medicare patients. This methodology yielded depreciation as a
percent of capital costs of 27.3 percent for 2014. We then applied this
percentage to the proposed 2014-based SNF market basket Medicare-
allowable Capital-related cost weight of 7.9 percent, yielding a
Medicare-allowable depreciation cost weight (excluding leasing
expenses, which is described in more detail below) of 2.2 percent. To
further disaggregate the Medicare-allowable depreciation cost weight
into fixed and moveable depreciation, we proposed to use the 2014 SNF
MCR data for end-of-the-year capital asset balances as reported on
Worksheet A7. The 2014 SNF MCR data showed a fixed/moveable split of
83/17. The FY 2010-based SNF market basket, which utilized the same
data from the FY 2010 MCRs, had a fixed/moveable split of 85/15.
We also proposed to derive the interest expense share of capital-
related expenses from 2014 SNF MCR data, specifically from Worksheet A,
column 2, line 81. Similar to the depreciation cost weight, we proposed
to calculate the interest cost weight using total facility capital
costs. This methodology yielded interest as a percent of capital costs
of 27.4 percent for 2014. We then applied this percentage to the
proposed 2014-based SNF market basket Medicare-allowable Capital-
related cost weight of 7.9 percent, yielding a Medicare-allowable
interest cost weight (excluding leasing expenses) of 2.2 percent. As
done with the last SNF market basket rebasing (78 FR 26454), we
proposed to determine the split of interest expense between for-profit
and not-for-profit facilities based on the distribution of long-term
debt outstanding by type of SNF (for-profit or not-for-profit/
government) from the 2014 SNF MCR data. We estimated the split between
for-profit and not-for-profit interest expense to be 27/73 percent
compared to the FY 2010-based SNF market basket with 41/59 percent.
Because the detailed data were not available in the MCRs, we
proposed to use the most recent 2014 Census Bureau Service Annual
Survey (SAS) data to derive the capital-related expenses attributable
to leasing and other capital-related expenses. The FY 2010-based SNF
market basket used the 2010 SAS data. Based on the 2014 SAS data, we
determined that leasing expenses are 63 percent of total leasing and
capital-related expenses costs. In the FY 2010-based SNF market basket,
leasing costs represent 62 percent of total leasing and capital-related
expenses costs. We then applied this percentage to the proposed 2014-
based SNF market basket residual Medicare-allowable capital costs of
3.6 percent derived from subtracting the Medicare-allowable
depreciation cost weight and Medicare-allowable interest cost weight
from the 2014-based SNF market basket of total Medicare-allowable
capital cost weight (7.9 percent - 2.2 percent - 2.2 percent = 3.6
percent). This produced the proposed 2014-based SNF Medicare-allowable
leasing cost weight of 2.3 percent and all-other capital-related cost
weight of 1.3 percent.
Lease expenses are not broken out as a separate cost category in
the SNF market basket, but are distributed among the cost categories of
depreciation, interest, and other capital-related expenses, reflecting
the assumption that the underlying cost structure and price movement of
leasing expenses is similar to capital costs in general. As was done
with past SNF market baskets and other PPS market baskets, we assumed
10 percent of lease expenses are overhead and proposed to assign them
to the other capital-related expenses cost category. This is based on
the assumption that leasing expenses
[[Page 36557]]
include not only depreciation, interest, and other capital-related
costs but also additional costs paid to the lessor. We distributed the
remaining lease expenses to the three cost categories based on the
proportion of depreciation, interest, and other capital-related
expenses to total capital costs, excluding lease expenses.
We did not receive any public comments on our proposed methodology
for deriving the detailed capital cost weights. Therefore, for the
reasons discussed above and in the FY 2018 SNF PPS proposed rule, we
are finalizing the detailed capital cost weights and methodology as
proposed, without modification.
Table 11 shows the capital-related expense distribution (including
expenses from leases) in the final 2014-based SNF market basket and the
FY 2010-based SNF market basket.
Table 11--Comparison of the Capital-Related Expense Distribution of the
2014-Based SNF Market Basket and the FY 2010-Based SNF Market Basket
------------------------------------------------------------------------
Final 2014- FY 2010-based
Cost category based SNF SNF market
market basket basket
------------------------------------------------------------------------
Capital-related Expenses................ 7.9 7.4
Total Depreciation.................. 2.9 3.2
Total Interest...................... 3.0 2.1
Other Capital-related Expenses...... 2.0 2.1
------------------------------------------------------------------------
Note: The cost weights are calculated using three decimal places. For
presentational purposes, we are displaying one decimal and therefore,
the detail capital cost weights may not add to the total capital-
related expenses cost weight due to rounding.
Table 12 presents the final 2014-based SNF market basket and the FY
2010-based SNF market basket.
Table 12--2014-Based SNF Market Basket and FY 2010-Based SNF Market
Basket
------------------------------------------------------------------------
Final 2014- FY 2010-based
Cost category based SNF SNF market
market basket basket
------------------------------------------------------------------------
Total................................... 100.0 100.0
Compensation............................ 60.4 62.1
Wages and Salaries \1\.............. 50.0 50.6
Employee Benefits \1\............... 10.5 11.5
Utilities............................... 2.6 2.2
Electricity......................... 1.2 1.4
Fuel: Oil and Gas................... 1.3 0.7
Water and Sewerage.................. 0.2 0.1
Professional Liability Insurance........ 1.1 1.1
All Other............................... 27.9 27.2
Other Products........................ 14.3 16.1
Pharmaceuticals..................... 7.3 7.9
Food: Direct Purchase............... 3.1 3.7
Food: Contract Purchase............. 0.7 1.2
Chemicals........................... 0.2 0.2
Medical Instruments and Supplies.... 0.6 0.8
Rubber and Plastics................. 0.8 1.0
Paper and Printing Products......... 0.8 0.8
Apparel............................. 0.3 0.2
Machinery and Equipment............. 0.3 0.2
Miscellaneous Products.............. 0.3 0.3
All Other Services...................... 13.6 11.0
Labor-Related Services................ 7.4 6.2
Professional Fees: Labor-related.... 3.8 3.4
Installation, Maintenance, and 0.6 n/a
Repair Services....................
Administrative and Facilities 0.5 0.5
Support............................
All Other: Labor-Related Services... 2.5 2.3
Non Labor-Related Services............ 6.2 4.8
Professional Fees: Nonlabor-Related. 1.8 2.0
Financial Services.................. 2.0 0.9
Telephone Services.................. 0.5 0.6
Postage............................. 0.2 0.2
All Other: Nonlabor-Related Services 1.8 1.1
Capital-Related Expenses................ 7.9 7.4
Total Depreciation.................... 2.9 3.2
Building and Fixed Equipment........ 2.5 2.7
Movable Equipment................... 0.4 0.5
Total Interest........................ 3.0 2.1
For-Profit SNFs..................... 0.8 0.9
[[Page 36558]]
Government and Nonprofit SNFs....... 2.1 1.2
Other Capital-Related Expenses........ 2.0 2.1
------------------------------------------------------------------------
Note: The cost weights are calculated using three decimal places. For
presentational purposes, we are displaying one decimal and therefore,
the detailed cost weights may not add to the aggregate cost weights or
to 100.0 due to rounding.
\1\ Contract labor is distributed to wages and salaries and employee
benefits based on the share of total compensation that each category
represents.
b. Price Proxies Used To Measure Operating Cost Category Growth
After developing the 30 cost weights for the 2014-based SNF market
basket, we selected the most appropriate wage and price proxies
currently available to represent the rate of change for each
expenditure category. With four exceptions (three for the capital-
related expenses cost categories and one for Professional Liability
Insurance (PLI)), we base the wage and price proxies on Bureau of Labor
Statistics (BLS) data, and group them into one of the following BLS
categories:
Employment Cost Indexes: Employment Cost Indexes (ECIs)
measure the rate of change in employment wage rates and employer costs
for employee benefits per hour worked. These indexes are fixed-weight
indexes and strictly measure the change in wage rates and employee
benefits per hour. ECIs are superior to Average Hourly Earnings (AHE)
as price proxies for input price indexes because they are not affected
by shifts in occupation or industry mix, and because they measure pure
price change and are available by both occupational group and by
industry. The industry ECIs are based on the 2004 North American
Classification System (NAICS).
Producer Price Indexes: Producer Price Indexes (PPIs)
measure price changes for goods sold in other than retail markets. PPIs
are used when the purchases of goods or services are made at the
wholesale level.
Consumer Price Indexes: Consumer Price Indexes (CPIs)
measure change in the prices of final goods and services bought by
consumers. CPIs are only used when the purchases are similar to those
of retail consumers rather than purchases at the wholesale level, or if
no appropriate PPI were available.
We evaluated the price proxies using the criteria of reliability,
timeliness, availability, and relevance. Reliability indicates that the
index is based on valid statistical methods and has low sampling
variability. Widely accepted statistical methods ensure that the data
were collected and aggregated in a way that can be replicated. Low
sampling variability is desirable because it indicates that the sample
reflects the typical members of the population. (Sampling variability
is variation that occurs by chance because only a sample was surveyed
rather than the entire population.) Timeliness implies that the proxy
is published regularly, preferably at least once a quarter. The market
baskets are updated quarterly, and therefore, it is important for the
underlying price proxies to be up-to-date, reflecting the most recent
data available. We believe that using proxies that are published
regularly (at least quarterly, whenever possible) helps to ensure that
we are using the most recent data available to update the market
basket. We strive to use publications that are disseminated frequently,
because we believe that this is an optimal way to stay abreast of the
most current data available. Availability means that the proxy is
publicly available. We prefer that our proxies are publicly available
because this will help ensure that our market basket updates are as
transparent to the public as possible. In addition, this enables the
public to be able to obtain the price proxy data on a regular basis.
Finally, relevance means that the proxy is applicable and
representative of the cost category weight to which it is applied. The
CPIs, PPIs, and ECIs that we have selected to propose in this
regulation meet these criteria. Therefore, we believe that they
continue to be the best measure of price changes for the cost
categories to which they would be applied.
Table 15 in the proposed rule (82 FR 21039) lists all price proxies
for the 2014-based SNF market basket. Below is a detailed explanation
of the proposed price proxies used for each operating cost category.
Wages and Salaries: We proposed to use the ECI for Wages
and Salaries for Private Industry Workers in Nursing Care Facilities
(NAICS 6231; BLS series code CIU2026231000000I) to measure price growth
of this category. NAICS 623 includes facilities that provide a mix of
health and social services, with many of the health services being
largely some level of nursing services. Within NAICS 623 is NAICS 6231,
which includes nursing care facilities primarily engaged in providing
inpatient nursing and rehabilitative services. These facilities, which
are most comparable to Medicare-certified SNFs, provide skilled nursing
and continuous personal care services for an extended period of time,
and, therefore, have a permanent core staff of registered or licensed
practical nurses. This is the same index used in the FY 2010-based SNF
market basket.
Employee Benefits: We proposed to use the ECI for Benefits
for Nursing Care Facilities (NAICS 6231) to measure price growth of
this category. The ECI for Benefits for Nursing Care Facilities is
calculated using BLS's total compensation (BLS series ID
CIU2016231000000I) for nursing care facilities series and the relative
importance of wages and salaries within total compensation. We believe
this constructed ECI series is technically appropriate for the reason
stated above in the Wages and Salaries price proxy section. This is the
same index used in the FY 2010-based SNF market basket.
Electricity: We proposed to use the PPI Commodity for
Commercial Electric Power (BLS series code WPU0542) to measure the
price growth of this cost category. This is the same index used in the
FY 2010-based SNF market basket.
Fuel: Oil and Gas: We proposed to change the proxy used
for the Fuel: Oil and Gas cost category. The FY 2010-based SNF market
basket uses the PPI Commodity for Commercial Natural Gas (BLS series
code WPU0552) to proxy these expenses. For the 2014-based SNF market
basket, we proposed to use a blend of the PPI Industry for Petroleum
Refineries (BLS series code PCU32411-32411) and the PPI Commodity for
Natural Gas (BLS series code WPU0531). Our analysis of the Bureau of
Economic Analysis' 2007 Benchmark I-O data for Nursing and Community
Care Facilities shows that petroleum refineries expenses accounts for
[[Page 36559]]
approximately 65 percent and natural gas accounts for approximately 35
percent of the fuel: Oil and gas expenses. Therefore, we proposed a
blended proxy of 65 percent of the PPI Industry for Petroleum
Refineries (BLS series code PCU32411-32411) and 35 percent of the PPI
Commodity for Natural Gas (BLS series code WPU0531). We believe that
these two price proxies are the most technically appropriate indices
available to measure the price growth of the Fuel: Oil and Gas category
in the 2014-based SNF market basket.
Water and Sewerage: We proposed to use the CPI All Urban
for Water and Sewerage Maintenance (BLS series code CUUR0000SEHG01) to
measure the price growth of this cost category. This is the same index
used in the FY 2010-based SNF market basket.
Professional Liability Insurance: We proposed to use the
CMS Hospital Professional Liability Insurance Index to measure price
growth of this category. We were unable to find a reliable data source
that collects SNF-specific PLI data. Therefore, we proposed to use the
CMS Hospital Professional Liability Index, which tracks price changes
for commercial insurance premiums for a fixed level of coverage,
holding non-price factors constant (such as a change in the level of
coverage). This is the same index used in the FY 2010-based SNF market
basket. We believe this is an appropriate proxy to measure the price
growth associated of SNF professional liability insurance as it
captures the price inflation associated with other medical institutions
that serve Medicare patients.
Pharmaceuticals: We proposed to use the PPI Commodity for
Pharmaceuticals for Human Use, Prescription (BLS series code
WPUSI07003) to measure the price growth of this cost category. This is
the same index used in the FY 2010-based SNF market basket.
Food: Wholesale Purchases: We proposed to use the PPI
Commodity for Processed Foods and Feeds (BLS series code WPU02) to
measure the price growth of this cost category. This is the same index
used in the FY 2010-based SNF market basket.
Food: Retail Purchase: We proposed to use the CPI All
Urban for Food Away From Home (All Urban Consumers) (BLS series code
CUUR0000SEFV) to measure the price growth of this cost category. This
is the same index used in the FY 2010-based SNF market basket.
Chemicals: For measuring price change in the Chemicals
cost category, we proposed to use a blended PPI composed of the
Industry PPIs for Other Basic Organic Chemical Manufacturing (NAICS
325190) (BLS series code PCU32519-32519), Soap and Cleaning Compound
Manufacturing (NAICS 325610) (BLS series code PCU32561-32561), and
Other Miscellaneous Chemical Product Manufacturing (NAICS 3259A0) (BLS
series code PCU325998325998).
Using the 2007 Benchmark I-O data, we found that these three NAICS
industries accounted for approximately 96 percent of SNF chemical
expenses. The remaining four percent of SNF chemical expenses are for
three other incidental NAICS chemicals industries such as Paint and
Coating Manufacturing. We proposed to create a blended index based on
those three NAICS chemical expenses listed above that account for 96
percent of SNF chemical expenses. We proposed to create this blend
based on each NAICS' expenses as a share of their sum. These expenses
as a share of their sum are listed in Table 34.
The FY 2010-based SNF market basket also used a blended chemical
proxy that was based on 2002 Benchmark I-O data. We believe our
proposed chemical blended index for the 2014-based SNF market basket is
technically appropriate as it reflects more recent data on SNFs
purchasing patterns. Table 13 in the proposed rule (82 FR 21035)
provided the weights for the 2014-based blended chemical index and the
FY 2010-based blended chemical index. The table is also shown below.
Table 13--Proposed Chemical Blended Index Weights
----------------------------------------------------------------------------------------------------------------
2014-based 2010-based
NAICS Industry description index (%) index (%)
----------------------------------------------------------------------------------------------------------------
325190..................................... Other basic organic chemical 22 7
manufacturing.
25510...................................... Paint and coating manufacturing.... n/a 12
325610..................................... Soap and cleaning compound 37 49
manufacturing.
3259A0..................................... Other miscellaneous chemical 41 32
product manufacturing.
-------------------------------
Total.................................. ................................... 100 100
----------------------------------------------------------------------------------------------------------------
As discussed below, we are finalizing the weights for the 2014-
based blended chemical index as proposed, without modification.
Medical Instruments and Supplies: We proposed to use a
blend for the Medical Instruments and Supplies cost category. The 2007
Benchmark I-O data shows an approximate 60/40 split between `Medical
and Surgical Appliances and Supplies' and `Surgical and Medical
Instruments'. Therefore, we proposed a blend composed of 60 percent of
the PPI Commodity for Medical and Surgical Appliances and Supplies (BLS
series code WPU1563) and 40 percent of the PPI Commodity for Surgical
and Medical Instruments (BLS series code WPU1562).
The FY 2010-based SNF market basket used the single, higher level
PPI Commodity for Medical, Surgical, and Personal Aid Devices (BLS
series code WPU156). We believe that the proposed price proxy better
reflects the mix of expenses for this cost category as obtained from
the 2007 Benchmark I-O data.
Rubber and Plastics: We proposed to use the PPI Commodity
for Rubber and Plastic Products (BLS series code WPU07) to measure
price growth of this cost category. This is the same index used in the
FY 2010-based SNF market basket.
Paper and Printing Products: We proposed to use the PPI
Commodity for Converted Paper and Paperboard Products (BLS series code
WPU0915) to measure the price growth of this cost category. This is the
same index used in the FY 2010-based SNF market basket.
Apparel: We proposed to use the PPI Commodity for Apparel
(BLS series code WPU0381) to measure the price growth of this cost
category. This is the same index used in the FY 2010-based SNF market
basket.
Machinery and Equipment: We proposed to use the PPI
Commodity for Machinery and Equipment (BLS series code WPU11) to
measure the price growth of this cost category. This is the
[[Page 36560]]
same index used in the FY 2010-based SNF market basket.
Miscellaneous Products: For measuring price change in the
Miscellaneous Products cost category, we proposed to use the PPI
Commodity for Finished Goods less Food and Energy (BLS series code
WPUFD4131). Both food and energy are already adequately represented in
separate cost categories and should not also be reflected in this cost
category. This is the same index used in the FY 2010-based SNF market
basket.
Professional Fees: Labor-Related: We proposed to use the
ECI for Total Compensation for Private Industry Workers in Professional
and Related (BLS series code CIU2010000120000I) to measure the price
growth of this category. This is the same index used in the FY 2010-
based SNF market basket (which was called the Nonmedical Professional
Fees: Labor-Related cost category).
Administrative and Facilities Support Services: We
proposed to use the ECI for Total Compensation for Private Industry
Workers in Office and Administrative Support (BLS series code
CIU2010000220000I) to measure the price growth of this category. This
is the same index used in the FY 2010-based SNF market basket.
Installation, Maintenance and Repair Services: We proposed
to include a separate cost category for Installation, Maintenance, and
Repair Services to proxy these costs by a price index that better
reflects the price changes of labor associated with maintenance-related
services. We proposed to use the ECI for Total Compensation for All
Civilian Workers in Installation, Maintenance, and Repair (BLS series
code CIU1010000430000I) to measure the price growth of this new cost
category. Previously these costs were included in the All Other: Labor-
Related Services category and were proxied by the ECI for Total
Compensation for Private Industry Workers in Service Occupations (BLS
series code CIU2010000300000I).
All Other: Labor-Related Services: We proposed to use the
ECI for Total Compensation for Private Industry Workers in Service
Occupations (BLS series code CIU2010000300000I) to measure the price
growth of this cost category. This is the same index used in the FY
2010-based SNF market basket.
Professional Fees: NonLabor-Related: We proposed
to use the ECI for Total Compensation for Private Industry Workers in
Professional and Related (BLS series code CIU2010000120000I) to measure
the price growth of this category. This is the same index used in the
FY 2010-based SNF market basket (which was called the Nonmedical
Professional Fees: Nonlabor-Related cost category).
Financial Services: We proposed to use the ECI
for Total Compensation for Private Industry Workers in Financial
Activities (BLS series code CIU201520A000000I) to measure the price
growth of this cost category. This is the same index used in the FY
2010-based SNF market basket.
Telephone Services: We proposed to use the CPI
All Urban for Telephone Services (BLS series code CUUR0000SEED) to
measure the price growth of this cost category. This is the same index
used in the FY 2010-based SNF market basket.
Postage: We proposed to use the CPI All Urban for Postage
(BLS series code CUUR0000SEEC) to measure the price growth of this cost
category. This is the same index used in the FY 2010-based SNF market
basket.
All Other: NonLabor-Related Services: We proposed to use
the CPI All Urban for All Items Less Food and Energy (BLS series code
CUUR0000SA0L1E) to measure the price growth of this cost category. This
is the same index used in the FY 2010-based SNF market basket.
We did not receive any public comments on our proposed price
proxies for each of the operating cost categories. For the reasons
discussed above and in the FY 2018 SNF PPS proposed rule, we are
finalizing the price proxies of the operating cost categories as
proposed, without modification. In addition, we did not receive any
public comments on our proposed weights for the 2014-based blended
chemical index. Thus, for the reasons discussed above and in the FY
2018 SNF PPS proposed rule, we are finalizing the weights for 2014-
based blended chemical index as proposed, without modification.
c. Price Proxies Used To Measure Capital Cost Category Growth
We proposed to apply the same price proxies as were used in the FY
2010-based SNF market basket, and below is a detailed explanation of
the price proxies used for each capital cost category. We also proposed
to continue to vintage weight the capital price proxies for
Depreciation and Interest to capture the long-term consumption of
capital. This vintage weighting method is the same method that was used
for the FY 2010-based SNF market basket and is described below.
Depreciation--Building and Fixed Equipment: We proposed to
use the BEA Chained Price Index for Private Fixed Investment in
Structures, Nonresidential, Hospitals and Special Care (BEA Table
5.4.4. Price Indexes for Private Fixed Investment in Structures by
Type). This BEA index is intended to capture prices for construction of
facilities such as hospitals, nursing homes, hospices, and
rehabilitation centers.
Depreciation--Movable Equipment: We proposed to use the
PPI Commodity for Machinery and Equipment (BLS series code WPU11). This
price index reflects price inflation associated with a variety of
machinery and equipment that would be utilized by SNFs including but
not limited to medical equipment, communication equipment, and
computers.
Nonprofit Interest: We proposed to use the average yield
on Municipal Bonds (Bond Buyer 20-bond index).
For-Profit Interest: We proposed to use the average yield
on Moody's AAA corporate bonds (Federal Reserve). We proposed different
proxies for the interest categories because we believe interest price
pressures differ between nonprofit and for-profit facilities.
Other Capital: Since this category includes fees for
insurances, taxes, and other capital-related costs, we proposed to use
the CPI All Urban for Owners' Equivalent Rent of Primary Residence (BLS
series code CUUR0000SEHC01), which would reflect the price growth of
these costs.
We believe that these price proxies continue to be the most
appropriate proxies for SNF capital costs that meet our selection
criteria of relevance, timeliness, availability, and reliability.
As stated above, we proposed to continue to vintage weight the
capital price proxies for Depreciation and Interest to capture the
long-term consumption of capital. To capture the long-term nature, the
price proxies are vintage-weighted; and the vintage weights are
calculated using a two-step process. First, we determined the expected
useful life of capital and debt instruments held by SNFs. Second, we
identified the proportion of expenditures within a cost category that
is attributable to each individual year over the useful life of the
relevant capital assets, or the vintage weights.
We proposed to rely on Bureau of Economic Analysis (BEA) fixed
asset data to derive the useful lives of both fixed and movable
capital, which is the same data source used to derive the useful lives
for the FY 2010-based SNF market basket. The specifics of the data
sources used are explained below.
[[Page 36561]]
i. Calculating Useful Lives for Moveable and Fixed Assets
Estimates of useful lives for movable and fixed assets for the
2014-based SNF market basket are 10 and 23 years, respectively. These
estimates are based on three data sources from the BEA: (1) Current-
cost average age; (2) historical-cost average age; and (3) industry-
specific current cost net stocks of assets.
BEA current-cost and historical-cost average age data by asset type
are not available by industry but are published at the aggregate level
for all industries. The BEA does publish current-cost net capital
stocks at the detailed asset level for specific industries. There are
61 detailed movable assets (including intellectual property) and there
are 32 detailed fixed assets in the BEA estimates. Since we seek
aggregate useful life estimates applicable to SNFs, we developed a
methodology to approximate movable and fixed asset ages for nursing and
residential care services (NAICS 623) using the published BEA data. For
the proposed FY 2014 SNF market basket, we used the current-cost
average age for each asset type from the BEA fixed assets Table 2.9 for
all assets and weight them using current-cost net stock levels for each
of these asset types in the nursing and residential care services
industry, NAICS 6230. (For example, nonelectro medical equipment
current-cost net stock (accounting for about 37 percent of total
moveable equipment current-cost net stock in 2014) is multiplied by an
average age of 4.7 years. Current-cost net stock levels are available
for download from the BEA Web site at https://www.bea.gov/national/FA2004/Details/. We then aggregated the ``weighted'' current-
cost net stock levels (average age multiplied by current-cost net
stock) into moveable and fixed assets for NAICS 6230. We then adjusted
the average ages for moveable and fixed assets by the ratio of
historical-cost average age (Table 2.10) to current-cost average age
(Table 2.9).
This produced historical cost average age data for movable
(equipment and intellectual property) and fixed (structures) assets
specific to NAICS 6230 of 4.8 and 11.6 years, respectively. The average
age reflects the average age of an asset at a given point in time,
whereas we want to estimate a useful life of the asset, which would
reflect the average over all periods an asset is used. To do this, we
multiplied each of the average age estimates by two to convert to
average useful lives with the assumption that the average age is
normally distributed (about half of the assets are below the average at
a given point in time, and half above the average at a given point in
time). This produced estimates of likely useful lives of 9.6 and 23.2
years for movable and fixed assets, which we rounded to 10 and 23
years, respectively. We proposed an interest vintage weight time span
of 21 years, obtained by weighting the fixed and movable vintage
weights (23 years and 10 years, respectively) by the fixed and movable
split (87 percent and 13 percent, respectively). This is the same
methodology used for the FY 2010-based SNF market basket which had
useful lives of 22 years and 6 years for fixed and moveable assets,
respectively. The impact of revising the useful life for moveable
assets from 6 years to 10 years had little to no impact on the growth
rate of the 2014-based SNF market basket capital cost weight. Over the
2014 to 2026 time period, the impact on the growth rate of the capital
cost weight was no larger than 0.01 percent in absolute terms.
ii. Constructing Vintage Weights
Given the expected useful life of capital (fixed and moveable
assets) and debt instruments, we then must determine the proportion of
capital expenditures attributable to each year of the expected useful
life for each of the three asset types: Building and fixed equipment,
moveable equipment, and interest. These proportions represent the
vintage weights. We were not able to find a historical time series of
capital expenditures by SNFs. Therefore, we proposed to approximate the
capital expenditure patterns of SNFs over time, using alternative SNF
data sources. For building and fixed equipment, we used the stock of
beds in nursing homes from the National Nursing Home Survey (NNHS)
conducted by the National Center for Health Statistics (NCHS) for 1962
through 1999. For 2000 through 2010, we extrapolated the 1999 bed data
forward using a 5-year moving average of growth in the number of beds
from the SNF MCR data. For 2011 to 2014, we proposed to extrapolate the
2010 bed data forward using the average growth in the number of beds
over the 2011 to 2014 time period. We then used the change in the stock
of beds each year to approximate building and fixed equipment purchases
for that year. This procedure assumes that bed growth reflects the
growth in capital-related costs in SNFs for building and fixed
equipment. We believe that this assumption is reasonable because the
number of beds reflects the size of a SNF, and as a SNF adds beds, it
also likely adds fixed capital.
As was done for the FY 2010-based SNF market basket (as well as
prior market baskets), we proposed to estimate moveable equipment
purchases based on the ratio of ancillary costs to routine costs. The
time series of the ratio of ancillary costs to routine costs for SNFs
measures changes in intensity in SNF services, which are assumed to be
associated with movable equipment purchase patterns. The assumption
here is that as ancillary costs increase compared to routine costs, the
SNF caseload becomes more complex and would require more movable
equipment. The lack of movable equipment purchase data for SNFs over
time required us to use alternative SNF data sources. A more detailed
discussion of this methodology was published in the FY 2008 SNF final
rule (72 FR 43428). We believe the resulting two time series,
determined from beds and the ratio of ancillary to routine costs,
reflect real capital purchases of building and fixed equipment and
movable equipment over time.
To obtain nominal purchases, which are used to determine the
vintage weights for interest, we converted the two real capital
purchase series from 1963 through 2014 determined above to nominal
capital purchase series using their respective price proxies (the BEA
Chained Price Index for Nonresidential Construction for Hospitals &
Special Care Facilities and the PPI for Machinery and Equipment). We
then combined the two nominal series into one nominal capital purchase
series for 1963 through 2014. Nominal capital purchases are needed for
interest vintage weights to capture the value of debt instruments.
Once we created these capital purchase time series for 1963 through
2014, we averaged different periods to obtain an average capital
purchase pattern over time: (1) For building and fixed equipment, we
averaged 30, 23-year periods; (2) for movable equipment, we averaged
43, 10-year periods; and (3) for interest, we averaged 32, 21-year
periods. We calculate the vintage weight for a given year by dividing
the capital purchase amount in any given year by the total amount of
purchases during the expected useful life of the equipment or debt
instrument. To provide greater transparency, we posted on the CMS
market basket Web site at https://www.cms.gov/Research-Statistics-Data-and-Systems/Statistics-Trends-and-Reports/MedicareProgramRatesStats/MarketBasketResearch.html, an illustrative spreadsheet that contains an
example of how the vintage-weighted price indexes are calculated.
[[Page 36562]]
We did not receive any public comments on our proposed price
proxies used for each of the detailed capital cost categories or on our
methodology for deriving the vintage weights. For the reasons discussed
above and in the FY 2018 SNF PPS proposed rule, we are finalizing the
price proxies of the capital cost categories, the vintage weights, and
the methodology for deriving the vintage weights, as proposed without
modification.
The vintage weights for the 2014-based SNF market basket and the FY
2010-based SNF market basket are presented in Table 14.
Table 14--Final 2014-Based Vintage Weights and FY 2010-Based Vintage Weights
--------------------------------------------------------------------------------------------------------------------------------------------------------
Building and fixed equipment Movable equipment Interest
-----------------------------------------------------------------------------------------------
Year \1\ 2014-based 23 FY 2010- based 2014-based 10 FY 2010- based 2014-based 21 FY 2010- based
years 25 years years 6 years years 22 years
--------------------------------------------------------------------------------------------------------------------------------------------------------
1....................................................... .056 .061 .085 .165 .032 .030
2....................................................... .055 .059 .087 .160 .033 .030
3....................................................... .054 .053 .091 .167 .034 .032
4....................................................... .052 .050 .097 .167 .036 .033
5....................................................... .049 .046 .099 .169 .037 .035
6....................................................... .046 .043 .102 .171 .039 .037
7....................................................... .044 .041 .108 .............. .041 .039
8....................................................... .043 .039 .109 .............. .043 .040
9....................................................... .040 .036 .110 .............. .044 .041
10...................................................... .038 .034 .112 .............. .045 .043
11...................................................... .038 .034 .............. .............. .048 .045
12...................................................... .039 .034 .............. .............. .052 .047
13...................................................... .039 .033 .............. .............. .056 .048
14...................................................... .039 .032 .............. .............. .058 .048
15...................................................... .039 .031 .............. .............. .060 .050
16...................................................... .039 .031 .............. .............. .059 .052
17...................................................... .040 .032 .............. .............. .057 .055
18...................................................... .041 .034 .............. .............. .057 .058
19...................................................... .043 .035 .............. .............. .056 .060
20...................................................... .042 .036 .............. .............. .056 .060
21...................................................... .042 .038 .............. .............. .057 .058
22...................................................... .042 .039 .............. .............. .............. .058
23...................................................... .042 .042 .............. .............. .............. ..............
24...................................................... .............. .043 .............. .............. .............. ..............
25...................................................... .............. .044 .............. .............. .............. ..............
26...................................................... .............. .............. .............. .............. .............. ..............
-----------------------------------------------------------------------------------------------
Total............................................... 1.000 1.000 1.000 1.000 1.000 1.000
--------------------------------------------------------------------------------------------------------------------------------------------------------
Note: The vintage weights are calculated using thirteen decimals. For presentational purposes, we are displaying three decimals and therefore, the
detail vintage weights may not add to 1.000 due to rounding.
\1\ Year 1 represents the vintage weight applied to the farthest year while the vintage weight for year 23, for example, would apply to the most recent
year.
Table 15 shows all the price proxies for the final 2014 based SNF
market basket.
Table 15--Price Proxies for the Final 2014-Based SNF Market Basket
------------------------------------------------------------------------
Cost category Weight Proposed price proxy
------------------------------------------------------------------------
Total.......................... 100.0
Compensation................... 60.4
Wages and Salaries \1\..... 50.0 ECI for Wages and
Salaries for Private
Industry Workers in
Nursing Care
Facilities.
Employee Benefits \1\...... 10.5 ECI for Total Benefits
for Private Industry
Workers in Nursing
Care Facilities.
Utilities...................... 2.6
Electricity................ 1.2 PPI Commodity for
Commercial Electric
Power.
Fuel: Oil and Gas.......... 1.3 Blend of Fuel PPIs.
Water and Sewerage......... 0.2 CPI for Water and
Sewerage Maintenance
(All Urban Consumers).
Professional Liability 1.1 CMS Professional
Insurance. Liability Insurance
Premium Index.
All Other...................... 27.9
Other Products............. 14.3
Pharmaceuticals........ 7.3 PPI Commodity for
Pharmaceuticals for
Human Use,
Prescription.
Food: Direct Purchase.. 3.1 PPI Commodity for
Processed Foods and
Feeds.
Food: Contract Purchase 0.7 CPI for Food Away From
Home (All Urban
Consumers).
[[Page 36563]]
Chemicals.............. 0.2 Blend of Chemical PPIs.
Medical Instruments and 0.6 Blend of Medical
Supplies. Instruments and
Supplies PPIs.
Rubber and Plastics.... 0.8 PPI Commodity for
Rubber and Plastic
Products.
Paper and Printing 0.8 PPI Commodity for
Products. Converted Paper and
Paperboard Products.
Apparel................ 0.3 PPI Commodity for
Apparel.
Machinery and Equipment 0.3 PPI Commodity for
Machinery and
Equipment.
Miscellaneous Products. 0.3 PPI Commodity for
Finished Goods Less
Food and Energy.
All Other Services............. 13.6
Labor-Related Services..... 7.4
Professional Fees: 3.8 ECI for Total
Labor-related. Compensation for
Private Industry
Workers in
Professional and
Related.
Installation, 0.6 ECI for Total
Maintenance, and Compensation for All
Repair Services. Civilian workers in
Installation,
Maintenance, and
Repair.
Administrative and 0.5 ECI for Total
Facilities Support. Compensation for
Private Industry
Workers in Office and
Administrative
Support.
All Other: Labor- 2.5 ECI for Total
Related Services. Compensation for
Private Industry
Workers in Service
Occupations.
Non Labor-Related Services. 6.2
Professional Fees: 1.8 ECI for Total
Nonlabor-Related. Compensation for
Private Industry
Workers in
Professional and
Related.
Financial Services..... 2.0 ECI for Total
Compensation for
Private Industry
Workers in Financial
Activities.
Telephone Services..... 0.5 CPI for Telephone
Services.
Postage................ 0.2 CPI for Postage.
All Other: Nonlabor- 1.8 CPI for All Items Less
Related Services. Food and Energy.
Capital-Related Expenses....... 7.9
Total Depreciation......... 2.9
Building and Fixed 2.5 BEA's Chained Price
Equipment. Index for Private
Fixed Investment in
Structures,
Nonresidential,
Hospitals and Special
Care--vintage weighted
23 years.
Movable Equipment...... 0.4 PPI Commodity for
Machinery and
Equipment--vintage
weighted 10 years.
Total Interest............. 3.0
For-Profit SNFs........ 0.8 Moody's--Average yield
on AAA bonds, vintage
weighted 21 years.
Government and 2.1 Moody's--Average yield
Nonprofit SNFs. on Domestic Municipal
Bonds--vintage
weighted 21 years.
Other Capital-Related 2.0 CPI for Owners'
Expenses. Equivalent Rent of
Primary Residence.
------------------------------------------------------------------------
Note: The cost weights are calculated using three decimal places. For
presentational purposes, we are displaying one decimal and, therefore,
the detailed cost weights may not add to the aggregate cost weights or
to 100.0 due to rounding.
\1\ Contract labor is distributed to wages and salaries and employee
benefits based on the share of total compensation that each category
represents.
c. Labor-Related Share
We define the labor-related share (LRS) as those expenses that are
labor-intensive and vary with, or are influenced by, the local labor
market. Each year, we calculate a revised labor-related share based on
the relative importance of labor-related cost categories in the input
price index. Effective beginning with FY 2018, we proposed to revise
and update the labor-related share to reflect the relative importance
of the 2014-based SNF market basket cost categories that we believe are
labor-intensive and vary with, or are influenced by, the local labor
market. For the proposed 2014-based SNF market basket, these are: (1)
Wages and Salaries (including allocated contract labor costs as
described above); (2) Employee Benefits (including allocated contract
labor costs as described above); (3) Professional fees: Labor-related;
(4) Administrative and Facilities Support Services; (5) Installation,
Maintenance, and Repair services; (6) All Other: Labor-Related
Services; and (7) a proportion of capital-related expenses. We proposed
to continue to include a proportion of capital-related expenses because
a portion of these expenses are deemed to be labor-intensive and vary
with, or are influenced by, the local labor market. For example, a
proportion of construction costs for a medical building would be
attributable to local construction workers' compensation expenses.
Consistent with previous SNF market basket revisions and rebasings,
the All Other: Labor-related services cost category is mostly comprised
of building maintenance and security services (including, but not
limited to, landscaping services, janitorial services, waste management
services, and investigation and security services). Because these
services tend to be labor-intensive and are mostly performed at the SNF
facility (and therefore, unlikely to be purchased in the national
market), we believe that they meet our definition of labor-related
services.
The proposed inclusion of the Installation, Maintenance, and Repair
Services cost category into the labor-related share remains consistent
with the current labor-related share, since this cost category was
previously included in the FY 2010-based SNF market basket All Other:
Labor-related Services cost category. We proposed to establish a
separate Installation, Maintenance, and Repair Services cost category
so that we can use the ECI for Total Compensation for All Civilian
Workers in Installation, Maintenance, and Repair to reflect the
specific price
[[Page 36564]]
changes associated with these services. We also use this cost category
in the 2012-based IRF market basket (80 FR 47059), 2012-based IPF
market basket (80 FR 46667), and 2013-based LTCH market basket (81 FR
57091).
As discussed in the FY 2014 SNF PPS proposed rule (78 FR 26462), in
an effort to determine more accurately the share of nonmedical
professional fees (included in the 2014-based SNF market basket
Professional Fees cost categories) that should be included in the
labor-related share, we surveyed SNFs regarding the proportion of those
fees that are attributable to local firms and the proportion that are
purchased from national firms. Based on these weighted results, we
determined that SNFs purchase, on average, the following portions of
contracted professional services inside their local labor market:
78 percent of legal services.
86 percent of accounting and auditing services.
89 percent of architectural, engineering services.
87 percent of management consulting services.
Together, these four categories represent 3.3 percentage points of
the total costs for the 2014-based SNF market basket. We applied the
percentages from this special survey to their respective SNF market
basket weights to separate them into labor-related and nonlabor-related
costs. As a result, we proposed to designate 2.8 percentage points of
the 3.3 percentage points to the labor-related share, with the
remaining 0.5 percentage point is categorized as nonlabor-related.
For the proposed 2014-based SNF market basket, we conducted a
similar analysis of home office data. The Medicare cost report CMS Form
2540-10 requires a SNF to report information regarding their home
office provider. Approximately 57 percent of SNFs reported some type of
home office information on their Medicare cost report for 2014 (for
example, city, state, zip code). Using the data reported on the
Medicare cost report, we compared the location of the SNF with the
location of the SNF's home office. For the FY 2010-based SNF market
basket, we used the Medicare HOMER database to determine the location
of the provider's home office as this information was not available on
the Medicare cost report CMS Form 2540-96. For the 2014-based SNF
market basket, we proposed to determine the proportion of home office
contract labor costs that should be allocated to the labor-related
share based on the percent of total SNF home office contract labor
costs as reported in Worksheet S-3, Part II attributable to those SNFs
that had home offices located in their respective local labor markets--
defined as being in the same Metropolitan Statistical Area (MSA). We
determined a SNF's and home office's MSAs using their zip code
information from the Medicare cost reports.
Using this methodology, we determined that 28 percent of SNFs' home
office contract labor costs were for home offices located in their
respective local labor markets. Therefore, we proposed to allocate 28
percent of home office expenses to the labor-related share. The FY
2010-based SNF market basket allocated 32 percent of home office
expenses to the labor-related share.
In the proposed 2014-based SNF market basket, home office expenses
that were subject to allocation based on the home office allocation
methodology represent 0.7 percent of the 2014-based SNF market basket.
Based on the home office results, we proposed to apportion 0.2
percentage point of the 0.7 percentage point figure into the labor-
related share (0.7 x 0.28 = 0.193, or 0.2) and designate the remaining
0.5 percentage point as nonlabor-related. Therefore, based on the two
allocations mentioned above, we proposed to apportion 3.0 percentage
points into the labor-related share. This amount is added to the
portion of professional fees that we continue to identify as labor-
related using the I-O data such as contracted advertising and marketing
costs (0.8 percentage point of total operating costs) resulting in a
Professional Fees: Labor-Related cost weight of 3.8 percent.
We did not receive any public comments on our proposed methodology
for deriving the labor-related share. For the reasons discussed above
and in the FY 2018 SNF PPS proposed rule, we are finalizing our
proposals, without modification, as discussed above to update and
revise the labor-related share effective October 1, 2017, to reflect
the relative importance of the following 2014-based SNF market basket
cost weights that we believe are labor-intensive and vary with, or are
influenced by, the local labor market: (1) Wages and Salaries
(including allocated contract labor costs as described above); (2)
Employee Benefits (including allocated contract labor costs as
described above); (3) Professional fees: Labor-related; (4)
Administrative and Facilities Support Services; (5) Installation,
Maintenance, and Repair services; (6) All Other: Labor-Related
Services; and (7) a proportion of capital-related expenses.
Table 16 compares the 2014-based labor-related share and the FY
2010-based labor-related share based on the relative importance of
IGI's most recent second quarter 2017 forecast with historical data
through the first quarter of 2017. The FY 2018 SNF PPS proposed rule
(82 FR 21040) reflected IGI's first quarter 2017 forecast with
historical data through the fourth quarter of 2016. As stated in the FY
2018 SNF PPS proposed rule (82 FR 21019), our policy has been that, if
more recent data becomes available (for example, a more recent estimate
of the SNF market basket and/or MFP adjustment), we would use such
data, if appropriate, to determine the SNF market basket percentage
change, labor-related share relative importance, forecast error
adjustment, and MFP adjustment in the SNF PPS final rule.
We note that in Table 16 of the FY 2018 SNF PPS proposed rule (82
FR 21041), we misreported the FY 2017 labor-related share as 69.1
percent (this was the FY 2016 labor-related share (80 FR 46402)). The
FY 2017 labor-related share was 68.8 percent as finalized in the FY
2017 SNF PPS final rule (81 FR 51979, 51980). We present the FY 2017
labor-related share in Table 16 below.
Table 16--FY 2018 and FY 2017 SNF Labor-Related Share
------------------------------------------------------------------------
Relative
Relative importance,
importance, labor-related,
labor-related, FY 2017 (FY
FY 2018 (2014- 2010-based
based index) index) 2016:Q2
2017:Q2 forecast forecast
------------------------------------------------------------------------
Wages and Salaries \1\.............. 50.3 48.8
Employee Benefits \1\............... 10.2 11.1
[[Page 36565]]
Professional fees: Labor-Related.... 3.7 3.4
Administrative and Facilities 0.5 0.5
Support Services...................
Installation, Maintenance and Repair 0.6 n/a
Services \2\.......................
All Other: Labor-related Services... 2.5 2.3
Capital-related (.391).............. 3.0 2.7
-----------------------------------
Total........................... 70.8 68.8
------------------------------------------------------------------------
\1\ The Wages and Salaries and Employee Benefits cost weight reflect
contract labor costs as described above.
\2\ Previously classified in the All Other: Labor-related services cost
category in the FY 2010-based SNF market basket.
Source: IHS Global Inc. 2nd quarter 2017 forecast with historical data
through 1st quarter 2017.
The FY 2018 SNF labor-related share (LRS) is 2.0 percentage points
higher than the FY 2017 SNF LRS, which is based on the FY 2010-based
SNF market basket relative importance. This implies an increase in the
quantity of the labor-related services because rebasing the index
contributed significantly to the increase. Also contributing to the
higher labor-related share is a higher capital-related cost weight in
the 2014-based SNF market basket compared to the FY 2010-based SNF
market basket. As stated above, we include a proportion of capital-
related expenses in the labor-related share as we believe a portion of
these expenses (such as construction labor costs) are deemed to be
labor-intensive and vary with, or are influenced by, the local labor
market.
d. Market Basket Estimate for the FY 2018 SNF PPS Update
As discussed previously in this final rule, beginning with the FY
2018 SNF PPS update, we are adopting the 2014-based SNF market basket
as the appropriate market basket of goods and services for the SNF PPS.
Based on IHS Global Inc.'s (IGI) second quarter 2017 forecast with
historical data through the first quarter of 2017, the most recent
estimate of the 2014-based SNF market basket for FY 2018 is 2.6
percent. As stated above, the FY 2018 SNF PPS proposed rule reflected
IGI's first quarter 2017 forecast with historical data through the
fourth quarter of 2016. IGI is a nationally recognized economic and
financial forecasting firm that contracts with CMS to forecast the
components of CMS' market baskets.
Table 17 compares the 2014-based SNF market basket and the FY 2010-
based SNF market basket percent changes. For the historical period
between FY 2013 and FY 2016, the average difference between the two
market baskets is -0.3 percentage point. This is primarily the result
of the lower pharmaceuticals cost category weight, increased Fuel: Oil
and Gas cost category weight, and the change in the Fuels price proxy.
For the forecasted period between FY 2017 and FY 2019, there is no
difference in the average growth rate.
Table 17--2014-Based SNF Market Basket and FY 2010-Based SNF Market
Basket, Percent Changes: 2013 to 2019
------------------------------------------------------------------------
2014-based FY 2010-based
Fiscal year (FY) SNF market SNF market
basket basket
------------------------------------------------------------------------
Historical data:
FY 2013............................. 1.6 1.8
FY 2014............................. 1.6 1.7
FY 2015............................. 1.8 2.3
FY 2016............................. 1.9 2.3
Average FY 2013-2016................ 1.7 2.0
Forecast:
FY 2017............................. 2.7 2.7
FY 2018............................. 2.6 2.7
FY 2019............................. 2.7 2.7
Average FY 2017-2019................ 2.7 2.7
------------------------------------------------------------------------
Source: IHS Global Inc. 2nd quarter 2017 forecast with historical data
through 1st quarter 2017.
While we ordinarily would adopt the use of this 2014-based SNF
market basket percentage to update the SNF PPS per diem rates for FY
2018, we note that section 411(a) of the MACRA amended section 1888(e)
of the Act to add section 1888(e)(5)(B)(iii) of the Act, which
establishes a special rule for FY 2018 that requires the market basket
percentage, after the application of the productivity adjustment, to be
1.0 percent. In accordance with section 1888(e)(5)(B)(iii) of the Act,
we will use a market basket percentage of 1.0 percent to update the
federal rates set forth in this final rule. We proposed to use the
2014-based SNF market basket to determine the market basket percentage
update for the SNF PPS per diem rates effective FY 2019. For the
reasons discussed above and in the FY 2018 SNF PPS proposed rule, we
are finalizing our proposal to use the 2014-based SNF market basket to
determine
[[Page 36566]]
the market basket percentage update for the SNF PPS per diem rates,
effective FY 2019. In addition, as stated in section III.D.1.d. in this
preamble, we are adopting the use of the 2014-based SNF market basket
to determine the labor-related share effective October 1, 2017.
2. Skilled Nursing Facility (SNF) Quality Reporting Program (QRP)
a. Background and Statutory Authority
Section 1888(e)(6)(A)(i) of the Act, as added by section 2(c)(4) of
the Improving Medicare Post-Acute Care Transformation Act of 2014
(IMPACT Act), requires that for fiscal years beginning with FY 2018, in
the case of a SNF that does not submit data as applicable in accordance
with sections 1888(e)(6)(B)(i)(II) and (III) of the Act for a fiscal
year, the Secretary reduce the market basket percentage described in
section 1888(e)(5)(B)(i) of the Act for payment rates during that
fiscal year by two percentage points. In section III.B.2. of this final
rule, we discuss revisions in the market basket update regulations at
Sec. 413.337(d) that will implement this provision. In accordance with
this statutory mandate, we have implemented a SNF Quality Reporting
Program (QRP), which we believe promotes higher quality and more
efficient health care for Medicare beneficiaries. 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 a full discussion of
the statutory background and policy considerations that have shaped the
SNF QRP.
When we use the term ``FY (year)SNF QRP,'' we are referring to the
fiscal year for which the SNF QRP requirements applicable to that
fiscal year must be met in order for a SNF to receive the full market
basket percentage when calculating the payment rates applicable to it
for that fiscal year.
The IMPACT Act (Pub. L. 113-185) amended Title XVIII of the Act, in
part, by adding a new section 1899B that requires the Secretary to
establish new data reporting requirements for certain post-acute care
(PAC) providers, including SNFs. Specifically, new sections
1899B(a)(1)(A)(ii) and (iii) of the Act require SNFs, inpatient
rehabilitation facilities (IRFs), Long Term Care Hospitals (LTCHs), and
home health agencies (HHAs), under the provider-type's respective
quality reporting program (which, for SNFs, is found at section
1888(e)(6) of the Act), to report data on quality measures specified
under section 1899B(c)(1) of the Act for at least five domains, and
data on resource use and other measures specified under section
1899B(d)(1) of the Act for at least three domains. Section
1899B(a)(1)(A)(i) of the Act further requires each of these PAC
provider-types to report under its respective quality reporting program
standardized resident assessment data in accordance with subsection
(b), for at least the quality measures specified under subsection
(c)(1), and that is for at least five specific categories: Functional
status; cognitive function and mental status; special services,
treatments, and interventions; medical conditions and co-morbidities;
and impairments. Section 1899B(a)(1)(B) of the Act requires that all of
the data that must be reported in accordance with section
1899B(a)(1)(A) of the Act be standardized and interoperable to allow
for the exchange of the information among PAC providers and other
providers and the use of such data to enable access to longitudinal
information and to facilitate coordinated care. We refer readers to the
FY 2016 SNF PPS final rule (80 FR 46427 through 46429) for additional
information on the IMPACT Act and its applicability to SNFs.
b. General Considerations Used for Selection of Quality 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,\3\ which incorporates the three broad aims of the
National Quality Strategy.\4\
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\3\ https://www.cms.gov/Medicare/Quality-Initiatives-Patient-Assessment-Instruments/QualityInitiativesGenInfo/CMS-Quality-Strategy.html.
\4\ https://www.ahrq.gov/workingforquality/nqs/nqs2011annlrpt.htm.
---------------------------------------------------------------------------
As part of our consideration for measures for use in the SNF QRP,
we review and evaluate measures that have been implemented in other
programs and take into account measures that have been endorsed by NQF
for provider settings other than the SNF setting. We have previously
adopted measures that we referred to as ``applications'' of those
measures. We have received questions pertaining to the term
``application'' and want to clarify that when we refer to a proposed or
implemented measure as an ``application of'' the measure, we mean that
the measure will be used in the SNF setting, rather than the setting
for which it was endorsed by the NQF. For example, in the FY 2016 SNF
PPS final rule (80 FR 46440 through 46444), we adopted a measure
entitled Application of Percent of Residents Experiencing One or More
Falls With Major Injury (Long Stay) (NQF #0674), which is currently
endorsed for the nursing home setting but not for the SNF setting. For
such measures, we intend to seek NQF endorsement for the SNF setting,
and if the NQF endorses one or more of them, we will update the title
of the measure to remove the reference to ``application''.
We received several comments generally related to the proposed
measures, the IMPACT Act, NQF endorsement, and training needs. The
comments and our responses are discussed below.
Comment: A few commenters expressed concern that CMS has not
provided a timeline for seeking NQF endorsement for non-NQF-endorsed
quality measures in the SNF QRP. One commenter expressed further
concern that non-NQF-endorsed measures may be implemented before
undergoing adequate testing, as required for NQF endorsement. Another
commenter expressed concern regarding the adequacy of resources
allocated to complete necessary testing and obtain consensus
endorsement for measures as required by the IMPACT Act. All commenters
commenting on this topic requested further information from CMS
regarding the process and timeline for seeking NQF endorsement.
Response: We recognize that the NQF endorsement process is an
important part of measure development and plan to submit non-NQF-
endorsed quality measures in the SNF QRP adopted in this rule for NQF
endorsement as soon as feasible, with an intended timeframe of 2018.
With regard to adequate testing prior to implementation, we wish to
note that we engage in multiple testing activities prior to measure
implementation. These activities include testing of items and measures
in their intended settings, public posting of measure testing data,
when possible, seeking public comment on measures in the various stages
of their development, and utilization of technical expert input on
measure development, including expert evaluation of the validity and
importance of measures. We interpret the commenter's comment regarding
the adequacy of the resources necessary to obtain consensus endorsement
as efforts to engage stakeholders. We believe that we commit an
adequate level of resources to the measure development process and the
NQF endorsement process. Such resources are outlined above and include
engaging in pilot
[[Page 36567]]
testing with providers, seeking public comment, convening TEPs, and
engaging subject matter experts to provide feedback throughout the
measure development process.
Comment: One commenter recommended aligning the SNF QRP quality
measures with other CMS initiatives such as the Financial Alignment
Initiative, the value-based payment program and the Medicaid managed
care initiatives under the Section 1115 waiver authorities.
