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 is Managing Partner & CEO of No World Borders, a leading healthcare management and IT consulting firm. He serves as an expert witness in Federal and State Court and was recently ruled as an expert by a 9th Circuit Federal Judge. He serves as a patent expert witness on intellectual property disputes, both as a Technical Expert and a Damages expert. He leads a team that provides Cybersecurity best practices for healthcare clients, ICD-10 Consulting, Meaningful Use of Electronic Health Records. He advises legal teams as an expert witness in HIPAA Privacy and Security, medical coding and billing and usual and customary cost of care, the Affordable Care Act and benefits enrollment, white collar crime, False Claims Act, Anti-Kickback, Stark Law, Insurance Fraud, payor-provider disputes, and consults to venture capital and private equity firms on mHealth, Cloud Computing in Healthcare, and Software as a Service. He advises self-insured employers on cost of care and regulations. Arrigo was recently retained by the U.S. Department of Justice (DOJ) regarding a significant false claims act investigation. He has provided opinions on over $1 billion in health care claims and due diligence on over $8 billion in healthcare mergers and acquisitions. Education: UC Irvine - Economics and Computer Science, University of Southern California - Business, studies at Stanford Medical School - Biomedical Informatics, studies at Harvard Medical School - Bioethics. Trained in over 10 medical specialties in medical billing and coding. Trained by U.S. Patent and Trademark Office (USPTO) and PTAB Judges on patent statutes, rules and case law (as a non-attorney to better advise clients on Technical and Damages aspects of patent construction and claims). Mr. Arrigo has been quoted in the Wall Street Journal, New York Times, and National Public Radio.

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