Medicare 2023 SNF Proposed Rule Includes Payment Reduction Through a “Parity Adjustment”

April 13, 2022

The Centers for Medicare & Medicaid Services (CMS) released the 2023 Medicare Proposed Rule for Skilled Nursing Facilities (SNFs). Significant policy changes proposed for next year focus on payment rates, quality reporting, and the Patient Driven Payment Model (PDPM) code mapping.

ASHA will provide comments to CMS on the proposed rule during the official comment period, which ends on June 10, 2022. The proposal will be published in the Federal Register on April 15, 2022.

Payment Rates

CMS is proposing a mix of payment increases and decreases for fiscal year (FY) 2023, but the overall impact would reduce Medicare payments to SNFs by $320 million.

The proposed payment increases are outweighed by a negative 4.6% “parity adjustment”. This is due to an unintended 5% increase in payments Medicare made to the industry under the current PDPM compared with expenditures under the previous prospective payment system known as the Resource Utilization Groups model.

ASHA has noted that the funding surplus is likely due to SNF implementation of PDPM, which the industry responded with a dramatic reduction of therapy delivery and related staff layoffs. As a result, the increase in Medicare funding over expenses has driven CMS to issue the “parity adjustment”. ASHA continues to warn the industry that similar service delivery reductions, in response to the “parity adjustments”, will likely lead CMS to continue a vicious cycle of reductions until staffing and beneficiary access to medically necessary skilled therapy, including speech-language pathology, stabilizes or is increased.

Quality Reporting

The Skilled Nursing Facility Quality Reporting Program (SNF QRP) is a reporting program that requires facilities to report specific quality metrics to avoid a 2% payment reduction for non-compliance. For FY 2025, CMS proposes to add a measure to the SNF QRP related to Influenza Vaccination Status among Health Care Personnel designated as HC NQF #0431. ASHA will provide members with additional information about this proposal, if finalized by CMS.

Code Mapping

PDPM uses patient data and diagnosis codes to classify patients into different payment categories including specific reimbursement for speech-language pathology services and other skilled therapies. The rule proposes adjustments to the ICD-10 codes for primary conditions and comorbidities used to categorize patients into various PDPM payment components. ASHA will continue to analyze the proposed changes and provide comments to CMS. Updates will be posted on ASHA’s PDPM webpages, if finalized by CMS.

Background

Each year, CMS releases proposed rules for various service delivery settings. After publication of proposed rules, the agency seeks comments from interested stakeholders, such as ASHA and ASHA members, and considers that input before crafting and issuing a final rule. CMS releases the final rule for SNFs for the following fiscal year between June and September.

CMS noted the possibility of applying the now proposed parity adjustment in the 2022 proposed and final rules. ASHA, along with industry advocates urged CMS not to issue the adjustment because the impact could be a reduction of access to therapy services for Medicare beneficiaries in SNFs. ASHA’s official comments to CMS [PDF] in response to the 2022 proposed rule address this concern.

ASHA has met extensively with CMS staff as well as SNF industry leaders to address concerns with the way in which the industry has implemented PDPM and will continue to engage key stakeholders to improve Medicare beneficiary access to services as well as ASHA members’ employment opportunities and experiences in SNFs.

ASHA continues engaging with CMS regarding improvements to PDPM. Furthermore, ASHA is partnering with consumer advocacy organizations on an extensive campaign targeting CMS to improve coverage and access to speech-language pathology and other skilled therapy services in SNFs.