Response: We acknowledge the value of aligning the SNF QRP measures
to other CMS initiatives and we will seek to align measures with other
initiatives in an effort to reduce provider burden where feasible.
(1) Measuring and Accounting for Social Risk Factors in the SNF QRP
In, the FY 2018 SNF PPS proposed rule (82 FR 21042 through 21043),
we discussed accounting for social risk factors in the SNF QRP. We
stated that we consider related factors that may affect measures in the
SNF QRP. We understand that social risk factors such as income,
education, race and ethnicity, employment, disability, community
resources, and social support (certain factors of which are also
sometimes referred to as socioeconomic status (SES) factors or socio-
demographic status (SDS) factors) play a major role in health. One of
our core objectives is to improve beneficiary outcomes including
reducing health disparities, and we want to ensure that all
beneficiaries, including those with social risk factors, receive high
quality care. In addition, we seek to ensure that the quality of care
furnished by providers and suppliers is assessed as fairly as possible
under our programs while ensuring that beneficiaries have adequate
access to excellent care.
We have been reviewing reports prepared by the Office of the
Assistant Secretary for Planning and Evaluation (ASPE) and the National
Academies of Sciences, Engineering, and Medicine on the issue of
measuring and accounting for social risk factors in CMS' quality
measurement and payment programs, and considering options on how to
address the issue in these programs. On December 21, 2016, ASPE
submitted a Report to Congress on a study it was required to conduct
under section 2(d) of the IMPACT Act. The study analyzed the effects of
certain social risk factors of Medicare beneficiaries on quality
measures and measures of resource use used in one or more of nine
Medicare value-based purchasing programs.\5\ The report also included
considerations for strategies to account for social risk factors in
these programs. In a January 10, 2017 report released by The National
Academies of Sciences, Engineering, and Medicine, that body provided
various potential methods for measuring and accounting for social risk
factors, including stratified public reporting.\6\
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\5\ Office of the Assistant Secretary for Planning and
Evaluation. 2016. Report to Congress: Social Risk Factors and
Performance Under Medicare's Value-Based Purchasing Programs.
Available at https://aspe.hhs.gov/pdf-report/report-congress-social-risk-factors-and-performance-under-medicares-value-based-purchasing-programs.
\6\ National Academies of Sciences, Engineering, and Medicine.
2017. Accounting for social risk factors in Medicare payment.
Washington, DC: The National Academies Press.
---------------------------------------------------------------------------
In addition, the NQF undertook a 2-year trial period in which new
measures, measures undergoing maintenance review, and measures endorsed
with the condition that they enter the trial period were assessed to
determine whether risk adjustment for selected social risk factors was
appropriate for these measures. This trial entailed temporarily
allowing inclusion of social risk factors in the risk-adjustment
approach for these measures. The trial has concluded and NQF will issue
recommendations on the future inclusion of social risk factors in risk
adjustment for quality measures.
As we continue to consider the analyses and recommendations from
these reports and await the recommendations of the NQF trial on risk
adjustment for quality measures, we are continuing to work with
stakeholders in this process. As we have previously communicated, we
are concerned about holding providers to different standards for the
outcomes of their patients with social risk factors because we do not
want to mask potential disparities or minimize incentives to improve
the outcomes for disadvantaged populations. Keeping this concern in
mind, while we sought input on this topic previously, we continue to
seek public comment on whether we should account for social risk
factors in measures in the SNF QRP, and if so, what method or
combination of methods would be most appropriate for accounting for
social risk factors. Examples of methods include: Confidential
reporting to providers of measure rates stratified by social risk
factors, public reporting of stratified measure rates, and potential
risk adjustment of a particular measure as appropriate based on data
and evidence.
In addition, in the FY 2018 SNF PPS proposed rule (82 FR 21042
through 21043), we sought public comment on which social risk factors
might be most appropriate for reporting stratified measure scores and/
or potential risk adjustment of a particular measure. Examples of
social risk factors include, but are not limited to, dual eligibility/
low-income subsidy, race and ethnicity, and geographic area of
residence. We also sought comments on which of these factors, including
current data sources where this information would be available, could
be used alone or in combination, and whether other data should be
collected to better capture the effects of social risk. We will take
commenters' input into consideration as we continue to assess the
appropriateness and feasibility of accounting for social risk factors
in the SNF QRP. We note that any such changes would be proposed through
future notice and comment rulemaking.
We look forward to working with stakeholders as we consider the
issue of accounting for social risk factors and reducing health
disparities in CMS programs. Of note, implementing any of the above
methods would be taken into consideration in the context of how this
and other CMS programs operate (for example, data submission methods,
availability of data, statistical considerations relating to
reliability of data calculations, among others), so we sought comment
on operational considerations. We are committed to ensuring that
Medicare beneficiaries have access to and receive excellent care, and
that the quality of care furnished by providers and suppliers is
assessed fairly in CMS programs. A discussion of the comments we
received on this topic, along with our responses, appears below.
Comment: Some commenters were generally supportive of accounting
for social risk factors for the SNF QRP quality measures. Many
commenters stated that there was evidence demonstrating that these
factors can have substantial influence on patient health outcomes. Some
commenters noted that social risk factors are beyond the control of the
facility and were concerned that without risk adjustment, differences
in quality scores may reflect differences in patient populations rather
than differences in quality. Commenters also recommended incorporating
the results of the NQF SES trial period into consideration of adopting
risk-adjustment strategies.
A few commenters, while acknowledging the influence of social risk
factors on health outcomes, cautioned against adjusting for them in
quality measurement due to the potential for unintended consequences.
These commenters expressed concern
[[Page 36568]]
over the possibility that risk-adjusted measures may remove incentives
for quality improvement among facilities that serve higher levels of
underserved populations.
Regarding the methodology for risk adjustment, some commenters made
specific recommendations regarding the type of risk adjustment that
should be used. One commenter suggested that both risk stratification
and statistical risk adjustment be used. Commenters stated that any
risk stratification should be considered on a measure-by-measure basis,
and that measures that are broadly within the control of the facility
and reflective of direct care, such as pressure ulcers, should not be
stratified. Multiple commenters recommended that we conduct further
research and testing of risk-adjustment methods. A few commenters noted
the importance of continued monitoring of the effect of social risk
factors on health outcomes and on the SNF QRP over time. Other
commenters recommended adjusting for social risk factors, specifically
for resource use measures assessing potentially preventable
readmissions, Medicare Spending Per Beneficiary, and social and
environmental risk factors for functional improvement measures. Another
commenter noted there are meaningful SES, clinical or other differences
between traditional Medicare versus Medicare Advantage (MA) enrollees
that could affect comparisons between facilities with different
proportion of Medicare Advantage and Part A stays. The commenter
further requested that this possibility should be investigated.
In addition to support for our suggested categories of race and
ethnicity, dual eligibility status, and geographical location, specific
social risk factors suggested by commenters included: Patient-level
factors such as lack of personal resources, education level, healthcare
literacy, employment, and limited English proficiency. Commenters also
suggested community resources and other factors such as access to
adequate food, medications, availability of primary care and therapy
services, living conditions including living alone, lack of an adequate
support system or caregiver availability. Regarding sources for data
collection, a commenter suggested the use of confidential patient-
reported data to determine social risk and another commenter suggested
using confidential electronic health records to collect data relevant
to social risk factors.
There were a few comments discussing confidential and public
reporting of data adjusted for social risk factors. While a commenter
recommended that risk-stratified measures should be publicly reported
for purposes of transparency, another commenter noted that the public
reporting of stratified rates could create a disincentive to care for
disadvantaged populations.
Response: As we have previously stated, we are concerned about
holding providers to different standards for the outcomes of their
patients with social risk factors, because we do not want to mask
potential disparities. We believe that the path forward should
incentivize improvements in health outcomes for disadvantaged
populations while ensuring that beneficiaries have adequate access to
excellent care.
We will consider all suggestions as we continue to assess each
measure and the overall program. We intend to explore options including
but not limited to measure stratification by social risk factors in a
consistent manner across programs, informed by considerations of
stratification methods described in section IX.A.13 of the preamble of
the FY 2018 IPPS/LTCH PPS final rule. We thank commenters for this
important feedback and will continue to consider options to account for
social risk factors that would allow us to view disparities and
potentially incentivize improvement in care for patients and
beneficiaries. We will also consider providing feedback to providers on
outcomes for individuals with social risk factors in confidential
reports.
c. Collection of Standardized Resident Assessment Data Under the SNF
QRP
(1) Definition of Standardized Resident Assessment Data
Section 1888(e)(6)(B)(i)(III) of the Act requires that for fiscal
year 2019 (beginning October 1, 2018) and each subsequent year, SNFs
report standardized resident assessment data required under section
1899B(b)(1) of the Act. For purposes of meeting this requirement,
section 1888(e)(6)(B)(ii) of the Act requires a SNF to submit the
standardized resident assessment data required under section 1819(b)(3)
of the Act using the standard instrument designated by the state under
section 1819(e)(5) of the Act.
For purposes of the SNF QRP, we refer to beneficiaries who receive
services from SNFs as ``residents,'' and we collect certain information
about the SNF services they receive using the Resident Assessment
Instrument Minimum Data Set (MDS).
Section 1899B(b)(1)(B) of the Act describes standardized resident
assessment data as data required for at least the quality measures
described in sections 1899B(c)(1) of the Act and that is for the
following categories:
Functional status, such as mobility and self-care at
admission to a PAC provider and before discharge from a PAC provider;
Cognitive function, such as ability to express ideas and
to understand and mental status, such as depression and dementia;
Special services, treatments and interventions such as the
need for ventilator use, dialysis, chemotherapy, central line placement
and total parenteral nutrition;
Medical conditions and comorbidities such as diabetes,
congestive heart failure and pressure ulcers;
Impairments, such as incontinence and an impaired ability
to hear, see or swallow; and
Other categories deemed necessary and appropriate.
As required under section 1899B(b)(1)(A) of the Act, the
standardized resident assessment data must be reported at least for SNF
admissions and discharges, but the Secretary may require the data to be
reported more frequently.
In the FY 2018 SNF PPS proposed rule (82 FR 21043 through 21044),
we proposed to define the standardized resident assessment data that
SNFs must report to comply with section 1888(e)(6) of the Act, as well
as the requirements for the reporting of these data. The collection of
standardized resident assessment data is critical to our efforts to
drive improvement in health care quality across the four post-acute
care (PAC) settings to which the IMPACT Act applies. We intend to use
these data for a number of purposes, including facilitating their
exchange and longitudinal use among health care providers to enable
high quality care and outcomes through care coordination, as well as
for quality measure calculation, and identifying comorbidities that
might increase the medical complexity of a particular admission.
SNFs are currently required to report resident assessment data
through the MDS by responding to an identical set of assessment
questions using an identical set of response options (we refer to each
solitary question/response option as a data element and we refer to a
group of questions/responses as data elements), both of which
incorporate an identical set of definitions and standards. The primary
purpose of the identical questions and response options is to ensure
that we collect a set of standardized resident assessment data elements
across SNFs which we
[[Page 36569]]
can then use for a number of purposes, including SNF payment and
measure calculation for the SNF QRP.
LTCHs, IRFs, and HHAs are also required to report patient
assessment data through their applicable PAC assessment instruments,
and they do so by responding to identical assessment questions
developed for their respective settings using an identical set of
response options (which incorporate an identical set of definitions and
standards). Like the MDS, the questions and response options for each
of these other PAC assessment instruments are standardized across the
PAC provider type to which the PAC assessment instrument applies.
However, the assessment questions and response options in the four PAC
assessment instruments are not currently standardized with each other.
As a result, questions and response options that appear on the MDS
cannot be readily compared with questions and response options that
appear, for example, on the Inpatient Rehabilitation Facility-Patient
Assessment Instrument (IRF-PAI) the PAC assessment instrument used by
IRFs. This is true even when the questions and response options are
similar. This lack of standardization across the four PAC provider
types has limited our ability to compare one PAC provider type with
another for purposes such as care coordination and quality improvement.
To achieve a level of standardization across SNFs, LTCHs, IRFs, and
HHAs that enables us to make comparisons between them, we proposed to
define ``standardized resident assessment data'' \7\ as patient or
resident assessment questions and response options that are identical
in all four PAC assessment instruments, and to which identical
standards and definitions apply. Standardizing the questions and
response options across the four PAC assessment instruments will also
enable the data to be interoperable allowing it to be shared
electronically, or otherwise, between PAC provider types. It will
enable the data to be comparable for various purposes, including the
development of cross-setting quality measures, which may enhance
provider and resident choice when selecting a post-acute care setting
that will deliver the best outcome possible, and to inform payment
models that take into account patient characteristics rather than
setting, as described in the IMPACT Act.
---------------------------------------------------------------------------
\7\ The FY 2018 SNF PPS proposed rule (82 FR 21044) used the
term ``standardized patient assessment data.'' For purposes of the
final rule we use the term ``standardized resident assessment
data''.
---------------------------------------------------------------------------
We sought comment on this definition. A discussion of these
comments, along with our responses, appears below.
Comment: Most commenters expressed general support for the
definition of standardized patient/resident assessment data. One
commenter further expressed support for CMS efforts to standardize
assessment data to promote care coordination and quality improvements
as required under the IMPACT Act.
Response: We thank the commenters for their support.
Final Decision: We are finalizing our definition of standardized
resident assessment data as proposed.
(2) General Considerations Used for the Selection of Standardized
Resident Assessment Data
As part of our effort to identify appropriate standardized resident
assessment data for purposes of collecting under the SNF QRP, we sought
input from the general public, stakeholder community, and subject
matter experts on items that would enable person-centered, high quality
health care, as well as access to longitudinal information to
facilitate coordinated care and improved beneficiary outcomes.
To identify optimal data elements for standardization, our data
element contractor organized teams of researchers for each category,
and each team worked with a group of advisors made up of clinicians and
academic researchers with expertise in PAC. Information-gathering
activities were used to identify data elements, as well as key themes
related to the categories described in section 1899B(b)(1)(B) of the
Act. In January and February 2016, our data element contractor also
conducted provider focus groups for each of the four PAC provider
types, and a focus group for consumers that included current or former
PAC patients and residents, caregivers, ombudsmen, and patient advocacy
group representatives. The Development and Maintenance of Post-Acute
Care Cross-Setting Standardized Patient Assessment Data Focus Group
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.
We also assembled a 16-member TEP that met on April 7 and 8, 2016,
and January 5 and 6, 2017, in Baltimore, Maryland, to provide expert
input on data elements that are currently in each PAC assessment
instrument, as well as data elements that could be standardized. The
Development and Maintenance of Post-Acute Care Cross-Setting
Standardized Patient Assessment Data TEP Summary Reports are 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.
As part of the environmental scan, data elements currently in the
four existing PAC assessment instruments were examined to see if any
could be considered for proposal as standardized resident assessment
data. Specifically, this evaluation included consideration of data
elements in OASIS-C2 (effective January 2017); IRF-PAI, v1.4 (effective
October 2016); LCDS, v3.00 (effective April 2016); and MDS 3.0, v1.14
(effective October 2016). Data elements in the standardized assessment
instrument that we tested in the Post-Acute Care Payment Reform
Demonstration (PAC PRD)--the Continuity Assessment Record and
Evaluation (CARE) were also considered. A literature search was also
conducted to determine whether additional data elements to propose as
standardized resident assessment data could be identified.
We additionally held four Special Open Door Forums (SODFs) on
October 27, 2015; May 12, 2016; September 15, 2016; and December 8,
2016, to present data elements we were considering and to solicit
input. At each SODF, some stakeholders provided immediate input, and
all were invited to submit additional comments via the CMS IMPACT
Mailbox at PACQualityInitiative@cms.hhs.gov.
We also convened a meeting with federal agency subject matter
experts (SMEs) on May 13, 2016. In addition, a public comment period
was open from August 12, to September 12, 2016, to solicit comments on
detailed candidate data element descriptions, data collection methods,
and coding methods. The IMPACT Act Public Comment Summary Report
containing the public comments (summarized and verbatim) and our
responses, 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.
We specifically sought to identify standardized resident assessment
data that we could feasibly incorporate into the LTCH, IRF, SNF, and
HHA assessment instruments and that have
[[Page 36570]]
the following attributes: (1) Being supported by current science; (2)
testing well in terms of their reliability and validity, consistent
with findings from the Post-Acute Care Payment Reform Demonstration
(PAC PRD); (3) the potential to be shared (for example, through
interoperable means) among PAC and other provider types to facilitate
efficient care coordination and improved beneficiary outcomes; (4) the
potential to inform the development of quality, resource use and other
measures, as well as future payment methodologies that could more
directly take into account individual beneficiary health
characteristics; and (5) the ability to be used by practitioners to
inform their clinical decision and care planning activities. We also
applied the same considerations that we apply with quality measures,
including the CMS Quality Strategy which is framed using the three
broad aims of the National Quality Strategy.
d. Policy for Retaining SNF QRP Measures and Application of That Policy
to Standardized Resident Assessment Data
In the FY 2016 SNF PPS final rule (80 FR 46431 through 46432), we
adopted our policy for measure removal and also finalized that when we
initially adopt a measure for the SNF QRP, 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. In the FY 2018 SNF PPS proposed rule (82 FR 21044) we proposed
to apply this policy to the standardized resident assessment data that
we adopt for the SNF QRP.
We sought public comment on our proposal. A discussion of these
comments, along with our responses, appears below.
Comment: Several commenters supported applying the existing policy
for retaining SNF QRP measures to standardized resident assessment
data.
Response: We thank the commenters for their support.
Final Decision: After consideration of the public comments we
received, we are finalizing our proposal to apply the policy for
retaining SNF QRP measures to the standardized resident assessment data
as proposed.
e. Policy for Adopting Changes to SNF QRP Measures and Application of
That Policy to Standardized Resident Assessment Data
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 did not propose to make any
changes to this policy in the FY 2018 SNF PPS proposed rule (82 FR
21044 through 20145). We did propose to apply this policy to the
standardized resident assessment data that we adopt for the SNF QRP.
We sought public comment on our proposal. A discussion of these
comments, along with our responses, appears below.
Comment: All commenters who commented on this topic expressed
support for our subregulatory process for adopting non-substantive
changes to SNF QRP measures, recognizing that the measures will require
adjustments over time to reflect changes in practice or populations.
All of these commenters also specifically expressed support for our
proposal to apply this approach to the standardized resident assessment
data proposed for the SNF QRP. Many of these commenters further
supported our policy to make substantive changes to quality measures
using the rulemaking process. The commenters also recognized that
corrections and adjustments to measures may become necessary over time
and that we will provide a clear rationale for such changes, as well as
a mechanism for public comment on these changes.
Response: We appreciate the commenters' support.
Final Decision: After consideration of the public comments we
received, we are finalizing our proposal to apply our policy for
adopting changes to the SNF QRP measures to the standardized resident
assessment data as proposed.
f. Quality Measures Currently Adopted for the SNF QRP
The SNF QRP currently has seven adopted measures as outlined in
Table 18.
Table 18--Quality Measures Currently Adopted for the SNF QRP
------------------------------------------------------------------------
Short name Measure name & data source
------------------------------------------------------------------------
Resident Assessment Instrument Minimum Data Set
------------------------------------------------------------------------
Pressure Ulcers................... Percent of Residents or Patients
with Pressure Ulcers that are New
or Worsened (Short Stay) (NQF
#0678).
Application of Falls.............. Application of the NQF-endorsed
Percent of Residents Experiencing
One or More Falls with Major Injury
(Long Stay) (NQF #0674).*
Application of Functional Application of Percent of LTCH
Assessment/Care Plan. Patients with an Admission and
Discharge Functional Assessment and
a Care Plan That Addresses Function
(NQF #2631).*
DRR............................... Drug Regimen Review Conducted with
Follow-Up for Identified Issues-
Post Acute Care (PAC) Skilled
Nursing Facility Quality Reporting
Program.*
------------------------------------------------------------------------
Claims-based
------------------------------------------------------------------------
MSPB.............................. Total Estimated Medicare Spending
Per Beneficiary (MSPB)--Post Acute
Care (PAC) Skilled Facility (SNF)
Quality Reporting Program (QRP).*
DTC............................... Discharge to Community-Post Acute
Care (PAC) Skilled Nursing Facility
(SNF) Quality Reporting Program
(QRP).*
PPR............................... Potentially Preventable 30-Day Post-
Discharge Readmission Measure for
Skilled Nursing Facility Quality
Reporting Program.*
------------------------------------------------------------------------
* Not currently NQF-endorsed for the SNF Setting.
We received several comments about quality measures currently
adopted for the SNF QRP which are summarized and discussed below.
Comment: A few commenters expressed views regarding the Potentially
Preventable 30-Day Post-Discharge Readmission Measure for SNF QRP, a
measure previously finalized in the FY 2017 SNF PPS final rule (81 FR
52030 through 52034). Comments included recommendations for
[[Page 36571]]
additional testing and evaluation of the PPR definition and measure
exclusions. One commenter supported the public reporting thresholds.
Another commenter requested that patient-level data be made available
to SNFs to facilitate quality improvement and review and corrections.
We also received some comments related to accounting for social risk
factors.
Response: While we received comments regarding this previously
finalized measure, the changes we proposed pertain only to the years of
data used to calculate this measure and therefore we consider these
comments to be out of scope of this current rule. We did address these
issues in the FY 2017 SNF PPS final rule (81 FR 52030 through 52034),
and we refer the reader to that detailed discussion. We continue to
believe that the measure specifications are appropriate for this
measure. We also refer readers to section III.D.2.b.1 of this rule for
responses to comments received related to social risk factors for this
measure.
Comment: We received a comment regarding the Drug Regimen Review
Conducted with Follow-Up for Identified Issues-PAC SNF QRP measure, a
measure previously finalized in the FY 2017 SNF PPS final rule. The
commenter expressed support for MedPAC comments regarding the measure,
including the MedPAC recommendation that we develop a measure to
evaluate PAC provider support for medication reconciliation throughout
the care continuum, including provider transfer of the patient
medication list to the follow-up provider at patient discharge. The
commenter stated the importance of provider access to patient
medication lists and suggested that requiring providers to transmit the
patient medication list to the follow-up provider at discharge may
improve patient safety and prevent avoidable readmissions.
Response: We appreciate the comments received for this finalized
measure. We refer readers to the FY 2017 SNF PPS final rule (81 FR
52034 through 52039) for detailed responses related to the previously
finalized Drug Regimen Review Conducted with Follow-Up for Identified
Issues-PAC SNF QRP measure.
Comment: A few commenters expressed views regarding the Medicare
Spending per Beneficiary-PAC SNF QRP, a measure finalized in the FY
2017 SNF PPS final rule (81 FR 52014 through 52021). Commenters
addressed the risk-adjustment approach, clinically unrelated services,
confidential feedback reporting, accounting for social risk factors,
MSPB-PAC measure alignment, and unintended consequences related to
implementation of the measure. One commenter felt that the measure was
confusing, and that patients and providers might incorrectly interpret
it as a measure of quality rather than efficiency. Another commenter
encouraged CMS to utilize claims and patient assessment data to
incorporate functional status into the risk-adjustment. Another
commenter expressed concern that PAC providers' performance on this
measure would focus on costs per patient, without fully accounting for
patient outcomes, and that efficiency should not be based solely on the
MSPB-PAC measures. This commenter also noted that this measure may
result in limiting access to certain patients. One commenter stated
that the MSPB-PAC measures should be more uniformly defined so as to
facilitate a meaningful comparison of spending for beneficiaries across
PAC settings. Another commenter felt that the measure was flawed with
regard to putting SNFs at risk for post-discharge services beyond their
control. The commenter encouraged CMS to provide additional details
regarding the types of services that would be considered ``included and
associated services.'' Another commenter urged CMS to provide the
opportunity for confidential feedback between CMS and providers before
publicly displaying the MSPB-PAC measures.
Response: While we received comments regarding the previously
finalized measure, Medicare Spending per Beneficiary-PAC SNF QRP, since
no changes were proposed to this measure, we consider comments received
to be outside the scope of the current rule. We addressed these issues
in the FY 2017 SNF PPS final rule (81 FR 52014 through 52021), and we
refer readers to that detailed discussion. We continue to believe that
the measure specifications, including the risk-adjustment, are
appropriate for this measure. With regard to comments related to
accounting for social risk factors, we refer readers to section
III.D.2.b.1. of this rule.
Comment: We received comments related to the Discharge to
Community-PAC SNF QRP measure, a measure previously finalized in the FY
2017 SNF PPS final rule. Comments included suggestions to adjust for
sociodemographic and socioeconomic risk factors and caregiver support,
to adjust for factors unique to providers offering dedicated services
to specialty residents (for example, those with HIV/AIDS) who may
encounter greater challenges with community transitions, to exclude
patients who died in the observation window following return to a
community setting, to distinguish between a patient's return to home in
the community versus home in a custodial nursing facility, to assess
reliability and validity of the claims discharge status code used to
calculate the measure, and to submit the measure for NQF endorsement.
Commenters also shared concerns about risk adjustment for social
factors as this could mask disparities in care, potential unintended
consequences for patients expected to have difficult transitions to the
community such as decreased PAC access and increased healthcare costs
due to more costly acute care stays, lack of adjustment for regional
differences in community-based needs and supports, and lack of
adjustment for patients' goals in the community, such as those seeking
end-of-life care outside of formal hospice services.
Response: While we received comments regarding the previously
finalized Discharge to Community-PAC SNF QRP measure, since no changes
were proposed to this measure, we consider comments received to be
outside the scope of the current rule. We previously responded to
comments on these topics in the FY 2017 SNF PPS final rule (81 FR 52021
through 52029); we refer the commenters to the FY 2017 SNF PPS final
rule for a detailed response on these issues. We also note that in the
FY 2018 SNF PPS proposed rule (81 FR 21058), we sought comment on the
exclusion of baseline nursing facility residents as a potential future
modification of the Discharge to Community-PAC SNF QRP measure. We
refer readers to section III.D.2.i.1 of this final rule for a
discussion of this issue. We also refer readers to section III.D.2.b.1.
of this final rule for responses to comments received related to
accounting for social risk factors for the Discharge to Community-PAC
SNF QRP measure.
g. SNF QRP Quality Measures Beginning With the FY 2020 SNF QRP
In the FY 2018 SNF PPS proposed rule (82 FR 21045 through 21057),
beginning with the FY 2020 SNF QRP, in addition to the quality measures
we are retaining under our policy described in section III.D.2.f. of
this final rule, we proposed to remove the current pressure ulcer
measure entitled Percent of Residents or Patients with Pressure Ulcers
That Are New or Worsened (Short Stay) (NQF #0678) and to replace it
with a modified version of the measure entitled Changes in Skin
Integrity Post-Acute Care: Pressure Ulcer/Injury and to adopt four
function
[[Page 36572]]
outcome measures on resident functional status. We also proposed to
characterize the data elements described below as standardized resident
assessment data under section 1899B(b)(1)(B) of the Act that must be
reported by SNFs under the SNF QRP through the MDS.
The measures are as follows:
Changes in Skin Integrity Post-Acute Care: Pressure Ulcer/
Injury.
Application of IRF Functional Outcome Measure: Change in
Self-Care Score for Medical Rehabilitation Patients (NQF #2633).
Application of IRF Functional Outcome Measure: Change in
Mobility Score for Medical Rehabilitation Patients (NQF #2634).
Application of IRF Functional Outcome Measure: Discharge
Self-Care Score for Medical Rehabilitation Patients (NQF #2635).
Application of IRF Functional Outcome Measure: Discharge
Mobility Score for Medical Rehabilitation Patients (NQF #2636).
The measures are described in more detail below.
(1) Replacing the Current Pressure Ulcer Quality Measure, Percent
of Residents or Patients with Pressure Ulcers That Are New or Worsened
(Short Stay) (NQF #0678), with a Modified Pressure Ulcer Measure,
Changes in Skin Integrity Post-Acute Care: Pressure Ulcer/Injury
(a) Measure Background
In the FY 2018 SNF PPS proposed rule (82 FR 21045 through 21049),
we proposed to remove the current pressure ulcer measure, Percent of
Residents or Patients with Pressure Ulcers That Are New or Worsened
(Short Stay) (NQF #0678) from the SNF QRP measure set and replace it
with a modified version of that measure, Changes in Skin Integrity
Post-Acute Care: Pressure Ulcer/Injury, beginning with the FY 2020 SNF
QRP. The change in the measure name is to reduce confusion about the
new modified measure. The modified version differs from the current
version of the measure because it includes new or worsened unstageable
pressure ulcers, including deep tissue injuries (DTIs), in the measure
numerator. The modified version of the measure would satisfy the IMPACT
Act domain of skin integrity and changes in skin integrity.
We note that the technical specifications for the pressure ulcer
measure were updated in August 2016 through a subregulatory process to
ensure technical alignment of the SNF measure specifications with the
LTCH, IRF, and HH specifications. The technical updates were added to
ensure clarity in how the measure is calculated, and to avoid possible
over counting of pressure ulcers in the numerator. We corrected the
technical specifications to mitigate the risk of over counting new or
worsened pressure ulcers and to reflect the actual unit of analysis as
finalized in the rule, which is a stay (Medicare Part A stay) for SNF
QRP, consistent with the IRF, and LTCH QRPs, rather than an episode
(which could include multiple stays) as is used in the case of Nursing
Home Compare. Thus, we updated the SNF measure specifications to
reflect all resident stays, rather than the most-recent episode in a
quarter, which is comprised of one or more stays in that measure
calculation. Also, to ensure alignment, we corrected our specifications
to ensure that healed wounds are not incorrectly captured in the
measure. Further, we corrected the specifications to ensure the
exclusion of residents who expire during their SNF stay. The SNF
specifications can be reviewed on our Web site at https://www.cms.gov/Medicare/Quality-Initiatives-Patient-Assessment-Instruments/NursingHomeQualityInits/Skilled-Nursing-Facility-Quality-Reporting-Program/SNF-Quality-Reporting-Program-Measures-and-Technical-Information.html.
(b) Measure Importance
As described in the FY 2016 SNF PPS final rule (80 FR 46433),
pressure ulcers are high-cost adverse events and an important measure
of quality. For information on the history and rationale for the
relevance, importance, and applicability of having a pressure ulcer
measure in the SNF QRP, we refer readers to the FY 2016 SNF PPS final
rule (80 FR 46433 through 46434).
We proposed to adopt a modified version of the current pressure
ulcer measure because unstageable pressure ulcers, including DTIs, are
similar to Stage 2, Stage 3, and Stage 4 pressure ulcers in that they
represent poor outcomes, are a serious medical condition that can
result in death and disability, are debilitating and painful, and are
often an avoidable outcome of medical care.8 9 10 11 12 13
Studies show that most pressure ulcers can be avoided and can also be
healed in acute, post-acute, and long-term care settings with
appropriate medical care.\14\
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\8\ Casey, G. (2013). ``Pressure ulcers reflect quality of
nursing care.'' Nurs N Z 19(10):20-24.
\9\ Gorzoni, M.L. and S.L. Pires (2011). ``Deaths In nursing
homes.'' Rev Assoc Med Bras 57(3):327-331.
\10\ Thomas, J.M., et al. (2013). ``Systematic review: health-
related characteristics of elderly hopitalized adults and nursing
home residents associated with short-term mortality.'' J Am Geriatr
Soc 61(6): 902-911.
\11\ White-Chu, E.F., et al. (2011). ``Pressure ulcers in long-
term care.'' Clin Geriatr Med 27(2):241-258.
\12\ Bates-Jensen BM. Quality indicators for prevention and
management of pressure ulcers in vulnerable elders. Ann Int Med.
2001;135 (8 Part 2), 744-51.
\13\ Bennet, G, Dealy, C Posnett, J (2004). The cost of pressure
ulcers in the UK, Age and Aging, 33(3):230-235.
\14\ Black, Joyce M., et al. ``Pressure ulcers: avoidable or
unavoidable? Results of the national pressure ulcer advisory panel
consensus conference.'' Ostomy-Wound Management 57.2 (2011): 24.
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Furthermore, some studies indicate that DTIs, if managed using
appropriate care, can be resolved without deteriorating into a worsened
pressure ulcer.15 16 While DTIs are a subset of unstageable
pressure ulcers, we collect DTI data elements separately and analyze
them both separately and with other unstageable pressure ulcer item
categories in our analysis below. We note that DTIs are categorized as
a type of unstageable pressure ulcer on the MDS and other post-acute
care item sets.
---------------------------------------------------------------------------
\15\ Sullivan, R. (2013). A Two-year Retrospective Review of
Suspected Deep Tissue Injury Evolution in Adult Acute Care Patients.
Ostomy Wound Management 59(9) https://www.o-wm.com/article/two-year-retrospective-review-suspected-deep-tissue-injury-evolution-adult-acute-care-patien.
\16\ Posthauer, ME, Zulkowski, K. (2005). Special to OWM: The
NPUAP Dual Mission Conference: Reaching Consensus on Staging and
Deep Tissue Injury. Ostomy Wound Management 51(4) https://www.o-wm.com/content/the-npuap-dual-mission-conference-reaching-consensus-staging-and-deep-tissue-injury.
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While there are few studies that provide information regarding the
incidence of unstageable pressure ulcers in PAC settings, an analysis
conducted by a contractor suggests the incidence of unstageable
pressure ulcers varies according to the type of unstageable pressure
ulcer and setting.\17\ This analysis examined the national incidence of
new unstageable pressure ulcers in SNFs at discharge compared with
admission using SNF discharges from January through December 2015. The
contractor found a national incidence of 0.40 percent of new
unstageable pressure ulcers due to slough and/or eschar, 0.02 percent
of new unstageable pressure ulcers due to non-removable dressing/
device, and 0.57 percent of new DTIs. In addition, an international
study spanning the time period 2006 to 2009, provides some evidence to
suggest that the
[[Page 36573]]
proportion of pressure ulcers identified as DTI has increased over
time.\18\
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\17\ Final Measure Specifications for SNF QRP Quality Measures
and Standardized Resident Assessment Data Elements, available at
https://www.cms.gov/Medicare/Quality-Initiatives-Patient-Assessment-Instruments/NursingHomeQualityInits/Skilled-Nursing-Facility-Quality-Reporting-Program/SNF-Quality-Reporting-Program-Measures-and-Technical-Information.html.
\18\ VanGilder, C, MacFarlane, GD, Harrison, P, Lachenbruch, C,
Meyer, S (2010). The Demographics of Suspected Deep Tissue Injury in
the United States: An Analysis of the International Pressure Ulcer
Prevalence Survey 2006-2009. Advances in Skin & Wound Care. 23(6):
254-261.
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The inclusion of unstageable pressure ulcers, including DTIs, in
the numerator of this measure is expected to increase measure scores
and variability in measure scores, thereby improving the ability to
discriminate among poor- and high-performing SNFs. In the currently
implemented pressure ulcer measure, Percent of Residents or Patients
with Pressure Ulcers That Are New or Worsened (Short Stay) (NQF #0678),
analysis using data from Quarter 4 2015 through Quarter 3 2016 reveals
that the SNF mean score is 1.75 percent; the 25th and 75th percentiles
are 0.0 percent and 2.53 percent, respectively; and 29.11 percent of
facilities have perfect scores. In the measure, Changes in Skin
Integrity Post-Acute Care: Pressure Ulcer/Injury, during the same
timeframe, the SNF mean score is 2.58 percent; the 25th and 75th
percentiles are 0.65 percent and 3.70 percent, respectively; and 20.32
percent of facilities have perfect scores.
(c) Stakeholder Feedback
Our measure development contractor sought input from subject matter
experts, including Technical Expert Panels (TEPs), over the course of
several years on various skin integrity topics and specifically those
associated with the inclusion of unstageable pressure ulcers, including
DTIs. Most recently, on July 18, 2016, a TEP convened by our measure
development contractor provided input on the technical specifications
of this quality measure, including the feasibility of implementing the
proposed measure's updates related to the inclusion of unstageable
ulcers, including DTIs, across PAC settings. The TEP supported the
updates to the measure across PAC settings, including the inclusion in
the numerator of unstageable pressure ulcers due to slough and/or
eschar that are new or worsened, new unstageable pressure ulcers due to
a non-removable dressing or device, and new DTIs. The TEP recommended
supplying additional guidance to providers regarding each type of
unstageable pressure ulcer. This support was in agreement with earlier
TEP meetings, held on June 13, and November 15, 2013, which had
recommended that CMS update the specifications for the pressure ulcer
measure to include unstageable pressure ulcers in the
numerator.19 20 Exploratory data analysis conducted by our
measure development contractor suggests that the addition of
unstageable pressure ulcers, including DTIs, will increase the observed
incidence and variation in the rate of new or worsened pressure ulcers
at the facility level, which may improve the ability of the proposed
quality measure to discriminate between poor- and high-performing
facilities.
---------------------------------------------------------------------------
\19\ Schwartz, M., Nguyen, K.H., Swinson Evans, T.M., Ignaczak,
M.K., Thaker, S., and Bernard, S.L.: Development of a Cross-Setting
Quality Measure for Pressure Ulcers: OY2 Information Gathering,
Final Report. Centers for Medicare & Medicaid Services, November
2013. Available: https://www.cms.gov/Medicare/Quality-Initiatives-Patient-Assessment-Instruments/Post-Acute-Care-Quality-Initiatives/Downloads/Development-of-a-Cross-Setting-Quality-Measure-for-Pressure-Ulcers-Information-Gathering-Final-Report.pdf.
\20\ Schwartz, M., Ignaczak, M.K., Swinson Evans, T.M., Thaker,
S., and Smith, L.: The Development of a Cross-Setting Pressure Ulcer
Quality Measure: Summary Report on November 15, 2013, Technical
Expert Panel Follow-Up Webinar. Centers for Medicare & Medicaid
Services, January 2014. Available: https://www.cms.gov/Medicare/Quality-Initiatives-Patient-Assessment-Instruments/Post-Acute-Care-Quality-Initiatives/Downloads/Development-of-a-Cross-Setting-Pressure-Ulcer-Quality-Measure-Summary-Report-on-November-15-2013-Technical-Expert-Pa.pdf.
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We solicited stakeholder feedback on this proposed measure by means
of a public comment period held from October 17 through November 17,
2016. In general, we received considerable support for the proposed
measure. A few commenters supported all of the changes to the current
pressure ulcer measure that resulted in the measure, with one commenter
noting the significance of the work to align the pressure ulcer quality
measure specifications across the PAC settings. Many commenters
supported the inclusion of unstageable pressure ulcers due to slough/
eschar, due to non-removable dressing/device, and DTIs in the quality
measure. Other commenters did not support the inclusion of DTIs in the
quality measure because they stated that there is no universally
accepted definition for this type of skin injury.
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.
This summary includes further detail about our responses to various
concerns and ideas stakeholders raised at that time.
The NQF-convened Measures Application Partnership (MAP) Post-Acute
Care/Long-Term Care (PAC/LTC) Workgroup met on December 14 and 15,
2016, and provided input to us about this measure. The workgroup
provided a recommendation of ``support for rulemaking'' for use of the
measure in the SNF QRP. The MAP Coordinating Committee met on January
24 and 25, 2017, and provided a recommendation of ``conditional support
for rulemaking'' for use of the proposed measure in the SNF QRP. The
MAP's conditions of support include that, as a part of measure
implementation, CMS provide guidance on the correct collection and
calculation of the measure result, as well as guidance on public
reporting Web sites explaining the impact of the specification changes
on the measure result. The MAP's conditions also specify that CMS
continue analyzing the proposed measure to investigate unexpected
results reported in public comment. We intend to fulfill these
conditions by offering additional training opportunities and
educational materials in advance of public reporting, and by continuing
to monitor and analyze the proposed measure. More information about the
MAP's recommendations for this measure is available at https://www.qualityforum.org/WorkArea/linkit.aspx?LinkIdentifier=id&ItemID=84452.
We reviewed the NQF's consensus endorsed measures and were unable
to identify any NQF-endorsed pressure ulcer quality measures for PAC
settings that are inclusive of unstageable pressure ulcers. There are
related measures, but after careful review, we determined these
measures are not applicable for use in SNFs based on the populations
addressed or other aspects of the specifications. We are unaware of any
other such quality measures that have been endorsed or adopted by
another consensus organization for the SNF setting. Therefore, based on
the evidence discussed above, we proposed to adopt the quality measure
entitled, Changes in Skin Integrity Post-Acute Care: Pressure Ulcer/
Injury, for the SNF QRP beginning with the FY 2020 SNF QRP. We plan to
submit the proposed measure to the NQF for endorsement consideration as
soon as feasible.
(d) Data Collection
The data for this quality measure would be collected using the MDS,
which is currently submitted by SNFs through the Quality Improvement
and Evaluation System (QIES) Assessment Submission and Processing
(ASAP) System. The proposed standardized resident assessment data
applicable to this measure that must be reported by SNFs for admissions
as well as discharges occurring on or after October
[[Page 36574]]
1, 2018 is described in section III.D.2. of this final rule. SNFs are
already required to complete unstageable pressure ulcer data elements
on the MDS. While the inclusion of unstageable wounds in the proposed
measure results in a measure calculation methodology that is different
from the methodology used to calculate the current pressure ulcer
measure, the data elements needed to calculate the proposed measure are
already included in the MDS. In addition, this proposed measure will
further standardize the data elements used in risk adjustment of this
measure. Our proposal to eliminate duplicative data elements will
result in an overall reduced reporting burden for SNFs for the proposed
measure.
To view the updated MDS, with the proposed changes, we refer to the
reader to https://www.cms.gov/medicare/quality-initiatives-patient-assessment-instruments/nursinghomequalityinits/mds30raimanual.html. For
more information on MDS submission using the QIES ASAP System, we refer
readers to https://www.cms.gov/Medicare/Quality-Initiatives-Patient-Assessment-Instruments/NursingHomeQualityInits/NHQIMDS30TechnicalInformation.html.
For technical information about this proposed measure, including
information about the measure calculation and the standardized resident
assessment data elements used to calculate this measure, we refer
readers to the document titled, Final Measure Specifications for SNF
QRP Quality Measures and Standardized Resident Assessment Data
Elements, available at https://www.cms.gov/Medicare/Quality-Initiatives-Patient-Assessment-Instruments/NursingHomeQualityInits/Skilled-Nursing-Facility-Quality-Reporting-Program/SNF-Quality-Reporting-Program-Measures-and-Technical-Information.html.
We proposed that SNFs begin reporting the proposed pressure ulcer
measure, Changes in Skin Integrity Post-Acute Care: Pressure Ulcer/
Injury, which will replace the current pressure ulcer measure, with
data collection beginning October 1, 2018 for admissions as well as
discharges.
We sought public comment on our proposal to replace the current
pressure ulcer measure, Percent of Residents or Patients with Pressure
Ulcers That Are New or Worsened (Short Stay) (NQF #0678), with a
modified version of that measure, entitled Changes in Skin Integrity
Post-Acute Care: Pressure Ulcer/Injury, beginning with the FY 2020 SNF
QRP. A discussion of these comments, along with our responses, appears
below.
Comment: Many commenters supported the proposed replacement of the
current pressure ulcer measure, the Percent of Residents or Patients
with Pressure Ulcers That Are New or Worsened (Short Stay) (NQF #0678),
with a modified version of that measure, entitled Changes in Skin
Integrity Post-Acute Care: Pressure Ulcer/Injury. Commenters recognized
that the proposed measure will meet the requirements of the IMPACT Act
for the Skin Integrity and Changes in Skin Integrity domain. Commenters
believed that the revisions identified in the proposed rule will
improve on the existing pressure ulcer measure and ensure that the data
collected accurately reflects the care and conditions of the SNF
patient population. One commenter supported the use of data elements
that are already in use in the MDS to reduce reporting burden for
providers. Another commenter noted that revisions to quality measures
are an important part of ensuring accurate information that is
reflective of advances in knowledge and technology, and ensuring that
the data reflect the patient population.
Response: We appreciate the commenters' support to replace the
current pressure ulcer measure, Percent of Residents or Patients with
Pressure Ulcers That Are New or Worsened (Short Stay) (NQF #0678), with
a modified version of the measure, Changes in Skin Integrity Post-Acute
Care: Pressure Ulcer/Injury to fulfill the requirements of the IMPACT
Act. We agree that this proposal will limit regulatory burden and
promote high quality care, as the commenters describe.
Comment: A few commenters expressed concerns that the variation in
measure scores between facilities could reflect differences in the
interpretation of definitions for unstageable pressure ulcers or DTIs,
rather than actual differences in quality or care practices. One
commenter cautioned that a measure should not be changed to create
performance variation, but rather to be consistent with current science
or to provide clarity and consistent data collection. The commenters
encouraged additional testing of the measure to ensure that it collects
accurate data.
Response: We have performed testing to compare the performance of
the proposed measure with the existing pressure ulcer/injury measure.
Current findings indicate that the measure is both valid and reliable
in the SNF, LTCH, and IRF settings.
The reliability and validity of the data elements used to calculate
this quality measure have been tested in several ways. Rigorous testing
on both reliability and validity of the data elements in the MDS 3.0
provides evidence for the data elements used in the SNF, LTCH, and IRF
settings.\21\ The MDS 3.0 pilot test showed good reliability, and the
results are applicable to the IRF-PAI as well as the LTCH CARE Data Set
because the data elements tested are the same as those used in the IRF-
PAI and LTCH CARE Data Set. Across pressure ulcer data elements,
average gold-standard to gold-standard kappa statistic was 0.905. The
average gold-standard to facility-nurse kappa statistic was 0.937.
These kappa scores indicate ``almost perfect'' agreement using the
Landis and Koch standard for strength of agreement.\22\
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\21\ Saliba, D., & Buchanan, J. (2008, April). Development and
validation of a revised nursing home assessment tool: MDS 3.0.
Contract No. 500-00-0027/Task Order #2. Santa Monica, CA: Rand
Corporation. Retrieved from https://www.cms.hhs.gov/NursingHomeQualityInits/Downloads/MDS30FinalReport.pdf.
\22\ Landis, R., & Koch, G. (1977, March). The measurement of
observer agreement for categorical data. Biometrics 33(1), 159-174.
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To assess the construct validity of this measure, or the degree to
which the measure construct measures what it claims or purports to be
measuring, our measure contractor sought input from TEPs over the
course of several years. Most recently, on July 18, 2016, a TEP
supported the inclusion in the numerator of unstageable pressure ulcers
due to slough and/or eschar that are new or worsened, new unstageable
pressure ulcers/injuries due to a non-removable dressing or device, and
new DTIs. The measure testing activities were presented to TEP members
for their input on the reliability, validity, and feasibility of this
measure change. The TEP members supported the measure construct.
The proposed measure also increased the variability of measures
scores between providers, as noted by some commenters. We would like to
clarify that the goal of the proposed measure is not to create
performance variation where none exists, but rather to better measure
existing performance variation. This increased variability of scores
between facilities will improve the ability of the measure to
distinguish between high- and low-performing facilities.
We will continue to perform reliability and validity testing in
compliance with NQF guidelines and the Blueprint for the CMS Measures
Management System to ensure that that the measure demonstrates
scientific acceptability (including reliability and validity) and meets
the goals of the QRP.
[[Page 36575]]
Finally, as with all measure development and implementation, we will
provide training and guidance prior to implementation of the measure to
promote consistency in the interpretation of the measure.
Comment: Commenters requested further training and guidance in
completing the M0300 data element that will be used to calculate the
proposed quality measure. One commenter stated that confusion exists
related to worsening of pressure ulcers, unstageable pressure ulcers
due to slough or eschar, and the concept of ``present on admission''.
One commenter stated that the use of these data elements would require
SNFs to calculate the number of new or worsened pressure ulcers by
subtracting those present on admission. Some commenters stated that the
modified measure may be difficult for providers to capture because they
are being asked to report on a different data element.
Response: The measure will be calculated using data reported on the
M0300 data element collected at discharge, which only requires SNFs to
report the number of pressure ulcers for each stage (including stages
2, 3, and 4, unstageable due to slough and/or eschar, unstageable due
to non-removable dressing/device, and DTIs), and of those, the number
that were present on admission. The M0300 data element currently exists
on the MDS, and the current MDS RAI Manual, as well as prior versions
of the Manual, include guidance about how to complete the data element,
including unstageable pressure ulcers and pressure ulcers that are
present on admission. The MDS RAI Manual can be found at https://
www.cms.gov/Medicare/Quality-Initiatives-Patient-Assessment-
Instruments/NursinghomeQualityInits/MDS30RAIManual.html.
Comment: We received several comments regarding the inclusion of
unstageable pressure ulcers in the proposed measure. One commenter
specifically supported the inclusion of these types of pressure ulcers.
Other commenters did not support the inclusion of unstageable pressure
ulcers, in the quality measure as proposed, and encouraged further
testing. Some commenters stated that there is a lack of clear
definition of pressure ulcers included in this measure, and that those
definitions may be too subjective to get reliable data. Commenters also
requested that we provide training opportunities and educational
materials prior to the implementation of this measure.
Response: We appreciate the support we have received regarding the
inclusion of unstageable pressure ulcers, including DTIs, in the
proposed quality measure. We believe that the inclusion of unstageable
pressure ulcers in the measure will result in a fuller picture of
quality to residents and families, and lead to further quality
improvement efforts that will advance patient safety by reducing the
rate of facility acquired pressure ulcers at any stage. We would like
to clarify that the definitions of pressure ulcers are adapted from the
National Pressure Ulcer Advisory Panel (NPUAP), and are standardized
across all PAC settings. These definitions are universally accepted,
objective, and considered to be the gold-standard definition by
national and international stakeholders such as the NPUAP, European
Pressure Ulcer Advisory Panel (EPUAP), Wound, Ostomy and Continence
Nurses Society (WOCN), amongst others. As a result, the use of these
universally accepted definitions of pressure ulcers furthers our
commitment to ensuring that all quality measures implemented in the QRP
meet the testing goals of the QRP.
To provide greater clarity about the definitions of different types
of unstageable pressure ulcers and how to code them on the MDS, we are
currently engaged in multiple educational efforts. These include
training events, updates to the manuals and training materials, and
responses to Help Desk questions to promote understanding and proper
coding of these data elements. We will continue to engage in these
training activities prior to implementation of the proposed measure.
Comment: One commenter specifically supported the new measure and
the specific inclusion of DTIs, and stressed the importance and impact
of such change in increasing the number of pressure ulcers captured.
The commenter stated that it would be important to note the impact on
the Five Star Quality Rating System. This commenter also noted that
some DTIs can also evolve or worsen, despite being managed with
appropriate care. Other commenters did not support the inclusion of
DTIs in the measure. These commenters stated that there is not a
universally accepted definition of DTIs, and that DTIs are commonly
misdiagnosed, which could lead to surveillance bias.
Response: We appreciate the comments regarding the inclusion of
DTIs in the proposed quality measure. DTIs are often an avoidable
outcome of medical care, are debilitating and painful, and can result
in death and/or disability, similar to Stage 2, Stage 3 and Stage 4
pressure ulcers. While some DTIs may worsen, studies indicate that many
DTIs, if managed using appropriate care, can be resolved without
deteriorating into a worsened pressure ulcer. Therefore, we believe
that the inclusion of DTIs in the proposed quality measure is essential
to be able to accurately reflect the number of these types of pressure
injuries and to provide the appropriate patient care. Further, we
believe that it is important to do a thorough assessment on every
patient in each PAC setting, including a thorough skin assessment
documenting the presence of any pressure ulcers or injuries of any
kind, including DTIs. We agree that it is important to conduct thorough
and consistent assessments to avoid the possibility of surveillance
bias.
When considering the addition of DTIs to the measure numerator, we
convened cross-setting TEPs in June and November 2013, and obtained
input from clinicians, experts, and other stakeholders. An additional
cross-setting TEP convened by our measure development contractor in
July 2016 also supported the recommendation to include unstageable
pressure ulcers, including DTIs, in the numerator of the quality
measure. Given DTIs' potential impact on mortality, morbidity, and
quality of life, it may be detrimental to the quality of care to
exclude DTIs from a pressure ulcer quality measure.
We do not intend to include the proposed measure in the Five Star
Quality Rating System calculations.
Comment: Several commenters recommended that we attain NQF
endorsement of the Changes in Skin Integrity Post-Acute Care: Pressure
Ulcer/Injury measure prior to implementation.
Response: While this measure is not currently NQF-endorsed, we
recognize that the NQF endorsement process is an important part of
measure development and plan to submit this measure for NQF endorsement
consideration as soon as feasible.
Comment: Several commenters noted that there is a difference in the
denominator across settings in terms of which payer sources (Medicare
Part A or Medicare Advantage) are included in the measure. Commenters
recommended that we ensure that common denominators are used when
displaying this measure for quality comparison purposes. One commenter
stated that there is an IMPACT Act mandate to implement ``interoperable
measures'' across PAC settings.
Response: We recognize that data is currently collected from
different payer sources for each PAC setting. We believe
[[Page 36576]]
that quality care is best assessed through the collection of data from
all patients, and strive to include the largest possible patient
population in the measure denominator. For this reason, we do not seek
to limit the denominator in each setting based on the data currently
available in other settings (that is, limiting every setting
denominator to Medicare Part A patients). Regarding the concern that
different patient population denominators are misleading to consumers
and providers, we seek to clarify the intent and use of this quality
measure through rulemaking, provider training, and ongoing
communication with stakeholders. Ongoing communication includes the
posting of measure specifications and communication accompanying public
reporting. Further, we will take into consideration the expansion of
the SNF QRP to include all payer sources through future rulemaking.
The Changes in Skin Integrity Post-Acute Care: Pressure Ulcer/
Injury measure is harmonized across all PAC settings and uses
standardized resident assessment data as required by the IMPACT Act.
Further, we would like to clarify that the M0300 data element used to
calculate this measure is standardized across all PAC settings,
enabling interoperability. This standardization and interoperability of
data elements allows for the exchange of information among PAC
providers and other providers to whom this data is applicable. We refer
readers to the measure specifications, which describe the
specifications for the measure in PAC settings, Final Specifications
for SNF QRP Quality Measures and Standardized Resident Assessment Data
Elements, available at https://www.cms.gov/Medicare/Quality-Initiatives-Patient-Assessment-Instruments/NursingHomeQualityInits/Skilled-Nursing-Facility-Quality-Reporting-Program/SNF-Quality-Reporting-Program-Measures-and-Technical-Information.html.
