FY 2018 Inpatient Rehabilitation Facilities, Skilled Nursing Facilities Final Rules Released

August 2017 ~

On July 31, CMS released final rules to update the Medicare fee-for-service prospective payment systems for inpatient rehabilitation facilities (IRFs) and skilled nursing facilities (SNFs) for fiscal year (FY) 2018. According to CMS, the final rules are effective for fiscal year (FY) 2018 and reflect a broader Administration strategy to streamline administrative requirements for providers; support the patient-doctor relationship in healthcare; and promote transparency, flexibility, and innovation in the delivery of care.

The 2018 Skilled Nursing Facility (SNF) Prospective Payment System

The SNF final rule increases Medicare payment rates by 1.0% for FY 2018, as statutorily-required by section 411(a) of the Medicare Access and CHIP Reauthorization Act of 2015 (MACRA), which is an aggregate impact of $370 million from payments in FY 2017. The rule revises and rebases the SNF market basket index by updating the base year data from FY 2010 to 2014 and by adding a new cost category for Installation, Maintenance, and Repair Services.

The rule also finalizes updates to the SNF Quality Reporting Program, including replacing the pressure ulcer measure with an updated version, adopting new functional status measures and publicly displaying new measures. In addition, it finalizes policies for the SNF Value-Based Purchasing Program for FY 2019, the first year this program will impact Medicare payments and the requirements regarding the composition of professionals for the survey team.

The 2018 Inpatient Rehabilitation Facility (IRF) Prospective Payment System

The IRF Final Rule updates payment rates for FY 2018 using the most recent available data. The updated IRF prospective payment system payments for FY 2018 reflect a 1.0% increase factor, in accordance with section 411(b) of the Medicare Access and CHIP Reauthorization Act of 2015 (MACRA). An additional 0.1% decrease to aggregate payments due to updating the outlier threshold results in an overall update for FY 2018 of 0.9% (or $75 million) relative to payments in FY 2017. CMS also finalized the removal of the 25% payment penalty in order to remove an unnecessary burden on IRFs. Following public comments, CMS finalized the replacement of the current pressure ulcer measure with an updated version of that measure, the removal of the All-Cause Unplanned Readmission Measure for 30 Days Post-Discharge from IRFs, and the public display of six additional quality measures.

Under the IRF final rule, CMS refined the ICD-10-CM diagnostic code lists used to determine a facility’s presumptive compliance with the 60% rule. This rule requires that at least 60% of patients be treated for certain conditions in order for the facility to be paid as an IRF. For FY 2018, CMS finalized its proposal that certain ICD-10-CM diagnosis codes for patients with traumatic brain injury and hip fracture conditions be included in the conditions counting toward the 60% parameter. It also finalized the revised presumptive methodology list for major multiple traumas by counting IRF cases that contain two or more of the ICD-10-CM codes from three major multiple trauma lists in the specified combinations. CMS did not finalize the removal of any codes from the presumptive methodology at this time and will continue to evaluate.

The 2018 Hospice Update

CMS also released the hospice updates for FY 2018 Medicare payment rates and the wage index for hospices serving Medicare beneficiaries and hospice quality reporting requirements. The final hospice payment and hospice quality reporting requirements rule reflects the ongoing efforts of CMS to support beneficiary access to hospice care and includes measures that are burden neutral and improve care quality and outcomes for patients. The Medicare payments update to hospices is statutorily-mandated by section 411(d) of the MACRA to be 1.0% ($180 million) for FY 2018.

All three final rules will take effect October 1, 2017.

For full details, refer to the links below:

FY 2018 Skilled Nursing Facility Prospective Payment System final rule (CMS-1679-F) fact sheet;

FY 2018 Inpatient Rehabilitation Facility Prospective Payment System Final Rule (CMS-1671-F) fact sheet; and

View the text of the final rules on the Federal Register.


Source(s): Health Industry Washington Watch; CMS Press Release; CMS Fact Sheet; Federal RegisterAmerican Association of Post-Acute Care Nursing (AAPACN); American Speech-Language-Hearing Association; Health Industry Washington Watch; Applied Policy; American Hospital Association;