Updated on: August 4, 2020

CMS Finalizes Payment Rules for IPFs, SNFs, Hospices 

Original story posted on: August 5, 2020

 Federal officials seek enhancements to the Medicare program through payment realignment.

The Centers for Medicare & Medicaid Services (CMS) has finalized Medicare rules adjusting payments for three types of providers: inpatient psychiatric facilities (IPFs), skilled nursing facilities (SNFs), and hospices.

First, the CMS final rule applying to IPFs issued last week update Medicare payment policies and rates for the IPF Prospective Payment System (PPS) for the 2021 fiscal year: specifically, this means a 2.2-percent payment rate update and the finalization of a proposal to adopt revised Office of Management and Budget (OMB) statistical area delineations, resulting in “wage index values being more representative of the actual costs of labor in a given area,” CMS said in a press release.

“CMS is finalizing updates to allow advanced practice providers, including physician assistants, nurse practitioners, psychologists, and clinical nurse specialists, to operate within the scope of practice allowed by state law by documenting progress notes in the medical record of patients, for whom they are responsible, receiving services in psychiatric hospitals,” the release read.

Second, the final rule applying to SNFs updates the Medicare payment rates and quality programs for such providers; these updates include routine technical rate-setting changes to the SNF PPS payment rates, as well as the adoption of the most recent OMB statistical area delineations. It also applies a 5-percent cap on wage index decreases from 2020 to 2021.

“CMS is also finalizing changes to the ICD-10 code mappings that would be effective beginning in FY 2021, in response to stakeholder feedback,” officials said. “CMS projects aggregate payments to SNFs will increase by $750 million, or 2.2 percent, for FY 2021 compared to FY 2020.”

Lastly, for 2021, hospice payment rates are being updated by the market basket percentage increase of 2.4 percent ($540 million); hospices that fail to meet quality reporting requirements receive a 2-percentage point reduction to the annual market basket percentage increase for the year.

The hospice payment system also includes a statutory aggregate cap limiting the overall payments made to a hospice annually. The final hospice cap amount for 2021 is $30,683.93, which is equal to the 2020 cap amount ($29,964.78), updated by the final 2021 hospice payment update percentage of 2.4 percent.

To review fact sheets on each final rule, go online to:

IPF PPS – https://www.cms.gov/newsroom/fact-sheets/fiscal-year-2021-final-medicare-payment-and-policy-changes-inpatient-psychiatric-facilities-cms-1731

SNF PPS – https://www.cms.gov/newsroom/fact-sheets/fiscal-year-2021-payment-and-policy-changes-medicare-skilled-nursing-facilities-cms-1737-f

Hospice PPS -- https://www.cms.gov/newsroom/fact-sheets/fiscal-year-2021-hospice-payment-rate-update-final-rule-cms-1733-f

Mark Spivey

Mark Spivey is a national correspondent for RACmonitor.com, ICD10monitor.com, and Auditor Monitor who has been writing and editing material about the federal oversight of American healthcare for more than a decade. He can be reached at mcspivey@hotmail.com.

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