Comment: One commenter indicated support for our efforts to
standardize data elements across PAC settings and encouraged further
standardization of coding instructions across settings. The commenter
specifically noted that coding guidance surrounding Kennedy Ulcers
seems to differ between the LTCH and SNF manuals. The commenter urged
us to thoroughly review all manuals to ensure standardization of coding
guidance and instructions.
Response: The LTCH QRP Manual Version 3.0 instructs LTCHS to not
count Kennedy ulcers in the pressure ulcer data elements. The MDS RAI
Manual Version 1.14 provides guidance regarding the etiology of ulcers
that should be reported in the data elements, but does not provide
specific guidance on Kennedy ulcers. The guidance in the two manuals
differs in order to be specific to each setting. Although the guidance
is tailored to be most applicable to each setting, the data elements
are standardized. Therefore, we do not expect this tailored guidance to
add variation to the measure outcome or to the standardized resident
assessment data.
Comment: A few commenters noted that SNF performance scores on the
proposed measure are likely to differ from performance scores on the
currently implemented pressure ulcer measure, Percent of Residents or
Patients with Pressure Ulcers That Are New or Worsened (Short Stay)
(NQF #0678). They recommended development of educational materials for
the public to explain the perceived shifts in performance.
Response: We appreciate commenters' concerns about differences in
performance scores between the two measures and the possibility of
misinterpretation. While the proposed measure will not be directly
comparable to the existing measure, it is expected to provide an
improved measure of quality moving forward since it will more
accurately capture the number of new and worsened pressure ulcers and
include unstageable pressure ulcers. Further information and training
will be provided to providers as well as consumers regarding how to
interpret scores on the proposed measure, to avoid any possible
confusion between the proposed measure and the existing measure.
Comment: One commenter suggested that we include additional risk
factors in the proposed measure for populations that may be compromised
physically, such as the ventilator-dependent population, and to include
factors such as whether the resident experienced a hospital stay, was
in the emergency department for an extended period of time, was on a
stretcher for an extended period of time, was receiving palliative
care, and other hospital factors that may lead to the development of
pressure ulcers. The commenter also recommended that social risk
factors be accounted for in the quality measure. One commenter stated
that the proposed measure should be properly risk adjusted.
Response: The proposed quality measure would be risk adjusted for
functional mobility admission performance, bowel continence, diabetes
mellitus or peripheral vascular disease/peripheral arterial disease,
and low body mass index in each of the four settings. This risk
adjustment methodology is described further in the Final Specifications
for SNF QRP Quality Measures and Standardized Resident Assessment Data
Elements, available at https://www.cms.gov/Medicare/Quality-Initiatives-Patient-Assessment-Instruments/NursingHomeQualityInits/Skilled-Nursing-Facility-Quality-Reporting-Program/SNF-Quality-Reporting-Program-Measures-and-Technical-Information.html. As with our
measure modification and evaluation processes, we will continue to
analyze this measure, specifically assessing the addition of variables
to the risk adjustment model, and testing the inclusion of other risk
factors as additional risk adjustors. This continued refinement of the
risk adjustment models will ensure that the measure remains valid and
reliable to inform quality improvement within and across each PAC
setting, and to fulfill the public reporting goals of quality reporting
programs. Our approach to using social risk factors for risk adjustment
is further described in section III.D.2.B.1 of this final rule.
Comment: One commenter requested clarification regarding the
proposed measure and the population it is applied to, stating that the
long stay pressure ulcer quality measure and short stay pressure ulcer
quality measure appear to be combined into a single measure.
Response: The proposed measure, Changes in Skin Integrity Post-
Acute Care: Pressure Ulcer/Injury, is distinct from both the Percent of
Residents or Patients with Pressure Ulcers That Are New or Worsened
(Short-Stay) Measure (NQF #0678) and the Percent of High Risk Residents
with Pressure Ulcers (Long Stay) Measure (NQF #0679). There are several
key differences between these measures and the programs they are used
in. The long-stay measure, Percent of High-Risk Residents with Pressure
Ulcers (NQF #0679), measures the percent of residents with one or more
conditions indicating high risk to develop pressure ulcers (impaired
bed mobility or transfer, comatose, or malnutrition/risk of
malnutrition) with any pressure ulcers. This measure is used in the
Nursing Home Quality Initiative (NHQI) and reported on Nursing Home
Compare. Conversely, the short-stay measure, Percent of Residents with
Pressure Ulcers that are New or Worsened (short-stay) (NQF #0678),
currently used in used in the SNF QRP, assesses the percentage of
residents who develop new pressure ulcers or have existing
[[Page 36577]]
pressure ulcers worsen over their course of stay in a PAC facility.
The short stay measure does not include unstageable pressure ulcers
in the numerator. The measure is used in the NHQI and reported on
Nursing Home Compare, and is also currently applied to SNF residents
for the SNF QRP.
We reviewed both the short stay and long stay measures for
suitability, but the short stay measure does not include unstageable
pressure ulcers in the numerator, as described above, and the long stay
measure was determined to not be applicable for use in SNFs due to the
populations addressed. The proposed measure is to be applied to the SNF
population, which comprises residents who are receiving skilled nursing
services. This measure includes new or worsened pressure ulcers that
are numerically staged or unstageable, and is standardized across the
PAC settings. Further information about the specifications of this
measure can be found at https://www.cms.gov/Medicare/Quality-Initiatives-Patient-Assessment-Instruments/NursingHomeQualityInits/Skilled-Nursing-Facility-Quality-Reporting-Program/SNF-Quality-Reporting-Program-Measures-and-Technical-Information.html.
Final Decision: After consideration of the public comments we
received, we are finalizing our proposal to remove the current pressure
ulcer measure, Percent of Residents or Patients with Pressure Ulcers
That Are New or Worsened (Short Stay) (NQF #0678), from the SNF QRP
measure set and to replace it with a modified version of that measure,
entitled Changes in Skin Integrity Post-Acute Care: Pressure Ulcer/
Injury, for the SNF QRP with an implementation date of October 1, 2018.
(2) Functional Outcome Measures
In the FY 2018 SNF PPS proposed rule (82 FR 21047 through 21057) we
proposed for the SNF QRP four measures that we are specifying under
section 1899B(c)(1) of the Act for the purposes of meeting the
functional status, cognitive function, and changes in function and
cognitive function domain: (1) Application of the IRF Functional
Outcome Measure: Change in Self-Care Score for Medical Rehabilitation
Patients (NQF #2633); (2) Application of the IRF Functional Outcome
Measure: Change in Mobility Score for Medical Rehabilitation Patients
(NQF #2634); (3) Application of the IRF Functional Outcome Measure:
Discharge Self-Care Score for Medical Rehabilitation Patients (NQF
#2635); and (4) Application of the IRF Functional Outcome Measure:
Discharge Mobility Score for Medical Rehabilitation Patients (NQF
#2636). We finalized the same functional outcome measures for the IRF
QRP in the FY 2016 IRF PPS final rule (80 FR 47111 through 47117).
These measures are: (1) IRF Functional Outcome Measure: Change in Self-
Care for Medical Rehabilitation Patients (NQF #2633); (2) IRF
Functional Outcome Measure: Change in Mobility Score for Medical
Rehabilitation (NQF #2634); (3) IRF Functional Outcome Measure:
Discharge Self-Care Score for Medical Rehabilitation Patients (NQF
#2635); and (4) IRF Functional Outcome Measure: Discharge Mobility
Score for Medical Rehabilitation Patients (NQF #2636). We believe these
measures satisfy section 1899B(c)(1)(A) of the Act because they address
functional status, cognitive function, and changes in function and
cognitive function domain. We intend to propose functional outcome
measures for the home health and long-term care hospital settings in
the future.
In developing these SNF functional outcome quality measures, we
sought to build on our cross-setting function work by leveraging data
elements currently collected in the MDS section GG, which would
minimize additional data collection burden while increasing the
feasibility of cross-setting item comparisons.
SNFs provide skilled services, such as skilled nursing or therapy
services. Residents receiving care in SNFs include those whose illness,
injury, or condition has resulted in a loss of function, and for whom
rehabilitative care is expected to help regain that function. Treatment
goals may include fostering residents' ability to manage their daily
activities so that they can complete self-care and mobility activities
as independently as possible, and, if feasible, return to a safe,
active, and productive life in a community-based setting. Given that
the primary goal of many SNF residents is improvement in function, SNF
clinicians assess and document residents' functional status at
admission and at discharge to evaluate the effectiveness of the
rehabilitation care provided to individual residents and the SNF's
effectiveness.
Examination of SNF data shows that SNF treatment practices directly
influence resident outcomes. For example, therapy services provided to
SNF residents have been found to be correlated with the functional
improvement that SNF residents achieve (that is, functional
outcomes).\23\ Several studies found patients' functional outcomes vary
based on treatment by physical and occupational therapists.
Specifically, therapy was associated with significantly greater odds of
improving mobility and self-care functional independence,\24\ shorter
length of stay,\25\ and a greater likelihood of discharge to
community.\26\ Furthermore, Jung et al.\27\ found that an additional
hour of therapy treatment per week was associated with approximately a
3.1 percentage-point increase in the likelihood of returning to the
community among residents with a hip fracture. Achieving these targeted
resident outcomes, including improved self-care and mobility functional
independence, reduced length of stay, and increased discharges to the
community, is a core goal of SNFs.
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\23\ Jette, D. U., R. L. Warren, & C. Wirtalla. (2005). The
relation between therapy intensity and outcomes of rehabilitation in
skilled nursing facilities. Archives of Physical Medicine and
Rehabilitation, 86 (3), 373-9.
\24\ Lenze, E.J., Host, H.H., Hildebrand, M.W., Morrow-Howell,
N., Carpenter, B., Freedland, K.E., . . . & Binder, E.F. (2012).
Enhanced medical rehabilitation increases therapy intensity and
engagement and improves functional outcomes in post acute
rehabilitation of older adults: a randomized-controlled trial.
Journal of the American Medical Directors Association, 13(8), 708-
712.
\25\ Medicare Payment Advisory Commission (US). (2016). Report
to the Congress: Medicare payment policy. Medicare Payment Advisory
Commission.
\26\ Cary, M.P., Pan, W., Sloane, R., Bettger, J.P., Hoenig, H.,
Merwin, E.I., & Anderson, R.A. (2016). Self-Care and Mobility
Following Postacute Rehabilitation for Older Adults with Hip
Fracture: A Multilevel Analysis. Archives of Physical Medicine and
Rehabilitation, 97(5), 760-771.
\27\ Jung, H.Y., Trivedi, A.N., Grabowski, D.C., & Mor, V.
(2016). Does More Therapy in Skilled Nursing Facilities Lead to
Better Outcomes in Patients With Hip Fracture? Physical therapy,
96(1), 81-89.
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Among SNF residents receiving rehabilitation services, the amount
of treatment received can vary. For example, the amount of therapy
treatment provided varies by type (that is, for-profit versus not-for-
profit) and facility location (that is, urban versus
rural).28 29
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\28\
\29\ Grabowski, D.C., Feng, Z., Hirth, R., Rahman, M., & Mor, V.
(2013). Effect of nursing home ownership on the quality of post-
acute care: An instrumental variables approach. Journal of Health
Economics, 32(1), 12-21.
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Measuring residents' functional improvement across all SNFs on an
ongoing basis would permit identification of SNF characteristics, such
as ownership types or locations, associated with better or worse
resident risk adjusted outcomes and thus help SNFs optimally target
quality improvement efforts.
[[Page 36578]]
MedPAC \30\ noted that while there was an overall increase in the
share of intensive therapy days between 2002 and 2012, the for-profit
and urban facilities had higher shares of intensive therapy than not-
for-profit facilities and those located in rural areas. Data from 2011
to 2014 indicate that this variation is not explained by patient
characteristics, such as activities of daily living, comorbidities and
age, as SNF residents with stays in 2011 were more independent on
average than the average SNF resident with stays in 2014. Because more
intense therapy is associated with more functional improvement for
certain beneficiaries, this variation in rehabilitation services
supports the need to monitor SNF residents' functional outcomes.
Therefore, we believe there is an opportunity for improvement in this
area.
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\30\ Medicare Payment Advisory Commission (US). (2016). Report
to the Congress: Medicare payment policy. Medicare Payment Advisory
Commission.
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In addition, a recent analysis that examined the incidence,
prevalence, and costs of common rehabilitation conditions found that
back pain, osteoarthritis, and rheumatoid arthritis are the most common
and costly conditions affecting more than 100 million individuals and
costing more than $200 billion per year.\31\ Persons with these medical
conditions are admitted to SNFs for rehabilitation treatment.
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\31\ Ma V.Y., Chan L., & Carruthers K.J. (2014). Incidence,
Prevalence, Costs, and Impact on Disability of Common Conditions
Requiring Rehabilitation in the United States: Stroke, Spinal Cord
Injury, Traumatic Brain Injury, Multiple Sclerosis, Osteoarthritis,
Rheumatoid Arthritis, Limb Loss, and Back Pain. Archives of Physical
Medicine and Rehabilitation, 95(5), 986-995.
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The use of standardized mobility and self-care data elements would
standardize the collection of functional status data, which could
improve communication when residents are transferred between providers.
Most SNF residents receive care in an acute care hospital prior to the
SNF stay, and many SNF residents receive care from another provider
after the SNF stay.
Recent research provides empirical support for the risk adjustment
variables for these quality measures. In a study of resident functional
improvement in SNFs, Wysocki et al.\32\ found that several resident
conditions were significantly related to resident functional
improvement, including cognitive impairment, delirium, dementia, heart
failure, and stroke. Also, Cary et al. found that several resident
characteristics were significantly related to resident functional
improvement, including age, cognitive function, self-care function at
admission, and comorbidities.\33\
---------------------------------------------------------------------------
\32\ Wysocki, A., Thomas, K.S., & Mor, V. (2015). Functional
Improvement Among Short-Stay Nursing Home Residents in the MDS 3.0.
Journal of the American Medical Directors Association, 16(6), 470-
474. https://doi.org/10.1016/j.jamda.2014.11.018.
\33\ Cary, M.P., Pan, W., Sloane, R., Bettger, J.P., Hoenig, H.,
Merwin, E.I., & Anderson, R.A. (2016). Self-Care and Mobility
Following Postacute Rehabilitation for Older Adults With Hip
Fracture: A Multilevel Analysis. Archives of Physical Medicine and
Rehabilitation, 97(5), 760-771.
---------------------------------------------------------------------------
These outcome-based quality measures could inform SNFs about
opportunities to improve care in the area of function and strengthen
incentives for quality improvement related to resident function.
We describe each of the four functional outcome quality measures
below, and then follow with a discussion of the comments we received.
(a) Application of IRF Functional Outcome Measure: Change in Self-Care
Score for Medical Rehabilitation Patients (NQF #2633)
The outcome quality measure, Application of IRF Functional Outcome
Measure: Change in Self-Care Score for Medical Rehabilitation Patients
(NQF #2633), is an application of the outcome measure finalized in the
IRF QRP entitled, IRF Functional Outcome Measure: Change in Self-Care
Score for Medical Rehabilitation Patients (NQF #2633). The quality
measure estimates the mean risk-adjusted improvement in self-care score
between admission and discharge among SNF residents. A summary of the
NQF-endorsed quality measure specifications can be accessed on the NQF
Web site: https://www.qualityforum.org/qps/2633. Detailed specifications
for the NQF-endorsed quality measure can be accessed at https://www.qualityforum.org/ProjectTemplateDownload.aspx?SubmissionID=2633.
The functional outcome measure, the Application of IRF Functional
Outcome Measure: Change in Self-Care Score for Medical Rehabilitation
Patients (NQF #2633), requires the collection of admission and
discharge functional status data by trained clinicians using
standardized patient data elements that assess specific functional
self-care activities such as shower/bathe self, dressing upper body and
dressing lower body. These self-care items are daily activities that
clinicians typically assess at the time of admission and/or discharge
to determine residents' needs, evaluate resident progress, and/or
prepare residents and families for a transition to home or to another
provider. The standardized self-care function data elements are coded
using a 6-level rating scale that indicates the resident's level of
independence with the activity; higher scores indicate more
independence. The outcome quality measure also requires the collection
of risk factor data, such as resident functioning prior to the current
reason for admission, bladder continence, communication ability and
cognitive function, at the time of admission.
The data elements included in the quality measure were originally
developed and tested as part of the PAC PRD version of the Continuity
Assessment Record and Evaluation (CARE) Item Set,\34\ which was
designed to standardize assessment of patients' and residents' status
across acute and post-acute providers, including IRFs, SNFs, HHAs and
LTCHs. The development of the CARE Item Set and a description and
rationale for each item is described in a report entitled ``The
Development and Testing of the Continuity Assessment Record and
Evaluation (CARE) Item Set: Final Report on the Development of the CARE
Item Set: Volume 1 of 3.'' \35\ Reliability and validity testing were
conducted as part of CMS' Post-Acute Care Payment Reform Demonstration,
and we concluded that the functional status items have acceptable
reliability and validity. A description of the testing methodology and
results are available in several reports, including the report entitled
``The Development and Testing of the Continuity Assessment Record And
Evaluation (CARE) Item Set: Final Report On Reliability Testing: Volume
2 of 3'' \36\ and the report entitled ``The Development and Testing of
The Continuity Assessment Record And Evaluation (CARE) Item Set: Final
Report on Care Item Set and Current Assessment Comparisons: Volume 3 of
3.'' \37\ The reports are available on CMS' Post-Acute Care Quality
Initiatives Web page at https://www.cms.gov/Medicare/Quality-Initiatives-Patient-Assessment-Instruments/Post-Acute-Care-Quality-Initiatives/CARE-Item-Set-and-B-CARE.html.
---------------------------------------------------------------------------
\34\ Barbara Gage et al., ``The Development and Testing of the
Continuity Assessment Record and Evaluation (CARE) Item Set: Final
Report on the Development of the CARE Item Set'' (RTI International,
2012).
\35\ Barbara Gage et al., ``The Development and Testing of the
Continuity Assessment Record and Evaluation (CARE) Item Set: Final
Report on the Development of the CARE Item Set'' (RTI International,
2012).
\36\ Ibid.
\37\ Ibid.
---------------------------------------------------------------------------
[[Page 36579]]
(i) Stakeholder Input
A cross-setting function TEP convened by our measure development
contractor on September 9, 2013 provided input on the initial technical
specifications of this quality measure, Application of IRF Functional
Outcome Measure: Change in Self-Care Score for Medical Rehabilitation
Patients (NQF #2633). The TEP was supportive of the implementation of
this measure and supported CMS's efforts to standardize patient/
resident assessment data elements. The 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 MAP met on December 14 and 15, 2015, and provided input on the
measure, Application of IRF Functional Outcome Measure: Change in Self-
Care Score for Medical Rehabilitation Patients (NQF #2633) for use in
the SNF QRP. The MAP recognized that this quality outcome measure is an
adaptation of a currently endorsed measure for the IRF population, and
encouraged continued development to ensure alignment of this measure
across PAC settings. The MAP noted there should be some caution in the
interpretation of measure results due to resident differentiation
between facilities. The MAP also noted possible duplication as the MDS
already includes function data elements. We note that the data elements
for the measure are similar, but not the same as the existing MDS
Section G function data elements. The data elements for the measure
include those that are the standardized patient assessment data for
functional status under section 1899B(b)(1)(B)(i) of the Act. The MAP
also stressed the importance of considering burden on providers when
measures are considered for implementation. The MAP's overall
recommendation was for ``encourage further development.'' More
information about the MAP's recommendations for this measure is
available at https://www.qualityforum.org/WorkArea/linkit.aspx?LinkIdentifier=id&ItemID=81593.
Since the MAP's review and recommendation for further development,
we have continued to develop this measure by soliciting input via a
TEP, providing a public comment opportunity, and providing an update on
measure development to the MAP via the feedback loop. More
specifically, our measure development contractor convened a SNF-
specific function TEP on May 5, 2016, to provide further input on the
technical specifications of this quality measure by reviewing the IRF
specifications and the specifications of competing and related function
quality measures. Overall, the TEP was supportive of the measure and
supported our efforts to standardize patient assessment data elements.
The SNF-specific function 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.
We also solicited stakeholder feedback on the development of this
measure by means of a public comment period that was open from October
7, 2016, until November 4, 2016. There was general support of the
measure concept and the importance of functional improvement. Comments
on the measure varied, with some commenters supportive of the measure,
while others were either not in favor of the measure, or in favor of
suggested potential modifications to the measure specifications. The
public comment summary report for the 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.
Further, we engaged with stakeholders when we presented an update
on the development of this quality measure to the MAP on October 19,
2016, during a MAP feedback loop meeting. Slides from that meeting are
available at https://www.qualityforum.org/WorkArea/linkit.aspx?LinkIdentifier=id&ItemID=83640.
(ii) Competing and Related Measures and Measure Justification
During the development of this proposed functional outcome measure,
we have monitored and reviewed NQF-endorsed measures that are competing
and/or related to the proposed quality measures. We identified six
competing and related quality measures focused on self-care functional
improvement for residents in the SNF setting entitled: (1) CARE:
Improvement in Self Care (NQF #2613); (2) Functional Change: Change in
Self-Care Score for Skilled Nursing Facilities (NQF #2769); (3)
Functional Status Change for Patients with Shoulder Impairments (NQF
#0426); (4) Functional Status Change for Patients with Elbow, Wrist and
Hand Impairments (NQF #0427); (5) Functional Status Change for Patients
with General Orthopedic Impairments (NQF #0428); and (6) Change in
Daily Activity Function as Measures by the AM-PAC (NQF #0430). We
reviewed the technical specifications for these six quality measures
and compared these specifications to those of our outcome-based quality
measure, the Application of IRF Functional Outcome Measure: Change in
Self-Care Score for Medical Rehabilitation Patients (NQF #2633), and
have noted the following differences in the technical specifications:
(1) The number of risk adjustors and variance explained by these risk
adjustors in the regression models; (2) the use of functional
assessment items that were developed and tested for cross-setting use;
(3) the use of items that are already on the MDS 3.0 and what this
means for burden; (4) the handling of missing functional status data;
and (5) the use of exclusion criteria that are baseline clinical
conditions. We describe these key specifications of the proposed
outcome measure, Application of IRF Functional Outcome Measure: Change
in Self-Care Score for Medical Rehabilitation Patients (NQF #2633), in
detail below.
Our literature review, input from technical expert panels, public
comment feedback, and data analyses demonstrated the importance of
adequate risk adjustment of admission case mix factors for functional
outcome measures. Inadequate risk adjustment of admission case mix
factors may lead to erroneous conclusions about the quality of care
delivered within the facility, and thus is a potential threat to the
validity of a quality measure that examines outcomes of care, such as
functional outcomes. The quality measure, the Application of IRF
Functional Outcome Measure: Change in Self-Care Score for Medical
Rehabilitation Patients (NQF #2633) risk adjusts for more than 60 risk
factors, explaining approximately 25 percent of the variance in change
in function, and includes all of the following risk factors: prior
functioning, prior device use, age, functional status at admission,
primary diagnosis, and comorbidities. These risk factors are key
predictors of functional performance and should be accounted for in any
facility-level comparison of functional outcomes.
Another key feature of the measure, the Application of IRF
Functional Outcome Measure: Change in Self-Care Score for Medical
Rehabilitation Patients (NQF #2633), is that it uses the functional
assessment data elements and the associated rating scale that were
developed and tested for cross-setting
[[Page 36580]]
use. The measure uses functional assessment items from the CARE Item
Set, which were developed and tested as part of the PAC-PRD between
2006 and 2010. The items were designed to build on the existing science
for functional assessment instruments, and included a review of the
strengths and limitations of existing functional assessment
instruments. An important strength of the standardized function items
from the CARE instrument is that they allow comparison and tracking of
patients' and residents' functional outcomes as they move across post-
acute settings. Specifically, the CARE Item Set was designed to
standardize assessment of patients' status across acute and post-acute
settings, including SNFs, IRFs, LTCHs, and HHAs. The risk-adjustors for
various setting-specific versions of this measure differ by the
inclusion of adjustors such as comorbidities in the IRF measure.
However, we believe that the differences in risk adjustment will not
hinder future comparability across settings. Agencies such as MedPAC
have supported a coordinated approach to measurement across settings
using standardized patient data elements.
A third important consideration is that some of the data elements
associated with the measure are already included on the MDS in section
GG, because we adopted a cross-setting function process measure in the
SNF QRP FY 2016 Final Rule (FR 80 46444 through 46453). Three of the
self-care data elements necessary to calculate that quality measure, an
Application of the Percent of Long-Term Care Hospital Patient with a
Functional Assessment and a Care Plan that Addresses Function (NQF
#2631) are used to calculate the quality measure. Provider burden of
reporting on multiple items was a key consideration discussed by
stakeholders in our recent TEP 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.
We believe it is important to include the records of residents with
missing functional assessment data when calculating a facility-level
functional outcome quality measure for SNFs. The proposed measure, the
Application of IRF Functional Outcome Measure: Change in Self-Care
Score for Medical Rehabilitation Patients (NQF #2633), incorporates a
method to address missing functional assessment data.
We believe certain clinically-defined exclusion criteria are
important to specify in a functional outcome quality measure to
maintain the validity of the quality measure. Exclusions for the
quality measure, Application of IRF Functional Outcome Measure: Change
in Self-Care Score for Medical Rehabilitation Patients (NQF #2633),
were selected through a review of the literature, input from Technical
Expert Panels, and input from the public comment process. The quality
measure, Application of IRF Functional Outcome Measure: Change in Self-
Care Score for Medical Rehabilitation Patients (NQF #2633) is intended
to capture improvement in self-care function from admission to
discharge for residents who are admitted with an expectation of
functional improvement. Therefore, we exclude residents with certain
conditions, for example progressive neurologic conditions, because
these residents are typically not expected to improve on self-care
skills for activities such as lower body dressing. Furthermore, we
exclude residents who are independent on all self-care items at the
time of admission, because no improvement in self-care can be measured
with the selected set of items by discharge. Including residents with
limited expectation for improvement could introduce incentives for SNFs
to restrict access to these residents.
We would like to note that our measure developer presented and
discussed these technical specification differentiations with TEP
members during the May 6, 2016 TEP meeting to obtain TEP input on
preferred specifications for valid functional outcome quality measures.
The differences in measure specifications and the TEP feedback are
presented in the TEP Summary Report, which 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. Overall, the TEP supported the
use of a risk adjustment model that addressed all of the following risk
factors: Prior functioning, admission functioning, prior diagnosis and
comorbidities. In addition, they supported exclusion criteria that
would address functional improvement expectations of residents.
(iii) Data Collection Mechanism
Data for the quality measure, the Application of IRF Functional
Outcome Measure: Change in Self-Care Score for Medical Rehabilitation
Patients (NQF #2633), would be collected using the MDS, with the
submission through the QIES ASAP system. For more information on SNF
QRP reporting through the QIES ASAP system, refer to CMS Web site at
https://www.cms.gov/Medicare/Quality-Initiatives-Patient-Assessment-Instruments/NursingHomeQualityInits/Skilled-Nursing-Facility-Quality-Reporting-Program/SNF-Quality-Reporting-Program-Measures-and-Technical-Information.html. The calculation of the quality measure would be based
on the data collection of standardized items to be included in the MDS.
The function items used to calculate this measure are the same set of
functional status data items that have been added to the IRF-PAI
version 1.4, for the purpose of providing standardized resident
assessment data elements under the domain of functional status, which
is required by the IMPACT Act.
If finalized for implementation into the SNF QRP, the MDS would be
modified so as to enable us to calculate this quality measure using
additional data elements that are standardized with the IRF-PAI and
such data would be obtained at the time of admission and discharge for
all SNF residents covered under a Part A stay. The standardized items
used to calculate this proposed quality measure do not duplicate
existing Section G items currently used for data collection within the
MDS. The quality measure and standardized data element specifications
for the Application of IRF Functional Outcome Measure: Change in Self-
Care Score for Medical Rehabilitation Patients (NQF #2633) can be found
on the SNF QRP Measures and Technical Information Web site at https://www.cms.gov/Medicare/Quality-Initiatives-Patient-Assessment-Instruments/NursingHomeQualityInits/Skilled-Nursing-Facility-Quality-Reporting-Program/SNF-Quality-Reporting-Program-Measures-and-Technical-Information.html.
(b) Application of IRF Functional Outcome Measure: Change in Mobility
Score for Medical Rehabilitation Patients (NQF #2634)
This quality measure is an application of the outcome measure
finalized in the IRF QRP entitled, IRF Functional Outcome Measure:
Change in Mobility Score for Medical Rehabilitation Patients (NQF
#2634). This quality measure estimates the risk-adjusted mean
improvement in mobility score between admission and discharge among SNF
residents. A summary of this quality measure can be accessed on the NQF
Web site: https://www.qualityforum.org/qps/2634. Detailed specifications
for this quality measure can be accessed at https://www.qualityforum.org/ProjectTemplateDownload.aspx?SubmissionID=2634.
[[Page 36581]]
As previously noted, residents seeking care in SNFs include those
whose illness, injury, or condition has resulted in a loss of function,
and for whom rehabilitative care is expected to help regain that
function. Several studies found patients' functional outcomes vary
based on treatment. Physical and occupational therapy treatment was
associated with greater functional gains, shorter stays, and a greater
likelihood of a discharge to a community. Among SNF residents receiving
rehabilitation services, the amount of therapy prescribed can vary
widely, and this variation is not always associated with resident
characteristics. This variation in rehabilitation services supports the
need to monitor SNF resident's functional outcomes, as we believe there
is an opportunity for improvement in this area.
The functional outcome measure, the Application of IRF Functional
Outcome Measure: Change in Mobility Score for Medical Rehabilitation
Patients (NQF #2634), requires the collection of admission and
discharge functional status data by trained clinicians using
standardized resident data elements that assess specific functional
mobility activities such as toilet transfer and walking. These mobility
items are daily activities that clinicians typically assess at the time
of admission and/or discharge to determine resident's needs, evaluate
resident progress, and prepare residents and families for a transition
to home or to another care provider. The standardized mobility function
items are coded using a 6-level rating scale that indicates the
resident's level of independence with the activity; higher scores
indicate more independence.
The functional assessment items included in the outcome quality
measures were originally developed and tested as part of the Post-Acute
Care Payment Reform Demonstration version of the CARE Item Set, which
was designed to standardize assessment of patients' status across acute
and post-acute providers, including SNFs, HHAs, IRFs, and LTCHs.
This outcome quality measure also requires the collection of risk
factors data, such as resident functioning prior to the current reason
for admission, history of falls, bladder continence, communication
ability and cognitive function, at the time of admission.
A cross-setting function TEP convened by our measure development
contractor on September 9, 2013 provided input on the initial technical
specifications of this proposed quality measure, the Application of IRF
Functional Outcome Measure: Change in Mobility Score for Medical
Rehabilitation Patients (NQF #2634). The TEP was supportive of the
implementation of this measure and supported our efforts to standardize
patient/resident assessment data elements. The 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 list of measures under consideration for the SNF QRP, including
this quality measure, was released to the public on November 27, 2015,
and early comments were submitted between December 1 and December 7,
2015. The MAP met on December 14 and 15, 2015, sought public comment on
this measure from December 23, 2015, to January 13, 2015, and met on
January 26 and 27, 2016. The NQF provided the MAP's input to us as
required under section 1890A(a)(3) of the Act in the final report, MAP
2016 Considerations for Implementing Measures for Federal Programs:
Post-Acute and Long-Term Care, which is available at https://www.qualityforum.org/Setting_Priorities/Partnership/MAP_Final_Reports.aspx. The MAP recognized that this measure is an
adaptation of currently endorsed measures for the IRF population, and
encouraged continued development to ensure alignment across PAC
settings. They also noted there should be some caution in the
interpretation of measure results due to patient/resident
differentiation between facilities. To alignment across PAC settings,
the self-care items included in the proposed quality measure are the
same self-care items that are included in the IRF-PAI Version 1.4. We
agree with the MAP that patient/resident populations can vary across
IRFs and SNFs, and we have taken this issue into consideration while
selecting and testing the risk adjustors, which include medical
conditions, admission function, prior functioning and comorbidities.
The risk-adjustors for the IRF and the SNF versions of this measure
differ by the inclusion of adjustors such as comorbidities in the IRF
measure. As noted, though there are differences between the measures we
believe that the differences in risk adjustment will not hinder future
comparability across measures.
The MAP also noted possible duplication as the MDS already includes
function data elements. The data elements for the measure are similar,
but not the same as the existing MDS Section G function data elements.
The data elements for the measures include those that are the proposed
standardized resident assessment data elements for function. The MAP
also stressed the importance of considering burden on providers when
measures are considered for implementation. We appreciate the issue of
burden and have taken that into consideration in developing the
measure. Please refer to the FY 2016 SNF PPS final rule (80 FR 46428)
for more information on the MAP.
The MAP's overall recommendation was for ``encourage further
development.'' More information about the MAP's recommendations for
this proposed measure is available at https://www.qualityforum.org/WorkArea/linkit.aspx?LinkIdentifier=id&ItemID=81593.
Since the MAP's review and recommendation for further development,
we have continued to develop this measure including soliciting input
from a TEP, providing a public comment opportunity, and providing an
update on measure development to the MAP via the feedback loop. More
specifically, our measure development contractor convened a SNF-
specific TEP on May 5, 2016 to provide further input on the technical
specifications of this proposed quality measure by reviewing the IRF
specifications and the specifications of competing and related function
quality measures. Overall, the TEP was supportive of the measure and
supported our efforts to standardize patient/resident assessment data
elements. The SNF-specific function 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.
We also solicited stakeholder feedback on the development of this
measure by means of a public comment period open from October 7, until
November 4, 2016. There was general support of the measure concept and
the importance of functional improvement. Comments on the measure
varied, with some commenters supportive of the measure, while others
were either not in favor of the measure, or in favor of suggested
potential modifications to the measure specifications. 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.
[[Page 36582]]
We also engaged with the NQF convened MAP when we presented an
update on the development of this quality measure on October 19, 2016,
during a MAP feedback loop meeting. Slides from that meeting are
available at https://www.qualityforum.org/WorkArea/linkit.aspx?LinkIdentifier=idamp;ItemID=83640.
During the development of this measure, we have monitored and
reviewed NQF-endorsed measures that are competing and related. We
identified seven competing and related quality measures focused on
improvement in mobility for residents in the SNF setting entitled: (1)
CARE: Improvement in Mobility (NQF #2612); (2) Functional Change:
Change in Mobility Score (NQF 2774); (3) Functional Status Change for
Patients with Knee Impairments (NQF #0422); (4) Functional Status
Change for Patients with Hip Impairments (NQF #0423); (5) Functional
Status Change for Patients with Foot and Ankle Impairments (NQF #0424);
(6) Functional Status Change for Patients with Lumbar Impairments (NQF
#0425); and (7) Change in Basic Mobility as Measures by the AM-PAC (NQF
#0429). We reviewed the technical specifications for these seven
measures carefully and compared them with the specifications of the
proposed quality measure, the Application of IRF Functional Outcome
Measure: Change in Mobility Score for Medical Rehabilitation Patients
(NQF #2634) and have noted the following differences in the technical
specifications: (1) The number of risk adjustors and variance explained
by these risk adjustors in the regression models; (2) the use of
functional assessment items that were developed and tested for cross-
setting use; (3) the use of items that are already on the MDS 3.0 and
what this means for burden; (4) the handling of missing functional
status data; and (5) the use of exclusion criteria that are baseline
clinical conditions. We describe these key specifications of the
proposed outcome measure, the Application of IRF Functional Outcome
Measure: Change in Mobility Score for Medical Rehabilitation Patients
(NQF #2634), below in more detail.
Our literature review, input from technical expert panels, public
comment feedback, and analyses demonstrated the importance of adequate
risk adjustment of admission case mix factors for functional outcome
measures. Inadequate risk adjustment of admission case mix factors may
lead to erroneous conclusions about the quality of care delivered
within the facility, and thus is a potential threat to the validity of
a quality measure that examines outcomes of care, such as functional
status. The quality measure, the Application of IRF Functional Outcome
Measure: Change in Mobility Score for Medical Rehabilitation Patients
(NQF #2634) risk adjusts for more than 60 risk factors, explaining
approximately 23 percent of the variance in change in function, and
includes all of the following risk adjusters: Prior functioning, prior
device use, age, functional status at admission, primary diagnosis and
comorbidities. These are key predictors of functional performance and
need to be accounted for in any facility-level functional outcome
quality measure.
Another key feature of the proposed measure, Application of IRF
Functional Outcome Measure: Change in Mobility Score for Medical
Rehabilitation Patients (NQF #2634), is that it uses the functional
assessment data elements and the associated rating scale that were
developed and tested for cross-setting use. The measure uses functional
assessment items from the CARE Item Set, which were developed and
tested as part of the PAC PRD between 2006 and 2010.
The items were designed to build on the existing science for
functional assessment instruments, and included a review of the
strengths and limitations of existing functional assessment
instruments. An important strength of the cross-setting function items
from the CARE instrument is that they allow tracking of patients' and
residents' functional outcomes as they move across post-acute settings.
Specifically, the CARE Item Set was designed to standardize assessment
of patients' and residents' status across acute and post-acute
settings, including SNFs, IRFs, LTCHs, and HHAs. MedPAC has publicly
supported a coordinated approach to measurement across settings using
standardized resident assessment data elements.
A third important consideration is that some of the data elements
associated with the measure, Application of IRF Functional Outcome
Measure: Change in Mobility Score for Medical Rehabilitation Patients
(NQF #2634), are already included on the MDS in section GG, because we
adopted a cross-setting function process measure in the SNF QRP FY 2016
Final Rule (FR 80 46444 through 46453), and seven of the mobility data
elements necessary to calculate that quality measure, an Application of
the Percent of Long-Term Care Hospital Patient with a Functional
Assessment and a Care Plan that Addresses Function (NQF #2631) are used
to calculate the proposed quality measure. Provider burden of reporting
on multiple measures was a key consideration discussed by stakeholders
in our recent TEP: 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 believe it is important to include the records of residents with
missing functional assessment data when calculating a facility-level
functional outcome quality measure for SNFs. The measure, Application
of IRF Functional Outcome Measure: Change in Mobility Score for Medical
Rehabilitation Patients (NQF #2634), incorporates a method to address
missing functional assessment data.
We believe certain clinically-defined exclusion criteria are
important to specify in a functional outcome quality measure to
maintain the validity of the quality measure. Exclusions for the
proposed quality measure, Change in Mobility Score for Medical
Rehabilitation Patients (NQF #2634), were selected through a literature
review, input from TEPs, and input from the public comment process. The
Application of IRF Functional Outcome Measure: Change in Mobility Score
for Medical Rehabilitation Patients (NQF #2634) is intended to capture
improvement in mobility from admission to discharge for residents who
are admitted with an expectation of functional improvement. Therefore,
we exclude residents with certain conditions, for example progressive
neurologic conditions, because these residents are typically not
expected to improve on mobility skills for activities such as walking.
Furthermore, we exclude residents who are independent on all mobility
items at the time of admission, because no improvement can be measured
with the selected set of items by discharge. Inclusion of residents
with limited expectation for improvement could introduce incentives for
SNF providers to limited access to these residents.
Our measure developer contractor presented and discussed these
technical specification differentiations during the May 6, 2016 TEP
meeting to obtain TEP input on preferred specifications for valid
functional outcome quality measures. The differences in measure
specifications and the TEP feedback are presented in the TEP Summary
Report, which is available at https://www.cms.gov/Medicare/Quality-
Initiatives-Patient-Assessment-Instruments/Post-Acute-Care-Quality-
Initiatives/IMPACT-Act-of-2014/
[[Page 36583]]
IMPACT-Act-Downloads-and-Videos.html.
Data for the quality measure, the Application of IRF Functional
Outcome Measure: Change in Mobility Score for Medical Rehabilitation
Patients (NQF #2634), would be collected using the MDS, with the
submission through the QIES ASAP system. For more information on SNF
QRP reporting through the QIES ASAP system, refer to https://www.cms.gov/Medicare/Quality-Initiatives-Patient-Assessment-Instruments/NursingHomeQualityInits/Skilled-Nursing-Facility-Quality-Reporting-Program/SNF-Quality-Reporting-Program-Measures-and-Technical-Information.html.
The calculation of the quality measure would be based on the data
collection of standardized items to be included in the MDS. The
function items used to calculate this measure are the same set of
functional status data items that have been added to the IRF-PAI
version 1.4, for the purpose of providing standardized resident
assessment data elements under the domain of functional status. If this
quality measure is finalized for implementation in the SNF QRP, the MDS
would be modified so as to enable the calculation of these standardized
items that are used to calculate this proposed quality measure. The
collection of data by means of the standardized items would be obtained
at admission and discharge. The standardized items used to calculate
this quality measure do not duplicate existing items currently used for
data collection within the MDS. The quality measure and standardized
data element specifications for the Application of IRF Functional
Outcome Measure: Change in Mobility Score for Medical Rehabilitation
Patients (NQF #2634) is available on the SNF QRP Measures and Technical
Information Web site at https://www.cms.gov/Medicare/Quality-Initiatives-Patient-Assessment-Instruments/NursingHomeQualityInits/Skilled-Nursing-Facility-Quality-Reporting-Program/SNF-Quality-Reporting-Program-Measures-and-Technical-Information.html.
(c) Application of IRF Functional Outcome Measure: Discharge Self-Care
Score for Medical Rehabilitation Patients (NQF #2635)
This quality measure is an application of the outcome quality
measure finalized in the IRF QRP entitled, IRF Functional Outcome
Measure: Discharge Self-Care Score for Medical Rehabilitation Patients
(NQF #2635). The quality measure estimates the percentage of SNF
residents who meet or exceed an expected discharge self-care score. A
summary of this quality measure can be accessed on the NQF Web site at
https://www.qualityforum.org/qps/2635. Detailed specifications for the
quality measure can be accessed at https://www.qualityforum.org/ProjectTemplateDownload.aspx?SubmissionID=2635.
As previously noted, residents seeking care in SNFs include
individuals whose illness, injury, or condition has resulted in a loss
of function, and for whom rehabilitative care is expected to help
regain that function. Several studies found patients' functional
outcomes vary based on treatment by physical and occupational
therapists. Therapy was associated with greater functional gains,
shorter stays, and a greater likelihood of discharge to community.
Among SNF residents receiving rehabilitation services, the amount of
treatment prescribed can vary widely, and this variation is not
associated with resident characteristics. This variation in
rehabilitation services supports the need to monitor SNF resident's
functional outcomes, as we believe there is an opportunity for
improvement in this area.
The outcome quality measure, Application of IRF Functional Outcome
Measure: Discharge Self-Care Score or Medical Rehabilitation Patients
(NQF #2635), requires the collection of functional status data at
admission and discharge by trained clinicians using standardized
resident assessment data elements such as eating, oral hygiene, and
lower body dressing. These self-care items are daily activities that
clinicians typically assess at the time of admission and discharge to
determine residents' needs, evaluate resident progress, and prepare
residents and families for a transition to home or to another provider.
The self-care function data elements are coded using a 6-level rating
scale that indicates the resident's level of independence with the
activity; higher scores indicate more independence.
The functional assessment items included in the outcome quality
measures were originally developed and tested as part of the Post-Acute
Care Payment Reform Demonstration version of the CARE Item Set, which
was designed to standardize assessment of patients' status across acute
and post-acute providers, including SNFs, HHAs, IRFs, and LTCHs.
This outcome quality measure also requires the collection of risk
factors data, such as resident functioning prior to the current reason
for admission, bladder continence, communication ability, and cognitive
function at the time of admission.
A cross-setting function TEP convened by our measure development
contractor on September 9, 2013 provided input on the initial technical
specifications of this proposed quality measure, the Application of IRF
Functional Outcome Measure: Discharge Self-Care Score for Medical
Rehabilitation Patients (NQF #2635). The TEP was supportive of the
implementation of this measure and supported CMS's efforts to
standardize patient/resident assessment data elements. The 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 MAP met on December 14 and 15, 2015, and provided input on the
proposed measure, Application of IRF Functional Outcome Measure:
Discharge Self-Care Score for Medical Rehabilitation Patients (NQF
#2635) for use in the SNF QRP. The MAP recognized that this quality
measure is an adaptation of a currently endorsed measure for the IRF
population, and encouraged continued development to ensure alignment of
this measure across PAC settings. The MAP also noted there should be
some caution in the interpretation of measure results due to patient/
resident differentiation between facilities. The MAP also stressed the
importance of considering burden on providers when measures are
considered for implementation. The MAP also noted possible duplication
as the MDS already includes function data elements. The data elements
for the proposed measure are similar, but not the same as the existing
MDS function data elements. The data elements for the measures include
those that are the proposed standardized assessment data elements for
function. The MAP's overall recommendation was to ``encourage further
development.'' More information about the MAP's recommendations for
this measure is available at https://www.qualityforum.org/WorkArea/linkit.aspx?LinkIdentifier=id&ItemID=81593.
Since the 2015 MAP's review and recommendation for further
development, we have continued to develop this measure including
soliciting input via a TEP, proving a public comment opportunity and
providing an update on measure development to the MAP via the feedback
loop. More specifically, our measure development contractor convened a
SNF-specific TEP on May 5, 2016 to provide further input on the
[[Page 36584]]
technical specifications of this quality measure by reviewing the IRF
specifications and the specifications of competing and related function
quality measures. Overall, the TEP was supportive of the measure.
Specifically, they supported the risk adjustors, suggested some
additional risk adjustors, supported the exclusion criteria and
supported CMS's efforts to standardize patient/resident assessment data
elements. The SNF-specific function 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.
We also solicited stakeholder feedback on the development of this
measure by means of a public comment period open from October 7, 2016
until November 4, 2016. There was general support of the measure
concept and the importance of functional improvement. Comments on the
measure varied, with some commenters supportive of the measure, while
others were either not in favor of the measure, or in favor of
suggested potential modifications to the measure specifications. Some
comments focused on suggestions for additional risk adjustors, and the
data elements. The public comment summary report for the 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.
We also engaged with stakeholders when we presented an update on
the development of this quality measure to the MAP on October 19, 2016,
during a MAP feedback loop meeting. Slides from that meeting are
available at https://www.qualityforum.org/WorkArea/linkit.aspx?LinkIdentifier=id&ItemID=83640.
During the development of this measure, we monitored and reviewed
NQF-endorsed measures that are competing and related. We identified six
competing and related quality measures focused on self-care functional
improvement for residents in the SNF setting entitled: (1) CARE:
Improvement in Self Care (NQF #2613); (2) Functional Change: Change in
Self-Care Score (NQF #2286); (3) Functional Status Change for Patients
with Shoulder Impairments (NQF #0426); (4) Functional Status Change for
Patients with Elbow, Wrist and Hand Impairments (NQF #0427); (5)
Functional Status Change for Patients with General Orthopedic
Impairments (NQF #0428); and (6) Change in Daily Activity Function as
Measures by the AM-PAC (NQF #0430).
As described above, we reviewed the technical specifications for
these six measures and compared them with the specifications for the
quality measure, Application of IRF Functional Outcome Measure:
Discharge Self-Care Score for Medical Rehabilitation Patients (NQF
#2635) and, as described in detail above, we noted the following
differences in the technical specifications: (1) The number of risk
adjustors and variance explained by these risk adjustors in the
regression models; (2) the use of functional assessment items that were
developed and tested for cross-setting use; (3) the use of items that
are already on the MDS 3.0 and what this means for burden; (4) the
handling of missing functional status data; and (5) the use of
exclusion criteria that are baseline clinical conditions.
Consistent with the other functional outcome measures, the
specifications for this quality measure, Application of IRF Functional
Outcome Measure: Discharge Self-Care Score for Medical Rehabilitation
Patients (NQF #2635), were developed based on our literature review,
input from technical expert panels, public comment feedback and data
analyses. The details about the specifications for the measures
described above also apply to this quality measure. Overall, the TEP
supported the use of a risk adjustment model that addressed prior
functioning, admission functioning, prior diagnosis and comorbidities.
In addition, they supported exclusion criteria that would address
functional improvement expectations of residents.
Our measure developer contractor presented and discussed these
technical specification differentiations during the May 6, 2016 TEP
meeting to obtain TEP input on preferred specifications for valid
functional outcome quality measures. The differences in measure
specifications and the TEP feedback are presented in the TEP Summary
Report, which 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.
Data for the quality measure, the Application of IRF Functional
Outcome Measure: Discharge Self-Care Score for Medical Rehabilitation
Patients (NQF #2635), would be collected using the MDS, with the
submission through the QIES ASAP system. For more information on SNF
QRP reporting through the QIES ASAP system, refer to CMS Web site at
https://www.cms.gov/Medicare/Quality-Initiatives-Patient-Assessment-Instruments/NursingHomeQualityInits/Skilled-Nursing-Facility-Quality-Reporting-Program/SNF-Quality-Reporting-Program-Measures-and-Technical-Information.html.
The calculation of the proposed quality measure would be based on
the data collection of standardized items to be included in the MDS.
The function items used to calculate this measure are the same set of
functional status data items that have been added to the IRF-PAI
version 1.4, for the purpose of providing standardized resident
assessment data elements under the domain of functional status.
The collection of data by means of the standardized items would be
obtained at admission and discharge. The standardized items used to
calculate this quality measure do not duplicate existing items
currently used for data collection within the MDS. The quality measure
and standardized data element specifications for the Application of IRF
Functional Outcome Measure: Discharge Self-Care Score for Medical
Rehabilitation Patients (NQF #2635) can be found on the SNF QRP
Measures and Technical Information Web site at https://www.cms.gov/Medicare/Quality-Initiatives-Patient-Assessment-Instruments/NursingHomeQualityInits/Skilled-Nursing-Facility-Quality-Reporting-Program/SNF-Quality-Reporting-Program-Measures-and-Technical-Information.html.
If finalized for implementation into the SNF QRP, the MDS would be
modified so as to enable us to calculate the proposed measure using
additional data elements that are standardized with the IRF-PAI and
such data would be obtained at the time of admission and discharge for
all SNF residents covered under a Part A stay.
(d) Application of IRF Functional Outcome Measure: Discharge Mobility
Score for Medical Rehabilitation Patients (NQF #2636)
This quality measure is an application of the outcome quality
measure finalized in the IRF QRP entitled, IRF Functional Outcome
Measure: Discharge Mobility Score for Medical Rehabilitation Patients
(NQF #2636). This quality measure estimates the percentage of SNF
residents who meet or exceed an expected discharge mobility score. A
summary of this quality measure can be accessed on the NQF Web site:
https://www.qualityforum.org/qps/2636. Detailed specifications for this
quality measure can be accessed at https://www.qualityforum.org/ProjectTemplateDownload.aspx?SubmissionID=2636.
[[Page 36585]]
As previously noted, residents seeking care in SNFs include
individuals whose illness, injury, or condition has resulted in a loss
of function, and for whom rehabilitative care is expected to help
regain that function. Several studies found patients' functional
outcomes vary based on treatment by physical and occupational
therapists. Therapy was associated with greater functional gains,
shorter stays, and a greater likelihood of discharge to community.
Among SNF residents receiving rehabilitation services, the amount of
treatment prescribed can vary widely, and this variation is not
associated with resident characteristics. This variation in
rehabilitation services supports the need to monitor SNF resident's
functional outcomes, as we believe there is an opportunity for
improvement in this area.
The functional outcome measure, Application of IRF Functional
Outcome Measure: Discharge Mobility Score for Medical Rehabilitation
Patients (NQF #2636), requires the collection of admission and
discharge functional status data by trained clinicians using
standardized resident data elements that assess specific functional
mobility activities such as bed mobility and walking. These
standardized mobility items are daily activities that clinicians
typically assess at the time of admission and/or discharge to determine
residents' needs, evaluate resident progress and prepare residents and
families for a transition to home or to another care provider. The
standardized mobility function items are coded using a 6-level rating
scale that indicates the resident's level of independence with the
activity; higher scores indicate more independence.
The functional assessment items included in the outcome quality
measures were originally developed and tested as part of the Post-Acute
Care Payment Reform Demonstration version of the CARE Item Set, which
was designed to standardize assessment of patient or resident status
across acute and post-acute providers, including SNFs, HHAs, IRFs, and
LTCHs.
This quality measure requires the collection of risk factors data,
such as resident functioning prior to the current reason for admission,
history of falls, bladder continence, communication ability and
cognitive function, at the time of admission.
A cross-setting function TEP convened by our measure development
contractor on September 9, 2013 provided input on the initial technical
specifications of this quality measure, Application of IRF Functional
Outcome Measure: Discharge Mobility Score for Medical Rehabilitation
Patients (NQF #2636). The TEP was supportive of the implementation of
this measure and supported our efforts to standardize patient
assessment data elements. The 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 MAP met on December 14 and 15, 2015, and provided input on the
measure, Application of IRF Functional Outcome Measure: Discharge
Mobility Score for Medical Rehabilitation Patients (NQF #2636), for use
in the SNF QRP. The MAP recognized that this quality measure is an
adaptation of a currently endorsed measure for the IRF population, and
encouraged continued development to ensure alignment of this measure
across PAC settings. The MAP noted there should be some caution in the
interpretation of measure results due to patient/resident
differentiation between facilities. The MAP also stressed the
importance of considering burden on providers when measures are
considered for implementation. The MAP also noted possible duplication
as the MDS already includes function data elements. The data elements
for the proposed measure are similar, but not the same as the existing
MDS function data elements. The data elements for the measure include
those that are the standardized patient data elements for function. The
MAP's overall recommendation was to ``encourage further development.''
More information about the MAP's recommendations for this proposed
measure is available at https://www.qualityforum.org/WorkArea/linkit.aspx?LinkIdentifier=id&ItemID=81593.
Since the MAP's review and recommendation for further development,
we have continued to develop this measure including soliciting input
via a TEP, proving a public comment opportunity and providing an update
on measure development to the MAP via the feedback loop. More
specifically, our measure development contractor convened a SNF-
specific TEP on May 5, 2016, to provide further input on the technical
specifications of this quality measure by reviewing the IRF
specifications and the specifications of competing and related function
quality measures. Overall, the TEP was supportive of the measure and
supported our efforts to standardize patient/resident assessment data
elements. The SNF-specific function 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.
