Medicare 2020 Skilled Nursing Facility PPS Final Rule

The Centers for Medicare & Medicaid Services (CMS) has issued the federal fiscal year (FFY) 2020 final rule for the skilled nursing facility prospective payment system (SNFPPS). 

Highlights of the final rule include:

Payment Impact

CMS projects aggregate payments to SNFs will increase by $851 million, or 2.4 percent, for FY 2020 compared to FY 2019. This estimated increase is attributable to a 2.8 percent market basket increase factor with a 0.4 percentage point reduction for the multifactor productivity adjustment.  See the Fiscal Year 2020 Payment and Policy Changes for Medicare Skilled Nursing Facilities (CMS-1718-F)

Patient Driven Payment Model Implementation

CMS’ Patient Driven Payment Model (PDPM) will be effective October 1, 2019, under the SNF Prospective Payment System (PPS) for classifying patients in a covered Medicare Part A SNF stay. The PDPM utilizes ICD-10 codes to classify SNF patients into certain payment groups. Each year, the ICD-10 codes and guidelines are revised in a variety of non-substantive ways, such as a single code being split into two more specific codes. To help ensure SNFs have the most up-to-date ICD-10 code information as soon as possible, in the clearest and most useful format, CMS is finalizing a sub-regulatory process for making non-substantive changes to the list of ICD-10 codes used to classify patients into clinical categories under the PDPM. This sub-regulatory process aligns with similar policies in the SNF PPS and the Inpatient Rehabilitation Facility (IRF) PPS. The SNF PPS already uses a sub-regulatory process to make non-substantive updates to the list of Healthcare Common Procedure Coding System (HCPCS) codes that are subject to consolidated billing. In addition, the IRF PPS uses a similar sub-regulatory updating process for the IRF tier comorbidities list and for updating the ICD-10 code lists used for the IRF presumptive compliance methodology. ee the Fiscal Year 2020 Payment and Policy Changes for Medicare Skilled Nursing Facilities (CMS-1718-F)

Align SNF PPS Group Therapy Definitions with Other Post Acute Care (PAC) Settings


Various PAC settings permit therapists to furnish therapy to their patients in three different modes: individual, concurrent, and group. Under the current SNF PPS, group therapy is defined as consisting of exactly four patients. Other payment systems, such as the Inpatient Rehabilitation Facility Prospective Payment System (IRF PPS), define group therapy as including as few as two patients. For more consistent therapy definitions across care settings, CMS is adopting the same definition of group therapy that is used in the IRF PPS: group therapy consists of two to six patients doing the same or similar activities. As PDPM implementation takes place, CMS believes aligning the group therapy definition serves to improve the agency’s consistency in payment policies across PAC settings.

Standardized Patient Assessment Data Elements (SPADEs)

CMS finalizes several proposals relating to the SNF Quality Reporting Program (QRP), including the addition of several standardized patient assessment data elements, several of which address social determinants of health. CMS also finalizes two new measures addressing “Transfer of Health Information,” as well as a change to the existing “Discharge to Community” measure to exclude baseline nursing home residents. In response to comments, CMS is not finalizing its proposal to collect SNF QRP data on all patients, regardless of payer source.  See Proposed Specifications for IRF QRP Quality Measures and Standardized Patient Assessment Data Elements (SPADEs)

Value-Based Purchasing

The SNF VBP Program rewards skilled nursing facilities (SNFs) with incentive payments based on the quality of care they provide to Medicare beneficiaries, as measured by a hospital readmissions measure.

Section 215 of the Protecting Access to Medicare Act of 2014 (PAMA) added sections 1888(g) and (h) to the Social Security Act, which required the Secretary to establish a SNF VBP Program.

PAMA specifies that under the SNF VBP Program, SNFs:

  • Are evaluated by their performance on a hospital readmission measure;
  • Are scored on both improvement and achievement;
  • Receive quarterly confidential feedback reports containing information about their performance; and
  • Earn incentive payments based on their performance.

