Saltmarsh Siren: Skilled Nursing Facility (SNF) Final Rule for FY 2025

8/6/2024 - By Chris Biedal

Last week, CMS issued the final rule for the skilled nursing facility (SNF) prospective payment system (PPS) for the fiscal year 2025 update. Below are some of the key highlights of the final rule:

Reimbursement

An overall increase in Medicare Part A payments to SNFs of 4.2%, or approximately $1.4 billion. This includes a SNF market basket increase of 3.0%, a 1.7% forecast error adjustment, less a 0.5% productivity adjustment.
The total adjustment for SNFs that are subject to Value Based Purchasing (VBP) adjustments are estimated to be $196.5 million for FY 2025.
Wage index tables have been updated for FY 2025
Changes to the base rate components are shown below

Changes to the FY Base Rates from 2024 to 2025

Nursing Home Enforcement

Under the FY 2025 final rule, CMS is expanding its ability to impose civil monetary penalties (CMPs) for issues of noncompliance
Current rules limit CMPs to either a per-day (PD) or a per-instance (PI) penalty, depending on the survey deficiency identified
Under the final rule, CMS and state survey agencies have the ability to impose a per-day and a per-instance CMP, as well as additional per-instance CMPs when multiple occurrences of noncompliance have been identified during a survey
Total facility CMPs cannot exceed statutory and regulatory maximums on any given day
The enforcement updates go into effect October 5, 2024 and CMS will operationalize these requirements beginning March 3, 2025

Additional Updates

ICD-10 Code Mappings have been updated
SNF Quality Reporting Program (QRP) updates have been finalized which will include four new items and one modification to the MDS under the social determinants of health (SDOH)

Living situation
Food (two items)
Utilities
Modification of the transportation item

Beginning with the FY 2027 SNF QRP, SNFs will be required to participate in a validation process. Approximately 1,500 SNFs will be randomly selected to share a limited set of medical records for validation

If you have questions regarding the proposed changes, contact the Saltmarsh Healthcare Consulting team.

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About the Author | Chris Biedal

Chris is a senior in the Healthcare Consulting practice of Saltmarsh, Cleaveland & Gund. His primary areas of focus include cost reporting, support in Medicaid and Medicare bad debt audits, Proof of Financial Ability preparation, process improvement and data analysis. Prior to joining Saltmarsh, Chris worked as a staff accountant for a large skilled-nursing facility chain where he prepared annual Medicare and Medicaid cost reports and conducted financial analyses for multiple facilities.