We also solicited stakeholder feedback on the development of this
measure by means of a public comment period open from October 7, 2016,
until November 4, 2016. There was general support of the measure
concept and the importance of functional improvement. Comments on the
measure varied, with some commenters supportive of the measure, while
others were either not in favor of the measure, or suggested potential
modifications to the measure specifications.
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.
We also engaged with stakeholders when we presented an update on
the development of this quality measure to the MAP on October 19, 2016,
during a MAP feedback loop meeting. Slides from that meeting are
available at https://www.qualityforum.org/WorkArea/linkit.aspx?LinkIdentifier=id&ItemID=83640.
During the development of this measure, we have monitored and
reviewed the NQF-endorsed measures that are competing and related. We
identified seven competing and related quality measures focused on
mobility functional improvement for residents in the SNF setting
entitled: (1) CARE: Improvement in Mobility (NQF #2612); (2) Functional
Change: Change in Mobility Score (NQF #2774); (3) Functional Status
Change for Patients with Knee Impairments (NQF #0422); (4) Functional
Status Change for Patients with Hip Impairments (NQF #0423); (5)
Functional Status Change for Patients with Foot and Ankle Impairments
(NQF #0424); (6) Functional Status Change for Patients with Lumbar
Impairments (NQF #0425); and (7) Change in Basic Mobility as Measures
by the AM-PAC (NQF #0429). As described above, we reviewed the
technical specifications for these seven measures carefully and
compared them with the specifications of the proposed quality measure,
Application of IRF Functional Outcome Measure: Discharge Mobility Score
for Medical Rehabilitation Patients (NQF #2636) and have noted the
following differences in the technical specifications: (1) The
[[Page 36586]]
number of risk adjustors and variance explained by these risk adjustors
in the regression models; (2) the use of functional assessment items
that were developed and tested for cross-setting use; (3) the use of
items that are already on the MDS 3.0 and what this means for burden;
(4) the handling of missing functional status data; and (5) the use of
exclusion criteria that are baseline clinical conditions.
Consistent with the other functional outcome measures, the
specifications for this quality measure, Application of IRF Functional
Outcome Measure: Discharge Mobility Score for Medical Rehabilitation
Patients (NQF #2636), were developed based on our literature review,
input from technical expert panels, public comment feedback and data
analyses. The details about how the specifications for the measures
differ as described in the previous functional outcome measure
sections, also apply to this quality measure.
Our measure developer contractor presented and discussed these
technical specification differentiations during the May 6, 2016 TEP
meeting to obtain TEP input on preferred specifications for valid
functional outcome quality measures. The differences in measure
specifications and the TEP feedback are presented in the TEP Summary
Report, which 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.
Data for the quality measure, the Application of IRF Functional
Outcome Measure: Discharge Mobility Score for Medical Rehabilitation
Patients (NQF #2636), would be collected using the MDS, with the
submission through the QIES ASAP system. Additional information on SNF
QRP reporting through the QIES ASAP system can be found on the CMS Web
site at https://www.cms.gov/Medicare/Quality-Initiatives-Patient-Assessment-Instruments/NursingHomeQualityInits/Skilled-Nursing-Facility-Quality-Reporting-Program/SNF-Quality-Reporting-Program-Measures-and-Technical-Information.html.
The calculation of the quality measure would be based on the data
collection of standardized items to be included in the MDS. The
function items used to calculate this measure are the same set of
functional status data items that have been added to the IRF-PAI
version 1.4, for the purpose of providing standardized resident
assessment data elements under the domain of functional status.
The collection of data by means of the standardized items would be
obtained at admission and discharge. The standardized items used to
calculate this quality measure do not duplicate existing items
currently used for data collection within the MDS. The quality measure
and standardized resident data element specifications for the
Application of IRF Functional Outcome Measure: Discharge Change in
Mobility Score for Medical Rehabilitation Patients (NQF #2636) can be
found on the SNF QRP Measures and Technical Information Web site at
https://www.cms.gov/Medicare/Quality-Initiatives-Patient-Assessment-Instruments/NursingHomeQualityInits/Skilled-Nursing-Facility-Quality-Reporting-Program/SNF-Quality-Reporting-Program-Measures-and-Technical-Information.html.
If finalized for implementation into the SNF QRP, the MDS would be
modified so as to enable us to calculate the measure using additional
data elements that are standardized with the IRF-PAI and such data
would be obtained at the time of admission and discharge for all SNF
residents covered under a Part A stay.
We sought public comments on our proposal to adopt the four
functional outcome quality measures, entitled Application of IRF
Functional Outcome Measure: Change in Self-Care Score for Medical
Rehabilitation Patients (NQF #2633); Application of IRF Functional
Outcome Measure: Change in Mobility Score for Medical Rehabilitation
Patients (NQF #2634);, Application of IRF Functional Outcome Measure:
Discharge Self-Care Score for Medical Rehabilitation Patients (NQF
#2635); and Application of IRF Functional Outcome Measure: Discharge
Mobility Score for Medical Rehabilitation Patients (NQF #2636),
beginning with the FY 2020 SNF QRP. All of the comments we received
addressed all four measures, and our discussion of them follows.
Comment: Several stakeholders supported the adoption of all four
functional status quality measures into the SNF QRP. One commenter
noted that self-care and mobility are of particular concern for persons
with advanced illness. This commenter further noted that function
affects daily life and quality of life for both persons and caregivers,
and that tracking this information during a SNF stay and at discharge
would improve transitions. The commenter encouraged us to increase
measurement of functional status for all patients in all settings.
Another commenter who supported the measures noted that valid and
reliable measures of functional outcomes are important for informing
treatment planning. Two commenters supported all 4 functional status
quality measures in the SNF setting, and noted their general support
for quality measures in all PAC settings that assess functional status
and the real-life needs of beneficiaries. These two commenters believe
that these four functional outcome measures move the SNF QRP in this
direction. Another commenter stated that having a core set of data
elements will allow for tracking of function across the continuum of
care and is in alignment with the goals of the IMPACT Act. Another
commenter supported our efforts to improve quality of care and ensure
appropriate resource allocation among PAC settings, and specifically
voiced agreement for adapting the NQF-endorsed functional outcome
measures from the IRF setting to the SNF setting to align measures
noting the intent of the IMPACT Act. This commenter stated that
measures should be clinically relevant, representative for a given
setting and patient population, and meaningful to patients and
families.
Response: We appreciate the commenters' support for the four
functional status outcome quality measures that we proposed to adopt
for the SNF QRP. We agree that patient and resident functioning in the
areas of self-care care and mobility are clinically relevant and are an
important area of quality in post-acute care (PAC) settings. In
addition, we believe that examining resident functioning during the SNF
stay will help SNFs focus on optimizing residents' functioning and
discharge planning and support residents' transitions from the SNF to
home or another setting. Finally, we agree that valid and reliable
measures of functional outcomes will assist SNFs in planning treatment
aimed at increasing or maintaining functional status.
Comment: One commenter offered support for these measures in
concept, but expressed concern that the proposed measures have not been
tested in the SNF setting. The commenter recommended that testing
across population types take place prior to any public reporting to
avoid confusion among providers and consumers.
Response: CMS strongly agrees that item and quality measure
validity and reliability are important. The self-care and mobility
items underwent several types of testing across post-acute care
settings, including SNFs, as part of the Post-Acute Care Payment Reform
Demonstration (PAC PRD). This testing, which included data from 60 SNFs
(contributing almost 4,000 CARE
[[Page 36587]]
assessments) examined the items' feasibility, reliability, and
validity. Overall, these results indicate moderate to substantial
agreement on these items. Details regarding the reliability and
validity testing, can be found in reports entitled The Development and
Testing of the Continuity Assessment Record and Evaluation (CARE) Item
Set, Volumes 1 through 3, Continuity Assessment Record and Evaluation
(CARE) Item Set: Video Reliability Testing, and Continuity Assessment
Record and Evaluation (CARE) Item Set: Additional provider-Type
Specific Interater Reliability Analyses. These reports are available at
https://www.cms.gov/Medicare/Quality-Initiatives-Patient-Assessment-Instruments/Post-Acute-Care-Quality-Initiatives/CARE-Item-Set-and-B-CARE.html.
As part of our quality measure development work, we conducted
additional reliability and validity testing, including Rasch analysis,
which showed acceptable reliability and validity, and these results
were discussed during the May 2016 TEP meeting and are summarized in
the SNF Function TEP Summary Report, which is available at https://www.cms.gov/Medicare/Quality-Initiatives-Patient-Assessment-Instruments/NursingHomeQualityInits/Skilled-Nursing-Facility-Quality-Reporting-Program/SNF-Quality-Reporting-Program-Measures-and-Technical-Information.html. Therefore, given the overall findings of these
reliability and validity analyses, we believe that the proposed
functional outcome measures are sufficiently reliable for the SNF QRP.
In addition, beginning October 1, 2016, SNFs are reporting several
of the self-care and mobility data elements that are needed to
calculate these measures. The quality measure, an Application of the
Percent of LTCH Patients with a Functional Assessment and a Care Plan
that Addresses Function (NQF #2631), was finalized for use in the SNF
QRP in FY 2016 (80 FR 46444 through 46453). This process measure
includes several of the self-care and mobility items included in the
SNF functional outcome measures, and we are conducting tests of the
reliability and validity of that data. We conduct ongoing analysis of
reliability and validity of adopted measures.
Comment: One commenter did not support the proposed function
measures because the NQF has not endorsed them for the SNF setting and
the Measure Applications Partnership (MAP) recommended continued
development. Two commenters recommended that we seek rapid NQF
endorsement for the four outcome measures to remove the ``application
of'' and ``IRF'' wording from the measure titles and to prevent
confusion among consumers, policymakers, and payers when displayed. One
of these commenters stated that quality performance outcomes reported
by an NQF endorsed measure in one setting may not necessarily be
comparable to an ``application'' of the same measure in another setting
due to differences in patient populations, payment policy, and specific
measure calculation details, case mix adjustors such as co-morbidities,
and other measure details. Another commenter recommended that the
official name of the proposed measure distinguish them as SNF quality
measures, which would decrease the public confusion when viewing them
on Nursing Home Compare.
Response: While these measures are not currently NQF-endorsed for
SNFs, we recognize that the NQF endorsement process is an important
part of measure development and plan to submit these four measures for
consideration of NQF endorsement after one full year of data
collection. We initially presented the four SNF outcome measures to the
MAP in December 2015. After the MAP meeting, we continued development
as recommended. Our measure developer contractor convened a SNF
Function TEP in May 2016 and we then requested and received public
comment via the CMS Measures Management Web site. In October 2016, we
presented a review of our additional measure development work to the
MAP as part of the feedback loop to give an update on the measure
development activities.
We appreciate the comments pertaining to NQF endorsement of the
measures before they are publicly displayed and comments on the titling
of the proposed functional outcome measures. With regard to the measure
title, we recognize the confusion of leveraging the words ``IRF'' in
our title application when we are collecting for a SNF population, and
we will reassess the titling for these outcome measures to decrease
confusion among all stakeholders.
Comment: Several commenters expressed concern about the added
burden of collecting data for the functional outcome measures. One
commenter noted that the addition of the section GG items needed for
the function outcome measures will increase the time providers need to
complete residents' assessments. A few commenters stated that changes
in the MDS as a result of these measures will involve additional staff
time and resources for training and monitoring compliance. One
commenter suggested that we provide financial support for the
additional reporting burden.
Response: We appreciate the commenters' concerns associated with
the proposed functional outcome measures. We recognize that any new
data collection is associated with burden and take such concerns under
consideration when developing and selecting quality measures. As we
develop quality measures, we review existing items and consider the
appropriateness of adding or deleting any items. We note that some of
the data elements associated with the measure are already included on
the MDS in section GG, because we adopted a cross-setting function
process measure in the SNF QRP FY 2016 Final Rule (80 FR 46444 through
46453). Three of the self-care data elements and seven mobility data
elements necessary to calculate that quality measure, an Application of
the Percent of Long-Term Care Hospital Patient with a Functional
Assessment and a Care Plan that Addresses Function (NQF #2631) are used
to calculate the quality measure and are finalized in this rule as
standardized resident assessment data elements.
Comment: Three commenters noted that the requirement to assess
residents while utilizing both the section G--Functional Status and
section GG--Functional Abilities and Goals items on the MDS is
burdensome. One of the commenters explained that to address the same
functional activities in two different sections of the MDS, with
different item definitions, and with different look-back periods, is
excessively burdensome, and introduces unnecessary risk for reporting
errors. The two other commenters further suggested that we analyze the
section G mobility and self-care items that address the same or similar
domains in section GG to identify opportunities to eliminate the
redundant and non-compliant mobility and self-care items from section
G.
Response: We recognize that the items in section G and section GG
address similar domains of mobility and self-care. However, for the SNF
QRP, we believe that the section GG items and the associated 6-level
scale will allow us to better distinguish change at the highest and
lowest levels of functioning by documenting minimal change from no
change at the low end of the scale. This is important for measuring
progress in some of the most complex cases treated in PAC. The items in
section GG were developed with input from the clinical therapy
communities to better measure the change in function,
[[Page 36588]]
regardless of the severity of the individual's functional limitations.
To reduce the potential burden associated with collecting additional
items, we have included several mechanisms in the section GG to reduce
the number of items that apply to any one resident. First, in section
GG, there are skip patterns pertaining to walking and wheelchair
mobility that allow the clinician to skip items if the resident does
not walk or does not use a wheelchair, respectively. The skip patterns
mean that only a subset of section GG items are needed for most
residents. Second, section GG items will only be collected at admission
and discharge.
Comment: Two comments requested more detailed information about how
the functional outcome measures could be used to improve quality and
how we expect to use the information.
Response: We believe that examining residents' functional outcomes
will help SNF staff focus on optimizing patients' functioning and
supporting patients' transition from the SNF to home or another
setting. Furthermore, we believe that the feedback we provide to SNFs
on these measures will allow providers to monitor their performance on
key rehabilitation outcomes, relative to other facilities, and identify
opportunities to improve their quality of care.
Comment: One commenter voiced concern about the proposal to include
functional outcome measures that focus on functional improvement
without also proposing measures that cover SNF residents who are in the
facility for functional maintenance or the prevention or slowing of
functional decline. The commenter stated that the standards of care and
goals for patients in an IRF cannot be adopted for SNFs unless an
additional measure that focuses on residents covered under functional
maintenance is also adopted. The commenter further noted that adoption
of the four functional outcome measures will send the wrong message to
SNFs and indicate they are being judged solely on whether they improve
residents' functioning. The commenter recommends delaying
implementation of these measures until a maintenance measure can also
be implemented simultaneously. This commenter disagreed that the
exclusion of patients not receiving physical therapy or occupational
therapy is an appropriate proxy for SNF residents for whom there is no
expectation of functional improvement and suggested we consider another
measure that does not penalize SNFs that provide maintenance therapy.
Response: We agree that our measures should address maintenance and
the prevention or slowing of functional decline, and we note that the
functional process measure, Application of Percent of LTCH Patients
with an Admission and Discharge Functional Assessment and a Care Plan
that Addresses Function (NQF #2631), which is already included in the
SNF QRP measure set, addresses this topic. The functional process
measure requires that a SNF conduct a functional assessment at both
admission and discharge and that such assessment include at least one
goal related to function. Such functional status goals may focus on
maintenance of function, slowing decline in function or functional
improvement. Likewise, the proposed discharge functional outcome
measures, Application of the IRF Function Outcome Measure: Discharge
Self-Care Score for Medical Rehabilitation Patients (NQF #2635) and
Application of the IRF Function Outcome Measure: Discharge Mobility
Score for Medical Rehabilitation Patients (NQF #2636), calculate the
residents' observed and expected discharge functional status.
Maintenance of function or slowed decline in function may be expected
based on the resident's characteristics and this would be captured in
these measures. We also support future quality measurement work that
will assess the development of other measures that focus on maintaining
function and the slowing of functional decline.
Finally, we would like to note that the Nursing Home Quality
Initiative includes two quality measures focused on functional
maintenance and slowing decline. These measures are reported to the
public on the Nursing Home Compare Web site and are calculated using
MDS Section G data elements. We intend to develop similar quality
measures focused on maintenance of function and decline in function
that would be calculated using section GG Self-Care and Mobility data
elements. With regard to unintended consequences, we will monitor
potential unintended consequences of this exclusion criterion, and take
these suggestions into consideration during our ongoing efforts to
improve our quality measures.
Comment: One commenter agreed with the exclusion of residents who
do not have an expectation of functional improvement for the 2 change
functional outcome measures (Application of IRF Functional Outcome
Measure: Change in Self-Care for Medical Rehabilitation Patients (NQF
#2633) and Application of IRF Functional Outcome Measure: Change in
Mobility Score for Medical Rehabilitation Patients (NQF #2634)) and
requested clarification as to how we would identify these residents.
The commenter requested additional detail regarding residents who
qualify for this exclusion at admission and for residents whose status
changes during the SNF stay. The commenter noted that to ensure
accurate and appropriate identification of beneficiaries who qualify
for this exclusion, CMS needs to provide more detail regarding it. One
commenter stated that we should provide additional information
regarding how SNFs will be held accountable if the goal changes from
expecting functional improvement in a resident to not expecting
functional improvement during the resident's stay. Another commenter
also voiced concern that changes in residents' goals between admission
and discharge are common and would impact outcomes.
Response: For this exclusion criterion, we provide the list of
medical conditions that we will use in the Final Rule Specifications
for SNF QRP Quality Measures document, which is available at https://www.cms.gov/Medicare/Quality-Initiatives-Patient-Assessment-Instruments/NursingHomeQualityInits/Skilled-Nursing-Facility-Quality-Reporting-Program/SNF-Quality-Reporting-Program-Measures-and-Technical-Information.html.
We recognize that a resident's status or goals may change during
the SNF stay, and the measures include several exclusions that are
applied based on the resident's status at discharge to reflect this
change prior to the end of the stay. For example, a resident may
experience an incomplete stay due to an urgent medical condition and is
discharged to an acute care hospital. We recognize that it is
challenging to collect discharge functional assessment data under these
circumstances. For this reason, these residents are excluded from the
four functional outcome measures. We would also like to clarify that
the collection of a patient's goal is simply to track whether a
patient's goal was established on admission rather than to track the
expectation of function improvement.
Another exclusion criterion in the 4 functional outcome measures
relates to residents who are discharged to hospice. This may be a
circumstance where a resident's status changed during the stay due to a
new medical diagnosis or an unexpected worsening of a resident's
condition. The list of all measure exclusions and the specifications
for each of these exclusion criteria are
[[Page 36589]]
provided in the Final Rule Specifications for SNF QRP Quality Measures
document. We will continue to monitor for other examples as part of our
ongoing quality measure development work.
Comment: Several commenters disagreed with one proposed exclusion
criteria, Residents who do not receive physical or occupational therapy
services. Two commenters suggested that we adopt more person-centered
criteria that reflect functional improvement expectations in addition
to or to replace the current proposed exclusion that focuses on therapy
services. The two commenters stated that providers who administer
therapy services to residents to maintain, but not improve function,
would have lower functional improvement scores and the criterion
``creates a significant disincentive to provide any physical therapy
(PT) or occupational therapy (OT) to SNF residents that require skilled
services to maintain or delay decline in function.'' One of the two
commenters stated this may be a disincentive to provide therapy to
residents who fit into the Jimmo class of beneficiaries who may not
improve but still need SNF services. One of these commenters
recommended that CMS exclude residents whose aggregate ``Admission
Performance'' mobility (GG01701) or self-care (GG01301) score (see Step
1 of the CMS proposed quality measures algorithms) is greater than or
equal to their ``Discharge Goal'' mobility (GG01702) or self-care
(GG01302) score. Another commenter opposed excluding from the
functional outcome measures residents who do not receive occupational
therapy or physical therapy.
One commenter who disagreed with the proposed exclusions criterion
further noted that the exclusion of ``residents who do not receive
physical or occupational therapy services,'' for the 4 functional
outcome measures is substantively different than the May 2016 SNF
Function TEP discussion, and the 2016 CMS Measurement Management Public
Comment document. This commenter recognized that the exclusion did
refer to ``Residents who do not have an expectation of functional
improvement,'' which was subsequently clarified to exclude ``Residents
who do not receive physical or occupational therapy services.'' The
commentator expressed that no explanation or data analysis was provided
to justify the change in the exclusion definition.
Response: We thank the commenters for their feedback and
suggestions. We acknowledge the commenters' concern about excluding
residents who do not receive physical or occupational therapy services.
As noted in the SNF Function TEP Report, our measure development
contractor did solicit suggestions from TEP members about methods to
operationalize exclusion criteria so that the quality measure would
include only residents who were expected to improve functional status,
and TEP members did not offer a specific recommendation to address this
issue. For residents who are expected to improve their functional
abilities, physical and/or occupational therapy would be part of the
resident's care plan to assist the resident to relearn how to perform
the activity or to learn a new way to perform the activity. With regard
to the commenter's suggestion to exclude residents whose aggregate
``Admission Performance'' is greater than or equal to their ``Discharge
Goal,'' we would like to clarify that the Function Process Measure
requires SNFs to code at least one Discharge Goal item on the 5-day
admission assessment. The suggestion would require SNFs to code all
function Discharge Goal items, which is not currently required, and
this would incur a significant burden on SNFs.
Comment: MedPAC noted the importance of monitoring the accuracy of
data that is reported on measures that assess functional status.
Response: We agree with MedPAC on the importance of monitoring the
accuracy of functional status data that is reported to CMS, as data
accuracy is necessary to calculate reliable and valid quality measures.
To that end, we conduct ongoing analyses of the assessment data
submitted from PAC providers to ensure accuracy by examining the
reliability and validity of the data elements on a quarterly basis.
Comment: One commenter cautioned that the education level and
professional expertise of personnel collecting SNF functional outcome
measure data are important to consider when analyzing and drawing
conclusions about the data.
Response: We recognize that each SNF may have unique workflow
issues, which may mean that data collection protocols are not exactly
alike. However, we require that SNFs submit accurate data, and we
provide training and other resources.
Comment: One commenter supported the general numerator and
denominator definitions proposed for the four proposed SNF functional
outcome measures.
Response: We appreciate the commenter's support.
Comment: One commenter expressed support for the denominator
exclusion criteria proposed for the four proposed SNF functional
outcome measures.
Response: We appreciate the commenter's support.
Comment: One commenter expressed concern regarding the exclusion,
``residents who are scored as independent upon admission,'' from the
change in self-care score measure and the inclusion of these residents
in the self-care discharge score measure. The commenter explained that
this will cause confusion among providers, and recommended that further
education be offered to providers.
Response: This exclusion criterion only applies to the two change
quality measures (Application of IRF Functional Outcome Measure: Change
in Self-Care for Medical Rehabilitation Patients (NQF #2633) and
Application of IRF Functional Outcome Measure: Change in Mobility Score
for Medical Rehabilitation Patients (NQF #2634)), and is related to a
measurement issue. A resident who is independent with each of the self-
care or mobility activities in section GG at the time of admission
would be coded a 6 on each of those items, and any improvement in self-
care or mobility skills the resident achieved during the stay could not
be measured with the same set of function data elements and rating
scale at discharge. Therefore, residents who are at the ``ceiling'' of
the self-care or mobility scale at the start of a SNF stay are excluded
from the respective change in self-care or change in mobility quality
measure. Including these residents in a change quality measure may
disadvantage providers serving these residents, as the change in self-
care or mobility could not be mathematically higher than zero. We would
like to note that residents who are independent with all self-care or
mobility activities are included in the discharge self-care and the
discharge mobility quality measures, and for the discharge quality
measures, maintaining independence with all the self-care or mobility
activities is the expected outcome. With regard to provider knowledge
about this topic, we recognize the importance of comprehensive training
and we intend to provide such training.
Comment: Two commenters noted that the calculation of the 4
functional outcome quality measures requires recoding of ``activity did
not occur'' codes. These commenters expressed concern about recoding
the ``activity did not occur'' codes (that is, codes 07, 09, 88) to
01--Dependent, and one of the two commenters did not support recoding
of missing data as the method was not clear. [The other commenter
expressed concern that recoding the
[[Page 36590]]
activity not attempted codes to 01 will not accurately reflect resident
status or change, and that mobility and self-care tasks being refused,
not applicable, or not attempted due to medical or safety concerns,
does not necessarily mean the resident is dependent.
Another commenter noted that this recoding can result in different
statistical and clinical inferences compared to not recoding items to
01. The commenter recommended further detail regarding the use of
``activity did not occur'' codes and that an analysis be conducted that
compares the recoding method to excluding any or all the four
``activity did not occur'' item responses, and provide the percentage
of patient stays impacted. The commenter requested that these results
be shared with stakeholders for comment before adopting these four
proposed functional outcomes measures.
Response: We appreciate the concerns presented by commenters about
handling missing data and the ``activity not attempted'' codes.
``Activity did not occur'' codes and missing data are recoded to 01.
Dependent to calculate the quality measure. The rationale for this
recoding relates to the likelihood that when a resident cannot attempt
an activity due to a medical condition or safety concern, that the
resident often would have required significant assistance from one or
more helpers to complete the activity had the activity been attempted.
Thus, the resident would have been considered dependent with the
activity. Likewise, the code 09, ``Not applicable,'' is used to
indicate that the activity was not attempted, and that the resident did
not perform the activity prior to the current illness, injury or
exacerbation. We believe our re-coding approach is better than
excluding any resident stays that include one or more items coded as
``activity not attempted,'' because excluding these residents would
exclude residents who, in general, are lower functioning. That said, we
are exploring other methods of recoding items when an activity was not
attempted. We believe it is important to continue to monitor the
reliability and validity of the functional outcome measures, including
issues such as this one. Ongoing analyses of these items and outcomes
may provide support for an alternative approach to item recoding in the
future.
Comment: One commenter conditionally supported the inclusion of
only Medicare Part A residents, but requested that we consider revising
this criterion in the future to include SNF Medicare Advantage
enrollees. The commenter noted that with growing enrollment in the
Medicare Advantage program, excluding these beneficiaries may result in
the outcome measure not adequately representing quality of care for the
entire SNF. The commenter recommended that we pursue the regulatory
and/or statutory approaches necessary to make data reporting and
analysis possible include the Medicare Advantage population, and that
this was essential so that functional outcomes of all Medicare
beneficiaries (Part A or Medicare Advantage) reported by these proposed
measures would more accurately represent the quality of care provided
by a SNF. Two commenters commented that the description of the proposed
measures should specify that the measure estimates outcomes for the
Medicare Part A coverage benefit, as opposed to the admission and
discharge from a nursing home. The commenter noted this was important
because a Medicare Part A resident may remain in the nursing facility
at the end of the Part A coverage period, so while the resident may be
``discharged'' from Part A benefits, he/she is not ``discharged'' from
the nursing home.
Response: The commenter is correct that the functional outcome
measures apply only to Medicare Part A SNF residents. The assessment
data for the functional outcome measures would be collected at the
start of the SNF Part A stay and the end of the Part A stay. We
appreciate the suggestion to expand the proposed measure collection to
a Medicare Advantage population. We will take the recommendation to
expand the measure population into consideration in future measure
development efforts. Additional discussion of the expansion of quality
measures to include all residents regardless of payer status can be
found in section III.D.2.k.5
Comment: One commenter noted there are meaningful SES, clinical, or
other differences between traditional Medicare versus Medicare
Advantage (MA) enrollees that could affect comparisons between
facilities with different proportion of Medicare Advantage and Part A
stays. The commenter further requested that this possibility should be
investigated.
Response: For a discussion of social risk factors in the SNF QRP,
please see the discussion in section III.D.2.b.1 of this rule.
Comment: One commenter stated that the calculation of the four
proposed measures is complex, particularly with respect to the
calculation of the expected discharge functional status score using a
formula, which may result in providers not understanding the precise
target outcome. The commenter further noted that the measure scores
might be inappropriately compared across PAC settings even though they
are calculated differently using different risk adjustor coefficients.
The commenter stated that significant education and ongoing feedback
for providers will be necessary when these measures are implemented to
improve quality of care and suggested that we simplify the calculations
for the functional outcome measures.
Another commenter voiced concern that the calculated ``Expected
score'' for the function outcome measures would be an inaccurate point
of comparison if the risk adjustors were not accurate. The commenter
suggested that we fully evaluate the risk adjustors in a large data
sample to ensure they are appropriate prior to implementation. The
commenter also suggested that we should have a transparent process that
is clearly communicated with stakeholders to clarify and refine risk
adjustors for the functional outcome measures. The commenter noted that
if there is not a refinement period of the risk adjustors, providers
will be penalized for their performance on these measures at the same
time that we are examining the risk adjustors' accuracy and possibly
modifying them.
Response: We continuously examine the performance of quality
measures and revise measures, including risk adjustment, to optimize
measurement of quality ensuring that our measures and their components
are accurate. We also continue to seek stakeholder input as we conduct
our internal measure maintenance work. Further, we agree that education
is important and necessary to help SNFs, as well as other PAC settings,
understand how the four proposed functional outcome measures will be
calculated. To that end, we intend to provide training materials
through the CMS webinars, open door forums, and help desk support. The
expected scores are calculated using the results of our risk-adjustment
models. During our May 2016 TEP, we discussed the risk adjustment
models extensively, and these discussions included a review of our
analyses of the mean admission, discharge and change for the self-care
and mobility scores for each risk adjustor. We also reviewed the risk
adjustors for competing measures. These discussions are summarized in
the SNF Function Summary TEP report, which is available at https://
www.cms.gov/Medicare/Quality-Initiatives-Patient-Assessment-
Instruments/NursingHomeQualityInits/Skilled-Nursing-Facility-Quality-
Reporting-Program/SNF-Quality-Reporting-Program-Measures-and-Technical-
[[Page 36591]]
Information.html. We believe the risk adjustment model is
methodologically strong.
Comment: One commenter generally supported the proposed risk
adjustment approach for the four proposed functional outcome measures,
but requested additional items to address social risk, such as
Medicare-Medicaid status. The commenter recommended testing of the risk
adjustment methodology to ensure it adjusts for meaningful differences.
Another commenter suggested that we risk adjust the four proposed
functional outcome measures for social and environmental factors, such
as social support and an accessible home environment. The commenter
stated that by not adjusting for social and environmental risk factors,
we might be creating conflicting incentives between functional
improvement and resource use measures. Another commenter supported the
use of other assessment data, such as mode of communication and gateway
processes. One commenter expressed support for the proposed risk
adjustors for the functional outcome measures, but recommended that we
reassess all risk adjusters once the new MDS data are submitted.
Response: We selected the risk factors based on literature review,
clinical relevance, TEP input, and empirical findings from the PAC-PRD
analyses. For a discussion of social risk factors in the SNF QRP, we
refer the commenter to section III.D.2.b.1. of this rule. We agree with
the importance of testing and continuously monitoring the risk
adjustment models so that the functional outcome quality measures
reflect true differences in the effectiveness of treatments provided by
SNFs. We will continue to examine the performance of our quality
measures and revise risk adjustment approaches as necessary to optimize
quality measurement.
Comment: Several commenters supported the use of selected risk
adjustors and specifically noted that they support risk adjustors in
the areas of age, admission function score, medical conditions, and
impairments. One commenter stated that the proposed list of
comorbidities used for risk adjustment of the functional outcome
measures appears comprehensive but requested further detail of the
source of the comorbidities data and the proposed look-back period for
including the comorbidities. One commenter supported the inclusion of
prior functioning and prior device use items for risk adjustment in the
functional outcome measures but was concerned that the collection of
this data will add administrative burden. Some commenters noted that
coding for addition risk adjusters might cause additional provider
burden. One commenter supported the inclusion of new data elements for
risk adjustment, specifically the prior functioning, prior device use,
primary medical condition category and prior surgery items, but under
the condition that we appropriately account for the additional
reporting burden within the SNF PPS rates. Another commenter expressed
concern about the accuracy and burden of collecting the items that
refer to a time period outside the defined period of the SNF stay. One
commenter stated that SNFs would not know what determines the model
estimate, and proposed that we provide the benchmark for comparison
prior to the fiscal year. In addition, this commenter questioned the
use of a statistical model since section GG includes the establishment
of goals, arguing outcomes could be compared to the SNF's own
established goals. Other commenters requested that we use the median
discharge scores instead of the mean values as a way to avoid the
impact of outliers on the expected score. Another commenter expressed
that poor risk adjustment would penalize SNFs that provide care to
medically-complex and socioeconomically disadvantaged residents, and
threaten access to care.
Response: We agree with commenters on the importance of risk
adjustment as functional outcomes can vary based on residents'
demographic and admission clinical status. Risk adjustment allows for
the comparison of functional outcomes across SNFs. As with other risk
adjustors, both prior functioning and prior device use were identified
as important risk adjustors for the functional outcome measures through
data analyses. In development of the quality measures, we selected
risk-adjustors including comorbidities, and other health and prior
functioning items, based on evidence in the literature, stakeholder
comments during TEPs, public comment opportunities statistical
findings, and input from subject matter experts. As we develop and
refine quality measures, we review existing items, listen to feedback
from providers, and consider the appropriateness of adding or deleting
any items to the MDS. Reduction of burden is an important consideration
as we develop and refine quality measures, which includes risk
adjustors for outcome measures. We would like to emphasize the
importance of risk adjustment as functional outcomes can vary based on
residents' demographic and clinical factors. Prior functioning is an
important predictor of functional improvement and this is data
routinely collected by therapists when developing a resident's care
plan.
We agree with the commenter that it is important for risk
adjustment of quality measures to be reliable and valid. As mentioned
previously, the risk adjustors were determined based on data analysis,
stakeholder input, literature review, clinical relevance and public
comment. As noted above, we agree with the commenter for the need to
re-examine the risk adjustment model when additional data become
available. In addition, we appreciate the continued involvement of
stakeholders in all phases of measure development and implementation.
We refer the commenter to the Specifications for SNF QRP Quality
Measures and Standardized Resident Assessment Data Elements document
available at https://www.cms.gov/Medicare/Quality-Initiatives-Patient-Assessment-Instruments/NursingHomeQualityInits/Skilled-Nursing-Facility-Quality-Reporting-Program/SNF-Quality-Reporting-Program-Measures-and-Technical-Information.html for additional details about
the risk adjustment approach.
With regard to the use of the discharge goals, we would like to
note that the quality measure, Application of Percent of Long-Term Care
Hospital Patients with an Admission and Discharge Functional Assessment
and a Care Plan that Addresses Function (NQF #2631), requires
documentation of only one goal. Using goals to determine outcomes would
require SNFs to complete all goals in section GG, which would add
significant burden. With regard to the suggestion of using the median
rather than the mean value, we will examine this approach as we examine
additional data to determine how it affects quality measure scores.
We would like to note that the risk adjustment model for these
outcomes includes up to 60 risk-adjusters, and includes more clinically
and statistically relevant adjusters for function than other risk-
adjusted functional outcomes measures. We will pursue ongoing
monitoring and analysis of these proposed functional outcome measures
to identify any potential disparities across patient and facility
characteristics.
Comment: One commenter was concerned that the PAC PRD data from 34
nursing facilities and other providers used to develop the risk
adjustors for the functional outcome measures for SNFs were inadequate.
The commenter felt that a larger volume of data is
[[Page 36592]]
necessary to verify the current risk adjustors. The commenter
recommended that we reevaluate these risk adjustors on a regular basis
to ensure their accuracy and to ensure that SNF providers are not
evaluated and penalized in the future based on inadequate risk
adjustment. The commenter also stated that suggestions offered during a
Technical Expert Panel should be tested with data before becoming part
of the quality measure and payment system.
Response: As previously discussed, the risk adjustors were selected
based on literature review, clinical relevance, Technical Expert Panel
input, public comment opportunities, and empirical findings from the
data analyses from 60 SNFs and approximately 4,000 resident
assessments. Based on our comprehensive approach to developing the
models and the alignment between these models and the IRF models, we
believe that our models are adequate for risk adjustment for the four
SNF functional outcome measures. As part of measure maintenance and
evaluation, we routinely analyze data to monitor the performance of
implemented quality measures, including risk adjustment models, and
thus we agree with the commenter that we should re-examine the risk
adjustment model when national data become available. We aim to develop
accurate and fair measures and we continuously examine the performance
of quality measures and revise measures, including risk adjustment, to
optimize measurement of quality.
Comment: Some commenters requested that additional risk adjusters
be included in the proposed outcome measures' statistical models, and
that each model includes a similar set of risk adjusters. One commenter
requested that cognition and age be included in the model, while other
commenters were concerned that ``prior functioning: functional
cognition'', ``fall history'', and ``prior functioning: mobility'' were
not included in the self-care model. Another commenter disagreed with
the specification ``independent'' as the reference category since it
appeared this also included residents with an unknown prior functional
status. The commenter explained that in PAC settings, it is more likely
that a patient who cannot report their prior functional status was more
dependent rather than more independent before being admitted, so should
not be grouped into the ``independent'' reference category.
Response: The majority of risk adjusters are the same in both the
self-care and mobility functional outcome models. With regard to the
variables included in the mobility models, but not included in the
self-care models, these variables were all tested in the self-care
model, but they were not statistically significant predictors of the
change in self-care scores or the discharge self-care scores. As noted
above, we will continue to examine the risk adjustment models when more
data become available. We would also like to clarify that cognition and
age are included in risk adjustment models and that the Brief Interview
for Mental Status (BIMS) specifically accounts for functional variation
associated with cognition status. Regarding the reference group
``independent'' for the prior functional status risk adjustors, we
appreciate the commenter's suggestion and will take it into
consideration.
Comment: Several commenters requested additional information
regarding coding of some of the risk adjustment variables. One
commenter requested additional detail about how a SNF would identify
the appropriate primary medical condition category for the proposed new
MDS item I0020, which is used for risk adjustment of the functional
outcome measures. The commenter stated that the current approach of
requiring the provider to identify one of the 13 primary medical
diagnoses or list an ICD-10 code is burdensome and suggested rather a
provider should enter the applicable ICD-10 code onto the MDS, which
would then be mapped by the MDS grouper software to identify the
applicable condition. The commenter further stated that the admitting
diagnosis for admission to a SNF may not be directly relevant to the
diagnosis associated with mobility and self-care treatment plans and
goals, unlike with IRFs, and recommended that we revise this section of
the MDS to request providers report the primary medical condition
associated with mobility and self-care treatment. Another commenter
requested more clarification on the use ICD-10 codes in defining the
primary medical condition category, and further noted concern that
these codes are more prevalent in the IRF setting, compared to the SNF
setting. This commenter expressed concern about where the diagnosis
group information will come from and explained that ICD-10 coding is
complete and requires multiple levels of consideration and clinical
input. Another commenter requested information on how ``medically
complex'' is defined. Other commenters requested further clarification
on where information for items such as mechanical ventilation will be
acquired, how ``major surgery'' is defined and how the interaction
between primary diagnosis and SNF admission functional status is
determined in risk adjustment.
Response: We appreciate the commenters' concerns regarding coding
of the primary medical conditions as well as the coding of mechanical
ventilation and major surgery for risk adjustment. As previously noted,
we intend to provide guidance on these issues as part of our
comprehensive training. Some of these variables were added to the IRF-
PAI Version 1.4 when the functional outcome measures were adopted in
the IRF QRP, and since these primary medical conditions will be aligned
across the IRF and SNF settings, providers can get a preview of the
coding guidance and definitions in the IRF PAI Training Manual on page
J-5, which is available at https://www.cms.gov/Medicare/Quality-Initiatives-Patient-Assessment-Instruments/IRF-Quality-Reporting/IRF-PAI-and-IRF-QRP-Manual.html. The RAI manual will also be updated with
all timely and accurate information. With regard to the primary medical
condition diagnosis, which are risk adjustors for the four functional
outcome measures, the proposed MDS effective October 1, 2018 does
include primary diagnosis as a data element.
Comment: One commenter noted that the use of the term ``Primary
rehabilitation diagnosis'' does not recognize that not all patients are
admitted for rehabilitation.
Response: We would like to clarify that the term ``Primary
rehabilitation diagnosis'' is not used as part of the four proposed
functional outcome measures.
Comment: One commenter supported the use of the BIMS for risk
adjustment of the functional outcome measures, stating that learning
and memory deficits can significantly impact the rehabilitation of
residents with functional impairments. However, the commenter stated
that the BIMS is designed as a resident interview and that the use of
the BIMS alone as risk adjustment in the SNF setting would be
problematic due to the high percentage of residents unable to complete
the BIMS as a result of severe cognitive or physical impairments. The
commenter stated that a SNF resident's inability to complete the BIMS
is often associated with slower rates and lesser degrees of functional
improvement than those residents that can complete the BIMS. This
commenter requested clarification as to how we will address risk
adjustment for these residents and suggested excluding SNF residents
that cannot complete the BIMS items if they are not accounted for in
the current risk adjustment model. The commenter also
[[Page 36593]]
suggested development of standardized patient assessment data for
clinician observation of cognitive function and mental status in the
future to account for residents who are unable to complete the BIMS.
Response: We appreciate the commenter's feedback regarding the use
of the BIMS in risk adjustment for the functional outcome measures. We
would like to clarify that in the MDS 3.0, if a resident is unable to
complete the BIMS, the provider is directed to administer the Staff
Assessment for Mental Status (C0700-C1000), and the data from the staff
assessment for mental status is used for cognitive status risk
adjustment when the BIMS score is not available. With regard to the
residents who are unable to be interviewed for the BIMS due to
communication disorders, the BIMS can also be administered in writing.
Further, we note that communication impairment is also a risk adjusters
the self-care and mobility models. With regard to the residents who are
unable to be interviewed for the BIMS due to communication disorders,
we note that communication impairment is also a risk adjusters the
self-care and mobility models.
Comment: MedPAC noted the importance of using a consistent
definition for ``at admission'' to enable accurate comparisons across
PAC providers. The commenter stated that we should require that the
assessment be completed within 3 days of admission and stated that the
Day-5 assessment in SNFs is problematic since it can be conducted
between Day 1 and Day 8.
Response: We appreciate the importance of data collection within
consistent assessment time frames and we maintain a consistent approach
to collecting information on or as close to the time of admission as
possible. For example, on the 5-day assessment in SNF, the assessment
time frame for the section GG Self-Care and Mobility data items on the
MDS is 3 calendar days at the time of admission (first 3 calendar days)
and discharge (day of discharge and the 2 days prior to the day of
discharge). Therefore, across all PAC assessment instruments, we are
collecting on a patient's usual performance within that three-day time
period. That is, the 3-day assessment time frame for the section GG
Self-Care and Mobility data elements is standardized across the three
institutional PAC settings, SNFs, IRFs and LTCHs.
Comment: Two commenters requested that we ensure that the four
quality measures are consistently reviewed for reliability, accuracy,
and applicability to patients in different PAC settings to develop
standards to compare quality across PAC settings. The commenters
requested that we consider whether variation in training and practices
among providers in various PAC settings affects data entry processes
for the MDS and other PAC instruments, and whether this undermines the
comparability of the proposed functional outcome measures. Another
commenter requested that we provide clear language that cross-setting
applications are not valid at this time due to differences in patient
populations, payment policy, and specific measure calculation details.
One commenter voiced concern that additional time, testing, and
training may be necessary to ensure measures are implemented
consistently across different settings that use very different
processes, scales, definitions, and time frames, to allow data to be
comparable across settings.
One commenter requested that we use the same set of definitions for
standardized and interoperable functional assessment data in each PAC
setting. The commenter further stated that this would mitigate
providers collecting and calculating data for these measures
differently across settings. The commenter was concerned discrepancies
could result in unintended consequences with regard to payment and
public reporting.
Response: We agree with the commenters that the accurate collection
of functional assessment data is important across all PAC settings.
Providers are required to submit accurate data to us, and we provide
training and other resources. Providers should collect data in a manner
that fits with the clinical workflow within their facility. With regard
to the concern that reporting variability may impact comparability
across facilities, we agree that comprehensive training is needed to
ensure accuracy of data collection and interpretation as well as
successful implementation of new measures. As with previous measures,
we will provide training sessions, training manuals, Webinars, open
door forums, help desk support, and a Web site that hosts training
information (https://www.youtube.com/user/CMSHHSgov). At this time, we
are adopting these measures into the SNF QRP, which is a pay-for-
reporting program, and have not specified a timeframe for public
reporting of these measures for SNFs.
With regard to the request for standardized and interoperable
functional assessment data in each PAC setting, we agree with the
commenter about the importance of accurate collection of standardized
patient assessment data across the PAC settings. The item definitions
are the same across PAC settings, and we continue to work to harmonize
the coding guidance for the standardized assessment data elements as we
believe that this is key to the collection of accurate data.
Comment: One commenter supported our proposal to collect data on
the proposed function quality measures through the MDS using the QIES
ASAP system.
Response: We appreciate the commenter's support.
Final Decision: After careful consideration of the public comments
received, we are finalizing our proposal to adopt the four functional
outcome measures, Application of IRF Functional Outcome Measure: Change
in Self-Care Score for Medical Rehabilitation Patients (NQF #2633),
Application of IRF Functional Outcome Measure: Change in Mobility Score
for Medical Rehabilitation Patients (NQF #2634), the Application of IRF
Functional Outcome Measure: Discharge Self-Care Score for Medical
Rehabilitation Patients (NQF #2635), the Application of IRF Functional
Outcome Measure: Discharge Mobility Score for Medical Rehabilitation
Patients (NQF #2636), beginning with the FY 2020 SNF QRP.
h. Modifications to Potentially Preventable 30-Day Post-Discharge
Readmission Measure for Skilled Nursing Facility (SNF) Quality
Reporting Program (QRP)
In the FY 2017 SNF PPS final rule (81 FR 52030 through 52034), we
adopted the Potentially Preventable 30-Day Post-Discharge Readmission
Measure for SNF QRP. This measure was developed to meet section
1899B(d)(1)(C) of the Act, which calls for measures to reflect all-
condition risk-adjusted potentially preventable hospital readmission
rates for PAC providers, including SNFs.
This measure was specified to be calculated using 1 year of
Medicare FFS claims data; however, in the FY 2018 SNF PPS proposed rule
(82 FR 21057) we proposed to increase the measurement period to 2 years
of claims data. The rationale for this change is to expand the number
of SNFs with 25 stays or more, which is the minimum number of stays
that we require for public reporting. Furthermore, this modification
will align the SNF measure more closely with other potentially
preventable hospital readmission measures developed to meet the IMPACT
Act requirements and adopted for the IRF and LTCH QRPs, which are
[[Page 36594]]
calculated using 2 consecutive years of data.
We also proposed to update the dates associated with public
reporting of SNF performance on this measure. In the FY 2017 SNF PPS
final rule (81 FR 52030 through 52034), we finalized initial
confidential feedback reports by October 2017 for this measure based on
1 calendar year of claims data from discharges during CY 2016 and
public reporting by October 2018 based on data from CY 2017. However,
to make these measure data publicly available by October 2018, we
proposed to shift this measure from calendar year to fiscal year,
beginning with publicly reporting on claims data for discharges in
fiscal years 2016 and 2017.
Additional information regarding the Potentially Preventable 30-Day
Post-Discharge Readmission Measure for SNF QRP can be found at https://www.cms.gov/Medicare/Quality-Initiatives-Patient-Assessment-Instruments/NursingHomeQualityInits/Skilled-Nursing-Facility-Quality-Reporting-Program/SNF-Quality-Reporting-Program-Measures-and-Technical-Information.html.
We sought public comment on our proposal to increase the length of
the measurement period and to update the public reporting dates for
this measure. A discussion of these comments, along with our responses,
appears below.
Comment: We received several comments on our proposal to expand the
data reporting period for SNFs from one year to 2 years for the
Potentially Preventable 30-Day Post-Discharge Readmission Measure for
SNF QRP. MedPAC and other commenters supported this proposal because it
would increase the number of SNFs included in public reporting. Other
commenters expressed support for aligning the SNF measure with the
potentially preventable hospital readmission measures we have adopted
for the IRF and LTCH QRPs, which also use 2 years of data.
Some commenters were concerned that the greater lag associated with
expanding the reporting period to 2 years would make the measure less
valuable or sensitive to quality improvement. One commenter was
concerned that publicly reporting performance data based on 2 years of
data may not accurately reflect the quality of care that SNFs are
currently furnishing. Some commenters were opposed to the proposal
because it would not align with measurement periods used in other SNF
quality measures. One commenter was specifically opposed to shifting
this measure to a fiscal year cycle because most SNF data are based on
calendar years, noting that inconsistent time periods may create
confusion. Another commenter did not oppose the shift to fiscal year as
long as confidential feedback reports and review and correction
timelines would not be negatively impacted.
Response: We appreciate commenters' concerns that increasing the
measurement period from one year to 2 years would create a greater
delay between data collection and public reporting of this measure.
However, we agree with those commenters that noted the benefit of
increasing the number of SNFs for public reporting purposes outweighs
the concerns associated with the data delays. We also agree with
commenters that this change would better align the SNF measure with the
other PPR measures developed to meet the requirements of the IMPACT
Act. We also note that changing the public reporting dates for this
measure from calendar to fiscal year will not impact providers'
confidential feedback reports or the length of time they have to review
and correct the data to be made publicly available.
Final Decision: After careful consideration of the public comments,
we are finalizing our proposal to increase the measurement period from
1 year to 2 years for the calculation of the Potentially Preventable
30-day Post-Post Discharge Readmission Measure for SNF QRP measure. We
are also finalizing our proposal to shift from calendar to fiscal years
for public reporting of this measure.
i. SNF QRP Quality Measures Under Consideration for Future Years
In the FY 2018 SNF PPS proposed rule (82 FR 21058), we invited
public comment on the importance, relevance, appropriateness, and
applicability of each of the quality measures listed in Table 19 for
future years in the SNF QRP.
Table 19--SNF QRP Quality Measures Under Consideration for Future Years
------------------------------------------------------------------------
Patient- and Caregiver-Centered
NQS Priority Care
------------------------------------------------------------------------
Measure.............................. Application of Percent
of Residents Who Self-Report
Moderate to Severe Pain.
------------------------------------------------------------------------
NQS Priority Health and Well-Being
------------------------------------------------------------------------
Measure.............................. Application of 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.
------------------------------------------------------------------------
NQS Priority Communication and Care
Coordination
------------------------------------------------------------------------
Measure.............................. Modification of the
Discharge to Community-Post
Acute Care (PAC) Skilled Nursing
Facility (SNF) Quality Reporting
Program (QRP) measure.
------------------------------------------------------------------------
We are also considering a measure focused on pain that relies on
the collection of patient-reported pain data, and another measure
regarding the Percent of Residents Who Were Assessed and Appropriately
Given the Seasonal Influenza Vaccine. Finally, we are considering a
measure related to patient safety, that is, Patients Who Received an
Antipsychotic Medication.
Commenters submitted the following comments related to the proposed
rule's discussion of the SNF QRP Quality Measures Under Consideration
for Future Years. A discussion of these comments, along with our
responses, appears below.
Comment: One commenter supporting the future measure concept of the
percent of residents who self-report moderate to severe pain, suggested
inclusion of this measure by FY 2019 at the latest. Another commenter
suggested
[[Page 36595]]
that they do not believe that pain experience alone should be a quality
measure, expressing that the presence of pain does not provide enough
information to help an individual's overall quality of life improve.
One commenter suggested that a measure be developed that reflects
patient-centered care pain management regardless of ability to self-
report as a significant portion of SNF residents are not able to self-
report pain and suggested using reliable and valid observational
assessment items such as those in the current MDS 3.0 Section J0800 and
J0850. The commenter encouraged us to consider incorporating the
standardized observational pain assessment data elements that are
currently being developed and tested to fulfill the requirements of the
IMPACT Act. The commenter also urged us to seek NQF endorsement for any
new measures to be incorporated into the SNF QRP program. Another
commenter encouraged assessment for communication about pain rather
than experience of pain without inadvertently incentivizing the use of
opioid medications in alignment with proposed changes to HCAHPS.
Another commenter suggested modifying this measure to reflect the
proportion of residents for which moderate to severe pain interferes
with or prevents important daily functional tasks and drive
improvements in quality of life.
Response: We appreciate the comments pertaining to the Application
of Percent of Residents Who Self-Report Moderate to Severe Pain (Short
Stay) (NQF #0676) measure under consideration for future implementation
in the SNF QRP. We note that appropriately assessing pain as an outcome
is important, acknowledge the importance of avoiding unintended
consequences that may arise from such assessments, and will take into
consideration the commenters' recommendations. We would like to note
that our goal is to submit all fully developed measures to NQF for
consideration of endorsement.
Comment: We received several comments supporting the development of
a seasonal influenza vaccine measure appropriate for the SNF
population. One commenter stated that the incidence and impact of
influenza disease is severe within the population of older adults in a
SNF setting, and stated that as a result, there is a need for this
measure. One commenter further suggested that a measure of this type
presents an important opportunity to promote higher quality and more
efficient health care for Medicare beneficiaries. One commenter
recommended that we give due consideration to the cost of these
services when the costs (for example, the purchase of the vaccine) of
these services are bundled into the SNF Part A payment rates. This
commenter supported alignment with ongoing efforts to collect and
report this measure in the Long-Term Care Hospital Quality Reporting
Program (LTCH QRP). Further, this commenter suggested CMS may want to
add a pneumococcal vaccine measure in addition to an influenza measure.
Response: We acknowledge the commenters' support of inclusion of a
seasonal influenza vaccine measure. We will take all recommendations
into consideration in our ongoing efforts to identify and propose
appropriate measures for the SNF QRP.
Comment: We received general support for development of an
antipsychotic medication measure appropriate for the SNF population.
One commenter expressed support for this measure concept and suggested
inclusion of the measure by FY 2019 at the latest. One commenter
expressed support for including most individuals in the measure
regardless of dementia diagnoses. However, this commenter further
suggested that Food and Drug Administration (FDA) approved indications
of the medications should be excluded from this measure. Another
commenter suggested further development of the measure as there is no
existing baseline measurement. Another commenter suggested that any
future measure should account for informed choices by persons with
behavioral and psychotic symptoms of dementia (BPSD) and their families
regarding the use of antipsychotic medications for appropriately-used
antipsychotics, even if the medication does not have an indication
approved by the FDA for their symptoms.
