The Pulse

From 2012 through 2017, SNF occupancies fell from nearly 86% to less than 82%.  This drop is associated with a number of factors, including the influence of Medicare Managed Care contracts navigating shorter length of stay in SNF, the impact of bundled payment models trying to constrain spend by reducing the time spent in inpatient PAC settings, and the growth in beneficiaries electing to bypass SNF to receive PAC services through home health.  Overcoming these challenges to build census is comprised of two main components; attracting and providing superior quality outcomes to short-stay rehabilitation clients, and providing quality care and delivering an exceptional customer experience to maintain residential patients.

Starting in Fiscal Year 2019 (October 1, 2018), as mandated in the FY2018 SNF PPS Final Rule, Skilled Nursing Facility (SNF) providers will begin a new Quality Reporting Program (QRP) in which they will be assessed on their performance with four new functional outcome measures (change in self-care score, change in mobility score, discharge self-care score, and discharge mobility score).  In order to enable assessment of the functional outcome measures, CMS will be adding new Section GG items to the MDS on October 1, 2018.  Initially, the only financial penalty associated with these new measures will be a 2% withhold of Med A payments based on failure to report at an 80% threshold of Med A stays.  Beginning in FY 2020 (October 1 of 2019), facilities will be measured on their actual performance, with outcome incentives and penalties applied based on facility performance against established benchmarks for performance.  The data collected between 10/1/18 and 12/31/18 will be used to inform payment bonus/penalty starting 10/1/19 (FY20).  The data collection period will then move to a calendar year and the data from 1/1/19 to 12/31/19 will be used to inform payment starting 10/1/20 (FY21), and so on. 

Beginning October 1, 2018 (FY2019), SNFs will begin to face monetary incentives and penalties associated with hospital readmissions of Medicare beneficiaries, as a consequence of CMS’ SNF Value-Based Purchasing (VBP) Program. The SNF 30-Day All-Cause Readmission Measure will track all patients readmitted to the hospital within 30 days of being admitted to a SNF within 24 hours of a hospital discharge. If a readmission to the hospital occurs within 30 days of the SNF admission date, the readmission will count against the facility’s achievement and benchmark threshold to determine the financial penalty/incentive amount received. The VBP program mandates that CMS must reduce all SNF Medicare payments by two percentage points, then distribute incentive payments to all SNFs based on their quality performance, but not more than 60% of the total reduction. The best performing facilities will have the opportunity to earn back almost all of the 2% withhold, while the poorest performing facilities may earn back nothing.