April 3, 2024

Prospective Payment System Proposed Rule for FY25 Top 10 Things To Know SNF's

Kris B. Harmony, OTR/L, LNHA, MBA

Kris B. Harmony, OTR/L, LNHA, MBA

Prospective Payment System

Proposed Rule for FY25 Skilled Nursing Facility

The Centers for Medicare & Medicaid Services (CMS) has released the proposed rule for the Fiscal Year (FY) 2025 update of the Skilled Nursing Facility (SNF) Prospective Payment System (PPS). The proposed rule outlines various adjustments and updates affecting Medicare payments to SNFs.

1.)Market Basket and Adjustments Figures:

CMS has proposed a net FY25 market basket update of 4.1 percent. This update is calculated based on the unadjusted market basket index, forecast error adjustment, and productivity adjustment. The proposed update would result in an approximate $1.3 billion increase in Medicare SNF payments for FY 2025.

2.) SNF Value-Based Purchasing (VBP):

Reductions in SNF VBP payments for certain facilities subject to adjustments are estimated to total $196.5 million in FY 2025. Notably, there is no negative parity adjustment in FY25, as the phase-in concluded in FY24.

3.) Wage Index Updates:

CMS proposes to update SNF PPS wage indexes using Core-Based Statistical Areas (CBSAs) defined in OMB Bulletin 23-01. The 5% cap on decreases to a provider's wage index from the prior year continues in FY25.

4.) Administrative Updates: CMS proposes updates to the SNF market basket base year and payment rates, as well as changes to PDPM ICD-10 code mappings and a Request for Information (RFI) on potential future updates to the Non-Therapy Ancillary (NTA) component of PDPM.

5.) Nursing Home Enforcement:

Proposed changes include expanding penalties for noncompliance and allowing both per instance and per day Civil Money Penalties (CMPs) to be imposed.

SNF Quality Reporting Program (QRP):

CMS proposes adding new social determinants of health (SDOH) items, validating data submitted under the SNF QRP, and seeking feedback on future quality measure concepts.

6.) SNF Value-Based Purchasing (VBP):

Proposed policies include adopting a measure retention and removal policy and incorporating technical VBP measure updates.

7.) The proposed rule aims to Update Payment Rates.

8.) The proposed rule aims to Enhance Quality Reporting for SNFs in FY25.

9.) The proposed rule aims to Improve Enforcement for SNFs in FY25.

10.) The proposed rule aims to Refine Value-Based Purchasing Initiatives for SNFs in FY25.

Additional analysis and feedback may further inform these proposed changes as the rulemaking process progresses.




Kris B. Harmony OTR/L, LNHA, MBA
​President and CEO
KrisBHarmony, LLC

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