Response: We acknowledge the support of inclusion of an
antipsychotic measure and note the suggestion pertaining to the
exclusions as well as the measure accounting for persons with BPSD.
Recommendations will be taken into consideration in our ongoing efforts
to identify and propose appropriate measures for the SNF QRP in the
future.
Comment: MedPAC suggested that we consider the adoption of future
measures that can assess providers' ability to maintain function and
prevent functional decline. MedPAC noted that the two quality measures
for change in function do not capture whether a provider can maintain
function as residents with conditions who are not expected to improve
or who are already independent are excluded from the four measures that
we are finalizing.
Response: We agree with MedPAC that future quality measurement work
should include the development of quality measures that focus on
maintaining function and prevention of functional decline. We
appreciate MedPAC's concern regarding the exclusion of residents who
are not expected to improve due to certain medical conditions or who
are independent. We would like to point out that two of the measures we
are adopting in this final rule for the SNF QRP, Application of the IRF
Function Outcome Measure: Discharge Self-Care Score for Medical
Rehabilitation Patients (NQF #2635) and Application of the IRF Function
Outcome Measure: Discharge Mobility Score for Medical Rehabilitation
Patients (NQF #2636), capture residents who are independent with
function at admission. In that situation, maintenance of independence
for the section GG self-care or mobility activities would apply to
these residents.
Comment: One commenter recommended the addition of a quality
measure of maintenance of functional status to the SNF QRP to address
requirements of the Jimmo Settlement. The commenter noted that
functional improvement is not a goal for all residents receiving
rehabilitation; for some residents, maintaining or slowing functional
decline is a goal.
Response: We appreciate the commenter's suggestions, and we will
consider this recommendation in future measure development.
Comment: One commenter encouraged us to consider the importance of
instrumental activities of daily living as a measurement construct for
assessing patient need, monitoring quality, and affecting care and
payment, stating that instrumental activities of daily living
performance is critical to maintaining safety and avoiding
readmissions.
Response: We appreciate the commenter's suggestions for future
measures and we will consider this recommendation in future measure
development.
Comment: MedPAC commented that while the proposed future measures
capture important dimensions of SNF care, MedPAC prefers that Medicare
hold providers accountable for claims-based outcome measures. Several
commenters suggested further development and standardization of outcome
measures to compare and contrast between PAC settings and to assess
short- and long-term patient status post injury or illness. One
[[Page 36596]]
commenter suggested moving away from an emphasis on process measures
toward more outcome-related measures. Another commenter added that any
additional vaccination measure give due consideration to the cost of
these services. Others suggested measures related to consumer
satisfaction following short stay rehabilitation and discharge home.
One commenter suggested that any patient experience of care survey for
SNFs be economical in its approach and carefully aligned with other
surveys to reduce duplicative collection activities. Other commenters
suggested a number of additional measures for inclusion in the SNF QRP.
One commenter suggested that we consider developing measures to assess
quality of life and long-term functional outcomes such as community-
oriented factors including ability to live independently, return to
work (where appropriate), community participation and social
interaction. Another commenter suggested workforce related measures
such as staffing quality metrics from payroll-based journal staffing
and collection such as staff turnover, nursing staff hours per resident
stay and CNA hours per resident stay. The commenter further recommended
measures that include language related to initiating palliative care
and making ethical considerations regarding continuing or terminating
complex medical care. The commenter also suggested incorporating
coordination and collaboration on patient, family, and medical goals of
care as well as assessment of family members' and caregivers' capacity
to assume patient care post-discharge. Another commenter further
recommended that measures such as those currently reported on Nursing
Home Compare be used in the interim until more post-acute care cross-
setting measures are developed.
Response: We appreciate the input from MedPAC and other commenters
for their suggestions on future measure concepts as well as on the
interim use of measures currently reported on Nursing Home Compare.
With all measures, we seek to fulfill the mandate of the IMPACT Act to
align across settings and will take these comments into consideration
as we further develop measures for use in the SNF QRP.
(1) IMPACT Act Measure--Possible Future Update to Measure
Specifications
In the FY 2017 SNF PPS final rule (81 FR 52021 through 52029), we
finalized the Discharge to Community-Post Acute Care (PAC) Skilled
Nursing Facility (SNF) Quality Reporting Program (QRP) measure, which
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. We received public comments (see 81 FR 52025 through 52026)
recommending exclusion of baseline nursing facility residents from the
measure, as these residents did not live in the community prior to
their SNF stay. At that time, we highlighted that using Medicare FFS
claims alone, we were unable to accurately identify baseline nursing
facility residents. We stated that potential future modifications of
the measure could include assessment of the feasibility and impact of
excluding baseline nursing facility residents from the measure through
the addition of patient assessment-based data. In response to these
public comments, we are considering a future modification of the
Discharge to Community-PAC SNF QRP measure, which would exclude
baseline nursing facility residents from the measure. Further, this
measure is specified to be calculated using one year of Medicare FFS
claims data. We are considering expanding the measurement period in the
future to two consecutive years of data to increase SNF sample sizes
and reduce the number of SNFs with fewer than 25 stays that would
otherwise be excluded from public reporting. This modification would
also align the measurement period with that of the discharge to
community measures adopted for the IRF and LTCH Quality Reporting
Programs to meet the IMPACT Act requirements; both the IRF and LTCH
measures have measurement periods of two consecutive years.
We sought public comment on these considerations for Discharge to
Community-PAC SNF QRP measure in future years of the SNF QRP. A
discussion of these comments, along with our responses, appears below.
Comment: Multiple commenters expressed support for excluding
baseline nursing facility residents from the discharge to community
measure as a potential future measure modification. Commenters stated
that this exclusion would result in the measure more accurately
portraying quality of care provided by SNFs, while controlling for
factors outside of SNF control.
Response: We acknowledge the commenters' support for the potential
exclusion of baseline nursing facility residents as a future measure
modification. We will consider their views and determine whether to
propose to exclude baseline nursing facility residents from the
Discharge to Community-PAC SNF QRP measure in future years of the SNF
QRP.
Comment: MedPAC supported expanding the Discharge to Community-PAC
SNF QRP measurement period from 1 year to 2 years, acknowledging that
it is important to include as many providers in public reporting as
possible and that expansion to 2 years is a good strategy to help
include more low-volume providers in public reporting. A few commenters
opposed expansion of the measurement period to 2 years, expressing
concern that it decreased the timeliness of the data and actionability
for providers to drive change in quality or process improvement. One
commenter expressed concern that the expansion would misalign the
measurement period with that of other SNF measures in use, and that
inclusion of older data would decrease sensitivity to change in
quality, particularly for high volume SNFs. This commenter stated that
a 2-year window would not accurately reflect recent improvement or
decline in discharge planning practices, resulting in inaccurate
portrayal of the current quality of care furnished by a SNF. Another
commenter expressed concern that a two-year measurement period
penalized facilities with adverse ratings for longer periods of time.
Response: We acknowledge MedPAC for its support for possible
expansion of the Discharge to Community-PAC SNF QRP measurement period
to 2 years in future years of the SNF QRP. We would like to clarify
that we did not propose this change, but are considering it for future
years. We also acknowledge commenters' concerns about expanding the
measurement period to 2 years. We will consider these views and
determine whether to propose expanding the Discharge to Community-PAC
SNF QRP measurement period from 1 year to 2 years in future years of
the SNF QRP.
(2) IMPACT Act Implementation Update
As a result of the input and suggestions provided by technical
experts at the TEPs held by our measure developer, and through public
comment, we are engaging in additional development work for two
measures that would satisfy the domain of accurately communicating the
existence of and providing for the transfer of health information and
care preferences when the individual transitions, in section
1899B(c)(1)(E) of the Act, including performing additional testing. The
measures under development are: Transfer of Information at Post-Acute
Care Admission, Start or Resumption of Care from other Providers/
Settings; and Transfer of Information at Post-Acute Care Discharge, and
End of Care to
[[Page 36597]]
other Providers/Settings. We intend to specify these measures under
section 1899B(c)(1)(E) of the Act no later than October 1, 2018 and we
intend to propose to adopt them for the FY 2021 SNF QRP, with data
collection beginning on or about October 1, 2019.
Commenters submitted the following comments related to the proposed
rule's discussion of the IMPACT Act Implementation Update. A discussion
of these comments, along with our responses, appears below.
Comment: One commenter suggested that we be cautious in our
development of the Transfer of Health Information measure set and only
proceed to propose and adopt measures that receive NQF endorsement.
This commenter cited concerns about the measure development, citing the
2016 MAP PAC/LTC meeting. A commenter supported our efforts to promote
coordination of care across the care continuum, and commented that the
transfer of accurate health information--including resident
preferences, care plan, and other information--is essential to quality
outcomes for residents. A commenter expressed appreciation that we are
developing measures that will help facilitate the accurate
communication of a person's health information and care preferences
across the continuum of care and believes that these measures will
facilitate better care coordination and outcomes. The commenter also
appreciated that we have engaged providers and consumers in the
development of these measures and encourages us to develop measures
that represent a balance between the volume and detail of information
exchanged and reported, and the underlying administrative burdens the
measures may create. The commenter noted that the burden is
particularly important for small and rural providers that may have more
challenges with technology-driven information exchange because health
information technology incentive programs for hospitals and physicians
have not been extended to SNF providers.
Response: We appreciate the comments and feedback on the Transfer
of Health Information measures that are currently under development. We
also appreciate the recognition that we have engaged providers and
consumers in the development of these measures. As we continue to
develop these measures, we will consider this feedback. We would like
to clarify that the measure under development does not currently
require the adoption of health IT and electronic means of information
transfer. We intend to re-submit these measures, once fully specified
and tested, for review to the MAP PAC/LTC Workgroup. Further, we plan
to submit the measures to the NQF for consideration for endorsement
when we believe the measures are ready for NQF review.
j. Standardized Resident Assessment Data Reporting for the SNF QRP
(1) Standardized Resident Assessment Data Reporting for the FY 2019 SNF
QRP
Section 1888(e)(6)(B)(i)(III) of the Act requires that for fiscal
year 2019 and each subsequent year, SNFs report standardized resident
assessment data required under section 1899B(b)(1) of the Act. As we
describe in section III.D.2.g.(1) above, we are finalizing in this
final rule that the current pressure ulcer measure, Percent of
Residents or Patients with Pressure Ulcers That Are New or Worsened
(Short Stay) (NQF #0678), will be replaced with the proposed pressure
ulcer measure, Changes in Skin Integrity Post-Acute Care: Pressure
Ulcer/Injury, beginning with the FY 2020 SNF QRP. The current pressure
ulcer measure will remain in the SNF QRP until that time. Accordingly,
for the requirement that SNFs report standardized resident assessment
data for the FY 2019 SNF QRP, we proposed that the data elements used
to calculate that measure meet the definition of standardized resident
assessment data for medical conditions and co-morbidities under section
1899B(b)(1)(B)(iv) and that the successful reporting of that data under
section 1888(e)(6)(B)(i)(II) for admissions as well as discharges
occurring during fourth quarter CY 2017 would also satisfy the
requirement to report standardized resident assessment data for the FY
2019 SNF QRP.
The collection of assessment data pertaining to skin integrity,
specifically pressure related wounds, is important for multiple
reasons. Clinical decision support, care planning, and quality
improvement all depend on reliable assessment data collection. Pressure
related wounds represent poor outcomes, are a serious medical condition
that can result in death and disability, are debilitating, painful and
are often an avoidable outcome of medical
care.38 39 40 41 42 43 Pressure related wounds are
considered health care acquired conditions.
---------------------------------------------------------------------------
\38\ Casey, G. (2013). ``Pressure ulcers reflect quality of
nursing care.'' Nurs N Z 19(10): 20-24.
\39\ Gorzoni, M.L. and S.L. Pires (2011). ``Deaths in nursing
homes.'' Rev Assoc Med Bras 57(3): 327-331.
\40\ Thomas, J.M., et al. (2013). ``Systematic review: health-
related characteristics of elderly hospitalized adults and nursing
home residents associated with short-term mortality.'' J Am Geriatr
Soc 61(6): 902-911.
\41\ White-Chu, E.F., et al. (2011). ``Pressure ulcers in long-
term care.'' Clin Geriatr Med 27(2): 241-258.
\42\ Bates-Jensen, B.M. Quality indicators for prevention and
management of pressure ulcers in vulnerable elders. Ann Int Med.
2001;135 (8 Part 2), 744-51.
\43\ Bennet, G, Dealy, C, Posnett, J (2004). The cost of
pressure ulcers in the UK, Age and Aging, 33(3):230-235.
---------------------------------------------------------------------------
As we note above, the data elements needed to calculate the current
pressure ulcer measure are already included on the MDS and reported for
SNFs, and exhibit validity and reliability for use across PAC
providers. Item reliability for these data elements was also tested for
the nursing home setting during implementation of MDS 3.0. Testing
results are from the RAND Development and Validation of MDS 3.0
project.\44\ The RAND pilot test of the MDS 3.0 data elements showed
good reliability and is also applicable to both the IRF-PAI and the
LTCH CARE Data Set because the data elements tested are the same.
Across the pressure ulcer data elements, the average gold-standard
nurse to gold-standard nurse kappa statistic was 0.905. The average
gold-standard nurse to facility-nurse kappa statistic was 0.937. Data
elements used to risk adjust this quality measure were also tested
under this same pilot test, and the gold-standard to gold-standard
kappa statistic, or percent agreement (where kappa statistic not
available), ranged from 0.91 to 0.99 for these data elements. These
kappa scores indicate ``almost perfect'' agreement using the Landis and
Koch standard for strength of agreement.\45\
---------------------------------------------------------------------------
\44\ Saliba, D., & Buchanan, J. (2008, April). Development and
validation of a revised nursing home assessment tool: MDS 3.0.
Contract No. 500-00-0027/Task Order #2. Santa Monica, CA: Rand
Corporation. Retrieved from https://www.cms.hhs.gov/NursingHomeQualityInits/Downloads/MDS30FinalReport.pdf.
\45\ Landis, R., & Koch, G. (1977, March). The measurement of
observer agreement for categorical data. Biometrics 33(1), 159-174.
---------------------------------------------------------------------------
The data elements used to calculate the current pressure ulcer
measure received public comment on several occasions, including when
that measure was proposed in the FY 2012 IRF PPS (76 FR 47876) and
IPPS/LTCH PPS proposed rules (76 FR 51754). Further, they were
discussed in the past by TEPs held by our measure development
contractor on June 13 and November 15, 2013, and recently by a TEP on
July 18, 2016. TEP members supported the measure and its cross-setting
use in PAC. The report, Technical Expert Panel Summary Report:
Refinement of the Percent of Patients or Residents with
[[Page 36598]]
Pressure Ulcers that are New or Worsened (Short-Stay) (NQF #0678)
Quality Measure for Skilled Nursing Facilities (SNFs), Inpatient
Rehabilitation Facilities (IRFs), Long-Term Care Hospitals (LTCHs), and
Home Health Agencies (HHAs), 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.
We sought public comment on this proposal. A discussion of these
comments, along with our responses, appears below.
Comment: We received many comments in support of reporting the data
elements already implemented in the SNF QRP to fulfill the requirement
to report standardized resident assessment data for the FY 2019 SNF
QRP. Specifically, many commenters supported the use of data elements
used in calculation of the Percent of Residents or Patients with
Pressure Ulcers That Are New or Worsened (Short Stay) (NQF #0678) to
fulfill this requirement.
Response: We appreciate the commenter's support of the proposal.
Final Decision: After consideration of the public comments
received, we are finalizing the proposal that the data elements
currently reported by SNFs to calculate the current measure, Percent of
Residents or Patients with Pressure Ulcers That Are New or Worsened
(Short Stay) (NQF #0678), meet the definition of standardized resident
assessment data for medical conditions and co-morbidities under section
1899B(b)(1)(B)(iv) of the Act, and that the successful reporting of
that data under section 1888(e)(6)(B)(i)(II) of the Act would also
satisfy the requirement to report standardized resident assessment data
under section 1888(e)(6)(B)(i)(III) of the Act.
(2) Standardized Resident Assessment Data Reporting Beginning With the
FY 2020 SNF QRP
In the FY 2018 SNF PPS proposed rule (82 FR 21059 through 21076),
we described our proposals for the reporting of standardized resident
assessment data by SNFs beginning with the FY 2020 SNF QRP. SNFs would
be required to report these data for SNF admissions at the start of the
Medicare Part A stay and SNF discharges at the end of the Medicare Part
A stay that occur between October 1, 2018 and December 31, 2018, with
the exception of two data elements (Hearing and Vision), which would be
required for SNF admissions at the start of the Medicare Part A stay
only that occur between October 1, 2018, and December 31, 2018.
Following the initial reporting year for the FY 2020 SNF QRP,
subsequent years for the SNF QRP would be based on a full calendar year
of such data reporting.
In selecting the data elements, we carefully weighed the balance of
burden in assessment-based data collection and aimed to minimize
additional burden through the utilization of existing data in the
assessment instruments. We also note that the resident assessment
instruments are considered part of the medical record, and sought the
inclusion of data elements relevant to resident care. We also took into
consideration the following factors for each data element: overall
clinical relevance; ability to support clinical decisions, care
planning and interoperable exchange to facilitate care coordination
during transitions in care; and the ability to capture medical
complexity and risk factors that can inform both payment and quality.
Additionally, the data elements had to have strong scientific
reliability and validity; be meaningful enough to inform longitudinal
analysis by providers; had to have received general consensus agreement
for its usability; and had to have the ability to collect such data
once but support multiple uses. Further, to inform the final set of
data elements for proposal, we took into account technical and clinical
subject matter expert review, public comment and consensus input in
which such principles were applied. We also took into account the
consensus work and empirical findings from the PAC PRD. We acknowledge
that during the development process that led to these proposals, some
providers expressed concern that changes to the MDS to accommodate
standardized resident assessment data reporting would lead to an
overall increased reporting burden. However, we note that there is no
additional data collection burden for standardized data already
collected and submitted on the quality measures.
Comment: Many commenters expressed significant concerns with
respect to our standardized resident assessment data proposals. Several
commenters stated that the new standardized resident assessment data
reporting requirements will impose significant burden on providers,
given the volume of new standardized resident assessment data elements
that were proposed to be added to the MDS. Several commenters noted
that the addition of the proposed standardized resident assessment data
elements would require hiring more staff, retraining staff on revised
questions or coding guidance, and reconfiguring internal databases and
EHRs. Other commenters expressed concerns about the gradual but
significant past and future expansion of the MDS through the addition
of standardized resident assessment data elements and quality measures,
noting the challenge of coping with ongoing additions and changes.
Several commenters expressed concern related to the implementation
timeline in the proposed rule, which would require SNFs to begin
collecting the proposed standardized resident assessment data elements
in the timeframe stated in the proposed rule. A few commenters noted
that CMS had not yet provided sufficient specifications or educational
materials to support implementation of the new resident assessments in
the proposed timeline.
Several commenters urged CMS to delay the reporting of new
standardized resident assessment data elements by at least one year,
and to carefully assess whether all of the proposed standardized
resident assessment data elements are necessary under the IMPACT Act.
Commenters suggested ways to delay the proposals for standardized
resident assessment data elements in the categories of Cognitive
Function and Mental Status; Special Services, Treatments, and
Interventions; and Impairments, including allowing voluntary or limited
reporting for a period of time before making comprehensive reporting
mandatory, and delaying the beginning of mandatory data collection for
a period of time. Some commenters recommended that during the delay,
CMS re-evaluate whether it can require the reporting of standardized
resident assessment data in a less burdensome manner.
Response: We understand the concerns raised by commenters that the
finalization of our standardized resident assessment data proposals
would require SNFs to spend a significant amount of resources preparing
to report the data, including updating relevant protocols and systems
and training appropriate staff. We also recognize that we can meet our
obligation to require the reporting of standardized resident assessment
data with respect to the categories described in section 1899B(b)(1)(B)
of the Act while simultaneously being responsive to these concerns.
Therefore, after consideration of the public comments we received on
these issues, we have decided that at this time, we will not finalize
the standardized resident
[[Page 36599]]
assessment data elements we proposed for three of the five categories
under section 1899B(b)(1)(B) of the Act: Cognitive Function and Mental
Status; Special Services, Treatments, and Interventions; and
Impairments. Although we believe that the proposed standardized
resident assessment data elements would promote transparency around
quality of care and price as we continue to explore reforms to PAC
payment system, the data elements that we proposed for each of these
categories would have imposed a new reporting burden on SNFs. We agree
that it would be useful to evaluate further how to best identify the
standardized resident assessment data that would satisfy each of these
categories; would be most appropriate for our intended purposes
including payment and measure standardization; and can be reported by
SNFs in the least burdensome manner. As part of this effort, we intend
to conduct a national field test that allows for stakeholder feedback
and to consider how to maximize the time SNFs have to prepare for the
reporting of standardized resident assessment data in these categories.
We intend to make new proposals with respect to the categories
described in sections 1899B(b)(1)(B)(ii), (iii) and (v) of the Act no
later than in the FY 2020 SNF PPS proposed rule.
In this final rule, we are finalizing the standardized resident
assessment data elements that we proposed to adopt for the IMPACT Act
categories of Functional Status and Medical Conditions and Co-
Morbidities. Unlike the standardized resident assessment data that we
are not finalizing, the standardized resident assessment data that we
proposed for these categories are already required to calculate the
Percent of Residents or Patients with Pressure Ulcers That Are New or
Worsened (NQF #0678) quality measure, the Changes in Skin Integrity
Post-Acute Care: Pressure Ulcer/Injury quality measure (which we are
finalizing in this final rule), and the Application of Percent of Long-
Term Care Hospital Patients with an Admission and Discharge Functional
Assessment and a Care Plan That Addresses Function (NQF #2631) quality
measure (which we finalized in the FY 2016 SNF PPS final rule). As a
result, we do not believe that finalizing these proposals creates a new
reporting burden for SNFs or otherwise necessitates a delay.
Comment: Several commenters expressed support for the adoption of
standardized resident assessment data elements. A few commenters
expressed support for standardizing the definitions as well as the
implementation of the data collection effort. Several commenters also
supported CMS' goal of standardizing the questions and responses across
all PAC settings to help ``enable the data to be interoperable,
allowing it to be shared electronically, or otherwise between PAC
provider types.'' Another commenter noted full support of the IMPACT
Act's goals and objectives and appreciated CMS' efforts to regularly
communicate with stakeholders through various national provider calls,
convening of stakeholders, and meetings with individual organizations.
Response: We appreciate the support of these proposals, but note
that for the reasons explained above, we have decided at this time to
not finalize the proposals for three of the five categories under
section 1899B(b)(1)(B) of the Act: Cognitive Function and Mental
Status; Special Services, Treatments, and Interventions; and
Impairments.
Comment: Several commenters stated that there is insufficient
evidence demonstrating the reliability and validity of the proposed
standardized resident assessment data elements. Some commenters stated
that the expanded standardized resident assessment data reporting
requirements have not yet been adequately tested to ensure they collect
accurate and useful data in this setting. A few commenters stated that
six of the items that are currently reported in the MDS would be
expanded to include additional sub-elements that SNFs would be required
to complete. One of these commenters stated that CMS' conclusion that
the collection of these standardized resident assessment data elements
in the SNF setting would be feasible and the standardized resident
assessment data elements would result in valid and reliable data was
based on the current use of these data elements in the MDS and the
testing of these data elements in the PAC PRD. One commenter stated
that several of the proposed standardized resident assessment data
elements that had not been adequately tested were deemed close enough
to an item that had been tested in the PAC PRD or in other PAC settings
and thus appropriate for implementation.
Response: Our standardized resident assessment data elements were
selected based on a rigorous multi-stage process described in the FY
2018 SNF PPS proposed rule (82 FR 21044). In addition, we believe that
the PAC PRD testing of many of these data elements provides good
evidence from a large, national sample of patients and residents in PAC
settings to support the use of these standardized patient/resident
assessment data elements in and across PAC settings. However, as noted
above, we have decided at this time to not finalize the proposals for
three of the five categories under section 1899B(b)(1)(B) of the Act:
Cognitive Function and Mental Status; Special Services, Treatments, and
Interventions; and Impairments. Prior to making new proposals for these
categories, we intend to conduct extensive testing to ensure that the
standardized resident assessment data elements we select are reliable,
valid and appropriate for their intended use.
Comment: MedPAC supported the addition of standardized resident
assessment data elements, but cautioned that measures, when used for
risk-adjustment, may be susceptible to inappropriate manipulation by
providers. MedPAC believed that CMS may want to consider requiring a
physician signature to attest that the reported service was reasonable
and necessary and including a statement adjacent to the signature line
warning that filing a false claim is subject to treble damages under
the False Claims Act.
Response: We acknowledge MedPAC's feedback, and agree with the
importance of data integrity within resident assessments. We will
explore the suggestions made by MedPAC.
Comment: One commenter noted that the absence of a single source
document that identifies the MDS data element, assessment type,
allowable item responses, and item responses that could negatively
impact SNF QRP performance scores and creates administrative challenges
in keeping up to date with measure and item changes. This commenter
urged us to provide a single resource for SNF providers to identify
each individual MDS 3.0 data element identified by CMS and applicable
to the various measures and standardized cross-setting data elements
that apply to the SNF QRP. Another commenter urged us to provide
detailed guidance and training documents that includes prescriptive
coding, similar to what was done for the MDS. Another commenter
stressed the importance of timely, appropriate education and training
for providers to ensure that there is interoperability following full
implementation. Another commenter also believed that standardized
resident assessment data collected may be affected by educational level
and professional expertise of the evaluator and advocated for fully
developed risk-adjusters.
Response: We acknowledge the commenters' feedback with respect to
administrative challenges and the desire for detailed guidance and
training. In ongoing standardized resident
[[Page 36600]]
assessment data element development work, we will continue to be
mindful of the administrative challenges that new mandated assessment
items will place on providers. We agree with the commenter about the
importance of providing clear coding guidelines for the proposed
standardized resident assessment data elements for a range of education
levels. We are also committed to providing comprehensive training and
guidance to providers, for any new data elements, including
standardized resident assessment data elements, to ensure the fidelity
of the assessment.
Comment: A few commenters sought clarification on interoperability
requirements, if and how SNF providers will be required to demonstrate
interoperability, and described potential challenges to interoperable
data exchange, such as timeframes related to data submission (for
example, 14 days after discharge for SNFs) and inconsistencies in how
data are captured. One commenter encouraged CMS to consider
interoperability standards that promote information exchange utilizing
EHRs and to specify which data standards are to be used and how they
are to be implemented to ensure consistency across providers. The same
commenter recommended that CMS work with EHR vendors and other IT
developers to implement changes and to consider the time required for
implementing changes adopted in the final rule, which may require
adopting timelines that are more extended than what was originally
required. Further, two commenters urged CMS to develop methods to
incentivize providers who are ``stepping up'' and adopting health
information technology (HIT), despite the costs and the absence of a
regulatory requirement to do so.
Response: We acknowledge commenters' concerns regarding
standardization and interoperability of the proposed standardized
resident assessment data elements to meet section 1899B(a)(1)(B) of the
Act requirements. We wish to clarify that implementation of the
proposed standardized resident assessment data elements is intended to
facilitate interoperability. We acknowledge that the provision requires
that we make certain resident assessment data standardized and
interoperable to allow for the exchange of data among PAC settings and
other providers in order to access longitudinal information which will
facilitate coordinated care and improved outcomes. While the IMPACT Act
requires that the post-acute resident assessment instruments be
modified so that certain resident assessment data are standardized and
interoperable, it does not require the exchange of electronic health
information by such providers. We appreciate the comments surrounding
the need for more time for providers to implement the changes necessary
in response to such modifications, and have addressed this topic in our
proposals within this section.
A full discussion of the standardized resident assessment data
elements that we proposed to adopt for the categories described in
sections 1899B(b)(1)(B)(ii), (iii) and (v) can be found in the FY 2018
SNF PPS proposed rule (82 FR 21060 through 21076). In light of our
decision to not finalize our proposals with respect to these
categories, we are not going to address in this final rule the specific
technical comments that we received on these proposed data elements.
However, we appreciate the many technical comments we did receive
specific to each of these data elements, and we will take them into
consideration as we develop new proposals for these categories. Below
we discuss the comments we received specific to the standardized
resident assessment data we proposed to adopt, and are finalizing in
this final rule, for the categories of Functional Status and Medical
Conditions and Co-Morbidities.
a. Standardized Resident Assessment Data by Category
(1) Functional Status Data
We proposed that the data elements currently reported by SNFs to
calculate the measure, Application of Percent of Long-Term Care
Hospital Patients with an Admission and Discharge Functional Assessment
and a Care Plan That Addresses Function (NQF #2631), would also meet
the definition of standardized resident assessment data for functional
status under section 1899B(b)(1)(B)(i) of the Act, and that the
successful reporting of that data under section 1886(m)(5)(F)(i) of the
Act would also satisfy the requirement to report standardized resident
assessment data under section 1886(m)(5)(F)(ii) of the Act.
These patient assessment data for functional status are from the
CARE Item Set. The development of the CARE Item Set and a description
and rationale for each item is described in a report entitled ``The
Development and Testing of the Continuity Assessment Record and
Evaluation (CARE) Item Set: Final Report on the Development of the CARE
Item Set: Volume 1 of 3.'' \46\ Reliability and validity testing were
conducted as part of CMS' Post-Acute Care Payment Reform Demonstration,
and we concluded that the functional status items have acceptable
reliability and validity. A description of the testing methodology and
results are available in several reports, including the report entitled
``The Development and Testing of the Continuity Assessment Record And
Evaluation (CARE) Item Set: Final Report On Reliability Testing: Volume
2 of 3'' \47\ and the report entitled ``The Development and Testing of
The Continuity Assessment Record And Evaluation (CARE) Item Set: Final
Report on Care Item Set and Current Assessment Comparisons: Volume 3 of
3.'' \48\ The reports are available on CMS' Post-Acute Care Quality
Initiatives Web page at https://www.cms.gov/Medicare/Quality-Initiatives-Patient-Assessment-Instruments/Post-Acute-Care-Quality-Initiatives/CARE-Item-Set-and-B-CARE.html. For more information about
this quality measure, we refer readers to the FY 2016 SNF PPS final
rule (80 FR 46444 through 46453).
---------------------------------------------------------------------------
\46\ Barbara Gage et al., ``The Development and Testing of the
Continuity Assessment Record and Evaluation (CARE) Item Set: Final
Report on the Development of the CARE Item Set'' (RTI International,
2012).
\47\ Ibid.
\48\ Ibid.
---------------------------------------------------------------------------
We sought public comment on this proposal. A discussion of these
comments, along with our responses, appears below.
Comment: Several commenters supported the collection of
standardized resident assessment data across PAC settings to satisfy
the IMPACT Act's functional status data reporting requirement. Some
commenters specifically expressed support for our proposal that data
elements used to calculate Application of Percent of Long-Term Care
Hospital Patients with an Admission and Discharge Functional Assessment
and a Care Plan that Addresses Function (NQF #2631) be used to meet the
definition of standardized resident assessment data for functional
status. One commenter noted that their support of standardized resident
assessment data was contingent on not adding to facilities' costs or
burden.
Response: We appreciate the commenters' support of the functional
status standardized resident assessment data for SNFs. These
standardized resident assessment data have the potential to facilitate
communication among providers and improve care. With regard to burden
and cost, we would like to clarify that the data elements from the
quality measure Application of Percent of Long-Term Care Hospital
Patients with an
[[Page 36601]]
Admission and Discharge Functional Assessment and a Care Plan that
Addresses Function (NQF #2631) are data elements that are currently
being collected on the MDS by SNFs, and therefore, there is no
additional burden or cost associated with this reporting.
Comment: One commenter requested that we clarify that reporting on
the Discharge Goal items for each mobility and self-care item in the
SNF PPS admission assessment is for SNF QRP reporting purposes, and
does not require a care plan to be developed for each discharge goal.
Response: The proposal to use the data elements used to calculate
the function process quality measure as standardized resident
assessment data refers to the admission and discharge performance self-
care and mobility items. The adopted measure Application of Percent of
Long-Term Care Hospital Patients with an Admission and Discharge
Functional Assessment and a Care Plan that Addresses Function (NQF
#2631) requires that only one goal be reported for each SNF patient
stay, and that the requirement for that quality measure remains
unchanged. Reporting one goal on the MDS satisfies the measure
numerator care plan criteria. The SNF does not need to provide any
further documentation about a resident's care plan.
Final Decision: Based on the evidence provided above, we are
finalizing that the data elements currently reported by SNFs to
calculate the measure, Application of Percent of Long-Term Care
Hospital Patients with an Admission and Discharge Functional Assessment
and a Care Plan That Addresses Function (NQF #2631), would also meet
the definition of standardized resident assessment data for functional
status under section 1899B(b)(1)(B)(i) of the Act, and that the
successful reporting of that data under section 1886(m)(5)(F)(i) of the
Act would also satisfy the requirement to report standardized resident
assessment data under section 1886(m)(5)(F)(ii) of the Act.
(2) Medical Condition and Comorbidity Data
We proposed that the data elements needed to calculate the current
measure, Percent of Residents or Patients with Pressure Ulcers That Are
New or Worsened (Short Stay) (NQF #0678), and the proposed measure,
Changes in Skin Integrity Post-Acute Care: Pressure Ulcer/Injury, meet
the definition of standardized resident assessment data for medical
conditions and co-morbidities under section 1899B(b)(1)(B)(iv) of the
Act, and that the successful reporting of that data under section
1888(e)(6)(B)(i)(II) of the Act would also satisfy the requirement to
report standardized resident assessment data under section
1888(e)(6)(B)(i)(III) of the Act.
``Medical conditions and comorbidities'' and the conditions
addressed in the standardized resident assessment data used in the
calculation and risk adjustment of these measures, that is, the
presence of pressure ulcers, diabetes, incontinence, peripheral
vascular disease or peripheral arterial disease, mobility, as well as
low body mass index, are all health-related conditions that indicate
medical complexity that can be indicative of underlying disease
severity and other comorbidities.
Specifically, the data elements used in the measure are important
for care planning and provide information pertaining to medical
complexity. Pressure ulcers are serious wounds representing poor
healthcare outcomes, and can result in sepsis and death. Assessing skin
condition, care planning for pressure ulcer prevention and healing, and
informing providers about their presence in patient transitions of care
is a customary and best practice. Venous and arterial disease and
diabetes are associated with low blood flow which may increase the risk
of tissue damage. These diseases are indicators of factors that may
place individuals at risk for pressure ulcer development and are
therefore important for care planning. Low BMI, which may be an
indicator of underlying disease severity, may be associated with loss
of fat and muscle, resulting in potential risk for pressure ulcers.
Bowel incontinence and the possible maceration to the skin associated,
can lead to higher risk for pressure ulcers. In addition, the bacteria
associated with bowel incontinence can complicate current wounds and
cause local infection. Mobility is an indicator of impairment or
reduction in mobility and movement which is a major risk factor for the
development of pressure ulcers. Taken separately and together, these
data elements are important for care planning, transitions in services
and identifying medical complexities.
In sections III.D.2.g.1. and III.D.2.j.1. of this final rule, we
discuss our rationale for proposing that the data elements used in the
measures meet the definition of standardized resident assessment data.
In summary, we believe that the collection of such assessment data is
important for multiple reasons, including clinical decision support,
care planning, and quality improvement, and that the data elements
assessing pressure ulcers and the data elements used to risk adjust
showed good reliability. We solicited stakeholder feedback on the
quality measure, and the data elements from which it is derived, by
means of a public comment period and TEPs, as described in section
III.D.2.g.1. of this final rule.
We sought public comment on this proposal. A discussion of these
comments, along with our responses, appears below.
Comment: We received support for the reporting of data elements
already implemented in the SNF QRP to satisfy the requirement to report
standardized resident assessment data. Specifically, many commenters
supported the use of data elements used in calculation of the current
measure, Percent of Residents or Patients with Pressure Ulcers That Are
New or Worsened (Short Stay) (NQF #0678), or the proposed measure,
Changes in Skin Integrity Post-Acute Care: Pressure Ulcer/Injury, to
fulfill this requirement.
Response: We appreciate the comments in support of the proposal,
and agree that these data elements currently reported by SNFs meet the
definition of standardized resident assessment data and satisfy the
requirement to report standardized resident assessment data.
Final Decision: After consideration of the public comments we
received, we are finalizing as proposed that the data elements
currently reported by SNFs to calculate the current measure, Percent of
Residents or Patients with Pressure Ulcers That Are New or Worsened
(Short Stay) (NQF #0678), and the proposed measure, Changes in Skin
Integrity Post-Acute Care: Pressure Ulcer/Injury, meet the definition
of standardized resident assessment data for medical conditions and co-
morbidities under section 1899B(b)(1)(B)(iv) of the Act, and that the
successful reporting of that data under section 1888(e)(6)(B)(i)(II) of
the Act would also satisfy the requirement to report standardized
resident assessment data under section 1888(e)(6)(B)(i)(III) of the
Act.
k. Form, Manner, and Timing of Data Submission Under the SNF QRP
(1) Start Date for Standardized Resident Assessment Data Reporting by
New SNFs
In the FY 2016 SNF PPS final rule (80 FR 46455), we adopted timing
for new SNFs to begin reporting quality data under the SNF QRP
beginning with the FY 2018 SNF QRP. We proposed in the FY 2018 SNF PPS
proposed rule (82 FR
[[Page 36602]]
21076) that new SNFs will be required to begin reporting standardized
resident assessment data on the same schedule.
We sought public comment on the proposal that new SNFs will be
required to begin reporting standardized resident assessment data on
the same schedule. A discussion of these comments, along with our
responses, appears below.
Comment: We received a comment in support of maintaining the same
start date policy for both standardized resident assessment data and
SNF QRP measures as this creates consistency in reporting.
Response: We appreciate the commenter's support for extending this
policy to the standardized resident assessment data under the SNF QRP.
Final Decision: We are finalizing that new SNFs will be required to
begin reporting standardized resident assessment data on the same
schedule that they are currently required to begin reporting other
quality data under the SNF QRP.
(2) Mechanism for Reporting Standardized Resident Assessment Data
Beginning With the FY 2019 SNF QRP
Under our current policy, SNFs report data by completing applicable
sections of the MDS, and submitting the MDS-RAI to CMS through the
QIESASAP system. 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.
In addition to the data currently submitted on quality measures as
previously finalized and discussed in section III.D.2.f. of this final
rule, in the FY 2018 SNF PPS proposed rule (82 FR 21076) we proposed
that SNFs would be required to begin submitting the proposed
standardized resident assessment data for SNF Medicare resident
admissions and discharges that occur on or after October 1, 2018 using
the MDS. Details on the modifications and assessment collection for the
MDS for the proposed standardized resident assessment data are
available at https://www.cms.gov/Medicare/Quality-Initiatives-Patient-Assessment-Instruments/NursingHomeQualityInits/Skilled-Nursing-Facility-Quality-Reporting-Program/SNF-Quality-Reporting-Program-Measures-and-Technical-Information.html.
We sought public comments on this proposal. A discussion of these
comments, along with our responses, appears below.
Comment: A commenter expressed support for maintaining the same
data submission mechanism policy for submitting both standardized
resident assessment data and data on SNF QRP measures, as this
facilitates consistency in reporting.
Response: We appreciate the commenter's support.
Final Decision: We are finalizing that beginning with the FY 2019
SNF QRP, SNFs will be required to begin submitting standardized
resident assessment data for SNF Medicare resident admissions and
discharges that occur on or after October 1, 2018 using the MDS. We
note that for the FY 2019 SNF QRP, the standardized resident data
elements are already submitted using the same (existing) data
submission mechanism.
(3) Schedule for Reporting Standardized Resident Assessment Data
Beginning With the FY 2019 SNF QRP
Starting with the FY 2019 SNF QRP, we proposed to apply our current
schedule for the reporting of measure data to the reporting of
standardized resident assessment data. Under this proposed policy,
except for the first program year for which a measure is adopted, SNFs
must report data on measures for SNF Medicare admissions that occur
during the 12-month calendar year (CY) period that apply to the program
year. For the first program year for which a measure is adopted, SNFs
are only required to report data on SNF Medicare admissions that occur
on or after October 1 and discharged from the SNF up to and including
December 31 of the calendar year that applies to that program year. For
example, for the FY 2018 SNF QRP, data on measures adopted for earlier
program years must be reported for all CY 2016 SNF Medicare admissions
that occur on or after October 1, 2016 and discharges that occur on or
before December 31, 2016. However, data on newly adopted measures for
the FY 2018 SNF QRP program year must only be reported for SNF Medicare
admissions and discharges that occur during the last calendar quarter
of 2016.
Tables 20 and 21 illustrate this policy using the FY 2019 and FY
2020 SNF QRP as examples.
Table 20--Summary Illustration of Initial Reporting Cycle for Newly
Adopted Measure and Standardized Resident Assessment Data Reporting
Using CY Q4 Data *
------------------------------------------------------------------------
Data submission quarterly
Data collection/submission quarterly deadlines beginning with FY
reporting period * 2019 SNF QRP * [supcaret]
------------------------------------------------------------------------
Q4: CY 2017 10/1/2017-12/31/2017....... CY 2017 Q4 Deadline: May 15,
2018.
------------------------------------------------------------------------
* We note that submission of the MDS must also adhere to the SNF PPS
deadlines.
[supcaret] The term ``FY 2019 SNF QRP'' means the fiscal year for which
the SNF QRP requirements applicable to that fiscal year must be met in
order for a SNF to receive the full market basket percentage when
calculating the payment rates applicable to it for that fiscal year.
Table 21--Summary Illustration of Calendar Year Quarterly Reporting
Cycles for Measure and Standardized Resident Assessment Data Reporting *
------------------------------------------------------------------------
Data submission quarterly
Data collection/submission quarterly deadlines beginning with FY
reporting period * 2020 SNF QRP * [supcaret]
------------------------------------------------------------------------
Q1: CY 2018 1/1/2018-3/31/2018......... CY 2018 Q1 Deadline: August 15,
2018.
Q2: CY 2018 4/1/2018-6/30/2018......... CY 2018 Q2 Deadline: November
15, 2018.
Q3: CY 2018 7/1/2018-9/30/2018......... CY 2018 Q3 Deadline: February
15, 2019.
Q4: CY 2018 10/1/2018-12/31/2018....... CY 2018 Q4 Deadline: May 15,
2019.
------------------------------------------------------------------------
* We note that submission of the MDS must also adhere to the SNF PPS
deadlines.
[supcaret] The term ``FY 2020 SNF QRP'' means the fiscal year for which
the SNF QRP requirements applicable to that fiscal year must be met in
order for a SNF to receive the full market basket percentage when
calculating the payment rates applicable to it for that fiscal year.
[[Page 36603]]
In the FY 2018 SNF PPS proposed rule (82 FR 21076 through 21077),
we proposed that for the SNF QRP starting with the 2019 SNF QRP, we
would apply our current schedule for the reporting of measure data to
the reporting of standardized resident assessment data. Specifically,
we proposed to apply to the submission of standardized resident
assessment data our policy that except for the first program year for
which a measure is adopted, SNFs must report data on measures for SNF
Medicare admissions that occur during the 12 month calendar year period
that apply to the program year and that for the first program year for
which a measure is adopted, SNFs are only required to report data on
SNF Medicare admissions that occur on or after October 1 and are
discharged from the SNF up to and including December 31 of the calendar
year that applies to the program year. We sought comment on our
proposal to extend our current policy governing the schedule for
reporting the quality measure data to the reporting of standardized
resident assessment data beginning with the FY 2019 SNF QRP. A
discussion of these comments, along with our responses, appears below.
Comment: Commenters supported our proposal to adopt the same data
reporting schedule for both standardized resident assessment data and
SNF QRP measure data as this creates consistency in reporting. Another
commenter added that we should allow facilities to become familiar with
the assessment and coding requirements associated with the new
standardized resident assessment data elements for a period of time
before quality measure reporting begins.
Response: We appreciate commenters' support to extend this policy
to the standardized resident assessment data submitted under the SNF
QRP. We agree that comprehensive training is needed to ensure accurate
data collection and to ensure successful reporting on new measures that
are constructed using the new data. As with the data collection
required on new assessment data collection in the past, we will provide
training sessions, training manuals, webinars, open door forums, help
desk support, and a Web site that hosts training information and will
continue to provide the training providers may need to understand item
concepts and coding instructions.
Comment: In light of the additional data elements being proposed
for the MDS, one commenter recommended that the reporting data for the
purposes of quality measures for the SNF QRP not begin at the same time
as new items are added to the MDS, and requested at least a 3-month
time frame of data collection with the new items before the data is
collected for use in a quality measure.
Response: We interpret the comment to mean that given the new data
elements and need for SNFs to become familiar with the coding of the
new standardized resident assessment data elements, the commenter
believes that we should not use the first three months of data in the
calculation of the measures to be publicly reported. We acknowledge
that SNFs may need time to transition to new data reporting
requirements. As discussed previously, data collection on new measures
that are calculated using resident assessment data begins using a
schedule that starts on October 1 of a given year, we anticipate using
the subsequent calendar year of data for public reporting.
Final Decision: After careful consideration of the public comments,
we are finalizing our proposal to extend our current policy governing
the schedule for reporting quality measure data to the standardized
resident assessment data elements beginning with the FY 2019 SNF QRP.
(4) Schedule for Reporting the Quality Measures Beginning with the FY
2020 SNF QRP
As discussed in section III.D.2.g. of this final rule, we are
finalizing the adoption of five quality measures beginning with the FY
2020 SNF QRP: (1) Changes in Skin Integrity Post-Acute Care: Pressure
Ulcer/Injury; (2) Application of IRF Functional Outcome Measure: Change
in Self-Care for Medical Rehabilitation Patients (NQF #2633); (3)
Application of IRF Functional Outcome Measure: Change in Mobility Score
for Medical Rehabilitation Patients (NQF #2634); (4) Application of IRF
Functional Outcome Measure: Discharge Self-Care Score for Medical
Rehabilitation Patients (NQF #2635); (5) and Application of IRF
Functional Outcome Measure: Discharge Mobility Score for Medical
Rehabilitation Patients (NQF #2636). In the FY 2018 SNF PPS proposed
rule (82 FR 21077) we proposed that SNFs would report data on these
measures using the MDS that is submitted through the QIES ASAP system.
For the FY 2020 SNF QRP, SNFs would be required to report these data
for admissions as well as discharges that occur between October 1, 2018
and December 31, 2018. More information on SNF reporting using the QIES
ASAP system is located at https://www.cms.gov/Medicare/Quality-Initiatives-Patient-Assessment-Instruments/NursingHomeQualityInits/?redirect=/NursingHomeQualityInits/30_NHQIMDS30TechnicalInformation.asp#TopOfPage. Starting in CY 2019,
SNFs would be required to submit data for the entire calendar year
beginning with the FY 2021 SNF QRP.
We sought public comment on this proposal. A discussion of these
comments, along with our responses, appears below.
Comment: Two commenters supported our proposal that SNFs report
admission and discharge data for the five quality measures beginning
with the FY 2020 SNF QRP using the QIES ASAP system.
Response: We thank the commenters for their support.
Final Decision: We are finalizing our policy as proposed for the
Schedule for Reporting the Quality Measures Beginning with the FY 2020
SNF QRP.
(5) Input Sought on Data Reporting Related to Assessment Based Measures
Through various means of public input, including that through
previous rules (FY 2016 SNF PPS final rule, 80 FR 46415), public
comment on measures, and the MAP, we received input suggesting that we
expand the quality measures to include all residents and patients
regardless of payer status so as to ensure representation of the
quality of the services provided on the population as a whole, rather
than a subset limited to Medicare. While we appreciate that many SNF
residents are also Medicare beneficiaries, we agree that collecting
quality data on all residents in the SNF setting supports our mission
to ensure quality care for all individuals, including Medicare
beneficiaries. We also agree that collecting data on all patients
provides the most robust and accurate reflection of quality in the SNF
setting. Accurate representation of quality provided in SNFs is best
conveyed using data on all SNF residents, regardless of payer. We also
appreciate that collecting quality data on all SNF residents regardless
of payer source may create additional burden. However, we also note
that the effort to separate out SNF residents covered by other non-FFS
Medicare payers could have clinical and work flow implications with an
associated burden, and we further appreciate that it is common practice
for SNFs to collect MDS data on all residents regardless of payer
source. Additionally, we note that data collected through MDS for
Medicare beneficiaries should match that beneficiary's claims data in
certain key respects (for example, diagnoses and procedures); this
makes it easier for us to evaluate the accuracy of
[[Page 36604]]
reporting in the MDS, such as by comparing diagnoses at hospital
discharge to diagnoses at the follow-on SNF admission. However, we
would not have access to such claims data for non-Medicare
beneficiaries. Thus, we sought input on whether we should require
quality data reporting on all SNF residents, regardless of payer, where
feasible--noting that Part A claims data are limited to only Medicare
beneficiaries.
We sought comments on this topic. A discussion of these comments,
along with our responses, appears below.
Comment: We received overwhelming support from commenters including
MedPAC and others for the expansion of quality measures to include all
residents regardless of payer. Several commenters as well as MedPAC
expressed the benefit of enabling comparisons between FFS beneficiaries
and other users (including beneficiaries enrolled in Medicare
Advantage), expressing that such data would serve to better inform
beneficiaries on the broader quality of the entire facility, especially
those who are or will become long-term care residents of the same
facility. MedPAC also highlighted that while the data collection
activity incurs some cost, some providers currently assess all
residents routinely. Some commenters conveyed that data collection on
all payers is more feasible than having to select only Medicare
populations. Several commenters noted that it is advantageous for
facilities to focus on quality outcomes for all residents regardless of
payer, and several commenters noted that having information on rates
for all residents regardless of payor allows providers to utilize these
measures in system-based quality improvement initiatives.
One commenter noted a preference for using claims-based data and
urged that claims-based SNF QRP measures be re-specified to allow for
this inclusion. Another commenter highlighted the value in using
readily available MDS assessment-based data to better represent
facility performance on measures previously reported using Medicare
Part A claims data only.
Response: We acknowledge support for this policy from MedPAC and
other commenters. We agree that having such information from all payers
adds value to data comparisons, allows enhanced use of assessment data
already being collected on all residents, and further supports system-
wide quality improvement goals.
(l) Application of the SNF QRP Data Completion Thresholds to the
Submission of Standardized Resident Assessment Data Beginning with the
FY 2019 SNF QRP
We have received questions surrounding the data completion policy
we adopted beginning with the FY 2018 program year, specifically with
respect to how that policy applies to patients who reside in the SNF
for part of an applicable period, for example, a patient who is
admitted to a SNF during one reporting period but discharged in
another, or a patient who is assessed upon admission using one version
of the MDS but assessed at discharge using another version. We
previously finalized in the FY 2016 SNF PPS final rule (80 FR 46458)
that SNFs must report all of the data necessary to calculate the
measures that apply to that program year on at least 80 percent of the
MDS assessments that they submit. The term ``measures'' refers to
quality measures, resource use, and other measures. We also stated, in
response to a comment, that we would consider data to have been
satisfactorily submitted for a program year if the SNF reported all of
the data necessary to calculate the measures if the data actually can
be used for purposes of such calculations (as opposed to, for example,
the use of a dash [-]).
Some stakeholders interpreted our requirement that data elements be
necessary to calculate the measures to mean that if a patient is
assessed, for example, using one version of the MDS at admission and
another version of the MDS at discharge, the two assessments are
included in the pool of assessments used to determine data completion
only if the data elements at admission and discharge can be used to
calculate the measures. Our intention, however, was not to exclude
assessments on this basis. Rather, our intention was solely to clarify
that for purposes of determining whether a SNF has met the data
completion threshold, we would only look at the completeness of the
data elements in the MDS for which reporting is required under the SNF
QRP.
To clarify our intended policy, in the FY 2018 SNF PPS proposed
rule (82 FR 21077 through 21078), we proposed that for the purposes of
determining whether a SNF has met the data completion threshold, we
would consider whether the SNF has reported all of the required data
elements applicable to the program year on at least 80 percent of the
MDS assessments that they submit for that program year. For example, if
a resident is admitted on December 20, 2017 but discharged on January
10, 2018: (1) The resident's 5-Day PPS assessment would be used to
determine whether the SNF met the data completion threshold for the
2017 reporting period (and associated program year), and (2) the
discharge assessment would be used to determine whether the SNF met the
data completion threshold for the 2018 reporting period (and associated
program year). We also clarified in the FY 2018 SNF PPS proposed rule
(82 FR 21078) that some assessment data will not invoke a response; in
those circumstances, data are not ``missing'' or incomplete. For
example, in the case of a resident who does not have any of the medical
conditions in a check all that apply listing, the absence of a response
indicates that the condition is not present, and it would be incorrect
to consider the absence of such data as missing in a threshold
determination.
We also proposed to apply this policy to the submission of
standardized resident assessment data, and to codify it at Sec.
413.360(b) of our regulations. We sought comment on these proposals. A
discussion of these comments, along with our responses, appears below.
Comment: We received a comment noting the usefulness of a document
we published indicating which data we would be using to determine
compliance by SNFs beginning with the FY 2018 SNF QRP. The commenter
also requested that we continue providing that resource. The commenter
also acknowledged our clarification of which MDS assessments are
included in compliance determinations when the resident admission
occurs in one reporting period for the SNF QRP, while their discharge
occurs in a subsequent reporting period. The commenter further
acknowledged our clarification that an MDS item will not be considered
as missing data in the circumstances when no response is necessary.
Another commenter requested additional explanation and examples
regarding how the threshold compliance calculation is applied. One
commenter suggested that the 80 percent data completion threshold
finalized in the SNF PPS FY 2016 final rule is set too low and
requested that, for the FY 2018 payment determination year and beyond,
the data completion threshold be increased to at least ninety percent.
We also received a comment suggesting that requiring that SNFs submit
data on 100% of all items necessary to calculate quality measures and
all additional standardized resident assessment data elements is set
too high. They also expressed that the tracking of dash use, which is
what is used to determine compliance, is burdensome. Another
[[Page 36605]]
commenter suggested that we omit the first quarter of required data
reporting in our determination of compliance given the newness of the
reporting. They further expressed that for FY 2018 SNF QRP, the Review
and Correct reports that were proved were unavailable for the SNFs to
help them identify if they were successful in meeting the compliance
threshold.