See The Skilled Nursing Facility Value-Based Purchasing (SNF VBP) Program

Related Topics

Skilled Nursing Billing and Quality Reporting in 2020

Medical Billing Expert Witness

Medicare Fraud Expert Witness

Michael F. Arrigo

Michael Arrigo brings four decades of experience in the software, financial services, and healthcare industries. In 2000, Mr. Arrigo founded No World Borders, a healthcare data, regulations, and economics firm with clients in the pharmaceutical, medical device, hospital, surgical center, physician group, diagnostic imaging, genetic testing, health IT, and health insurance markets. His expertise spans the federal health programs Medicare and Medicaid and private insurance. He advises Medicare Advantage Organizations who provide health insurance under Part C of the Medicare Act. Mr. Arrigo serves as an expert witness regarding medical coding and medical billing, fraud damages, as well as electronic health record software for the U.S. Department of Justice. He has valued well over $1 billion in medical billings in personal injury liens, medical malpractice, insurance fraud cases. The U.S. Court of Appeals considered Mr. Arrigo's opinion regarding loss amounts, vacating, and remanding sentencing in a fraud case. Mr. Arrigo provides expertise in the Medicare Secondary Payer Act, Medicare LCDs, anti-trust litigation, medical intellectual property and trade secrets, HIPAA privacy, health care electronic claim data Standards, physician compensation, Anti-Kickback Statute, Stark law, the Affordable Care Act, False Claims Act, and the ARRA HITECH Act. Arrigo advises investors on merger and acquisition (M&A) diligence in the healthcare industry on transactions cumulatively valued at over $1 billion. Mr. Arrigo spent over ten years in Silicon Valley software firms in roles from Product Manager to CEO. He was product manager for a leading-edge database technology joint venture that became commercialized as Microsoft SQL Server, Vice President of Marketing for a software company when it grew from under $2 million in revenue to a $50 million acquisition by a company now merged into Cincom Systems, hired by private equity investors to serve as Vice President of Marketing for a secure email software company until its acquisition and multi $million investor exit by a company now merged into Axway Software SA (Euronext: AXW.PA), and CEO of one of the first cloud-based billing software companies, licensing its technology to Citrix Systems (NASDAQ: CTXS). Later, before entering the healthcare industry, he joined Fortune 500 company Fidelity National Financial (NYSE: FNF) as a Vice President, overseeing eCommerce solutions for the mortgage banking industry. While serving as a Vice President at Fortune 500 company First American Financial (NYSE: FAF), he oversaw eCommerce and regulatory compliance technology initiatives for top ten mortgage banks and led the Sarbanes Oxley Act Section 302 internal controls IT audit for the company, supporting Section 404 of the Sarbanes Oxley Act. Mr. Arrigo earned his Bachelor of Science in Business Administration from the University of Southern California. Before that, he studied computer science, statistics, and economics at the University of California, Irvine. His post-graduate studies include biomedical ethics at Harvard Medical School, biomedical informatics at Stanford Medical School, blockchain and crypto economics at the Massachusetts Institute of Technology, and training as a Certified Professional Medical Auditor (CPMA). Mr. Arrigo is qualified to serve as a director due to his experience in healthcare data, regulations, and economics, his leadership roles in software and financial services public companies, and his healthcare M&A diligence and public company regulatory experience. Mr. Arrigo is quoted in The Wall Street Journal, Fortune Magazine, Kaiser Health News, Consumer Affairs, National Public Radio (NPR), NBC News Houston, USA Today / Milwaukee Journal Sentinel, Medical Economics, Capitol ForumThe Daily Beast, the Lund Report, Inside Higher Ed, New England Psychologist, and other press and media outlets. He authored a peer-reviewed article regarding clinical documentation quality to support accurate medical coding, billing, and good patient care, published by Healthcare Financial Management Association (HFMA) and is published in Healthcare IT News.

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