One commenter did not support the codification of this proposal in
our regulations with respect to the FY 2019 SNF QRP, and requested that
we first review the results of the initial implementation of this
policy and propose such codification in the future.
Response: We appreciate the commenter's support of the materials we
provided to help SNFs identify the required MDS data elements for
accurate submission in order to meet the requirements of the SNF QRP.
We have published the document, Technical Specifications for Reporting
Assessment-Based Measures for FY2018, which identifies item completion
specifications for calculation of missing data rates on our Web site at
https://www.cms.gov/Medicare/Quality-Initiatives-Patient-Assessment-Instruments/NursingHomeQualityInits/Skilled-Nursing-Facility-Quality-Reporting-Program/SNF-Quality-Reporting-Program-Measures-and-Technical-Information.html and intend to update this resource document as
suggested.
We do not believe that the Review and Correct Reports would be an
appropriate mechanism for informing SNFs whether they have complied
with our data completion threshold. This report is intended to provide
SNFs information related to their overall quality measure calculations.
It will not provide SNFs with the discrete, data element level
information on what response was coded for every resident assessment
data element. We refer to the CMS SNF QRP Training Web site for
detailed information on the Review and Correct Reports: https://www.cms.gov/Medicare/Quality-Initiatives-Patient-Assessment-Instruments/NursingHomeQualityInits/Skilled-Nursing-Facility-Quality-Reporting-Program/SNF-Quality-Reporting-Program-Training.html.
Although the Review and Correct Reports do not enable SNFs to track
the coding of dashes which is what can lead to non-compliance, we
provide other reports via the Certification and Survey Provider
Enhanced Reports Reporting (CASPER) System which SNFs can use to track
their dash use in the assessment data they have submitted and other
submission information. These reports include: Submitter Validation
Reports, Facility Final Validation Reports, Error Detail by Facility
Reports, Activity or Submission Activity Reports and Assessment Print
Reports. We are also looking into other mechanisms and reports that
would serve to further assist SNFs in easily identifying their data
completion thresholds.
To illustrate an example as requested, if a provider submitted 100
records in a reporting period and 80% of those records had all of the
standardized resident assessment data elements that we require and the
data necessary to calculate the measures used in the SNF QRP, the SNF
would meet our compliance determination.
We currently believe that the completion of all of the required
data elements on at least 80 percent of all required assessments is a
fair criterion for a new program and is consistent with other post-
acute care programs. Regarding the suggestion that we not consider the
initial quarter of data reporting by SNFs on new data that is required,
we have analyzed the first quarter of data reporting and found that
most SNFs were successful in their data submission. We appreciate that
SNFs seek to track their compliance rates and the burden that may be
associated with their tracking of such data submission. However, we
believe that ensuring the submission of accurate data is an inherent
responsibility of the SNF. We note that the use of dashes, which is
what can lead to a determination of non-compliance, should be rare in
that the assessment data collected is required and the expectation is
that SNFs perform these assessments on their residents for not only
data reporting purposes for the SNF QRP, but also for other purposes as
well. As has been noted, overall dash use by SNFs is already low. That
said, the reports we provide can assist in a SNF's tracking of their
dash rates and we will evaluate other types of reports that can assist.
Final Decision: We are finalizing our proposal to apply the
threshold levels as proposed, to extend this policy to the submission
of standardized resident assessment data, and to codify the requirement
at Sec. 413.360(b) of our regulations.
m. SNF QRP Data Validation Requirements
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.
n. SNF QRP Submission Exception and Extension Requirements
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 SNF QRP. We did
not propose any changes to the SNF QRP requirements that we adopted in
these final rules. However, in the FY 2018 SNF PPS proposed rule (82 FR
21078) we proposed to codify the SNF QRP Submission Exception and
Extension Requirements at new Sec. 413.360(c).
We remind readers that, in the FY 2016 SNF PPS final rule (80 FR
46459 through 46460) we stated that SNF's must request an exception or
extension by submitting a written request along with all supporting
documentation to CMS via email to the SNF Exception and Extension
mailbox at SNFQRPReconsiderations@cms.hhs.gov. We further stated that
exception or extension requests sent to CMS through any other channel
would not be considered as a valid request for an exception or
extension from the SNF QRP's reporting requirements for any payment
determination. To be considered, a request for an exception or
extension must contain all of the requirements as outlined on our Web
site at https://www.cms.gov/Medicare/Quality-Initiatives-Patient-Assessment-Instruments/NursingHomeQualityInits/Skilled-Nursing-Facility-Quality-Reporting-Program/SNF-QR-Reconsideration-and-Exception-and-Extension.html. We sought public comments on our proposal
to codify the SNF QRP submission exception and extension requirements.
A discussion of these comments, along with our responses, appears
below.
Comment: A few commenters did not support codification of the SNF
QRP Submission Exception and Extension Requirements until one SNF QRP
program year has been completed.
Response: Our proposal to codify existing policy in our regulations
was technical in nature and would have no effect on its existing
applicability and enforceability. To the extent that the commenter was
asking us to delay the effective date of this policy, we did not
propose such a delay, and we believe that SNFs will benefit from having
this process available to them in the event that they experience an
extraordinary circumstance during the FY 2018 program year.
[[Page 36606]]
Final Decision: After considering the comments we received, we are
codifying the SNF QRP submission exception and extension requirements
at Sec. 413.360(c) of our regulations.
o. SNF QRP Submission Reconsideration and Appeals Procedures
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 beginning with the FY 2018 SNF QRP.
We did not propose any changes to these procedures in the FY 2018 SNF
PPS proposed rule (82 FR 21078). However, we proposed to codify the SNF
QRP Reconsideration and Appeals procedures at new Sec. 413.360(d).
Under these procedures, a SNF must follow a defined process to file a
request for reconsideration if it believes that a finding of
noncompliance with the reporting requirements for the applicable fiscal
year is erroneous, and the SNF can file a request for reconsideration
only after it has been found to be noncompliant. To be considered, a
request for a reconsideration must contain all of the elements outlined
on our Web site at https://www.cms.gov/Medicare/Quality-Initiatives-Patient-Assessment-Instruments/NursingHomeQualityInits/Skilled-Nursing-Facility-Quality-Reporting-Program/SNF-QR-Reconsideration-and-Exception-and-Extension.html. We stated that we would not review any
reconsideration request that is not accompanied by the necessary
documentation and evidence, and that the request should be emailed to
CMS at the following email address: SNFQRPReconsiderations@cms.hhs.gov.
We further stated that reconsideration requests sent to CMS through any
other channel would not be considered.
We sought public comments on our proposal to codify the SNF QRP
reconsideration and appeals procedures. A discussion of these comments,
along with our responses, appears below.
Comment: Several commenters did not support the codification of SNF
QRP Submission Reconsideration and Appeals Procedures until at least
the FY 2018 SNF QRP program year has been completed.
Response: Our proposal to codify existing policy in our regulations
was technical in nature and would have no effect on its existing
applicability and enforceability. To the extent that the commenter was
asking us to delay the effective date of this policy, we did not
propose such a delay, and we believe that SNFs will benefit from having
this process available to them in the event that they wish to seek
reconsideration during the FY 2018 program year.
Final Decision: After considering the comments, we are finalizing
our decision to codify the SNF QRP submission reconsideration and
appeals requirements at new Sec. 413.360(d) of our regulations.
p. Policies Regarding Public Display of Measure Data for the SNF QRP
Section 1899B(g) of the Act requires the Secretary to establish
procedures for the public reporting of SNFs' performance, including the
performance of individual SNFs, on the quality measures specified under
section (c)(1) and resource use and other measures specified under
section (d)(1) of the Act (collectively, IMPACT Act measures) beginning
not later than 2 years after the specified application date under
section 1899B(a)(2)(E) of the Act. This is consistent with the process
applied under section 1886(b)(3)(B)(viii)(VII) of the Act, which refers
to the public display and review requirements for the Hospital
Inpatient Quality Reporting (IQR) Program. For a more detailed
discussion about the provider's confidential review process prior to
public display of measures, we refer readers to the FY 2017 SNF PPS
final rule (81 FR 52045 through 52048).
In the FY 2018 SNF PPS proposed rule, pending the availability of
data, we proposed to publicly report data in CY 2018 for the following
3 assessment-based measures: (1) Application of Percent of Long-Term
Care Hospital (LTCH) Patients With an Admission and Discharge
Functional Assessment and a Care Plan That Addresses Function (NQF
#2631); (2) Percent of Residents or Patients with Pressure Ulcers That
Are New or Worsened (NQF #0678); and (3) Application of Percent of
Residents Experiencing One or More Falls with Major Injury (NQF #0674).
Data collection for these 3 assessment-based measures began on October
1, 2016. We proposed to display data for the assessment-based measures
based on rolling quarters of data, and we would initially use
discharges from January 1, 2016 through December 31, 2016.
In addition, we proposed to publicly report 3 claims-based measures
for: (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 measures were adopted for the SNF QRP in the FY 2017 SNF PPS
rule to be based on data from one calendar year. As previously adopted
in the FY 2017 SNF PPS final rule (81 FR 52045 through 52047),
confidential feedback reports for these 3 claims-based measures will be
based on data collected for discharges beginning January 1, 2016
through December 31, 2016. However, our current proposal revises the
dates for public reporting and we proposed to transition from calendar
year to fiscal year to make these measure data publicly available by
October 2018.
For the Medicare Spending Per Beneficiary-PAC SNF QRP and Discharge
to Community-PAC SNF QRP measures, we proposed public reporting
beginning in calendar year 2018 based on data collected from discharges
beginning October 1, 2016, through September 30, 2017 and rates will be
displayed based on one fiscal year of data. For the Potentially
Preventable 30-day Post-Discharge Readmission Measure for SNF QRP, we
also proposed to increase the years of data used to calculate this
measure from one year to 2 years and to update the associated reporting
dates. These proposed revisions to the Potentially Preventable 30-Day
Post-Discharge Readmission Measure for SNF QRP will result in the data
being publicly reported with discharges beginning October 1, 2015,
through September 30, 2017 and rates will be displayed based on two
consecutive fiscal years of data.
Also, we proposed to discontinue the public display of data on the
assessment-based measure ``Percent of Residents or Patients with
Pressure Ulcers That Are New or Worsened (Short Stay) (NQF #0678)'' and
to replace it with a modified version of the measure entitled ``Changes
in Skin Integrity Post-Acute Care: Pressure Ulcer/Injury'' from the SNF
QRP by October 2020.
For the assessment-based measures, Application of Percent of Long-
Term Care Hospital (LTCH) Patients With an Admission and Discharge
Functional Assessment and a Care Plan That Addresses Function (NQF
#2631); Percent of Residents or Patients with Pressure Ulcers That Are
New or Worsened (NQF #0678); and Application of Percent of Residents
Experiencing One or More Falls with Major Injury (NQF #0674), to ensure
the statistical reliability of the measures, we proposed to assign SNFs
with fewer than 20 eligible cases during a performance period to a
separate category: ``The number of cases/resident stays is too small to
report''. If a SNF had fewer than 20 eligible cases, then the SNF's
performance would not be publicly reported for the measure for that
performance period.
[[Page 36607]]
For the claims-based measures Medicare Spending Per Beneficiary-PAC
SNF QRP; Discharge to Community-PAC SNF QRP; and Potentially
Preventable 30-Day Post-Discharge Readmission Measure for SNF QRP, we
proposed to assign SNFs with fewer than 25 eligible cases during a
performance period to a separate category: ``The number of cases/
resident stays is too small to report,'' to ensure the statistical
reliability of the measures. If a SNF had fewer than 25 eligible cases,
the SNF's performance would not be publicly reported for the measure
for that performance period. For Medicare Spending Per Beneficiary-PAC
SNF QRP we proposed to assign SNFs with fewer than 20 eligible cases
during a performance period to a separate category: ``The number of
cases/resident stays is too small to report'' to ensure the statistical
reliability of the measure. If a SNF has fewer than 20 eligible cases,
the SNF's performance would not be publicly reported for the measure
for that performance period.
Table 22--Summary of Proposed Measures for CY 2018 Public Display
------------------------------------------------------------------------
-------------------------------------------------------------------------
Proposed Measures:
Percent of Residents or Patients with Pressure Ulcers that Are New
or Worsened (Short Stay) (NQF #0678).
Application of Percent of Residents Experiencing One or More Falls
with Major Injury (Long Stay) (NQF #0674).
Application of Percent of Long-Term Care Hospital (LTCH) Patients
With an Admission and Discharge Functional Assessment and a Care
Plan That Addresses Function (NQF #2631).
Potentially Preventable 30-Day Post-Discharge Readmission Measure
for SNF QRP.
Discharge to Community--(PAC) SNF QRP.
Medicare Spending Per Beneficiary (PAC) SNF QRP.
------------------------------------------------------------------------
We invited public comment on the proposal for the public display of
these three assessment-based measures and three claims-based measures,
and the replacement of ``Percent of Residents or Patients with Pressure
Ulcers That Are New or Worsened (Short Stay) (NQF #0678)'' with a
modified version of the measure, ``Changes in Skin Integrity Post-Acute
Care: Pressure Ulcer/Injury'' described above. A discussion of these
comments, along with our responses, appears below.
Comment: A commenter requested that we consider aligning the public
reporting periods and provider deadlines across PAC settings and other
CMS programs.
Response: We are working to achieve alignment where possible. For
example, with respect to the following 3 assessment-based measures: (1)
Application of Percent of Long-Term Care Hospital (LTCH) Patients With
an Admission and Discharge Functional Assessment and a Care Plan That
Addresses Function (NQF #2631); (2) Percent of Residents or Patients
with Pressure Ulcers That Are New or Worsened (NQF #0678); and (3)
Application of Percent of Residents Experiencing One or More Falls with
Major Injury (NQF #0674), we intend to initially report data using
discharges from January 1, 2017 through December 31, 2017 for the
public display of data, which aligns with the IRF and LTCH QRPs.
Comment: A commenter supported the proposed minimum denominator
requirements for public display.
Response: We appreciate the commenter's support.
Comment: A few commenters supported the public display of
assessment-based measures based on rolling quarters since it reflects
more recent SNF quality performance.
Response: We appreciate the commenters' support.
Final Decision: After consideration of the public comments we
received, we are finalizing that we intend to begin publicly reporting
in 2018 the following assessment-based measures based on the
availability of data: (1) ``Application of Percent of Long-Term Care
Hospital (LTCH) Patients With an Admission and Discharge Functional
Assessment and a Care Plan That Addresses Function (NQF #2631); (2)
Percent of Residents or Patients with Pressure Ulcers That Are New or
Worsened (NQF #0678); and (3) Application of Percent of Residents
Experiencing One or More Falls with Major Injury (NQF #0674), as well
as the following claims-based measures: (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. In addition, we will discontinue the public reporting of
data on the assessment-based measure: ``Percent of Residents or
Patients with Pressure Ulcers That Are New or Worsened (Short Stay)
(NQF #0678)'' by October 2020.
q. Mechanism for Providing Confidential Feedback Reports to SNFs
Section 1899B(f) of the Act requires the Secretary to provide
confidential feedback reports to PAC providers on their performance on
the measures specified under subsections (c)(1) and (d)(1) of section
1899B of the Act, beginning 1 year after the specified application date
that applies to such measures and PAC providers. In the FY 2017 SNF PPS
final rule (81 FR 52046 through 52048), we finalized processes to
provide SNFs the opportunity to review their data and information using
confidential feedback reports that will enable SNFs to review their
performance on the measures required under the SNF QRP. Information on
how to obtain these and other reports available to the SNF QRP can be
found at https://www.cms.gov/Medicare/Quality-Initiatives-Patient-Assessment-Instruments/NursingHomeQualityInits/Skilled-Nursing-Facility-Quality-Reporting-Program/SNF-Quality-Reporting-Program-Spotlights-and-Announcements.html. We did not propose any changes to
this policy but received comments, which are discussed below.
Comment: A few commenters requested more granular resident-specific
data in the reports.
Response: Resident level data will be available in the CASPER QM
reports.
Comment: A commenter suggested that we provide confidential
feedback reports to SNFs prior to the time that we publicly display
their quality measure data.
Response: Before publicly displaying measure scores, providers have
several opportunities to review their facility- and resident-level data
to ensure the accuracy of quality measure scores. Two separate
confidential feedback reports will be provided, in addition to Review
and Correct reports, for providers to review their single quarter and
aggregate quality measure scores, respectively. The confidential
feedback reports are the QM facility- and resident-level reports that
will be available to providers beginning in fall 2017, which is prior
to public display, and contain quality measure information for a single
reporting period. The facility-level QM reports will provide
information such as the numerator, denominator, facility
[[Page 36608]]
observed percent, facility adjusted percent, and national average. The
resident-level QM reports will contain individual resident data and
provide information related to which residents were included in the
quality measures.
The Review and Correct reports, currently available to SNFs,
provide aggregate performance for up to the past four full quarters as
the data are available. The reports contain information on assessment
based measures performance at the facility-level and observed rates.
The reports also display data correction deadlines and whether the data
correction period is open or closed. Please refer to the SNF QRP Web
site for information from the training on the Review and Correct
reports: https://www.cms.gov/Medicare/Quality-Initiatives-Patient-Assessment-Instruments/NursingHomeQualityInits/Skilled-Nursing-Facility-Quality-Reporting-Program/SNF-Quality-Reporting-Program-Training.html.
Finally, the Provider Preview reports will be available beginning
in the summer of 2018. Provider Preview reports are available about 5
months after the end of each reporting period. They contain facility-
level quality measure data results and will contain information such as
the numerator, denominator, facility observed percent, facility
adjusted percent, and national average. Providers will have 30 days
upon receiving the Provider Preview reports via their CASPER system
folders to review their data. We note at that point in time providers
are no longer able to correct the underlying data in these reports. At
this point, the data correction period has ended so providers are not
able to correct the underlying data in these reports.
3. Skilled Nursing Facility Value-Based Purchasing Program (SNF VBP)
a. Background
Section 215 of the Protecting Access to Medicare Act of 2014 (PAMA)
(Pub. L. 113-93) authorized the SNF VBP Program (the ``Program'') by
adding sections 1888(g) and (h) to the Act. As a prerequisite to
implementing the SNF VBP Program, in the FY 2016 SNF PPS final rule (80
FR 46409 through 46426) we adopted an all-cause, all-condition hospital
readmission measure, as required by section 1888(g)(1) of the Act. In
the FY 2017 SNF PPS final rule (81 FR 51986 through 52009), we adopted
an all-condition, risk-adjusted potentially preventable hospital
readmission measure for SNFs, as required by section 1888(g)(2) of the
Act. In this final rule, we are finalizing proposals related to the
Program's implementation.
Section 1888(h)(1)(B) of the Act requires that the SNF VBP Program
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
towards transforming how care is paid for, moving increasingly towards
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). We also refer
readers to the FY 2017 SNF PPS final rule (81 FR 51986 through 52009)
for discussion of the policies that we adopted related to the
potentially preventable hospital readmission measure, scoring, and
other topics.
In this rule, we are finalizing requirements for the SNF VBP
Program, as well as codifying some of those requirements at Sec.
413.338, including certain definitions, the process for making value-
based incentive payments, and limitations on review.
We received several general comments on the SNF VBP Program. We
note that we did not receive any comments specific to the proposed
regulation text. A discussion of the general comments that we received,
along with our responses, appears below.
Comment: One commenter urged us to seek the statutory authority to
broaden the scope of the SNF VBP Program to include other post-acute
care outcome measures beyond measures of readmissions.
Response: We thank the commenter for this suggestion.
Comment: One commenter suggested that we authorize the inclusion of
certified peer specialists in value-based, patient-centered treatment,
as well as transition teams assigned to nursing home patients with
mental illness or substance use disorders who might benefit in recovery
from a return to community-based services. The commenter stated that
peer support specialists' work could result in savings to the Medicare
Program due to reduced rehospitalizations and from reduced medical
expenditures for recurring medical conditions.
Response: We appreciate the comment. We will consider whether peer
support specialists could play a role providing technical assistance to
SNFs to help them reduce avoidable hospital readmissions through our
collaboration with the CMS Quality Innovation and Improvement Network.
Comment: One commenter suggested that we analyze the New York State
Nursing Home Quality Initiative, which the commenter stated
incorporates quality, compliance and efficiency with a focus on
potentially avoidable hospitalizations. While the initiative is limited
to long-stay Medicaid patients, the commenter stated that it presents
several important lessons for the SNF VBP Program. The commenter
specifically pointed to the need to structure measures narrowly for
participating facilities, regional adjustments, and detailed
information that the commenter believes must be provided to
participating facilities. The commenter also stated that potentially
avoidable hospitalizations are the most important factor, and that
incentive payments must be large enough and close enough to the
performance period to maximize improvement.
Response: The New York State Nursing Home Quality Initiative ``is
an annual quality and performance evaluation project to improve the
quality of care for residents in Medicaid-certified nursing facilities
across New York State.'' \49\ The initiative scores Medicaid-certified
nursing facilities in the state on previous performance and awards up
to 100 points for performance on measures of quality, compliance, and
efficiency. The initiative also incorporates deficiencies cited during
the health inspection survey process and creates an overall score for
each facility that forms the basis for a quintile ranking. We
appreciate the commenter's suggestion that we consider the New York
initiative's results and lessons and we agree that it may be
instructive for our continuing SNF VBP Program development. As the
commenter noted, its basis in long-stay Medicaid patients differs
somewhat from the SNF VBP Program's focus on shorter-stay Medicare
patients. However, as the commenter notes, the initiative provides
detailed information to participating facilities, a goal that we
believe we are now meeting by providing patient-level information to
SNF VBP Program participants. We also believe that the SNF VBP Program
is, as the commenter
[[Page 36609]]
suggests, narrowly constructed due to its focus on measures of hospital
readmissions, and while we have not considered regional adjustments in
the SNF VBP Program to date, we will consider if such adjustments are
appropriate in the future.
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\49\ See https://www.health.ny.gov/health_care/medicaid/redesign/nursing_home_quality_initiative.
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Comment: One commenter questioned whether the SNF VBP Program's
statute actually limits the Program to the specified measures of
readmissions, or whether other indicators could be included in
performance scoring. The commenter suggested that, at a minimum, we
should coordinate our approach and goals between SNF VBP, SNF QRP, and
the Staffing Data Collection initiative. Another commenter suggested
that we consider additional quality measures for the Program,
potentially including measures drawn from Nursing Home Compare, the NH
VBP demonstration, or the SNF QRP. The commenter also specifically
suggested that we measure turnover as a percentage of nursing staff,
total CNA hours per patient day, and total licensed nursing hours per
patient day. The commenter stated that these measures can be integrated
into SNF VBP because the payroll-based journal staffing information
collection system has been operational since July 2016. The commenter
also stated that several studies have positively correlated a higher
staffing level with higher care quality and outcomes, and stated that
such metrics will encourage SNFs to invest in their staffs.
Response: We interpret sections 1888(h)(2)(A) and (B) of the Act to
only allow us to include in the Program first the readmission measure
specified under section 1888(g)(1), and then in its place, the
readmission measure specified under section 1888(g)(2) of the Act. We
will continue our collaborative effort with the SNF QRP and Nursing
Home Compare programs to align our readmission measure to the fullest
extent feasible and practicable. Our collaborative focus area across
these programs is to improve the quality of care and reduce hospital
readmissions.
We thank the commenters for this feedback.
b. Measures
(1) Background
For background on the measures in the SNF VBP Program, we refer
readers to the FY 2016 SNF PPS final rule (80 FR 46419), where we
finalized the Skilled Nursing Facility 30-Day All-Cause Readmission
Measure (SNFRM) (NQF #2510) that we will use for the SNF VBP Program.
We also refer readers to the FY 2017 SNF PPS final rule (81 FR 51987
through 51995), where we finalized the Skilled Nursing Facility 30-Day
Potentially Preventable Readmission Measure (SNFPPR) that we will use
for the SNF VBP Program instead of the SNFRM as soon as practicable.
(2) Request for Comment on Measure Transition
Section 1886(h)(2)(B) of the Act requires us to apply the SNFPPR to
the SNF VBP Program instead of the SNFRM ``as soon as practicable.'' We
intend to propose a timeline for replacing the SNFRM with the SNFPPR in
future rulemaking, after we have had a sufficient opportunity to
analyze the potential effects of this replacement on SNFs' measured
performance. We believe we must approach the decision about when it is
practicable to replace the SNFRM thoughtfully, and we continue to
welcome public feedback on when it is practicable to replace the SNFRM
with the SNFPPR.
In the FY 2017 SNF PPS final rule (81 FR 51995), we summarized the
public comments we received in response to our request for when we
should begin to measure SNFs on their performance on the SNFPPR instead
of the SNFRM. Commenters' views were mixed; one suggested that we
replace the SNFRM immediately, while others requested that we wait
until the SNFPPR receives NQF endorsement, or that we allow SNFs to
receive and understand their SNFPPR data for at least 1 year prior to
beginning to use it. Another commenter suggested that we decline to use
the SNFPPR until the measure receives additional support from the
Measure Application Partnership and is the subject of additional public
comment.
We would like to thank stakeholders for their input on this issue.
We believe the first opportunity to replace the SNFRM with the SNFPPR
would be the FY 2021 program year, which would give SNFs experience
with the SNFRM and other measures of readmissions such as those adopted
under the SNF QRP. However, we have not yet determined if it would be
practicable to replace the SNFRM at that time. We intend to continue to
analyze SNF performance on the SNFPPR in comparison to the SNFRM and
assess how the replacement of the SNFRM with the SNFPPR will affect the
quality of care provided to Medicare beneficiaries.
In the FY 2018 SNF PPS proposed rule, we sought public comments on
when we should replace the SNFRM with the SNFPPR, particularly in light
of our proposal (discussed further in this section) to adopt
performance and baseline periods based on the federal FY rather than on
the calendar year. A discussion of these comments, along with our
responses, appears below.
Comment: Several commenters supported transitioning to the SNFPPR
beginning with the FY 2021 program year as long as the measure has
received NQF endorsement. Commenters stated that the measure's
importance to the program necessitates thorough vetting, including NQF
endorsement, and agreed that waiting until FY 2021 provides SNFs with
the opportunity to gain experience with the SNFRM prior to the measure
transition. One commenter requested that we provide a timeline for when
the measure will replace the SNFRM.
Response: We appreciate the feedback, and we intend to submit the
SNFPPR to NQF for consideration of endorsement as soon as possible. We
will address the replacement of the SNFRM with the SNFPPR in future
rulemaking.
Comment: One commenter expressed continued concern about the
SNFPPR, stating that we should conduct additional testing and analysis
of the measure before implementing it in the Program. The commenter
specifically requested that we await full endorsement by NQF, and if we
intend to proceed with its implementation, that we provide SNFPPR
performance information in our quarterly reports to SNFs.
Response: As we noted above, we intend to submit the SNFPPR to NQF
for consideration of endorsement as soon as possible. We also intend to
provide SNFs with SNFPPR performance information in their quarterly
reports prior to future replacement of the SNFRM. We intend to update
affected stakeholders on timing in future rulemaking.
Comment: One commenter supported adoption of the SNFPPR and did not
have any objection to transitioning the Program to the SNFPPR in FY
2021. The commenter also suggested that we consider including
additional measures in the Program to cover other relevant quality
improvement topics, such as resource use and functional outcomes.
Response: As we discussed above, we interpret sections
1888(h)(2)(A) and (B) of the Act to only allow us to include in the
Program first the readmission measure specified under section
1888(g)(1) of the Act, and then in its place, the readmission measure
specified under section 1888(g)(2) of the Act. We intend to provide
SNF's with SNFPPR rates prior to the replacement for SNF's to learn
more about the measure and incorporate into their
[[Page 36610]]
quality improvement and care transitions efforts to reduce
readmissions. We also intend to further analyze the SNFPPR prior to
replacing the SNFRM for any association with social risk factors, in
collaboration with the Assistant Secretary for Planning and Evaluation.
We intend to update stakeholders on this analysis in future rulemaking.
Comment: One commenter supported transitioning the Program to the
SNFPPR in FY 2021, if not sooner, and requested additional information
on why we believe that FY 2021 is the first opportunity to transition
the Program from the SNFRM.
Response: As we discussed in the FY 2018 SNF PPS proposed rule (82
FR 21080), we concluded that FY 2021 would be the first opportunity to
replace the SNFRM with the SNFPPR because we believe that giving SNFs
two Program years' experience with the SNFRM will provide them with
valuable experience with measures of readmissions that will be helpful
for their quality improvement efforts generally and with their specific
efforts to improve their scores under the SNF VBP Program. To expand on
that point, we did not believe it would be helpful to SNFs' quality
improvement efforts to adopt a quality measure for a single year, then
to replace that measure after that 1 year, particularly because the
Program is limited by statute to a single measure at a time. We viewed
that instability in the Program's quality metrics as undesirable and
unnecessary. We are also concerned that transitioning the Program too
quickly could prove confusing for SNFs and for affected patients.
We also intend to provide SNFs with their SNFPPR rates prior to the
replacement so that they have an opportunity to learn more about the
measure and incorporate that information into their quality improvement
and care transitions efforts to reduce readmissions. We also intend to
further analyze the SNFPPR prior to replacing the SNFRM for any
association with social risk factors, in collaboration with the
Assistant Secretary for Planning and Evaluation. We intend to update
stakeholders on this analysis in future rulemaking.
Comment: One commenter recommended that we transition the Program
to the SNFPPR no sooner than FY 2021 to allow sufficient time for SNFs
to adjust to the measure's implementation.
Response: We agree that SNFs need time to adjust to transitions
under the Program, which is why we sought comment in the FY 2017 SNF
PPS proposed rule on this topic and again sought comment in the FY 2018
SNF PPS proposed rule. We will consider the commenter's feedback as we
determine when it is practicable to transition the Program to the
SNFPPR.
We thank the commenters for this feedback and will take it into
consideration in the future. We also received a number of unsolicited
comments on the SNF VBP Program measures. The comments, together with
our responses, appear below.
Comment: One commenter expressed concern about our use of measures
of readmissions in the Program. The commenter was particularly
concerned that these measures place non-profit facilities at a
disadvantage compared to their for-profit competitors because non-
profits take all patients, including high-risk and high-acuity level
patients. The commenter also stated that the measures' risk adjustment
methodologies do not fully capture the additional effort needed to
treat these patients in the SNF setting, such as the risk of patient
non-compliance with medical direction after discharge. The commenter
requested that we provide additional transparency into claims-based
quality measures in order to improve providers' understanding of their
calculations and methodologies.
Response: We thank the commenter for this feedback, but we disagree
with their concern. As we discussed in the FY 2016 SNF PPS final rule
(80 FR 46418), we believe that the risk adjustment model that we have
adopted for the SNFRM will ensure that SNFs serving more complex
patient populations will not be penalized inadvertently under the
Program. As we discussed in the FY 2017 SNF PPS final rule (81 FR
51993), we have also specified the SNF Potentially Preventable
Readmissions Measure for the Program, and that measure estimates the
risk-standardized rate of unplanned, potentially preventable hospital
readmissions for Medicare FFS beneficiaries. The comprehensive claims-
based risk-adjustment model that the measure employs takes into account
demographic and eligibility characteristics, principal diagnoses, types
of surgery or procedure from the prior short-term hospital stay,
comorbidities, length of stay and ICU/CCU utilization from the
immediately prior short-term hospital stay, and number of admissions in
the year preceding the SNF admission. We continue to believe that the
measures' risk adjustment methodologies appropriately adjust for
factors beyond SNFs' control. We will carefully monitor the Program's
effects on SNFs' measured performance and on care quality, and will
work with SNFs to provide as much assistance as possible with their
efforts to improve on the Program's measures. For additional
information on the SNFRM's calculation and methodology, we refer
readers to the SNFRM Technical Report available on our Web site at
https://www.cms.gov/Medicare/Quality-Initiatives-Patient-Assessment-Instruments/NursingHomeQualityInits/Downloads/SNFRM-Technical-Report-3252015.pdf. For additional information on the SNFPPR's calculation and
methodology, we refer readers to the SNFPPR Technical Report available
on our Web site at https://www.cms.gov/Medicare/Quality-Initiatives-Patient-Assessment-Instruments/Value-Based-Programs/Other-VBPs/SNFPPR-Technical-Report.pdf.
Comment: Two commenters suggested that we consider removing
readmissions from the measure when they are associated with events
unrelated to SNF care, such as car accidents or disease outbreaks.
Response: We note that the SNF VBP Program's statute requires that
the measure specified under section 1888(g)(1) of the Act must be an
``all-cause all-condition hospital readmission'' measures, which we
specified as the SNFRM (NQF #2510). We previously addressed this issue
in detail in the FY 2016 SNF PPS Final Rule (80 FR 46412 through
46413). We explained that the SNFRM has been risk adjusted for case-mix
to account for differences in patient populations. The goal of risk
adjustment is to account for these differences so that providers who
treat sicker or more vulnerable patient populations are not
unnecessarily penalized for factors that are outside of their control.
Regarding hospitalizations due to other incidents unrelated to SNF care
such as car accidents and non-preventable disease outbreaks, we note
that these events are random and would not be likely to cluster in
certain SNFs over time; thus they would not result in systematic bias
in the measure.
Comment: One commenter suggested that we factor the expansion of
managed care into our measure development process, noting that many
states are rapidly expanding managed care offerings for both Medicare
and Medicaid patients. The commenter suggested that we consider
consolidating quality measure requirements between Medicare and
Medicaid to minimize the burden on participating providers, and
suggested that we promote best practices in quality improvement as
widely as possible.
[[Page 36611]]
Response: The measures that we have adopted for the Program are
based on Medicare claims, and are thus restricted to Medicare fee-for-
service beneficiaries. We believe that policy to be appropriate given
the Program's focus on Medicare fee-for-service payments. From our
collaboration with the Quality Innovation and Improvement Networks, we
also believe that many of the care transitions and quality improvement
strategies used by SNFs are broadly applicable to reduce readmissions
for Medicaid and managed-care patients. We will consider methods to
monitor managed-care performance in the future, and welcome commenters'
input on that topic.
Comment: One commenter urged us to refine and test the SNFPPR
further before adopting it for the Program. The commenter was also
concerned about our use of differing measures within the same service
line, noting that the re-hospitalization measure currently in use in
the Nursing Home Five-Star Quality Rating differs from the SNFPPR. The
commenter stated that our longer-term goal should be to align the SNF
VBP measure with other relevant hospitalization measures such as those
used in VBP programs developed under Medicaid waivers.
Response: We thank the commenter for the suggestion. We wish to
clarify that we are conducting additional testing on the SNFPPR
measure, in preparation to submit that measure to NQF for endorsement
consideration. We wish to clarify that the re-hospitalization measure
reported on Nursing Home Compare is not a measure of potentially
preventable readmissions, as required by PAMA. We agree that aligning
measures across Programs, when feasible, may reduce provider confusion.
Comment: One commenter discussed the length of the readmission
window for both the SNFRM (NQF #2510) and the SNFPPR. The commenter
urged us to extend the readmission window to include the entire SNF
stay and a set period after discharge from the SNF.
Response: We believe that the length of the readmission windows for
the SNFRM and SNFPPR is appropriate because they are harmonized with
measures used in the hospital setting. We note also that a longer
readmission window, such as 90-days, would make it difficult to ensure
that potentially preventable readmissions occurring up to 90 days after
prior hospital discharge are attributable to the SNF care received. We
refer readers to the FY 2017 SNF PPS Final Rule (81 FR 51993) for
additional details concerning the length of the readmission window for
SNF VBP Program measures.
We thank commenters for their feedback.
(3) Updates to the Skilled Nursing Facility 30-Day All-Cause
Readmission Measure (NQF#2510)
Since finalizing the SNFRM for use in the SNF VBP Program, we have
continued to conduct analyses using more recent data, as well as to
make some necessary non-substantive measure refinements. Results of
this work and all refinements are detailed in a Technical Report
Supplement that is available on the following CMS Web site at https://www.cms.gov/Medicare/Quality-Initiatives-Patient-Assessment-Instruments/Value-Based-Programs/Other-VBPs/SNF-VBP.html.
We did not receive any public comments on this topic.
(4) Accounting for Social Risk Factors in the SNF VBP Program
We understand that social risk factors such as income, education,
race and ethnicity, employment, disability, community resources, and
social support (certain factors of which are also sometimes referred to
as socioeconomic status (SES) factors or socio-demographic status (SDS)
factors) play a major role in health. One of our core objectives is to
improve beneficiary outcomes including reducing health disparities, and
we want to ensure that all beneficiaries, including those with social
risk factors, receive high quality care. In addition, we sought to
ensure that the quality of care furnished by providers and suppliers is
assessed as fairly as possible under our programs while ensuring that
beneficiaries have adequate access to excellent care.
We have been reviewing reports prepared by the Office of the
Assistant Secretary for Planning and Evaluation (ASPE) \50\ and the
National Academies of Sciences, Engineering, and Medicine on the issue
of accounting for social risk factors in CMS's value-based purchasing
and quality reporting programs, and considering options on how to
address the issue in these programs. On December 21, 2016, ASPE
submitted a Report to Congress on a study it was required to conduct
under section 2(d) of the Improving Medicare Post-Acute Care
Transformation (IMPACT) Act of 2014. The study analyzed the effects of
certain social risk factors in Medicare beneficiaries on quality
measures and measures of resource use used in one or more of nine
Medicare value- based purchasing programs, including the SNF VBP
Program.\51\ The report also included considerations for strategies to
account for social risk factors in these programs. In a January 10,
2017 report released by The National Academies of Sciences,
Engineering, and Medicine, that body provided various potential methods
for measuring and accounting for social risk factors, including
stratified public reporting.\52\
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\50\ Office of the Assistant Secretary for Planning and
Evaluation. 2016. Report to Congress: Social Risk Factors and
Performance Under Medicare's Value-Based Purchasing Programs.
Available at https://aspe.hhs.gov/pdf-report/report-congress-social-risk-factors-and-performance-under-medicares-value-based-purchasing-programs.
\51\ Office of the Assistant Secretary for Planning and
Evaluation. 2016. Report to Congress: Social Risk Factors and
Performance Under Medicare's Value-Based Purchasing Programs.
Available at https://aspe.hhs.gov/pdf-report/report-congress-social-risk-factors-and-performance-under-medicares-value-based-purchasing-programs.
\52\ National Academies of Sciences, Engineering, and Medicine.
2017. Accounting for social risk factors in Medicare payment.
Washington, DC: The National Academies Press.
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As noted in the FY 2017 IPPS/LTCH PPS final rule, the NQF has
undertaken a 2-year trial period in which certain new measures,
measures undergoing maintenance review, and measures endorsed with the
condition that they enter the trial period can be assessed to determine
whether risk adjustment for selected social risk factors is appropriate
for these measures. This trial entails temporarily allowing inclusion
of social risk factors in the risk-adjustment approach for these
measures. At the conclusion of the trial, NQF will issue
recommendations on the future inclusion of social risk factors in risk
adjustment for these quality measures, and we will closely review its
findings.
The SNF VBP section of ASPE's report examined the relationship
between social risk factors and performance on the 30-day SNF
readmission measure for beneficiaries in SNFs. Findings indicated that
beneficiaries with social risk factors were more likely to be re-
hospitalized but that this effect was significantly smaller when the
measure's risk adjustment variables were applied (including adjustment
for age, gender, and comorbidities), and that the effect of dual
enrollment disappeared. In addition, being at a SNF with a high
proportion of beneficiaries with social risk factors was associated
with an increased likelihood of readmissions, regardless of a
beneficiary's social risk factors.
As we continue to consider the analyses and recommendations from
these reports and await the results of the NQF trial on risk adjustment
for quality measures, we are continuing to work with stakeholders in
this process. As we
[[Page 36612]]
have previously communicated, we are concerned about holding providers
to different standards for the outcomes of their patients with social
risk factors because we do not want to mask potential disparities or
minimize incentives to improve the outcomes for disadvantaged
populations. Keeping this concern in mind, while we sought input on
this topic previously, we again sought public comment on whether we
should account for social risk factors in the SNF VBP Program, and if
so, what method or combination of methods would be most appropriate for
accounting for social risk factors. Examples of methods include:
Adjustment of the payment adjustment methodology under the SNF VBP
Program; adjustment of provider performance scores (for instance,
stratifying providers based on the proportion of their patients who are
dual eligible); confidential reporting of stratified measure rates to
providers; public reporting of stratified measure rates; risk
adjustment of measures as appropriate based on data and evidence; and
redesigning payment incentives (for instance, rewarding improvement for
providers caring for patients with social risk factors or incentivizing
providers to achieve health equity). While we consider whether and to
what extent we currently have statutory authority to implement one or
more of the above-described methods, we sought comments on whether any
of these methods should be considered, and if so, which of these
methods or combination of methods would best account for social risk
factors in the SNF VBP Program.
In addition, we sought public comment on which social risk factors
might be most appropriate for stratifying measure scores and/or
potential risk adjustment of a particular measure. Examples of social
risk factors include, but are not limited to, dual eligibility/low-
income subsidy, race and ethnicity, and geographic area of residence.
We are seeking comments on which of these factors, including current
data sources where this information would be available, could be used
alone or in combination, and whether other data should be collected to
better capture the effects of social risk. We will take commenters'
input into consideration as we continue to assess the appropriateness
and feasibility of accounting for social risk factors in the SNF VBP
Program. We note that any such changes would be proposed through future
notice-and-comment rulemaking.
We look forward to working with stakeholders as we consider the
issue of accounting for social risk factors and reducing health
disparities in CMS programs. Of note, implementing any of the above
methods would be taken into consideration in the context of how this
and other CMS programs operate (for example, data submission methods,
availability of data, statistical considerations relating to
reliability of data calculations, among others), and we also welcome
comment on operational considerations. CMS is committed to ensuring
that its beneficiaries have access to and receive excellent care, and
that the quality of care furnished by providers and suppliers is
assessed fairly in CMS programs.
Commenters submitted the following comments related to the proposed
rule's discussion of the Accounting for Social Risk Factors in the SNF
VBP Program. A discussion of these comments, along with our responses,
appears below.
Comment: Many commenters encouraged us to incorporate social risk
factors adjustments in various forms, including stratifying providers
into peer groups. Commenters stated that we should require measure
developers to incorporate SDS data elements testing in risk adjustment
models and suggested that we consider adjusting measures for dual-
eligible status as well as education level, limited English
proficiency, and living alone, among other possible factors. Some
commenters suggested that we examine the Program's effects on specialty
populations such as children and residents that are ventilator-
dependent, patients receiving dialysis, or patients living with HIV/
AIDS. Other commenters suggested that we use IMPACT Act measure data to
risk-adjust measures and provider performance scores. One commenter
suggested that we consider a stratification approach similar to that
proposed for the Hospital Readmissions Reduction Program.
Other commenters encouraged us to incorporate into our future
policies the findings both from NQF's sociodemographics trial and from
ASPE's report. One commenter noted that the ASPE report found that
provider-level factors are more powerful predictors of readmissions
than beneficiary-level factors, and that high-dual SNFs were among the
best performers on the readmission measure examined. The commenter
stated that these results alone do not suggest a need for risk
adjustment, but suggested again that we examine NQF's results before
determining whether or not risk adjustment is appropriate in the
Program, and further suggested that incorporating SES variables into
the measures' risk-adjustment model could embed health disparities,
create biases in reporting, undermine system-based approaches to
providing high-quality care, and create care access problems. Another
commenter noted that adjusting for social risk factors could negatively
affect providers and facilities in regions where social risk factors
are higher, but cautioned that adjusting for such factors may increase
health disparities by essentially masking them.
One commenter suggested that we consider developing readmission
measures or statistical approaches to report quality performance
specifically for beneficiaries with social risk factors. The commenter
noted that high social risk beneficiaries are substantially more likely
to be re-hospitalized, and that beneficiaries at SNFs serving a high
proportion of beneficiaries with social risk factors are also more
likely to be re-hospitalized. The commenter stated that these findings
suggest that the SNFPPR's outcomes could vary significantly due to
factors beyond the SNF's control.
Response: We appreciate all the comments and interest in this
topic. As we have previously stated, we are concerned about holding
providers to different standards for the outcomes of their patients
with social risk factors, because we do not want to mask potential
disparities or minimize incentives to improve outcomes for
disadvantaged populations. We believe that the path forward should
incentivize improvements in health outcomes for disadvantaged
populations while ensuring that beneficiaries have access to excellent
care. We intend to consider all suggestions as we continue to assess
each measure and the overall program. We appreciate that some
commenters recommended risk adjustment as a strategy to account for
social risk factors, while others stated a concern that risk adjustment
could minimize incentives and reduce efforts to address disparities for
patients with social risk factors. We intend to conduct further
analyses on the impact of strategies such as measure-level risk
adjustment and stratifying performance scoring to account for social
risk factors including the options suggested by commenters. In
addition, we appreciate the recommendations from the commenters about
consideration of specific social risk factor variables and will work to
determine the feasibility of collecting these patient-level variables.
As we consider the feasibility of collecting patient-level data and the
impact of strategies to account for social risk factors through further
analysis, we will continue to evaluate the reporting
[[Page 36613]]
burden on providers. Future proposals would be made after further
research and continued stakeholder engagement.
We thank commenters for their feedback. We will take it into
account in future rulemaking.
c. FY 2020 Performance Standards
We refer readers to the FY 2017 SNF PPS final rule (81 FR 51995
through 51998) for a summary of the statutory provisions governing
performance standards under the SNF VBP Program and our finalized
performance standards policy, as well as the numerical values for the
achievement threshold and benchmark for the FY 2019 program year. We
also responded to public comments on these policies in that final rule.
In the proposed rule (82 FR 21081 through 21802), we proposed
estimated performance standards for the FY 2020 SNF VBP Program based
on the FY 2016 MedPAR files including a 3-month run-out period. We
stated our intention to include the final numerical values of the
performance standards in the final rule. We have displayed the
estimated performance standards' numerical values from the proposed
rule in Table 23. As we have done previously, we have inverted the
SNFRM rates in Table 23 so that higher values represent better
performance.
Table 23--Estimated FY 2020 SNF VBP Program Performance Standards
----------------------------------------------------------------------------------------------------------------
Achievement
Measure ID Measure description threshold Benchmark
----------------------------------------------------------------------------------------------------------------
SNFRM......................................... SNF 30-Day All-Cause Readmission 0.80218 0.83721
Measure (NQF #2510).
----------------------------------------------------------------------------------------------------------------
We sought public comments on these estimated achievement threshold
and benchmark values. A discussion of these comments, along with our
responses, appears below.
Comment: One commenter supported our performance standards
methodology in general. The commenter was concerned, however, that
continually rewarding lower readmission rates may not be in the best
interests of SNF patients. The commenter suggested that we explore
identifying an optimal readmission rate.
Response: Our statistically based benchmark is intended to set an
empirically based performance standard of top performing SNFs as an
achievable goal for all SNFs during the performance period. We
recognize that this benchmark might not be an optimal readmission rate
as suggested by the commenter due to performance gaps between current
and optimal care, but the intent of the Program's incentives is to
encourage SNFs to improve the care they provide. We also caution that
establishing a single optimal readmission rate may not be feasible for
a nationwide quality program affecting care for millions of Medicare
beneficiaries. We intend to carefully monitor the Program's effects on
readmission rates and on care quality, and if warranted, will revisit
the performance standards methodology in future rulemaking.
In this final rule, we are providing the finalized numerical values
of the achievement threshold and the benchmark for the FY 2020 program
year. We note that the values have not changed since we published the
proposed rule.
Additionally, as discussed further below, we are finalizing
baseline and performance periods for the FY 2020 program year based on
the federal fiscal year rather than the calendar year as we had
finalized for the FY 2019 program year. The numerical values for the
achievement threshold and benchmark in Table 24 reflect this final
policy by using FY 2016 claims data. As we have done in prior
rulemaking, we have inverted the SNFRM rates in Table 24 so that higher
values represent better performance.
Table 24--Final FY 2020 SNF VBP Program Performance Standards
----------------------------------------------------------------------------------------------------------------
Achievement
Measure ID Measure description threshold Benchmark
----------------------------------------------------------------------------------------------------------------
SNFRM......................................... SNF 30-Day All-Cause Readmission 0.80218 0.83721
Measure (NQF #2510).
----------------------------------------------------------------------------------------------------------------
After consideration of the public comments that we received, we are
finalizing the performance standards for the FY 2020 SNF VBP Program as
proposed.
d. FY 2020 Performance Period and Baseline Period
(1) Background
We refer readers to the FY 2016 SNF PPS final rule (80 FR 46422)
for a discussion of the considerations that we took into account when
specifying performance periods for the SNF VBP Program. Based on those
considerations, as well as public comments received, we adopted CY 2017
as the performance period for the FY 2019 SNF VBP Program, with a
corresponding baseline period of CY 2015.
(2) FY 2020 Policies
As we stated in the proposed rule (82 FR 21082), we continue to
believe that a 12-month performance and baseline period are appropriate
for the Program, and we are concerned about the operational challenges
of linking the 12-month periods to the calendar year. Specifically, the
allowance of an approximately 90-day claims run out period following
the last date of discharge, coupled with the length of time needed to
calculate the measure rates using multiple sources of claims needed for
statistical modeling, determine achievement and improvement scores,
allow SNFs to review their measure rates, and determine the amount of
payment adjustments could risk delay in meeting requirement at section
1888(h)(7) of the Act to notify SNFs of their value-based incentive
payment percentages not later than 60 days prior to the fiscal year
involved.
We therefore considered what policy options we had to mitigate this
risk and ensure that we comply with the statutory deadline to notify
SNFs of their payment adjustments under the Program.
We continue to believe that a 12-month performance and baseline
period provide a sufficiently reliable and valid data set for the SNF
VBP Program. We
[[Page 36614]]
also continue to believe that, where possible and practicable, the
baseline and performance period should be aligned in length and in
months included in the selections. Taking those considerations and
beliefs into account, we proposed to adopt FY 2018 (October 1, 2017,
through September 30, 2018) as the performance period for the FY 2020
SNF VBP Program, with FY 2016 (October 1, 2015, through September 30,
2016) as the baseline period for purposes of calculating performance
standards and measuring improvement. We noted that this proposed
policy, would, if finalized, give us an additional 3 months between the
conclusion of the performance period and the 60-day notification
deadline prescribed by section 1888(h)(7) of the Act to complete the
activities described above.
We are aware that making this transition from the calendar year to
the FY will result in our measuring SNFs on their performance during Q4
of 2017 (October 1, 2017, through December 31, 2017) for both the FY
2019 program year and the FY 2020 program year. During the FY 2019
program year, that quarter will fall at the end of the finalized
performance period (January 1, 2017, through December 31, 2017), while
during the FY 2020 program year, that quarter will fall at the
beginning of the proposed performance period (October 1, 2017, through
September 30, 2018). We believe that, on balance, this overlap in data
is more beneficial than the alternative. We considered proposing not to
use that quarter of measured performance during the FY 2020 program
year, but, as a result, we would be left with fewer than 12 months of
data with which to score SNFs under the program. As we have stated, we
believe it is important to use 12 months of data to avoid seasonality
issues and to assess SNFs fairly. We therefore believe that meeting
these operational challenges, in total, outweighs any cost to SNFs
associated with including a single quarter's SNFRM data in their SNF
performance scores twice.
However, as an alternative, we requested comments on whether or not
we should instead consider adopting for the FY 2020 Program a one-time,
three-quarter performance period of January 1, 2018, through September
30, 2018, and a one-time, three-quarter baseline period of January 1,
2016 through September 30, 2016 to avoid the overlap in performance
period quarters that we describe above. We believe this option could
provide us with sufficiently reliable SNFRM data for purposes of the
Program's scoring while ensuring that SNFs are not scored on the same
quality measure data in successive Program years. However, we noted
that the shorter measurement period could result in lower denominator
counts and seasonal variations in care, as well as disparate effects of
cold weather months on SNFs' care could also create variations in
quality measurement, and could potentially disproportionately affect
SNFs in different areas of the country. Under this alternative, we
would resume a 12-month performance and baseline period beginning with
the FY 2021 program year.
We sought public comments on our proposal and alternative. In
addition, as we continue considering potential policy changes once we
replace the SNFRM with the SNFPPR, we also sought comment on whether we
should consider other potential performance and baseline periods for
that measure. We specifically sought comments on whether we should
attempt to align the SNF VBP Program's performance and baseline periods
with other CMS value-based purchasing programs, such as the Hospital
VBP Program or Hospital Readmissions Reduction Program, which could
mean proposing to adopt performance and baseline periods that run from
July 1st to June 30th. A discussion of these comments, along with our
responses, appears below.
Comment: Some commenters supported our proposed performance and
baseline periods for the FY 2020 Program, acknowledging that the one-
quarter overlap may be unavoidable and agreeing with us that a three-
quarter performance period would not be appropriate. Commenters also
stated that it is not necessary to align the SNF VBP Program's
performance periods with other VBP programs.
Response: We thank the commenters for their support and feedback.
Comment: Some commenters expressed concern about the SNF VBP
Program's shift from calendar year to fiscal year measurement periods
while the SNF QRP has proposed the reverse. Commenters were concerned
that this lack of alignment between the two programs could be confusing
for providers.
Response: As described above, the SNF VBP Program's shift from
calendar year to fiscal year measurement periods is logistically
necessary to meet the statutory deadlines for the program. CMS will
take all necessary steps to minimize any potential confusion among
providers.
Comment: One commenter opposed our proposal to maintain 12-month
performance and baseline periods while shifting to fiscal year
reporting periods, and stated that we should instead use a one-time
three-quarter baseline and performance period for the FY 2020 Program
year. Another commenter recommended that we use only 9 months for the
performance and baseline periods for FY 2019 and FY 2020, and then
beginning with FY 2021, consider aligning the reporting periods to
other VBP programs that run from July 1 to June 30 of each year. The
commenter noted that making this change would result in a six-month
overlap as opposed to the 3-month overlap under the proposal, with the
result being that the change would occur over 2 years.
Response: We thank the commenters for this feedback. However, as we
described in the proposed rule, we are concerned that a shorter
performance period than a 12-month period could result in lower
denominator counts and seasonal variations in care, which could
disproportionately affect SNFs in different regions of the country. Our
analysis of 9 and 12 month SNFRM denominator size reveals that these
issues are sufficiently mitigated by the commenters' suggestion, and we
continue to believe that a one-quarter overlap in performance periods
between FY 2019 and FY 2020 is an acceptable compromise to make this
transition to performance and baseline periods centered on the federal
fiscal year.
Additionally, we believe that using a full year of claims data to
calculate performance on the measures ensures that the variation found
among SNF performance is due to real differences in care delivery
between SNFs, and not within-facility variation due to issues such as
seasonality. Based on our SNFRM denominator analysis, we do not believe
that using a 9-month performance period would provide us with
sufficiently reliable data for a performance year, and given the
Program's focus on a single quality measure, we do not believe scoring
insufficiently reliable quality measure data to be a practical policy.
After consideration of the public comments that we have received,
we are finalizing the performance and baseline period for the FY 2020
SNF VBP Program as proposed.
e. SNF VBP Performance Scoring
We refer readers to the FY 2017 SNF PPS final rule (81 FR 52000
through 52005) for a detailed discussion of the scoring methodology
that we have finalized for the Program, along with responses to public
comments on our policies and examples of scoring calculations.
[[Page 36615]]
(1) Rounding Clarification for SNF VBP Scoring
In the FY 2017 SNF PPS final rule (81 FR 52001), we adopted
formulas for scoring SNFs on achievement and improvement. The final
step in these calculations is rounding the scores to the nearest whole
number.
As we have continued examining SNFRM data, we have identified a
concern related to that rounding step. Specifically, we are concerned
that rounding SNF performance scores to the nearest whole number is
insufficiently precise for purposes of establishing value-based
incentive payments under the Program. Rounding scores in this manner
has the effect of producing significant numbers of tie scores, since
SNFs have between 0 and 100 points available under the Program, and we
estimate that more than 15,000 SNFs will participate in the Program. As
discussed further in this section, the exchange function methodology
that we proposed to adopt is most easily implemented when we are able
to differentiate precisely among SNF performance scores to provide each
SNF with a unique value-based incentive payment percentage.
We therefore proposed to change the rounding policy from that
previously finalized for SNF VBP Program scoring methodology, and
instead to award points to SNFs using the formulas that we adopted in
last year's rule by rounding the results to the nearest ten-thousandth
of a point. Using significant digits terminology, we proposed to use no
more than five significant digits to the right of the decimal point
when calculating SNF performance scores and subsequently calculating
value-based incentive payments.
We view this policy change as necessary to ensure that the Program
scores SNFs as precisely as possible and to ensure that value-based
incentive payments reflect SNF performance scores as accurately as
possible.
We sought public comments on this proposal. A discussion of these
comments, along with our responses, appears below.
Comment: Some commenters supported our proposal to round SNF
performance scores to the fifth significant digit, noting that the step
is necessary to avoid ties and that it will have only minor financial
impacts.
Response: We thank the commenters for their support.
Comment: Several commenters cautioned that we should not implement
policy changes merely to ensure more differentiation among providers.
Response: We thank the commenters for their support. We agree with
the commenters that we should not implement policy changes solely to
ensure more differentiation, but we view this policy as necessary in
order to ensure that SNF performance scores are accurate. We will also
consider this caution as we adopt policies in future rulemaking.
Comment: One commenter opposed our proposal to round SNF
performance scores to the nearest ten-thousandth of a point, stating
that scoring in this manner is ``too narrow.'' The commenter
recommended instead that we round scores to the nearest tenth of a
point.
Response: We thank the commenter for this feedback, but we believe
that rounding scores to the nearest tenth of a point would still result
in numerous scoring ties due to the estimated 15,000 SNFs that will
participate in the Program. We believe that the rounding policy we have
proposed ensures that we have sufficient precision to calculate
performance scores under the program.
Comment: One commenter suggested that if our proposed change to the
rounding policy for SNF performance scores results in SNFs with nearly
identical readmission rates receiving materially different VBP payment
amounts, we should consider revising the methodology.
Response: We thank the commenter and agree. Our expectation is that
the additional precision will not significantly affect SNFs' payment
amounts when they have nearly identical SNF performance scores, but we
will monitor this issue carefully.
After consideration of the public comments that we have received,
we are finalizing that we will round the SNF performance scores to the
fifth significant digit.
(2) Policies for Facilities With Zero Readmissions During the
Performance Period
In our analyses of historical SNFRM data, we identified a unit
imputation issue associated with certain SNFs' measured performance.
Specifically, we found that a small number of facilities had zero
readmissions during the applicable performance period. An observed
readmission rate of zero is a desirable outcome; however, due to risk-
adjustment and the statistical approach used to calculate the measure,
outlier values are shifted towards the mean, particularly for smaller
SNFs. As a result, observed readmission rates of zero result in risk-
standardized readmission rates that are greater than zero. Analysis
conducted by our measure development contractor revealed that it may be
possible--although rare--for SNFs with zero readmissions to receive a
negative value-based incentive payment adjustment. We are concerned
that assigning a net negative value-based incentive payment to a SNF
that achieved zero readmissions during the applicable performance
period would not support the Program's goals.
We considered our policy options for SNFs that could be affected by
this issue, including excluding SNFs with zero readmissions from the
Program entirely to ensure that they are not unduly harmed by being
assigned a non-zero RSRR by the measure's finalized methodology.
However, because the Program's statute requires us to include all SNFs
in the Program, we do not believe we have the authority to exclude any
SNFs from the payment withhold and from value-based incentive payments.
We also considered proposing to replace SNF performance scores for
those SNFs in this situation with the median SNF performance score. But
because we must pay SNFs ranked in the lowest 40 percent less than the
amount they would otherwise be paid in the absence of the SNF VBP, we
do not believe that assigning these SNFs the median performance rate on
the applicable measure would necessarily protect them from receiving
net negative value-based incentive payments.
We are considering different policy options to ensure that SNFs
achieving zero readmissions among their patient populations during the
performance period do not receive a negative payment adjustment. We
intend to address this topic in future rulemaking, and we request
public comments on what accommodations, if any, we should employ to
ensure that SNFs meeting our quality goals are not penalized under the
Program. We specifically sought comments on the form this potential
accommodation should take. A discussion of these comments, along with
our responses, appears below.
Comment: Some commenters expressed concerns about the risk
adjustment methodology employed to calculate the measures, particularly
for SNFs with zero readmissions during the applicable period.
Commenters noted that the statistical approach employed by the measures
means that SNFs with low volume or zero readmissions during the
applicable period could receive a worse risk-standardized readmission
rate, which could hide true differences in performance and may dampen
SNFs' incentives to improve. Commenters
[[Page 36616]]
suggested that we consider expanding the performance periods for SNFs
with low volume to mitigate these effects. Other commenters suggested
that we consider returning the full 2 percentage points withheld from
SNFs' Medicare payments when those SNFs have zero readmissions during
the applicable period, provide a rolling average readmission rate, or
stratify readmission rates and value-based incentive payments by
facility size.
Response: We intend to address this topic in future rulemaking, and
will take these suggestions into account at that time.
Comment: One commenter believed that we should develop an
exceptions policy for SNFs in special circumstances, and recommended
that under this policy, we return affected SNFs' entire payment
withhold and not assign public rankings or scores. The commenter
recommended that we offer this exception to SNFs based on a small
denominator size of fewer than 25 cases rather than zero readmissions.
The commenter noted that a small denominator size would likely capture
SNFs with zero readmissions and would ensure that low-volume SNFs do
not stack at the top of the Program's ranking and harm non-zero
denominator facilities' standing.
Response: We thank the commenter for this feedback and will take it
into account in future rulemaking.
We thank the commenters for their feedback, and will take it into
account in the future.
(3) Request for Comments on Extraordinary Circumstances Exception
Policy
In other value-based purchasing programs, such as the Hospital VBP
Program (see 78 FR 50704 through 50706), as well as several of our
quality reporting programs, we have adopted Extraordinary Circumstances
Exceptions policies intended to allow participating facilities to
receive administrative relief from program requirements due to natural
disasters or other circumstances beyond the facility's control that may
affect the facility's ability to provide high-quality health care.
We are considering whether this type of policy would be appropriate
for the SNF VBP Program. We intend to address this topic in future
rulemaking. We therefore sought public comments on whether we should
implement such a policy, and if so, the form the policy should take. If
we propose such a policy in the future, our preference would be to
align it with the Extraordinary Circumstances Exception policy adopted
under our other quality programs. A summary of the public comments that
we received, along with our responses, appears below.
Comment: Some commenters stated their belief that we should adopt
an Extraordinary Circumstances Exception policy to provide
administrative relief to SNFs suffering from circumstances beyond their
control, and recommended that we align the policy with the Hospital VBP
Program. Other commenters suggested that we consider adopting the same
exception process as has been adopted under the SNF QRP.
Response: We thank the commenters for their suggestions, and will
take it into consideration if we decide to propose an Extraordinary
Circumstances Exception policy in future rulemaking.
f. SNF Value-Based Incentive Payments
(1) Exchange Function
We refer readers to the FY 2017 SNF PPS final rule (81 FR 52005
through 52006) for discussion of four possible exchange functions that
we considered adopting to translate SNFs' performance scores into
value-based incentive payments. We created new graphical
representations of the four functions that we have considered in the
past--linear, cube, cube root, and logistic--and presented those
updated representations in the proposed rule (82 FR 21084). We noted
that the actual exchange functions' forms and slopes will vary
depending on the distributions of SNFs' performance scores from the FY
2019 performance period, and wished to emphasize that these
representations are presented solely for the reader's clarity as we
discussed our exchange function policy.
[[Page 36617]]
[GRAPHIC] [TIFF OMITTED] TR04AU17.010
We have continued examining historical SNFRM data while considering
our policy options for this program. We have attempted to assess how
each of the four possible exchange functions that we set out in the FY
2017 SNF PPS final rule, as well as potential variations, would affect
SNFs' incentive payments under the Program. We specifically considered
the effects of the statutory constraints on the Program's value-based
incentive payments and our belief that to create an effective incentive
payment program, SNFs' value-based incentive payments must be widely
distributed to reward higher performing SNFs through increased payment
and to make reduced payments to lower performing SNFs. We also
considered our desire to avoid unintended consequences of the Program's
incentive payments, particularly since the Program is limited by
statute to using a single measure at a time, and our view that an
equitable distribution of value-based incentive payments would be most
appropriate to ensure that all SNFs, including SNFs serving at-risk
populations, could potentially qualify for incentive payments.
In our view, important factors when adopting an exchange function
include the number of SNFs that receive more in value-based incentive
payments than the number of SNFs for which a reduction is applied to
their Medicare payments, as well as the incentive for SNFs to reduce
hospital readmissions. We hold this view because we believe that the
Program will be most effective at encouraging SNFs to improve the
quality of care that they provide to Medicare beneficiaries if SNFs
have the opportunity to earn incentives, rather than simply avoid
penalties, through high performance on the applicable quality measure.
We also believe that SNFs must have incentives to reduce hospital
readmissions for their patients
[[Page 36618]]
no matter where their performance lies in comparison to their peers.
Taking those considerations into account, we analyzed the four
exchange functions on which we have previously sought comment--linear,
cube, cube root, and logistic--as well as variations of those exchange
functions. We scored SNFs using historical SNFRM data and modeled SNFs'
value-based incentive payments using each of the functions in turn. We
evaluated the distribution of value-based incentive payments that
resulted from each function, as well as the number of SNFs with
positive payment adjustments and the value-based incentive payment
percentages that resulted from each function. We also evaluated the
functions' results for the statutory requirements in section
1888(h)(5)(C)(ii) of the Act, including the requirements in subclause
(I) that the percentage be based on the SNF performance score for each
SNF, in subclause (II) that the application of all such percentages
results in an appropriate distribution, and in items (aa), (bb), and
(cc) of subclause (II), specifying that SNFs with the highest rankings
receive the highest value-based incentive payment amounts, that SNFs
with the lowest rankings receive the lowest value-based incentive
payment amounts, and that the SNFs in the lowest 40 percent of the
ranking receive a lower payment rate than would otherwise apply.
In our analyses of the four baseline functions, we found that the
logistic function maximized the number of SNFs with positive payment
adjustments among SNFs measured using the SNFRM. We also found that the
logistic function best fulfills the requirement that the SNFs in the
lowest 40 percent of the ranking receive a lower payment rate than
would otherwise apply, resulted in an appropriate distribution of
value-based incentive payment percentages, and fulfilled the other
statutory requirements described in this final rule. Specifically, we
noted that the logistic function provided a broad range of SNFs with
net-positive value-based incentive payments, and while it did not
provide the highest value-based incentive payment percentage to the top
performers of all the functions, we viewed the number of SNFs with
positive payment adjustments as a more important consideration than the
highest value-based incentive payment percentages being awarded.
We also considered alignment of VBP payment methodologies across
fee-for-service Medicare VBP programs, including the Hospital VBP
program and Quality Payment Program (QPP). We recognize that aligning
payment methodologies would help stakeholders that use VBP payment
information across care settings better understand the SNF VBP payment
methodology. Both the Hospital VBP program and QPP use some form of a
linear exchange function for payment. Three key program aspects that
facilitate the use of a linear exchange function are the programs'
number of measures, measure weights, and correlation across program
measures. These three aspects in tandem contribute to the approximately
normal distribution of scores expected in the Hospital VBP program and
QPP. No single measure is the key driver that might ``tilt'' scores to
a non-normal distribution. Since both programs are required to be
budget neutral, our modeling estimates that scores translate into an
approximately equal number of providers with positive payment
adjustments and providers receiving a net payment reduction.
In contrast, the SNF VBP payment adjustment is driven, in part, by
two specific SNF VBP statutory requirements: The program's use of a
single measure; and the requirement that the total amount of value-
based incentive payments for all SNFs in a fiscal year be between 50
and 70 percent of the total amount of reductions to payments for that
fiscal year, as estimated by the Secretary. Our analysis of the linear
exchange function showed that more SNFs would receive a net payment
reduction than a payment incentive because the total amount available
for incentive payments in a fiscal year is limited to between 50 and 70
percent of the total amount of the reduction to SNF payments for that
fiscal year. The linear exchange function also results in the provision
of a net payment reduction to a higher percentage of SNFs that exceeded
the 50th percentile of national performance, relative to the logistic
payment function. We believe that these findings are unique to the SNF
VBP program, relative to other fee-for-service Medicare programs,
because of the limitation on the total amount that we can use for
incentive payments, coupled with the use of a single measure and the
corresponding scoring distribution.
In addition to the four baseline functions described further above,
we considered adjusting the linear function to be able to make positive
payment adjustments to a greater number of SNFs. Specifically, we
tested an alternative where we reduced the baseline linear function by
20 percent, then redistributed the resulting funds to the middle 40
percent of SNFs. We found that the use of this linear function with
adjustment would enable us to make a positive payment adjustment to a
slightly greater number of SNFs than we would be able to make using the
logistic function. However, we were concerned with the additional
complexity involved in implementing this type of two-step adjustment to
the linear exchange function.
Taking all of these considerations into account, we proposed to
adopt a logistic function for the FY 2019 SNF VBP Program and
subsequent years. Under this policy, we would:
1. Estimate Medicare spending on SNF services for the FY 2019
payment year;
2. Estimate the total amount of reductions to SNFs' adjusted
Federal per diem rates for that year, as required by statute;
3. Calculate the amount realized under the payback percentage
policy (discussed further below);
4. Order SNFs by their SNF performance scores; and
5. Assign a value-based incentive payment multiplier to each SNF
that corresponds to a point on the logistic exchange function that
corresponds to its SNF performance score.
As we discussed in the proposed rule (82 FR 21085), we would model
the logistic exchange function in such a form that the estimated total
amount of value-based incentive payments equals not more than 60
percent of the amounts withheld from SNFs' claims. While the function's
specific form would also depend on the distribution of SNF performance
scores during the performance period, the formula that we used to
construct the logistic exchange function and that we proposed to use
for FY 2019 program calculations is:
[GRAPHIC] [TIFF OMITTED] TR04AU17.011
where xi is the SNF's performance score.
We sought public comments on this proposal, and in particular, on
whether a linear function with adjustment would alternatively be
feasible for the SNF VBP Program, potentially beginning with FY 2019. A
discussion of these comments, along with our responses, appears below.
Comment: Some commenters supported the logistic exchange function,
agreeing that it best incentivizes SNFs to improve continuously and
allows for the greatest number of SNFs to receive net-positive
payments. The commenters also agreed that the linear function with
adjustment could create confusion, and requested that we provide an
example calculation
[[Page 36619]]
of a provider's payment multiplier in the final rule.
Response: We thank the commenters for their support and feedback.
In response to the commenters' request for an example, we can provide
two hypothetical examples of SNFs' performance scores based on
historical performance data and historical Medicare spending that would
be subject to the Program. We would like to emphasize that the actual
multipliers that will result from the calculation of the logistic
exchange function for the FY 2019 Program year will depend on the
distribution of SNF performance scores that result from the performance
period as well as estimated Medicare spending subject to the Program
for the FY 2019 payment year, and thus SNFs should not expect to
receive the example multipliers below if their FY 2019 SNF performance
scores approximate either of these examples.
A SNF with a baseline period SNFRM rate of 0.16980, which inverts
to 0.83020, and a performance period SNFRM rate of 0.19989, which
inverts to 0.80011, would, according to the formulas that we have
adopted in previous regulations, receive 20.56057 points for
achievement and 0 points for improvement since its measured performance
declined. The higher of those two values is 20.56057, and that value
would become the SNF's performance score. Based on the distribution of
historical performance in the data sets that we analyzed, that SNF
performance score translates into a value-based incentive payment
multiplier of 0.150052 percent, which would be applied after the
application of the 2% reduction required by section 1888(h)(6)(B).
Conversely, a SNF with a baseline period SNFRM rate of 0.18842,
which inverts to 0.81158, and a performance period SNFRM rate of
0.17384, which inverts to 0.82616, would, according to the formulas
that we have adopted in previous regulations, receive 70.23616 points
for achievement and 4.78908 points for improvement. The higher of those
two values is 70.23616, and that value would become the SNF's
performance score. Based on the distribution of historical performance
in the data sets that we analyzed, that SNF performance score
translates into a value-based incentive payment multiplier of 2.64944
percent, which would be applied after the application of the 2 percent
reduction required by section 1888(h)(6)(B) of the Act.
Comment: Two commenters requested additional details on the
analyses that we conducted to reach the proposed policy, and also
requested that we detail how the future transition to the SNFPPR would
influence the distribution of incentive payments. One commenter
suggested that we perform a ``dry run'' with the proposed methodology
and provide confidential feedback reports to SNFs with the results.
Response: We thank the commenters for this feedback. We will
consider providing a dry run or other additional information prior to
the planned summer 2018 dissemination of Fiscal Year 2019 payment
reports that will notify SNFs of the adjustments to their Medicare
payments as required by section 1888(h)(7) of the Act. We also wish to
inform the commenters that SNFs received confidential feedback reports
with their calendar year 2015 baseline period readmission rates, as
captured by the SNFRM, in early 2017. We continue to analyze the
potential effects of the Program's transition to the SNFPPR, and we
intend to provide additional details on the resulting distribution of
value-based incentive payments in the future.
Comment: One commenter requested that we provide a scaling factor
that we would use to ensure that payouts equate to 60 percent of the
total amount withheld from SNFs' Medicare payments. The commenter also
recommended that we not consider the cube exchange function, noting
that it would result in extremely high payouts to top providers who may
be outliers, and suggested that we provide the slope of each
alternative function listed in the rule.
Response: We thank the commenter for the feedback on the exchange
function form, and we agree with the commenter that the cube function
results in an undesirable distribution of incentive payments to SNFs.
As discussed further below, we are finalizing the logistic exchange
function for the FY 2019 Program.
In response to the commenter's request that we provide the scaling
factor that we would use to ensure that value-based incentive payments
under the Program equal the 60 percent payback percentage that we
proposed and are finalizing in this final rule, we note that the
distribution of incentive payments provided under the Program depends
entirely on the distribution of SNFs' performance on the applicable
measure during the baseline and performance periods. We are unable to
provide a scaling factor for the FY 2019 program year at this time
because the performance period (CY 2017) has not concluded yet, though
we may consider doing so after the performance period has concluded. We
intend to provide additional detail on the distribution of SNF
performance scores and the resulting value-based incentive payment
percentages, potentially including the scaling factor, in the future.
After consideration of the public comments that we have received,
we are finalizing the logistic exchange function as proposed.
(2) Payback Percentage
Section 1888(h)(6)(A) of the Act requires the Secretary to reduce
the adjusted federal per diem rate determined under section
1888(e)(4)(G) of the Act otherwise applicable to a SNF for services
furnished by that SNF during a fiscal year by the applicable percent
(which, under section 1888(h)(6)(B) of the Act is 2 percent for FY 2019
and succeeding fiscal years) to fund the value-based incentive payments
for that fiscal year. Section 1888(h)(5)(C)(ii)(III) of the Act further
specifies that the total amount of value-based incentive payments under
the Program for all SNFs in a fiscal year 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 that fiscal year under the Program, as
estimated by the Secretary. Thus, we must decide what percentage of the
total amount of the reductions to payments for a fiscal year we will
pay as value-based incentive payments to SNFs based on their
performance under the Program for that fiscal year.
As with our exchange function policy described in this final rule,
we view the important factors when specifying a payback percentage to
be the number of SNFs that receive a positive payment adjustment, the
marginal incentives for all SNFs to reduce hospital readmissions and
make broad-based care quality improvements, and the Medicare Program's
long-term sustainability through the additional estimated Medicare
trust fund savings. We intend for the proposed payback percentage to
appropriately balance these factors. We analyzed the distribution of
value-based incentive payments using historical data, focusing on the
full range of available payback percentages.
Taking these considerations into account, we proposed that the
total amount of funds that would be available to pay as value-based
incentive payments in a fiscal year would be 60 percent of the
reductions to payments otherwise applicable to SNF Medicare payments
for that fiscal year, as estimated by the Secretary. We believe that 60
percent is the most appropriate payback percentage to balance the
considerations described in the proposed rule.
[[Page 36620]]
We noted that we intend to closely monitor the effects of the
payback percentage policy on Medicare beneficiaries, on participating
SNFs, and on their measured performance. We also stated that we intend
to consider proposing to adjust the payback percentage in future
rulemaking. In our consideration, we would include the Program's
effects on readmission rates, potential unintended consequences of SNF
care to beneficiaries included in the measure, and SNF profit margins.
Since the SNF VBP Program is a new, single measure value-based
purchasing program and will continue to evolve as we implement it--
including, for example, changing from the SNFRM to the SNFPPR as
required by statute--we stated that we intend to evaluate its effects
carefully.
We noted also that the Medicare Payment Advisory Commission's
research has shown that for-profit SNFs' average Medicare margins are
significantly positive,\53\ though not-for-profit SNFs' average
Medicare margins are substantially lower, and we requested comment on
the extent to which that should be considered in our policy. We also
recognized that there is some evidence that not-for-profit SNFs tend to
perform better on measures of hospital readmissions than for-profit
SNFs,\54\ and we requested comment on whether our proposed payback
percentage appropriately balances Medicare's long-term sustainability
with the need to provide strong incentives for quality improvement to
top-performing but lower-margin SNFs.
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\53\ Medicare Payment Advisory Commission, March 2017 Report to
the Congress, ch. 8: Skilled nursing facility services, Table 8-6.
https://medpac.gov/docs/default-source/reports/mar17_entirereport.pdf.
\54\ Neuman MD, Wirtalla C, Werner RM. Association Between
Skilled Nursing Facility Quality Indicators and Hospital
Readmissions. JAMA. 2014;312(15):1542-1551. doi:10.1001/
jama.2014.13513. Retrieved from https://jamanetwork.com/journals/jama/fullarticle/1915609.
---------------------------------------------------------------------------
We sought public comments on this proposal. A discussion of these
comments, along with our responses, appears below.
Comment: Several commenters recommended that we finalize a 70
percent payback percentage, stating that the largest possible incentive
pool will have a larger impact on changing practices and will provide a
softer landing for participating providers. Commenters were also
concerned that the actual payback percentage may be different than 60
percent if our forecast turns out to be erroneous, and suggested that
we instead calculate confidence intervals around the payback
percentage.
Other commenters stated that the greatest percentage of dollars
should be made available to facilities that invest in their staffs and
are therefore top performers, noting also that MedPAC analysis shows
that top performers are not enjoying large margins on their Medicare
business, and that a larger incentive pool would provide more incentive
dollars to high-performing SNFs. Commenters also stated that the
Medicare Trust Fund will benefit from reduced hospital spending
resulting from lower readmission rates.
Some commenters recommended that we adopt a 70 percent payback
percentage and that we use the other 30 percent of amounts withheld
from SNFs' Medicare payments to fund quality improvement initiatives.
One commenter cited the reduction to SNF PPS rates to fund physician
payments, significant MDS changes that will drive staffing and training
costs, and the possible revamping of the RUG methodology, as rationale
for selecting the maximum possible payback percentage under the
Program. The commenter stated that these changes mean that CMS should
not make any additional funding reductions beyond those absolutely
required.
Response: We thank the commenters for this feedback. Section
1888(h)(5)(C)(ii)(III) of the Act provides that the total amount of
value-based incentive payments for all skilled nursing facilities in a
fiscal year must be greater than or equal to 50 percent, but not
greater than 70 percent of the total amount of the reductions to SNFs'
Medicare payments for that fiscal year, as estimated by the Secretary.
We are confident that our payback percentage can be implemented
accurately, based on our experience estimating the total amount
available for value-based incentive payments under the Hospital Value
Based Purchasing program. We intend to utilize a similar methodology
for the SNF VBP Program by using the most currently available historic
SNF claims to estimate the pool of available funds, the finalized
payback percentage and corresponding withhold percentage, and the
finalized payment exchange function. It is important to note that the
50 to 70 percent range is based on national Medicare spending using the
entire population of about 15,000 SNF claims data, and that large data
set means that we are able to estimate the payment exchange function
that applies the finalized withhold and payback percentage with a high
degree of accuracy.
In response to comments that we finalize 70 percent as the payback
percentage for the Program, we intended for the proposed payback
percentage to balance several policy considerations, including the
number of SNFs that receive a positive payment adjustment, the marginal
incentives for SNFs to reduce hospital readmissions and make broad-
based care quality improvements, and the long-term financial
sustainability of the Medicare Program. We do not believe that
finalizing a 70 percent payback percentage appropriately balances those
factors, particularly the Medicare Program's long-term sustainability,
because it results in significantly higher Medicare spending under the
Program in a provider sector already experiencing significantly
positive Medicare margins. We believe that the other policies we are
finalizing in this final rule, including the logistic exchange
function, ensure that we provide strong incentives for quality
improvement to SNFs within the constraints imposed by the SNF VBP
Program's statute.
We intend to carefully monitor the Program's effects on SNFs' care
quality improvement efforts and providers' Medicare margins. We would
also like to clarify that the savings realized from the Program (that
is, the 30 to 50 percent of the amounts withheld from SNFs' claims) are
not authorized to be distributed separately for quality improvement
initiatives, and are instead retained in the Medicare Trust Fund and
used for other Medicare Program purposes authorized by statute.
Comment: One commenter stated that it is unnecessary to adjust the
payback percentage based on facility ownership type, stating that the
data do not support differential treatment among SNFs.
Response: We thank the commenter for this feedback. However, we
would like to clarify that we did not propose to adjust the payback
percentage based on facility ownership type. We will monitor the
Program's effects on SNFs carefully.
Comment: Two commenters requested that we provide additional
information regarding the empirical modeling used to inform our
proposed policies, including the proposed 60 percent payback
percentage. The commenters stated that the explanations we provided in
the proposed rule do not provide sufficient transparency into our
decision-making.
Response: We believe that we released sufficient information in the
proposed rule to give commenters enough information to submit
meaningful comments on our selection of the 60 percent payback
proposal, including the
[[Page 36621]]
considerations that we took into account when developing our proposed
policy (82 FR 21086) and the detailed analytical results that we
presented in the proposed rule's regulatory impact analysis (82 FR
21094 through 21095). However, we are in the process of compiling
additional empirical modeling information and intend to make that
information available to the public on the CMS.gov Web site no later
than November 2017.
Comment: One commenter stated that CMS should redistribute the full
amount withheld from SNFs' claims in incentive payments rather than 50
to 70 percent. The commenter also stated that the requirement that the
bottom 40 percent of SNFs not be eligible for incentive payments is
unfair, and requested that we provide details on the funds not being
redistributed to SNFs.
Response: We thank the commenter for this feedback. However, the
requirements that the total amount available for value-based incentive
payments in a fiscal year be greater than or equal to 50 percent, but
not greater than 70 percent, as well as the requirement that the SNFs
ranked in the lowest 40 percent receive a payment rate for services
furnished during a fiscal year that less than the payment rate they
would have received otherwise for that fiscal year, are statutory in
origin. As a result, we do not believe we have the discretion to
redistribute the full amount withheld from SNFs' claims as incentive
payments or to pay SNFs in the bottom 40 percent the same or a higher
rate than they would have otherwise received in the absence of the
Program.
In response to the commenter's question about funds not being
redistributed to SNFs (that is, the 30 to 50 percent of SNFs' Medicare
payments remaining after the payment withhold is determined), as we
stated above, those funds are not authorized to be distributed
separately for quality improvement initiatives, and are instead
retained in the Medicare Trust Fund and used for other Medicare Program
purposes authorized by statute.
Comment: Commenter agreed in general with our view that the Program
will be most effective if it offers incentive payments to SNFs rather
than payment penalties.
Response: We believe that the policies we are finalizing in this
final rule, including the payback percentage and the use of the
logistical exchange function, will enable us to offer incentive
payments to a broad number of SNFs while balancing that consideration
with the Medicare Program's long-term sustainability.
After consideration of the public comments that we received, we are
finalizing the payback percentage for the FY 2019 SNF VBP program as 60
percent of the total amount of the reduction to SNFs' Medicare payments
for that fiscal year, as estimated by the Secretary. We will set the
exchange function such that we remit 60 percent of the estimated total
amount withheld from SNFs' Medicare payments as value-based incentive
payments, though each individual SNF's value-based incentive payment
percentage will vary according to its SNF performance score.
g. SNF VBP Reporting
(1) Confidential Feedback Reports
We refer readers to the FY 2017 SNF PPS final rule (81 FR 52006
through 52007) for discussion of our intention to use the QIES system
CASPER files to fulfill the requirement in section 1888(g)(5) of the
Act that we provide quarterly confidential feedback reports to SNFs on
their performance on the Program's measures. We also responded in that
final rule to public comments on the appropriateness of the QIES
system.
We provided SNFs with a test report in September 2016, followed by
data on SNFs' CY 2013 performance on the SNFRM in December 2016 and
SNFs' CY 2014 performance on the SNFRM in March 2017. We then provided
SNFs with their CY 2015 performance on the SNFRM in June 2017, along
with a supplemental workbook providing patient-level data. We intend to
continue providing SNFs with their performance data each quarter as
required by the statute.
We sought feedback from SNFs on the contents of the quarterly
reports and what additional elements, if any, we should consider
including that would be useful for quality improvement efforts. We
specifically sought comment on what patient-level data would be most
helpful to SNFs if they were to request such data from us as part of
their quality improvement efforts. A discussion of these comments,
along with our responses, appears below.
Comment: Several commenters expressed their view that specific
facility-level and patient-level data elements should be provided in
quarterly confidential feedback reports. Other commenters expressed
support for both the facility level and patient identifiers that we are
providing. One commenter suggested that dual eligibility status for
patients be provided in quarterly confidential feedback reports.
Another commenter requested that we provide additional information in
our quarterly confidential feedback reports, including national
benchmarks used to calculate achievement and improvement scores, peer
ranking information, and SNF-specific trend data and top causes of
readmission. This commenter also requested that quarterly confidential
feedback reports contain the SNF VBP Program measure calculated using
12 rolling months of data, and that we update such calculations
quarterly. Lastly, one commenter requested that reports be provided
more frequently than quarterly.
Response: We are currently providing many patient-level indicators
to SNFs as part of the quarterly reports process, and since we began
that reporting during the public comment period on the proposed rule,
we believe some commenters may have erroneously believed that we did
not intend to provide patient-level data. June 2017 quarterly
confidential feedback reports and supplemental workbooks included the
following patient-level data: Patient identifiers (Health Insurance
Claim Number [HICN], Sex, Age); Index SNF information (admission/
discharge dates, discharge status code); Prior proximal hospital
information CMS Certification Number [CCN], admission/discharge dates,
principal diagnosis); Readmission hospital information (CCN, admission/
discharge dates, principal diagnosis); and SNFRM risk-adjustment
factors. The following facility-level information is also included:
Number of Eligible Stays, Number of Unplanned Readmissions, Observed
Readmission Rate, Predicted Number of Readmissions, Expected Number of
Readmissions, Standardized Risk Ratio (SRR), National Average
Readmission Rate, RSRR. We will take the commenter's request to report
patient's dual eligibility status under consideration for future
reports.
We intend to publish performance standards for each program year in
the SNF PPS final rule, and we intend to provide peer ranking
information to SNFs as it becomes available. We believe that providing
the SNF VBP program measure rate calculations using 12 rolling months
of data updated quarterly would create confusion among providers
regarding which of these rates would be used to calculate value-based
incentive payments for a specific program year. We strive to provide
information that is as user-friendly as possible and will take the
commenter's request for SNF-specific trend data and top causes of
readmission under consideration. Finally, while we appreciate the need
for frequent updates, monthly reports containing this information are
not logistically
[[Page 36622]]
feasible at this time. However, we continue to look for ways in which
we may provide this information more frequently in the future.
We thank the commenters for this feedback.
(2) Review and Corrections Process: Phase Two
In the FY 2017 SNF PPS final rule (81 FR 52007 through 52009), we
adopted a two-phase review and corrections process for SNFs' quality
measure data that will be made public under section 1888(g)(6) of the
Act and SNF performance information that will be made public under
section 1888(h)(9) of the Act. We explained that we would accept
corrections to the quality measure data used to calculate the measure
rates that is included in any SNF's quarterly confidential feedback
report, and also that we would provide SNFs with an annual confidential
feedback report containing the performance information that will be
made public. We detailed the process for requesting Phase One
corrections and finalized a policy whereby we would accept Phase One
corrections to SNFs' quarterly reports through March 31 following the
report's issuance via the CASPER system.
In the proposed rule (82 FR 21086 through 21087), we proposed
additional specific requirements for the Phase Two review and
correction process that we are finalizing in this final rule.
Specifically, we proposed to limit Phase Two correction requests to the
SNF's performance score and ranking because all SNFs would have already
had the opportunity to correct their quality measure data through the
Phase One corrections process.
We also proposed to provide these reports to SNFs at least 60 days
prior to the FY involved. SNFs will not be allowed to request
corrections to their value-based incentive payment adjustments.
However, we stated that we will make confirming corrections to a SNF's
value-based incentive payment adjustment if a SNF successfully requests
a correction to its SNF performance score.
As with Phase One, we proposed that Phase Two correction requests
must be submitted to the SNFVBPinquiries@cms.hhs.gov mailbox, and must
contain the following information:
SNF's CMS Certification Number (CCN);
SNF Name;
The correction requested and the SNF's basis for
requesting the correction.
Specifically, the SNF must identify the error for which it is
requesting correction, and explain the reason for requesting the
correction. The SNF must also submit documentation or other evidence,
if available, supporting the request. As noted above, corrections
requested during Phase Two will be limited to SNFs' performance score
and ranking. However, we noted that the SNFVBPinquiries@cms.hhs.gov
mailbox cannot receive secured email messages. If any SNF believes it
needs to submit patient-sensitive information as part of a correction
request, we requested that the SNF contact us at the mailbox to arrange
a secured transfer.
We further proposed that SNFs must make any correction requests no
later than 30 days following the date of our posting of their annual
SNF performance score report via the QIES system CASPER files. For
example, if we post the reports on August 1, 2017, SNFs must review
these reports and submit any correction requests by 11:59 p.m. Eastern
Standard Time on August 31, 2017 (or the next business day, if the 30th
day following the date of the posting is a weekend or federal holiday).
We stated that we would not consider any requests for corrections to
SNF performance scores or rankings that are received after this
deadline.
We proposed to review all timely Phase Two correction requests that
we receive and provide responses to SNFs that have requested
corrections as soon as practicable. We also proposed to issue an
updated SNF performance score report to any SNF that requests a
correction with which we agree, and if necessary, to update any public
postings on Nursing Home Compare and value-based incentive payment
percentages, as applicable.
We sought public comments on this proposed Phase Two corrections
process. A discussion of these comments, along with our responses,
appears below.
Comment: Some commenters recommended that SNFs be provided access
to the information used to calculate their SNFRM scores and estimate
their payment adjustment factors based on the payment exchange
function. Commenters stated that SNFs' may wish to replicate their SNF
VBP performance scores as closely as possible, and requested that SNFs
receive their predicted and expected readmission rates, national
average readmission rates, and RSRRs for both the baseline and
performance periods, as well as the cut points used to determine
performance standards. Commenters explained that such information will
help SNFs be more confident about their final payment adjustments as
well as to understand what they need to do to improve their SNFRM
scores and payment adjustments.
Response: We thank the commenters for this feedback. While it is
correct that SNFs cannot calculate their own risk-standardized
readmission rates because such a calculation would require national
stay-level data, including risk-adjustment information, we believe that
the additional patient-level and facility-level information that we are
now providing to SNFs (as discussed further above) along with their
quarterly reports will be useful to SNFs with their quality improvement
efforts. We also provide SNFs with their predicted and expected
readmission rates, national average readmission rates, and RSRRs in
their quarterly confidential feedback reports and supplemental
workbooks. We welcome commenters' continued feedback on the contents of
the supplemental workbooks containing facility-level and patient-level
data that accompany the quarterly confidential feedback reports.
Comment: One commenter requested that we provide Phase Two scoring
reports to SNFs as soon as possible if we elect to change from calendar
year to fiscal year performance periods to ensure that SNFs have
sufficient time to review those reports and submit correction requests.
Response: We thank the commenter for this suggestion, and we will
strive to provide SNF performance score reports to SNFs as quickly as
possible. We note, however, that it is time consuming for us to
complete the tasks necessary to ensure that the information contained
in the performance score reports is accurate. At this time, we do not
believe we can feasibly provide SNF performance score reports prior to
the statutorily-required deadline described in section 1888(h)(7) of
the Act that SNFs be notified of the adjustments to their Medicare
payments as a result of the Program. We will consider future
improvements if information technology and claims processing
improvements allow for earlier dissemination of this information to
SNFs.
Comment: One commenter supported our review and correction policies
in general, but was unsure how a SNF could challenge its SNF
performance score or ranking since SNFs do not receive patient-level
data, and requested that we make such data available to SNFs. The
commenter noted that additional information could be useful to SNFs,
including their predicted readmission rate, their expected readmission
rate, the national average, the SNF's baseline and performance period
rates, the SNF's ranking, and the
[[Page 36623]]
achievement and improvement thresholds.
Response: Our intention is to provide SNFs with the patient level
data and associated data elements that the commenter suggests in the
SNF performance score reports scheduled for delivery next year, though
we note, as stated above, that we are now providing patient-level data
in SNFs' quarterly confidential feedback reports. We welcome
commenters' continued feedback on those data and any other elements
that may be helpful to SNFs with their quality improvement efforts.
After consideration of the public comments that we received, we are
finalizing the Phase Two review and corrections process, as proposed.
(3) SNF VBP Program Public Reporting
We refer readers to the FY 2017 SNF PPS final rule (81 FR 52009)
for discussion of the statutory requirements governing the public
reporting of SNFs' performance information under the SNF VBP Program.
We also sought and responded to public comments on issues that we
should take into account when posting performance information on
Nursing Home Compare or a successor Web site.
We proposed to begin publishing SNF performance information under
the SNF VBP Program on Nursing Home Compare not later than October 1,
2017. We stated that we would only publish performance information for
which SNFs have had the opportunity to review and submit corrections.
We sought comments on this proposal. A discussion of these comments,
along with our responses, appears below.
Comment: One commenter supported posting SNF performance scores on
Nursing Home Compare, but opposed posting quality measure performance
scores, including achievement/improvement scores. The commenter stated
that achievement and improvement scores are not required by statute to
be publicly posted and could be confusing to the public. The commenter
also noted that the Program's quality measures differ from those
already posted on Nursing Home Compare, and stated that having multiple
rehospitalization rates would not be ideal.
Response: We thank the commenter for this feedback. We note that
section 1888(g)(6) of the Act directs the Secretary to make SNF-
specific information available to the public, including information on
measure-level performance, and we will consider the commenter's views
as we develop our plans for public reporting of SNF VBP data in the
future.
Comment: Commenter requested that we clarify our intentions for
public reporting of SNF VBP information on Nursing Home Compare,
wondering if this information will replace the current readmission rate
information and definitions on the site or if SNF VBP information will
be added to the site's current content. The commenter also expressed
frustration that CMS is using multiple definitions of readmissions for
different programs, and suggested that we align our efforts.
Response: We intend to publish SNF VBP performance information on
Nursing Home Compare or a successor Web site as directed by the SNF VBP
Program's statute. We are cognizant of the possibility for confusion,
and we intend to align our efforts as much as possible across programs,
including giving providers sufficient information to aid them in
distinguishing between the readmission measures on Nursing Home
Compare.
Comment: Commenter encouraged us to publish as much information as
possible on Nursing Home Compare, including readmissions rates,
achievement and improvement points, SNF performance scores, rankings,
and payment adjustments. The commenter noted that many of these data
points are available for the Hospital VBP and Readmissions Reduction
Programs, and noted that the public should expect the same transparency
for SNFs.
Response: We thank the commenter for this feedback and will take it
into consideration as we continue developing our public reporting
plans.
After consideration of the public comments that we have received,
we are finalizing our public reporting policy as proposed.
(4) Ranking of SNFs' Performance
We refer readers to the FY 2017 SNF PPS final rule (81 FR 52009)
for discussion of the statutory requirement that we rank SNFs based on
their performance on the Program. In that rule, we discussed the
statutory requirements to order SNF performance scores from low to high
and publish those rankings on both the Nursing Home Compare and
QualityNet Web sites, and to publish the ranking after August 1, 2018,
when performance scores and value-based incentive payment adjustments
will be made available to SNFs. We intend to publish the ranking for
each program year once performance scores and value-based incentive
payment adjustments are made available to SNFs.
Having considered those statutory requirements, we proposed to rank
SNFs for the FY 2019 program year and to publish the ranking after
August 1, 2018. We further proposed that the ranking include the
following data elements:
Rank,
Provider ID,
Facility name,
Address,
Baseline period (CY 2015) risk-standardized readmission
rate,
Performance period (CY 2017) risk-standardized readmission
rate,
Achievement score,
Improvement score, and
SNF performance score.
We believe that these data elements will provide consumers and
other stakeholders with the necessary information to evaluate SNFs'
performance under the program, including each component of the SNF
performance score, including both achievement and improvement. We
sought public comments on these proposals. We stated in the proposed
rule that we would address rankings for future program years in
subsequent rulemaking. A discussion of these comments, along with our
responses, appears below.
Comment: One commenter stated its belief that we must publish the
FY 2019 program ranking not later than August 1, 2018, rather than
after August 1 as we described in the proposed rule. The commenter
noted that publishing the ranking by that date will provide all
stakeholders with sufficient time to review the ranking prior to the
fiscal year.
Response: Section 1888(h)(9) of the Act does not provide a specific
deadline for public reporting of SNF performance scores and the ranking
for a given fiscal year. Our intention in stating that we would publish
the ranking after August 1, 2018, was only to communicate that we would
publish the ranking publicly after SNFs have been notified of their SNF
performance scores, value-based incentive payment percentages, and
ranking as required by section 1888(h)(7) of the Act, which must take
place not later than 60 days prior to the fiscal year involved.
After consideration of the public comments, we are finalizing the
SNF VBP Program's ranking policies as proposed.
4. Survey Team Composition
a. Background
To participate in the Medicare and Medicaid programs, long term
care facilities, including skilled nursing facilities (SNFs) in
Medicare and nursing facilities (NFs) in Medicaid, must be certified as
meeting Federal
[[Page 36624]]
participation requirements, which are specified in 42 CFR part 483.
Section 1864(a) of the Act authorizes the Secretary to enter into
agreements with state survey agencies to determine whether SNFs meet
the federal participation requirements for Medicare and section
1902(a)(33)(B) of the Act provides for state survey agencies to perform
the same survey tasks for NFs participating or seeking to participate
in the Medicaid program. Surveys are performed directly by us and also
under contract for certain surveys. The results of these surveys are
used by us and the Medicaid state agency as the basis for a
determination to enter into, deny, or terminate a provider agreement
with the facility, or to impose an enforcement remedy or remedies on a
facility, as appropriate, for failure to be in substantial compliance
with federal participation requirements. To assess compliance with
federal participation requirements, surveyors conduct onsite
inspections (surveys) of facilities. In the survey process, surveyors
gather evidence and directly observe the actual provision of care and
services to residents and the effect or possible effects of that care,
or lack thereof, to assess whether the care provided meets the assessed
needs of individual residents.
Sections 1819(g) and 1919(g) of the Act, and corresponding
regulations at 42 CFR part 488, subpart E, specify the requirements for
the types and periodicity of surveys that are to be performed for each
facility. Specifically, sections 1819(g)(2) and 1919(g)(2) of the Act
reference standard, special, and extended surveys. Sections
1819(g)(2)(E) and 1919(g)(2)(E) of the Act specify that surveys under
section 1819(g)(2) of the Act in general must consist of a
multidisciplinary team of professionals, including a registered nurse.
In addition, the statutory requirements governing the investigation of
complaints and for monitoring on-site a SNF's or NF's compliance with
participation requirements are found in sections 1819(g)(4) and
1919(g)(4) of the Act and Sec. 488.332.
These sections specify that a specialized team, including an
attorney, an auditor, and appropriate health care professionals may be
maintained and utilized in the investigation of complaints for the
purpose of identifying, surveying, gathering and preserving evidence,
and carrying out appropriate enforcement actions against SNFs and NFs,
respectively.
Consistent with the statutory provisions noted above, two separate
regulations directly address survey team composition. Section 488.314,
Survey Teams, reflects the statutory language under sections
1819(g)(2)(E)(i) and 1919(g)(2)(E)(i) of the Act, and states that
``[s]urvey teams must be conducted by an interdisciplinary team of
professions, which must include a registered nurse.'' Section 488.332,
Investigation of Complaints of Violations and Monitoring of Compliance,
reflects the statutory language under sections 1819(g)(4) and
1919(g)(4) of the Act, and states that the state survey agency may use
a specialized team, which may include an attorney, auditor, and
appropriate health professionals, but not necessarily a registered
nurse, to investigate complaints and conduct on-site monitoring. A
survey conducted to monitor on-site a SNF's or NF's compliance with
participation requirements, such as a revisit survey to determine
whether a noncompliant facility has achieved substantial compliance, is
also subject to the provisions of Sec. 488.332, and not Sec. 488.314.
Section 488.308(e) also addresses complaint investigations, but as
currently written, it combines special surveys, which are authorized
under sections 1819(g)(2)(A)(iii)(II) and 1919(g)(2)(A)(iii)(II) of the
Act, with the requirements associated with the investigations of
complaints, which are governed by sections 1819(g)(4) and 1919(g)(4) of
the Act. In the statute, ``special surveys'' are referenced at sections
1819(g)(2)(A)(iii)(II) and 1919(g)(2)(A)(iii)(II) of the Act, while the
investigation of complaints is referenced at sections 1819(g)(4) and
1919(g)(4) of the Act.
The regulations as currently written do not clearly indicate which
survey team requirement applies to complaint surveys. The language at
Sec. 488.314 could be broadly interpreted to cover the survey team
composition for all surveys, including those used to investigate a
complaint. Such an interpretation, however, would ignore the provisions
of Sec. 488.332, which allow a state survey agency to utilize a
specialized investigative team that does not necessarily include a
registered nurse to survey a facility in connection with a complaint
investigation. The placement of surveys to investigate a complaint
together with special surveys under Sec. 488.308(e) further places
into question which survey team requirement applies to complaint
surveys. However, CMS' State Operations Manual (SOM) (Internet Only
Manual Pub. 100-07) notes that ``Section 488.332 provides the Federal
regulatory basis for the investigation of complaints about nursing
homes,'' thus indicating CMS' view that provisions related to survey
team composition in Sec. 488.332 apply to complaint surveys. See SOM,
Ch. 5, Section 5300; see also SOM, Ch. 7, Sections 7203.5 and
7205.2(3); SOM, Appendix P, II.B.4A.
The lack of clarity as to which regulatory provision, that is,
Sec. 488.314 or Sec. 488.332, applies to the survey team composition
related to the investigation of complaints has been the cause of recent
administrative litigation. We thus believe that regulatory changes are
needed to clarify that only surveys conducted under sections 1819(g)(2)
and 1919(g)(2) of the Act are subject to the requirement at Sec.
488.314 that a survey team consist of an interdisciplinary team that
must include a registered nurse. Complaint surveys and surveys related
to on-site monitoring, including revisit surveys, are subject to the
requirements of sections 1819(g)(4) and 1919(g)(4) of the Act and Sec.
488.332, which allow the state survey agency to use a specialized
investigative team that may include appropriate health care
professionals but need not include a registered nurse.
b. Major Provisions
We proposed to make changes to Sec. Sec. 488.30, 488.301, 488.308,
and 488.314 to clarify the regulatory requirements for team composition
for surveys conducted for investigating a complaint and to align
regulatory provisions for investigation of complaints with the
statutory requirements found in sections 1819 and 1919 of the Act.
(a) Proposed revision of the definition of ``complaint survey''
under Sec. 488.30 to add a provision stating that the requirements of
sections 1819(g)(4) and 1919(g)(4) of the Act and Sec. 488.332 apply
to complaint surveys.
(b) Proposed revision of the definition of ``abbreviated standard
survey'' under Sec. 488.301 to clarify that abbreviated standard
surveys conducted to investigate a complaint or to conduct on-site
monitoring to verify compliance with participation requirements are
subject to the requirements of Sec. 488.332.
(c) Proposed relocation of the requirements included in Sec.
488.308(e)(2) and (3) related to surveys conducted to investigate a
complaint from under the heading ``Special Surveys'' to a new paragraph
(f), titled ``Investigations of Complaints.''
(d) Proposed revision of the language at Sec. 488.314(a)(1) to
specify that the team composition requirements at Sec. 488.314(a)(1)
apply only to surveys under sections 1819(g)(2) and 1919(g)(2) of the
Act.
[[Page 36625]]
Commenters submitted the following comments related to the proposed
rule's discussion of the Survey Team Composition. A discussion of these
comments, along with our responses, appears below.
Comment: We received one comment supporting our proposal and the
commenter agreed with our clarification on the survey team composition.
The commenter further stated that states should be able to determine
the composition of the survey team based on the complaint received and
the purpose of the revisit to determine compliance.
Response: We want to thank the commenter for their support of our
clarifications to the survey team composition. We agree that the states
should be able to determine which professional would be most
appropriate based on the complaint received, such as a registered nurse
for clinical concerns, a dietitian for dietary concerns, or a
pharmacist for medication issues for example.
Comment: We received several comments recommending us to consider
adding a Registered Nurse (RN) to all survey teams. Multiple commenters
stated that an RN should be the individual to investigate any alleged
incident. Another commenter stated that they believed statutory
language is clear that a survey team must include a registered
professional nurse, and that the citation of clinical violations should
be observed and made by a registered professional nurse. One commenter
recommended that we add a requirement for a psychosocial professional
to be on each team in addition to a registered nurse. One commenter
also recommended that in addition to having an RN on the survey team,
the team should also include an additional professional based on the
complaint type.
Response: We appreciate the feedback from the commenters regarding
the suggestion to have an RN on all surveys or to add a psychosocial
professional to the team, but the proposed change to the language
regarding survey team composition is not to change the composition of
survey teams, but to clarify the requirement that survey teams
conducted by an interdisciplinary team of professionals, including a
registered nurse applies only to surveys under sections 1819(g)(2) and
1919(g)(2) of the Act and does not apply to complaint surveys in which
the appropriate professional would be used to conduct the investigation
based on the type of allegation.
Comment: One commenter stated that they disagreed with our
interpretation of its statutory authority. The commenter stated that
they believed statutory requirement for a registered nurse on this team
is clear and that the statute draws no distinction between a complaint
survey and a standard survey. The commenter further stated that
citations of clinical violations should be observed and confirmed or
dismissed by a registered professional nurse based upon his or her
clinical judgment.
Response: The preamble to the proposed rule states that the
proposed change is to clarify the requirement that survey teams
conducted by an multidisciplinary team of professionals, including a
registered nurse, applies only to surveys described under sections
1819(g)(2) and 1919(g)(2) of the Act and does not apply to the
investigation of complaints. The authority for complaint surveys arises
under sections 1819(g)(4) and 1919(g)(4) of the Act, which authorizes
the State survey agency to use a specialized team, which includes
appropriate healthcare professionals that may or may not, if not
required, include a registered nurse, for purposes of, among other
things, ``surveying'' noncompliant facilities. As discussed in the
preamble, we believe these clarifying changes are consistent with the
statutory provisions of sections 1819(g)(2) and (g)(4) and 1919(g)(2)
and (g)(4) of the Act, as well as our long standing interpretation of
the statute, as expressed in the implementation of current regulations
at Sec. Sec. 488.314 and 488.332 and the State Operations Manual
(``SOM''). We believe that if we were to require a registered nurse on
all surveys including those that are meant to investigate complaint
allegations, it would place an undue burden on the resources of state
survey agencies and render the statutory language under sections
1819(g)(4) and 1919(g)(4) of the Act as meaningless. In addition, as
previously mentioned, we believe that the statute enables us to
determine which professional would be most appropriate to investigate
complaint allegations based on the nature of the complaint allegation
received.
Comment: We received one comment requesting a revision based on the
decision at DAB No. CR4670 (2016) (H.H.S.), 2016 WL 499224, in which an
Administrative Law Judge provided an interpretation of the survey
composition provisions in the statute and current regulations.
Response: We appreciate the commenter's reference to this case,
however the ALJ decision is currently being reviewed by the
Departmental Appeals Board Appellate Division and therefore we cannot
comment on this case at this time.
Based on the comments received, we are proceeding with the
finalization of our proposal without any changes.
5. Correction of the Performance Period for the National Healthcare
Safety Network (NHSN) Healthcare Personnel (HCP) Influenza Vaccination
Immunization Reporting Measure in the End-Stage Renal Disease (ESRD)
Quality Incentive Program (QIP) for Payment Year (PY) 2020
In the CY 2017 ESRD PPS final rule (81 FR 77834), we finalized that
the performance period for the NHSN Healthcare Personnel Influenza
Vaccination Reporting Measure for Payment Year (PY) 2020 would be from
October 1, 2016, through March 31, 2017 (81 FR 77915). We proposed to
revise that performance period so that it aligns with the schedule we
previously set for this measure. Specifically, we previously finalized
that for the PY 2018 ESRD QIP, the performance period for this measure
would be from October, 1, 2015 through March 31, 2016, which is
consistent with the length of the 2015-2016 influenza season (79 FR
66209), and that for the PY 2019 ESRD QIP, the performance period for
this measure would be from October, 1, 2016 through March 31, 2017,
which is consistent with the length of the 2016- 2017 influenza season
(80 FR 69059 through 69060). Maintaining the performance period we
finalized in the CY 2017 ESRD PPS final rule would result in scoring
facilities on the same data twice, and would not be consistent with our
intended schedule to collect data on the measure in successive
influenza seasons. Therefore, we proposed to revise the performance
period for the NHSN HCP Influenza Vaccination Reporting Measure for the
PY 2020 ESRD QIP. Specifically, we proposed that for the PY 2020 ESRD
QIP, the performance period for this measure would be October 1, 2017,
through March 31, 2018, which is consistent with the length of the
2017-2018 influenza season.
We sought comments on this proposal. A discussion of these
comments, along with our responses, appears below.
Comment: Commenters were generally supportive of our proposal to
set the performance period as October 1, 2017 through March 31, 2018
because it is consistent with the length of the 2017-2018 influenza
season, however they stated that to be truly consistent with the
influenza season and the standard practice of administering the
vaccine, the performance period for the measure should be aligned with
the CDC's recommendations that
[[Page 36626]]
vaccination occur as early as possible to protect against infection.
They stated that without including the phrase ``or when the vaccine
becomes available,'' the measure penalizes facilities that provide the
vaccine as soon as it becomes available in August or September. One
commenter also stated that not making this change could place patients
at increased risk early in the influenza season.
Response: As stated in the CY 2015 ESRD PPS final rule (79 FR
66207) in response to a commenter who was concerned about whether
vaccinations received before October 1 would qualify under this
measure, ``the performance period for the denominator (the number of
healthcare personnel working in a facility) is from October 1 through
March 31. However, the numerator measurement (vaccination status)
includes vaccines obtained `as soon as the vaccine is available.' As a
result, a Healthcare Personnel (HCP) working at the facility as of
October 1 who was vaccinated in September would be considered
vaccinated for the performance period under this measure'' (79 FR
66207). As a result, facilities will not be penalized for providing the
vaccine as soon as it becomes available and patients will not be placed
at an increased risk at any point during the influenza season due to
the vaccination status of HCPs working in the facility.
After carefully considering the comments received we are finalizing
the Performance Period for the NHSN HCP Influenza Vaccination Reporting
Measure for the ESRD QIP for Payment Year 2020 as proposed.
IV. Collection of Information Requirements
Under the Paperwork Reduction Act of 1995 (PRA) (44 U.S.C. 3501 et
seq.), we are required to publish a 60-day notice in the Federal
Register and solicit public comment before a collection of information
requirement is submitted to the Office of Management and Budget (OMB)
for review and approval.
To fairly evaluate whether an information collection should be
approved by OMB, PRA section 3506(c)(2)(A) requires that we solicit
comment on the following issues:
The need for the information collection and its usefulness
in carrying out the proper functions of our agency.
The accuracy of our burden estimates.
The quality, utility, and clarity of the information to be
collected.
Our effort to minimize the information collection burden
on the affected public, including the use of automated collection
techniques.
We solicited public comment in the FY 2018 SNF PPS proposed rule on
each of the section 3506(c)(2)(A)-required issues for the following
information collection requirements (ICRs).
A. Information Collection Requirements (ICRs)
1. ICRs Regarding the SNF VBP Program
As discussed in the FY 2016 SNF PPS final rule (80 FR 46473) and
the FY 2017 SNF PPS final rule (81 FR 52049 through 52050), we have
specified claims-based measures to fulfill the SNF VBP Program's
requirements. As required by the SNF VBP Program's statute, we will
score SNFs' performance on these measures in order to make value-based
incentive payments to SNFs beginning in FY 2019.
In this final rule, we are finalizing additional policies for the
SNF VBP Program, including performance standards and performance/
baseline periods for the FY 2020 Program year, an exchange function for
the FY 2019 Program year, and administrative requirements related to
review and correction of performance information to be made public.
None of these requirements result in any additional information
collections or reporting burden associated with the Program.
Additionally, because claims-based measures are calculated based on
claims figures that are already submitted to the Medicare program for
payment purposes, there is no additional respondent burden associated
with data collection or submission for either the SNFRM or SNFPPR
measures. Thus, there is no additional reporting burden associated with
the SNF VBP Program's measures finalized in this rule.
2. ICRs Regarding the Potentially Preventable 30-Day Post-Discharge
Readmission Measure
This rule modifies the Potentially Preventable 30-Day Post-
Discharge Readmission Measure by increasing the length of the
measurement period and updating the confidential feedback and public
reporting dates, as described in section III.D.2.h. Because this is a
claims-based measure, no data collection beyond Medicare claims
submitted by SNFs for the furnishing of SNF covered services are
required for the calculation of this measure. We believe the SNF QRP
burden estimate is unaffected by the modifications of this measure as
the modifications have no impact on any of the claims-based reported
data fields.
3. ICRs Exempt From the PRA
As discussed in this final rule, we are adopting five new measures
beginning with the FY 2020 SNF QRP (see section III.D.2.g). The five
new measures being finalized are: (1) Changes in Skin Integrity Post-
Acute Care: Pressure Ulcer/Injury; (2) Application of the IRF
Functional Outcome Measure: Change in Self-Care Score for Medical
Rehabilitation Patients (NQF #2633); (3) Application of IRF Functional
Outcome Measure: Change in Mobility Score for Medical Rehabilitation
Patients (NQF #2634); (4) Application of IRF Functional Outcome
Measure: Discharge Self-Care Score for Medical Rehabilitation Patients
(NQF #2635); and (5) Application of IRF Functional Outcome Measure:
Discharge Mobility Score for Medical Rehabilitation Patients (NQF
#2636). The measures must be collected by SNFs and reported to CMS
using the Resident Assessment Instrument, Minimum Data Set (MDS).
These measures will be calculated using data elements that are
included in the MDS. The data elements are discrete questions and
response codes that collect information on a SNF patient's health
status, preferences, goals and general administrative information. To
view the MDS, with the finalized data elements, we refer to the reader
to https://www.cms.gov/Medicare/Quality-Initiatives-Patient-Assessment-Instruments/NursingHomeQualityInits/Skilled-Nursing-Facility-Quality-Reporting-Program/SNF-Quality-Reporting-Program-Measures-and-Technical-Information.html.
This rule also finalizes that SNFs would be required to report
certain standardized resident assessment data beginning with the FY
2019 SNF QRP (see section III.D.2.j.). We are finalizing our definition
of the term ``standardized resident assessment data'' as patient
assessment questions and response options that are identical in all
four PAC assessment instruments, and to which identical standards and
definitions apply. The standardized resident assessment data are
intended to be shared electronically among PAC providers and will
otherwise enable the data to be comparable for various purposes,
including the development of cross-setting quality measures and to
inform payment models that take into account patient characteristics
rather than setting.
Under section 1899B(m) of the Act, the Paperwork Reduction Act does
not apply to the specific changes in the collections of information
described in this final rule. These changes to the collections of
information are being
[[Page 36627]]
finalized under section 2(a) of the IMPACT Act, which added new section
1899B to the Act. That section requires SNFs to report standardized
resident assessment data, data on quality measures, and data on
resource use and other measures. All of this data must, under section
1899B(a)(1)(B) of the Act, be standardized and interoperable to allow
for its exchange among PAC providers and other providers and the use by
such providers to provide access to longitudinal information to
facilitate coordinated care and improved Medicare beneficiary outcomes.
Section 1899B(a)(1)(C) of the Act requires us to modify the MDS to
allow for the submission of quality measure data and standardized
resident assessment data to enable its comparison across SNFs and other
providers. We are, however, setting out the burden as a courtesy to
advise interested parties of the proposed actions' time and costs and
for reference refer to section V.A of this final rule of the regulatory
impact analysis (RIA). The requirement and burden will be submitted to
OMB for review and approval when the modifications to the MDS have
achieved standardization and are no longer exempt from the requirements
under section 1899B(m) of the Act.
For the new measure ``Changes in Skin Integrity Post-Acute Care:
Pressure Ulcer/Injury'' (NQF #2633) the items used to calculate this
measure are already present on the MDS, so the adoption of this measure
will not require SNFs to report any new data elements. In addition, we
are removing some data elements related to pressure ulcers that have
been identified as duplicative. Taking these final policies together,
we estimate that there will be a 1.5 minute reduction in clinical staff
time needed to report the pressure ulcer measure data. We are also
removing 9 additional data elements from the MDS 3.0. The removal of
these data elements from the skin integrity section of the MDS provide
a reduction in burden with data reporting by SNFs and therefore serve
as offsets to the SNF QRP. These removals are: Date of oldest Stage 2
pressure ulcer; three items pertaining to the dimensions of an unhealed
pressure ulcer; the most severe tissue type for any pressure ulcer; and
four data elements pertaining to healed pressure ulcers. We estimate
that the data elements we are removing will reduce overall reporting
burden from the assessments, constituting a reduction of an additional
7 minutes of clinical staff time per stay which provide a reduction in
burden with data reporting by SNFs. Taken together, we are removing a
total of 12 data elements from the skin integrity section of the MDS.
Based on the data provided in Table 25 of this final rule, and
estimating 2,886,336 discharges from 15,447 SNFs annually, we also
estimate that the total cost of reporting these data will reduce
overall reporting burden for the assessments from what was proposed
constituting a total reduction of 8.5 minutes of clinical staff time
per stay or $1,837 per SNF annually, or $28,377,493 for all SNFs
annually. We believe that the MDS items will be completed by registered
nurses (BLS Occupation Code: 29-1141) at $69.40/hr \55\ including
overhead and fringe benefits.
---------------------------------------------------------------------------
\55\ U.S. Bureau of Labor Statistics, May 2016 National
Occupational Employment and Wage Estimates (see https://www.bls.gov/oes/current/oes_nat.htm).
---------------------------------------------------------------------------
For the four functional outcome measures (NQF: #2633, #2634, #2635,
and #2636) that we are finalizing in this final rule, we note that
although some of the data elements needed to calculate these measures
are currently included on the MDS, other data elements need to be added
to the MDS. As a result, we estimate that reporting these measures will
require an additional 9 minutes of nursing and therapy staff time to
report data on admission and 5.5 minutes of nursing and therapy time to
report data on discharge, for a total of 14.5 additional minutes per
stay. We estimate that the additional MDS items we are finalizing will
be completed by Registered Nurses for approximately 7 percent of the
time. Occupational Therapists (BLS Occupation Code: 29-1122) at $80.50/
hr including overhead and fringe benefits for approximately 41 percent
of the time, and Physical Therapists (BLS Occupation Code: 29-1123) at
$83.86/hr including overhead and fringe benefits for approximately 52
percent of the time. Individual providers determine the staffing
resources necessary. With 2,886,336 discharges from 15,447 SNFs
annually, we estimate that the reporting of the four functional outcome
measures would impose on SNFs an additional burden of 697,531 total
hours (2,886,336 discharges x 14.5 min/60) or 45.16 hours per SNF
(697,531 hr/15,447 SNFs). Of the 14.5 minutes per stay, 1 minute of
that time is for a Registered Nurse, 3.5 minutes is for an Occupational
Therapist, and 4.5 minutes is for a Physical Therapist for a total of 9
minutes are required for admission. For discharge, 2.5 minutes are for
an Occupational Therapist, and 3 minutes for a Physical Therapist for a
total of 5.5 minutes. For one stay we estimate a cost of $19.69 or, in
aggregate, an annual cost of $56,829,551. Per SNF, we estimate an
annual cost of $3,679. A summary of these estimates is provided in
Table 25.
We are not finalizing our proposal to adopt 1 new standardized
resident assessment data elements with respect to SNF admissions and 11
new standardized resident assessment data elements with respect to SNF
discharges. This results in a reduction to the burden that we estimated
in the proposed rule. We refer readers to the proposed rule (82 FR
21091 through 21092) for a discussion of our burden estimates for these
proposals. Our updated estimate is provided in Table 25 (Revised
Calculation of Burden), and results in a final estimated burden for the
SNF QRP of $28,452,058.
Table 25--Revised Calculation of Burden
--------------------------------------------------------------------------------------------------------------------------------------------------------
Aggregate Aggregate
QRP QM Data elements Minutes annual hours Hours per SNF Dollars per annual cost Annual cost
all SNFs annually stay all SNFs per SNF
--------------------------------------------------------------------------------------------------------------------------------------------------------
Functional Outcome Measures............. 18 14.5 697,531 45.16 $ 19.69 $ 56,829,551 $ 3,679
Changes in Skin Integrity............... (12) (8.5) (408,898) (26.47) (9.83) (28,377,493) (1,837)
---------------------------------------------------------------------------------------------------------------
Total............................... 6 6 288,633 18.69 9.86 28,452,058 1,842
--------------------------------------------------------------------------------------------------------------------------------------------------------
[[Page 36628]]
We received the following public comments on our collection of
information estimates.
Comment: A few commenters expressed concern about the
administrative burden imposed by the SNF QRP, specifically referring to
the volume and the pace of data collection that is required by the
implementation of the SNF QRP.
Response: We appreciate the commenters' concerns regarding burden
due to changes to the SNF QRP as a result of the fulfillment of the
requirements of the IMPACT Act. We appreciate the importance of
avoiding undue burden on providers and will continue to evaluate and
avoid any unnecessary burden associated with the implementation of the
SNF QRP. We will continue to work with stakeholders to explore ways to
minimize and decrease burden as our mutual goal is to focus on
improving patient care. Finally, in response to stakeholders' concerns
regarding burden, we have decided not to finalize a number of the
proposed standardized resident assessment data elements. This results
in a reduction to the burden estimate that appeared in the proposed
rule.
V. Economic Analyses
A. Regulatory Impact Analysis
1. Introduction
We have examined the impacts of this final 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), the Congressional Review Act (5 U.S.C. 804(2)), and Executive
Order 13771 on Reducing Regulation and Controlling Regulatory Costs
(January 30, 2017). 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.
Executive Order 13771, titled Reducing Regulation and Controlling
Regulatory Costs, was issued on January 30, 2017. This final rule is
considered an EO 13771 regulatory action. Details on the estimated
costs of this rule can be found in the preceding and subsequent
analyses.
2. Statement of Need
This final rule updates the FY 2017 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 on these issues.
3. Overall Impacts
This final rule sets forth updates of the SNF PPS rates contained
in the SNF PPS final rule for FY 2017 (81 FR 51970). Based on the
above, we estimate that the aggregate impact is an increase of $370
million in payments to SNFs in FY 2018, resulting from the SNF market
basket update to the payment rates, as required by section
1888(e)(5)(B)(iii) of the Act. We would note that this estimate is
different from the estimated impact of $390 million provided in the FY
2018 SNF PPS proposed rule (82 FR 21016, 21093), as we relied on an
updated SNF baseline spending figure for the final rule which reflect
baseline spending from the FY 2018 President's budget, as opposed to
that used in the proposed rule which was based on the Mid-session
review of the FY 2017 President's budget.
We would note that 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 events that may occur
within the assessed impact time period.
In accordance with sections 1888(e)(4)(E) and 1888(e)(5) of the
Act, if not for the enactment of section 411(a) of MACRA (as discussed
in section III.B.2. of this final rule), we would update the FY 2017
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 2018. As discussed previously, section 1888(e)(5)(B)(iii) of the
Act establishes a special rule for FY 2018 requiring the market basket
percentage used to update the federal SNF PPS rates to be equal to 1.0
percent. The impact to Medicare is included in the total column of
Table 25. In updating the SNF PPS rates for FY 2018, we made a number
of standard annual revisions and clarifications mentioned elsewhere in
this final 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 final rule applies to SNF PPS
payments in FY 2018. Accordingly, the analysis of the impact of the
annual update that follows only describes the impact of this single
year. Furthermore, in accordance with the requirements of the Act, we
will publish a rule or notice for each subsequent FY that will provide
for an update to the payment rates and include an associated impact
analysis.
We estimate the impact for the SNF QRP based on 15,447 SNFs in FY
2016 which had a total of 2,886,336 Medicare covered discharges for
Medicare fee for service beneficiaries. This would equate to 288,633
total added hours or 18.69 hours per SNF annually. We anticipate that
the additional MDS items we finalized will be completed by Registered
Nurses (RN), Occupational Therapists (OT), and/or Physical Therapists
(PT), depending on the item. Individual providers determine the
staffing resources necessary. We obtained mean hourly wages for these
staff from the U.S. Bureau of Labor Statistics' May 2016 National
Occupational Employment and Wage Estimates (https://www.bls.gov/oes/current/oes_nat.htm), and to account for overhead and fringe benefits,
we have doubled the mean hourly wage.
Estimated impacts for the SNF QRP are based on analysis discussed
in section III.D.2. of this final rule. For the 8.5 minute reduction in
burden associated with the new pressure ulcer measure and the removal
of duplicative pressure ulcer data elements and data elements no longer
being used, and the additional 14.5 additional minutes of burden for
the functional outcome measures, the overall cost associated with
finalized changes to the SNF QRP is $28,452,058.
4. Detailed Economic Analysis
The FY 2018 SNF PPS payment impacts appear in Table 26. Using the
most recently available data, in this case FY 2016, we apply the
current FY 2017
[[Page 36629]]
wage index and labor-related share value to the number of payment days
to simulate FY 2017 payments. Then, using the same FY 2016 data, we
apply the FY 2018 wage index and labor-related share value to simulate
FY 2018 payments. We tabulate the resulting payments according to the
classifications in Table 26 (for example, facility type, geographic
region, facility ownership), and compare the simulated FY 2017 payments
to the simulated FY 2018 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 6 rows show the
effects on facilities split by hospital-based, freestanding, urban, and
rural categories. The next 19 rows show the effects on facilities by
urban versus rural status by census region. The last 3 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 2018 payments. The update of 1.0 percent is constant for all
providers and, though not shown individually, is included in the total
column. It is projected that aggregate payments will increase by 1.0
percent, assuming facilities do not change their care delivery and
billing practices in response.
As illustrated in Table 26, the combined effects of all of the
changes vary by specific types of providers and by location. For
example, due to changes finalized in this rule, providers in the urban
Pacific region could experience a 1.5 percent increase in FY 2018 total
payments.
Table 26--Projected Impact to the SNF PPS for FY 2018
----------------------------------------------------------------------------------------------------------------
Number of
facilities FY Update wage Total change
2018 data (%) (%)
----------------------------------------------------------------------------------------------------------------
Group:
Total....................................................... 15,468 0.0 1.0
Urban....................................................... 11,008 0.1 1.1
Rural....................................................... 4,460 -0.6 0.4
Hospital-based urban........................................ 518 0.2 1.2
Freestanding urban.......................................... 10,490 0.1 1.1
Hospital-based rural........................................ 577 -0.7 0.3
Freestanding rural.......................................... 3,883 -0.6 0.4
Urban by region:
New England................................................. 791 0.2 1.2
Middle Atlantic............................................. 1,487 0.4 1.4
South Atlantic.............................................. 1,867 -0.2 0.8
East North Central.......................................... 2,121 0.0 1.0
East South Central.......................................... 551 -0.6 0.4
West North Central.......................................... 919 0.7 1.7
West South Central.......................................... 1,339 0.1 1.1
Mountain.................................................... 511 -0.2 0.8
Pacific..................................................... 1,417 0.5 1.5
Outlying.................................................... 5 -2.0 -1.0
Rural by region:
New England................................................. 137 1.4 2.5
Middle Atlantic............................................. 215 -0.5 0.5
South Atlantic.............................................. 502 -0.7 0.3
East North Central.......................................... 937 -1.1 -0.1
East South Central.......................................... 528 -0.9 0.1
West North Central.......................................... 1,076 -0.4 0.6
West South Central.......................................... 738 -0.6 0.4
Mountain.................................................... 228 -0.3 0.7
Pacific..................................................... 99 0.1 1.1
Ownership:
Profit...................................................... 1,045 -0.3 0.7
Non-profit.................................................. 10,822 0.0 1.0
Government.................................................. 3,601 0.0 1.0
----------------------------------------------------------------------------------------------------------------
Note: The Total column includes the 1.0 percent market basket increase required by section 1888(e)(5)(B)(iii) of
the Act. Additionally, we found no SNFs in rural outlying areas.
5. Estimated Impacts for the SNF QRP
We estimate the impact for the SNF QRP based on 15,447 SNFs in FY
2016 which had a total of 2,886,336 Medicare covered discharges for
Medicare fee for service beneficiaries. This would equate to 288,633
total added hours or 18.69 hours per SNF annually. We anticipate that
the additional MDS items we finalized will be completed by Registered
Nurses (RN), Occupational Therapists (OT), and/or Physical Therapists
(PT), depending on the item. Individual providers determine the
staffing resources necessary. We obtained mean hourly wages for these
staff from the U.S. Bureau of Labor Statistics' May 2016 National
Occupational Employment and Wage Estimates (https://www.bls.gov/oes/current/oes_nat.htm), and to account for overhead and fringe benefits,
we have doubled the mean hourly wage.
[[Page 36630]]
Estimated impacts for the SNF QRP are based on analysis discussed
in section III.D.2. of this final rule. For the 8.5 minute reduction in
burden associated with the new pressure ulcer measure and the removal
of duplicative pressure ulcer data elements and data elements no longer
being used, and the additional 14.5 additional minutes of burden for
the functional outcome measures, the overall cost associated with
finalized changes to the SNF QRP is $28,452,058.
Table 27--Revised Calculation of Cost Per Quality Measure
--------------------------------------------------------------------------------------------------------------------------------------------------------
Aggregate Aggregate
QRP QM Data elements Minutes annual hours Hours per SNF Dollars per annual cost Annual cost
all SNFs annually stay all SNFs per SNF
--------------------------------------------------------------------------------------------------------------------------------------------------------
Functional Outcome Measures............. 18 14.5 697,531 45.16 $19.69 $56,829,551 $3,679
Changes in Skin Integrity............... (12) (8.5) (408,898) (26.47) (9.83) (28,377,493) (1,837)
---------------------------------------------------------------------------------------------------------------
Total............................... 6 6 288,633 18.69 9.86 28,452,058 1,842
--------------------------------------------------------------------------------------------------------------------------------------------------------
6. Estimated Impacts for the SNF VBP Program
Estimated impacts of the FY 2019 SNF VBP Program are based on
historical data that appear in Table 28. We modeled SNFs' performance
under the Program using SNFRM data from CY 2013 as the baseline period
and CY 2015 as the performance period. Additionally, we modeled a
logistic exchange function with a payback percentage of 60 percent, as
discussed further in the preamble to this final rule.
As illustrated in Table 28, the effects of the SNF VBP Program vary
by specific types of providers and by location. For example, we
estimate that rural SNFs perform better on the SNFRM, on average,
compared to urban SNFs. Similarly, we estimate that non-profit SNFs
perform better on the SNFRM compared to for-profit SNFs, and that
government-owned SNFs perform better still. We also estimate that
smaller SNFs (measured by bed size) tend to perform better, on average,
compared to larger SNFs. (We note that the risk-standardized
readmission rates presented below are not inverted; that is, lower
rates represent better performance).
These differences in performance on the SNFRM result in differences
in value-based incentive payment percentages computed by the Program.
For example, we estimate that, at the proposed 60 percent payback
percentage, SNFs in urban areas would receive a 1.161 percent incentive
multiplier, on average, in FY 2019, while SNFs in rural areas would
receive a slightly higher incentive multiplier of 1.227 percent, on
average. Additionally, SNFs in the smallest 25 percent as measured by
bed size would receive an incentive multiplier of 1.203 percent, on
average, while SNFs in the 2nd quartile as measured by bed size would
receive an incentive multiplier of 1.166 percent, on average. We note
that the multipliers that we have listed in Table 27 are applied to
SNFs' adjusted Federal per diem rates after application of the 2
percent reduction to those rates required by statute.
Table 28--Estimated FY 2019 SNF VBP Program Impacts
--------------------------------------------------------------------------------------------------------------------------------------------------------
Mean
incentive Percent of
Category Criterion Number of RSRR (mean) multiplier proposed
facilities (60% payback) payback
(%)
--------------------------------------------------------------------------------------------------------------------------------------------------------
Group.......................................... Total.................................. 15,746 0.19061 1.218 100.0
Urban.................................. 11116 0.18790 1.161 83.5
Rural.................................. 4,630 0.18293 1.227 16.5
Urban by Region................................ Total.................................. 11,116
01=Boston.............................. 808 0.18734 1.165 5.978
02=New York............................ 922 0.18848 1.116 10.590
03=Philadelphia........................ 1,132 0.18611 1.307 10.295
04=Atlanta............................. 1,890 0.19291 1.025 12.443
05=Chicago............................. 2,330 0.18728 1.213 16.248
06=Dallas.............................. 1,379 0.19131 0.920 6.126
07=Kansas City......................... 666 0.18764 1.109 2.815
08=Denver.............................. 323 0.17831 1.644 2.879
09=San Francisco....................... 1,325 0.18518 1.174 12.107
10=Seattle............................. 341 0.17634 1.765 3.983
Rural by Region................................ Total.................................. 4,630
01=Boston.............................. 145 0.17458 1.648 1.009
02=New York............................ 94 0.17746 1.435 0.409
03=Philadelphia........................ 287 0.18145 1.231 1.431
04=Atlanta............................. 918 0.18633 1.011 3.363
05=Chicago............................. 1,127 0.18156 1.361 4.662
06=Dallas.............................. 814 0.18676 0.926 1.824
07=Kansas City......................... 801 0.18459 1.291 1.575
08=Denver.............................. 284 0.17596 1.570 0.883
09=San Francisco....................... 68 0.16620 1.650 0.706
10=Seattle............................. 92 0.17488 1.569 0.670
Ownership Type................................. Total.................................. 15,746
[[Page 36631]]
Government............................. 1,096 0.17844 1.240 4.601
Profit................................. 10,973 0.18864 1.113 71.137
Non-Profit............................. 3,677 0.18225 1.364 24.260
No. of Beds....................................
1st Quartile:.......................... 3,986 0.17935 1.203 13.393
2nd Quartile:.......................... 3,937 0.18646 1.166 19.738
3rd Quartile:.......................... 3,887 0.19009 1.148 26.388
4th Quartile:.......................... 3,938 0.19000 1.204 40.481
--------------------------------------------------------------------------------------------------------------------------------------------------------
7. Regulatory Review Costs
If regulations impose administrative costs on private entities,
such as the time needed to read and interpret this final rule, we
should estimate the cost associated with regulatory review. Due to the
uncertainty involved with accurately quantifying the number of entities
that will review the rule, we assume that the total number of unique
commenters on the published proposed rule will be the number of
reviewers of this final rule. We acknowledge that this assumption may
understate or overstate the costs of reviewing this final rule. It is
possible that not all commenters reviewed the proposed rule in detail,
and it is also possible that some reviewers chose not to comment on the
proposed rule. For these reasons we thought that the number of comments
received on the proposed rule would be a fair estimate of the number of
reviewers of this final rule.
We also recognize that different types of entities are in many
cases affected by mutually exclusive sections of this final rule, and
therefore for the purposes of our estimate we assume that each reviewer
reads approximately 50 percent of the rule.
Using the wage information from the BLS for medical and health
service managers (Code 11-9111), we estimate that the cost of reviewing
this rule is $105.16 per hour, including overhead and fringe benefits
(https://www.bls.gov/oes/current/oes_nat.htm) Assuming an average
reading speed, we estimate that it would take approximately 4 hours for
the staff to review half of this final rule. For each SNF that reviews
the rule, the estimated cost is $421 (4 hours x $105.16). Therefore, we
estimate that the total cost of reviewing this regulation is $103,987
($421 x 247 reviewers).
8. Alternatives Considered
As described in this section, we estimate that the aggregate impact
for FY 2018 under the SNF PPS is an increase of $370 million in
payments to SNFs, resulting from the SNF market basket update to the
payment rates, as required by section 1888(e)(5)(B)(iii) of the Act.
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 base payment rates under the SNF PPS, and does
not provide for the use of any alternative methodology. It specifies
that the base year cost data to be used for computing the SNF PPS
payment rates must be from FY 1995 (October 1, 1994, through September
30, 1995). In accordance with the statute, we also incorporated a
number of elements into the SNF PPS (for example, case-mix
classification methodology, a market basket index, a wage index, and
the urban and rural distinction used in the development or adjustment
of the federal rates). Further, section 1888(e)(4)(H) of the Act
specifically requires us to disseminate the payment rates for each new
FY through the Federal Register, and to do so before the August 1 that
precedes the start of the new FY; accordingly, we are not pursuing
alternatives for this process.
9. Accounting Statement
As required by OMB Circular A-4 (available online at https://obamawhitehouse.archives.gov/omb/circulars_a004_a-4/) in Table 29, we
have prepared an accounting statement showing the classification of the
expenditures associated with the provisions of this final rule for FY
2018. Table 29 provides our best estimate of the possible changes in
Medicare payments under the SNF PPS as a result of the policies in this
final rule, based on the data for 15,468 SNFs in our database and the
cost for the SNF QRP of implementing the IMPACT Act.
Table 29--Accounting Statement: Classification of Estimated
Expenditures, from the 2017 SNF PPS Fiscal Year to the 2018 SNF PPS
Fiscal Year
------------------------------------------------------------------------
Category Transfers
------------------------------------------------------------------------
Annualized Monetized Transfers............ $370 million.*
From Whom To Whom? Federal Government to SNF
Medicare Providers.
------------------------------------------------------------------------
FY 2018 Cost to Updating the Quality Reporting Program
------------------------------------------------------------------------
Cost for SNFs to Submit Data for the $29 million.
Quality Reporting Program**.
------------------------------------------------------------------------
* The net increase of $370 million in transfer payments is a result of
the market basket increase of $370 million.
** Costs associated with the submission of data for the quality
reporting program will occur in 2018 and likely continue in the future
years.
10. Conclusion
This final rule sets forth updates of the SNF PPS rates contained
in the SNF PPS final rule for FY 2017 (81 FR 51970). Based on the
above, we estimate the overall estimated payments for SNFs in FY 2018
are projected to increase by $370 million, or 1.0 percent, compared
with those in FY 2017. We estimate that in FY 2018 under RUG-IV, SNFs
in urban and rural areas will experience, on average, a 1.1 percent
increase and 0.4 percent increase, respectively, in estimated payments
compared with FY 2017. Providers in the rural New England region will
experience the largest estimated increase in payments of approximately
2.5 percent. Providers in the urban Outlying region will experience the
largest estimated decrease in payments of 1.0 percent.
Additionally, Sec. 488.314 regarding survey team composition
implements section 1819(g)(4) of the Act and provides that States may
maintain and
[[Page 36632]]
utilize a specialized team that need not include a registered nurse for
the investigation of complaints. Section 1919 of the Act contains the
same statutory language as applicable to nursing facilities (NFs). Part
488 was originally established under the authority of sections 1819 and
1919 of the Act, which were added by the Omnibus Budget Reconciliation
Act of 1987 (OBRA 87, Pub. L. 100-203, enacted on December 22, 1987)
and further amendments to OBRA 87 by subsequent 1988, 1989, and 1990
legislation.
Sections 4204(b) and 4214(d) of OBRA 87 pertain to SNFs and NFs,
respectively, and provide for a waiver of PRA requirements for the
regulations that implement the OBRA 87 requirements. The provisions of
OBRA 87 that exempt agency actions to collect information from states
or facilities relevant to survey and enforcement activities from the
PRA are not time-limited.
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 97 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/contracting/getting-started-contractor/make-sure-you-meet-sba-size-standards). In addition, approximately 23 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 final rule sets forth updates of the SNF PPS rates contained
in the SNF PPS final rule for FY 2017 (81 FR 51970). Based on the
above, we estimate that the aggregate impact for FY 2018 is an increase
of $370 million in payments to SNFs, resulting from the SNF market
basket update to the payment rates. While it is projected in Table 26
that most providers will 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 2018 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. In their March 2017 Report to Congress
(available at https://medpac.gov/docs/default-source/reports/mar17_medpac_ch8.pdf), MedPAC states that Medicare covers approximately
11 percent of total patient days in freestanding facilities and 21
percent of facility revenue (March 2017 MedPAC Report to Congress,
202). 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 26. As
indicated in Table 25, the effect on facilities is projected to be an
aggregate positive impact of 1.0 percent for FY 2018. 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 final rule will not
have a significant impact on a substantial number of small entities for
FY 2018.
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 604 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 final rule affects 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 will be
similar to the impact on SNF providers overall. Moreover, as noted in
previous SNF PPS final rules (most recently, the one for FY 2017 (81 FR
51970)), the category of small rural hospitals is included within the
analysis of the impact of this final rule on small entities in general.
As indicated in Table 25, the effect on facilities for FY 2018 is
projected to be an aggregate positive impact of 1.0 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 final rule does not have a significant impact on a substantial
number of small rural hospitals for FY 2018.
C. Unfunded Mandates Reform Act Analysis
Section 202 of the Unfunded Mandates Reform Act of 1995 also
requires that agencies assess anticipated costs and benefits before
issuing any rule whose mandates require spending in any 1 year of $100
million in 1995 dollars, updated annually for inflation. In 2017, that
threshold is approximately $148 million. This final rule will impose no
mandates on state, local, or tribal governments or on the private
sector.
D. Federalism Analysis
Executive Order 13132 establishes certain requirements that an
agency must meet when it issues a final rule that imposes substantial
direct requirement costs on state and local governments, preempts state
law, or otherwise has federalism implications. This final rule has no
substantial direct effect on state and local governments, preempt state
law, or otherwise have federalism implications.
E. Congressional Review Act
This 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
final rule was reviewed by the Office of Management and Budget.
List of Subjects
42 CFR Part 409
Health facilities, Medicare.
42 CFR Part 411
Diseases, Medicare, Reporting and recordkeeping requirements.
42 CFR Part 413
Health facilities, Diseases, Medicare, Reporting and recordkeeping
requirements.
42 CFR part 424
Emergency medical services, Health facilities, Health professions,
Medicare, Reporting and recordkeeping requirements.
[[Page 36633]]
42 CFR Part 488
Administrative practice and procedure, Health facilities, Medicare,
Reporting and recordkeeping requirements.
For the reasons set forth in the preamble, the Centers for Medicare
& Medicaid Services amends 42 CFR chapter IV as set forth below:
PART 409--HOSPITAL INSURANCE BENEFITS
0
1. The authority citation for part 409 continues to read as follows:
Authority: Secs. 1102 and 1871 of the Social Security Act (42
U.S.C. 1302 and 1395hh).
0
2. Section 409.30 is amended by revising the introductory text to read
as follows:
Sec. 409.30 Basic requirements.
Posthospital SNF care, including SNF-type care furnished in a
hospital or CAH that has a swing-bed approval, is covered only if the
beneficiary meets the requirements of this section and only for days
when he or she needs and receives care of the level described in Sec.
409.31. A beneficiary in an SNF is also considered to meet the level of
care requirements of Sec. 409.31 up to and including the assessment
reference date for the 5-day assessment prescribed in Sec. 413.343(b)
of this chapter, when correctly assigned one of the case-mix
classifiers that CMS designates for this purpose as representing the
required level of care. For the purposes of this section, the
assessment reference date is defined in accordance with Sec.
483.315(d) of this chapter, and must occur no later than the eighth day
of posthospital SNF care.
* * * * *
PART 411--EXCLUSIONS FROM MEDICARE AND LIMITATIONS ON MEDICARE
PAYMENT
0
3. The authority citation for part 411 continues to read as follows:
Authority: Secs. 1102, 1860D-1 through 1860D-42, 1871, and 1877
of the Social Security Act (42 U.S.C. 1302, 1395w-101 through 1395w-
152, 1395hh, and 1395nn).
0
4. Section 411.15 is amended by revising paragraph (p)(3)(iii) to read
as follows:
Sec. 411.15 Particular services excluded from coverage.
* * * * *
(p) * * *
(3) * * *
(iii) The beneficiary receives outpatient services from a Medicare-
participating hospital or CAH (but only for those services that CMS
designates as being beyond the general scope of SNF comprehensive care
plans, as required under Sec. 483.21(b) of this chapter); or
* * * * *
PART 413--PRINCIPLES OF REASONABLE COST REIMBURSEMENT; PAYMENT FOR
END-STAGE RENAL DISEASE SERVICES; PROSPECTIVELY DETERMINED PAYMENT
RATES FOR SKILLED NURSING FACILITIES; PAYMENT FOR ACUTE KIDNEY
INJURY DIALYSIS
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5. The authority citation for part 413 continues to read as follows:
Authority: 42 U.S.C. 1302; 42 U.S.C. 1395d(d); 42 U.S.C.
1395f(b); 42 U.S.C. 1395g; 42 U.S.C. 1395l(a), (i), and (n); 42
U.S.C. 1395x(v); 42 U.S.C. 1395hh; 42 U.S.C. 1395rr; 42 U.S.C.
1395tt; 42 U.S.C. 1395ww; sec. 124 of Public Law 106-113, 113 Stat.
1501A-332; sec. 3201 of Public Law 112-96, 126 Stat. 156; sec. 632
of Public Law 112-240, 126 Stat. 2354; sec. 217 of Public Law 113-
93, 129 Stat. 1040; sec. 204 of Public Law 113-295, 128 Stat. 4010;
and sec. 808 of Public Law 114-27, 129 Stat. 362.
0
6. The heading for part 413 is revised to read as set forth above.
0
7. Section 413.333 is amended by revising the definition of ``Resident
classification system'' to read as follows:
Sec. 413.333 Definitions.
* * * * *
Resident classification system means a system for classifying SNF
residents into mutually exclusive groups based on clinical, functional,
and resource-based criteria. For purposes of this subpart, this term
refers to the current version of the resident classification system, as
set forth in the annual publication of Federal prospective payment
rates described in Sec. 413.345.
* * * * *
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8. Section 413.337 is amended by adding paragraph (d)(4) to read as
follows:
Sec. 413.337 Methodology for calculating the prospective payment
rates.
* * * * *
(d) * * *
(4) Penalty for failure to report quality data. For fiscal year
2018 and subsequent fiscal years--
(i) In the case of a SNF that does not meet the requirements in
Sec. 413.360, for a fiscal year, the SNF market basket index
percentage change for the fiscal year (as specified in paragraph
(d)(1)(v) of this section, as modified by any applicable forecast error
adjustment under paragraph (d)(2) of this section, reduced by the MFP
adjustment specified in paragraph (d)(3) of this section, and as
specified for FY 2018 in section 1888(e)(5)(B)(iii) of the Act), is
further reduced by 2.0 percentage points.
(ii) The application of the 2.0 percentage point reduction
specified in paragraph (d)(4)(i) of this section to the SNF market
basket index percentage change may result in such percentage being less
than zero for a fiscal year, and may result in payment rates for that
fiscal year being less than such payment rates for the preceding fiscal
year.
(iii) Any 2.0 percentage point reduction applied pursuant to
paragraph (d)(4)(i) of this section will apply only to the fiscal year
involved and will not be taken into account in computing the payment
amount for a subsequent fiscal year.
* * * * *
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9. Section 413.338 is added to read as follows:
Sec. 413.338 Skilled nursing facility value-based purchasing.
(a) Definitions. As used in this section:
(1) Achievement threshold (or achievement performance standard)
means the 25th percentile of SNF performance on the SNF readmission
measure during the baseline period for a fiscal year.
(2) Adjusted Federal per diem rate means the payment made to SNFs
under the skilled nursing facility prospective payment system (as
described under section 1888(e)(4)(G) of the Act).
(3) Applicable percent means for FY 2019 and subsequent fiscal
years, 2.0 percent.
(4) Baseline period means the time period used to calculate the
achievement threshold, benchmark and improvement threshold that apply
for a fiscal year.
(5) Benchmark means, for a fiscal year, the arithmetic mean of the
top decile of SNF performance on the SNF readmission measure during the
baseline period for that fiscal year.
(6) Logistic exchange function means the function used to translate
a SNF's performance score on the SNF readmission measure into a value-
based incentive payment percentage.
(7) Improvement threshold (or improvement performance standard)
means an individual SNF's performance on the SNF readmission measure
during the applicable baseline period.
(8) Performance period means the time period during which
performance on the SNF readmission measure is calculated for a fiscal
year.
[[Page 36634]]
(9) Performance standards are the levels of performance that SNFs
must meet or exceed to earn points under the SNF VBP Program for a
fiscal year, and are announced no later than 60 days prior to the start
of the performance period that applies to the SNF readmission measure
for that fiscal year.
(10) Ranking means the ordering of SNFs based on each SNF's
performance score under the SNF VBP Program for a fiscal year.
(11) SNF readmission measure means, for a fiscal year, the all-
cause all-condition hospital readmission measure (SNFRM) or the all-
condition risk-adjusted potentially preventable hospital readmission
rate (SNFPPR) specified by CMS for application in the SNF Value-Based
Purchasing Program.
(12) Performance score means the numeric score ranging from 0 to
100 awarded to each SNF based on its performance under the SNF VBP
Program for a fiscal year.
(13) SNF Value-Based Purchasing (VBP) Program means the program
required under section 1888(h) of the Social Security Act.
(14) Value-based incentive payment amount is the portion of a SNF's
adjusted Federal per diem rate that is attributable to the SNF VBP
Program.
(15) Value-based incentive payment adjustment factor is the number
that will be multiplied by the adjusted Federal per diem rate for
services furnished by a SNF during a fiscal year, based on its
performance score for that fiscal year, and after such rate is reduced
by the applicable percent.
(b) Applicability of the SNF VBP Program. The SNF VBP Program
applies to SNFs, including facilities described in section
1888(e)(7)(B).
(c) Process for reducing the adjusted Federal per diem rate and
applying the value-based incentive payment adjustment factor under the
SNF VBP Program--(1) General. CMS will make value-based incentive
payments to each SNF based on its performance score for a fiscal year
under the SNF VBP Program under the requirements and conditions
specified in this paragraph.
(2) Value-based incentive payment amount--(i) Total amount
available for a fiscal year. The total amount available for value-based
incentive payments for a fiscal year is equal to 60 percent of the
total amount of the reduction to the adjusted SNF PPS payments for that
fiscal year, as estimated by CMS.
(ii) Calculation of the value-based incentive payment amount. The
value-based incentive payment amount is calculated by multiplying the
adjusted Federal per diem rate by the value- based incentive payment
adjustment factor, after the adjusted Federal per diem rate has been
reduced by the applicable percent.
(iii) Calculation of the value-based incentive payment adjustment
factor. The value-based incentive payment adjustment factor is
calculated by estimating Medicare spending under the skilled nursing
facility prospective payment system to estimate the total amount
available for value-based incentive payments, ordering SNFs by their
SNF performance scores, then assigning an adjustment factor value for
each performance score subject to the limitations set by the exchange
function.
(iv) Reporting of adjustment to SNF payments. CMS will inform each
SNF of the value-based incentive payment adjustment factor that will be
applied to its adjusted Federal per diem rate for services furnished
during a fiscal year at least 60 days prior to the start of that fiscal
year.
(d) Performance scoring under the SNF VBP Program. (1) CMS will
award points to SNFs based on their performance on the SNF readmission
measure applicable to a fiscal year during the performance period
applicable to that fiscal year as follows:
(i) CMS will award from 1 to 99 points for achievement to each SNF
whose performance meets or exceeds the achievement threshold but is
less than the benchmark.
(ii) CMS will award from 0 to 90 points for improvement to each SNF
whose performance exceeds the improvement threshold but is less than
the benchmark.
(iii) CMS will award 100 points to a SNF whose performance meets or
exceeds the benchmark.
(2) The highest of the SNF's achievement, improvement and benchmark
score will be the SNF's performance score for the fiscal year.
(e) Confidential feedback reports and public reporting. (1)
Beginning October 1, 2016, CMS will provide quarterly confidential
feedback reports to SNFs on their performance on the SNF readmission
measure. SNFs will have the opportunity to review and submit
corrections for this data by March 31st following the date that CMS
provides the reports. Any such correction requests must be accompanied
by appropriate evidence showing the basis for the correction.
(2) Beginning not later than 60 days prior to each fiscal year, CMS
will provide SNF performance score reports to SNFs on their performance
under the SNF VBP Program for a fiscal year. SNFs will have the
opportunity to review and submit corrections to their SNF performance
scores and ranking contained in these reports for 30 days following the
date that CMS provides the reports. Any such correction requests must
be accompanied by appropriate evidence showing the basis for the
correction.
(3) CMS will publicly report the information described in
paragraphs (e)(1) and (2) of this section on the Nursing Home Compare
Web site.
(f) Limitations on review. There is no administrative or judicial
review of the following:
(1) The methodology used to determine the value-based incentive
payment percentage and the amount of the value-based incentive payment
under section 1888(h)(5) of the Act.
(2) The determination of the amount of funding available for value-
based incentive payments under section 1888(h)(5)(C)(ii)(III) of the
Act and the payment reduction under section 1888(h)(6) of the Act.
(3) The establishment of the performance standards under section
1888(h)(3) of the Act and the performance period.
(4) The methodology developed under section 1888(h)(4) of the Act
that is used to calculate SNF performance scores and the calculation of
such scores.
(5) The ranking determinations under section 1888(h)(4)(B) of the
Act.
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10. Section 413.345 is revised to read as follows:
Sec. 413.345 Publication of Federal prospective payment rates.
CMS publishes information pertaining to each update of the Federal
payment rates in the Federal Register. This information includes the
standardized Federal rates, the resident classification system that
provides the basis for case-mix adjustment, and the factors to be
applied in making the area wage adjustment. This information is
published before May 1 for the fiscal year 1998 and before August 1 for
the fiscal years 1999 and after.
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11. Section 413.360 is added to subpart J to read as follows:
Sec. 413.360 Requirements under the Skilled Nursing Facility (SNF)
Quality Reporting Program (QRP).
(a) Participation start date. Beginning with the FY 2018 program
year, a SNF must begin reporting data in accordance with paragraph (b)
of this section 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, which designates the SNF as operating in the
Certification and Survey Provider Enhanced Reports (CASPER) system. For
purposes of this section, a program
[[Page 36635]]
year is the fiscal year in which the market basket percentage described
in Sec. 413.337(d) is reduced by two percentage points if the SNF does
not report data in accordance with paragraph (b) of this section.
(b) Data submission requirement. (1) Except as provided in
paragraph (c) of this section, and for a program year, SNFs must submit
to CMS data on measures specified under sections 1899B(c)(1) and
1899B(d)(1) of the Social Security Act and standardized resident
assessment data in accordance with section 1899B(b)(1) of the Social
Security Act, in the form and manner, and at a time, specified by CMS.
(2) CMS will consider a SNF to have complied with paragraph (b)(1)
of this section for a program year if the SNF reports: 100 percent of
the required data elements on at least 80 percent of the MDS
assessments submitted for that program year.
(c) Exception and extension requests. (1) A SNF may request and CMS
may grant exceptions or extensions to the reporting requirements under
paragraph (b) of this section for one or more quarters, when there are
certain extraordinary circumstances beyond the control of the SNF.
(2) A SNF may request an exception or extension within 90 days of
the date that the extraordinary circumstances occurred by sending an
email to SNFQRPReconsiderations@cms.hhs.gov that contains all of the
following information:
(i) SNF CMS Certification Number (CCN).
(ii) SNF Business Name.
(iii) SNF Business Address.
(iv) CEO or CEO-designated personnel contact information including
name, telephone number, title, email address, and mailing address. (The
address must be a physical address, not a post office box.)
(v) SNF's reason for requesting the exception or extension.
(vi) Evidence of the impact of extraordinary circumstances,
including, but not limited to, photographs, newspaper, and other media
articles.
(vii) Date when the SNF believes it will be able to again submit
SNF QRP data and a justification for the proposed date.
(3) Except as provided in paragraph (c)(4) of this section, CMS
will not consider an exception or extension request unless the SNF
requesting such exception or extension has complied fully with the
requirements in this paragraph (c).
(4) CMS may grant exceptions or extensions to SNFs without a
request if it determines that one or more of the following has
occurred:
(i) An extraordinary circumstance affects an entire region or
locale.
(ii) A systemic problem with one of CMS's data collection systems
directly affected the ability of a SNF to submit data in accordance
with paragraph (b) of this section.
(d) Reconsideration. (1) SNFs that do not meet the requirement in
paragraph (b) of this section for a program year will receive a letter
of non-compliance through the Quality Improvement and Evaluation System
Assessment Submission and Processing (QIES-ASAP) system, as well as
through the United States Postal Service. A SNF may request
reconsideration no later than 30 calendar days after the date
identified on the letter of non-compliance.
(2) Reconsideration requests must be submitted to CMS by sending an
email to SNFQRPReconsiderations@cms.hhs.gov containing all of the
following information:
(i) SNF CCN.
(ii) SNF Business Name.
(iii) SNF Business Address.
(iv) CEO or CEO-designated personnel contact information including
name, telephone number, title, email address, and mailing address. (The
address must be a physical address, not a post office box.)
(v) CMS identified reason(s) for non-compliance stated in the non-
compliance letter.
(vi) Reason(s) for requesting reconsideration, including all
supporting documentation.
(3) CMS will not consider a reconsideration request unless the SNF
has complied fully with the requirements in paragraph (d)(2) of this
section.
(4) CMS will make a decision on the request for reconsideration and
provide notice of the decision to the SNF through the QIES-ASAP system
and via letter sent through the United States Postal Service.
(e) Appeals. A SNF that is dissatisfied with CMS' decision on a
request for reconsideration may file an appeal with the Provider
Reimbursement Review Board (PRRB) under 42 CFR part 405, subpart R.
PART 424--CONDITIONS FOR MEDICARE PAYMENT
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12. The authority citation for part 424 continues to read as follows:
Authority: Secs. 1102 and 1871 of the Social Security Act (42
U.S.C. 1302 and 1395hh).
Sec. 424.20 [Amended]
0
13. In Sec. 424.20--
0
a. Amend paragraph (a)(1)(ii) by removing the phrase ``to one of the
Resource Utilization Groups designated'' and adding in its place the
phrase ``one of the case-mix classifiers that CMS designates''; and
0
b. Amend paragraph (e)(2)(ii)(B)(2) by removing the reference ``Sec.
483.40(e)'' and adding in its place the reference ``Sec. 483.30(e)''.
PART 488--SURVEY, CERTIFICATION, AND ENFORCEMENT PROCEDURES
0
14. The authority citation for part 488 continues to read as follows:
Authority: Secs. 1102, 1128l, 1864, 1865, 1871 and 1875 of the
Social Security Act, unless otherwise noted (42 U.S.C 1302, 1320a-
7j, 1395aa, 1395bb, 1395hh) and 1395ll.
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15. Section 488.30(a) is amended by revising the definition of
``Complaint surveys'' to read as follows:
Sec. 488.30 Revisit user fee for revisit surveys.
(a) * * *
Complaint surveys means those surveys conducted on the basis of a
substantial allegation of noncompliance, as defined in Sec. 488.1. The
requirements of sections 1819(g)(4) and 1919(g)(4) of the Social
Security Act and Sec. 488.332 apply to complaint surveys.
* * * * *
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16. Section 488.301 is amended by revising the definition of
``Abbreviated standard survey'' to read as follows:
Sec. 488.301 Definitions.
* * * * *
Abbreviated standard survey means a survey other than a standard
survey that gathers information primarily through resident-centered
techniques on facility compliance with the requirements for
participation. An abbreviated standard survey may be premised on
complaints received; a change of ownership, management, or director of
nursing; or other indicators of specific concern. Abbreviated standard
surveys conducted to investigate a complaint or to conduct on-site
monitoring to verify compliance with participation requirements are
subject to the requirements of Sec. 488.332. Other premises for
abbreviated standard surveys would follow the requirements of Sec.
488.314.
* * * * *
0
17. In Sec. 488.308--
0
a. Redesignate paragraphs (e)(2) and (3) as paragraphs (f)(1) and (2);
0
b. Reserve paragraph (e)(2);
[[Page 36636]]
0
c. Add a paragraph heading for new paragraph (f); and
0
d. Revise newly redesignated paragraph (f)(1) introductory text.
The addition and revision read as follows:
Sec. 488.308 Survey frequency.
* * * * *
(e) * * *
(2) [Reserved]
* * * * *
(f) Investigation of complaints. (1) The survey agency must review
all complaint allegations and conduct a standard or an abbreviated
survey to investigate complaints of violations of requirements by SNFs
and NFs if its review of the allegation concludes that--
* * * * *
0
18. Section 488.314 is amended by revising paragraph (a)(1) to read as
follows:
Sec. 488.314 Survey teams.
(a) * * *
(1) Surveys under sections 1819(g)(2) and 1919(g)(2) of the Social
Security Act must be conducted by an interdisciplinary team of
professionals, which must include a registered nurse.
* * * * *
Dated: July 26, 2017.
Seema Verma,
Administrator, Centers for Medicare & Medicaid Services.
Dated: July 27, 2017.
Thomas E. Price,
Secretary, Department of Health and Human Services.
[FR Doc. 2017-16256 Filed 7-31-17; 4:15 pm]
BILLING CODE 4120-01-P