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FY 2023 Proposed Rule: How Will SNFs Weather the Impact?

CMS has always been clear about its intention for the PDPM reimbursement model to be “budget neutral,” so the 4.6% parity adjustment outlined in FY 2023 Proposed Rule comes as no surprise. For the second consecutive year, CMS is proposing a downward adjustment to SNFs’ Medicare A rates to offset ~5% increased spending created by the implementation of PDPM reimbursement in October 2019. Last year’s Proposed Rule (April 2021) outlined a 5% parity adjustment which was ultimately not included in the Final Rule for FY 2022.

Read on as our experts summarize FY 2023 Proposed Rule’s financial implications + offer guidance for our valued HealthPRO Heritage partners, as well as SNF providers, contracted with other therapy companies, too!

Overall Financial Impact
SNFs will see a range of .1% - 2.3% decrease in Medicare Part A payments, depending on geographic location, with an overall average .9% reduction. The reduction is based on the following:

  • The 4.6% downward parity adjustment in Medicare Part A rates
  • Higher than normal 3.9% market basket increase
  • Regional wage data adjustments (See page 238 of Proposed Rule here for your SNF’s regional impact)

Opportunity to Optimize Reimbursement
Codes for cohort residents related to isolation infection measures may be added. This change could be a massive win for SNFs if reimbursement remains unchanged and SNFs understand the full criteria and adjust coding processes.

SNF Staffing Challenges
Staffing challenges are addressed in several ways, including VBP measures based on turnover, staff influenza vaccine tracking, and a positive proposed 5% cap on annual wage index decreases.

SNFs Must Continue to Envision Everything! HealthPRO Heritage Experts Offer Strategy
Evaluate whether your Medicare Part A per diem rates are where they SHOULD or COULD be. After all, what got us here is not going to get us where we need to go!   In fact, most SNFs have struggled to optimize reimbursement opportunities since the October 2019 transition to PDPM, leaving revenue on the table primarily due to uncoordinated interdisciplinary team collaboration and a lack of systems and processes. Further refinement may be needed to capture all clinical services and characteristics. To this end, leverage HealthPRO Heritage’s technology, proven processes & workflow; laser-focused staff education; helpful tools & resources.

Additionally, SNFs should consider the benefits of support from HealthPRO Heritage beyond rehab services and inclusive of:

  1. PDPM Opportunity Audit / Analysis
    To answer the question, “What am I still leaving on the table?” 
  2. Strategy, Education & Support
    Whether you’re new to HealthPRO Heritage (and perhaps even partnered with another therapy company) or we’re already your therapy partner/provider…an opportunity exists for a truly win-win contract arrangement where HealthPRO Heritage delivers strategy, education, and support to drive optimal reimbursement. Please inquire RE: mutually-aligned contract terms that assure success!  
  3. “Beyond Rehab” Partnership
    Coding and proactive auditing support for the entire MDS with not just a focus on the rehab case-mix groups but also in the Nursing and NTA sections. We are frequently seeing missed opportunities in coding related to shortness of breath while lying flat and malnutrition, among others. Our Rehab team’s complete focus is on assessing in every area, including BIMs, for accurate cognition capture impact of the SLP case-mix as well as NTA items impacting reimbursement. Our Rehab Directors are armed with the tools and resources to fully support the IDT and drive the projection of the PDPM payment in clinical meetings. Save nursing teams precious time by leveraging our partnership.
  4. Return on Investment
    Proven out with regular quarterly reviews

Stay Informed & Engaged
In order to Envision Everything, we have provided links for the 2023 Proposed Rule and other impactful changes just over the horizon.

The FY 2023 Proposed Rule can be found here, The CMS Fact sheet can be found here, and NASL and NARA’s summary can be found here.  

In addition, CMS is soliciting comments on President Biden’s recommendations to increase the minimum staffing requirements in nursing homes. Be prepared and advocate by reviewing the details here.

Lastly, SNFs are encouraged to provide CMS with feedback by the June 10 deadline. HealthPRO Heritage experts intend to submit comments and will also provide our customers with a template to facilitate advocacy efforts. Let’s make our voices heard!

Contact HealthPRO Heritage Experts
Please contact our experts and request a meeting to learn more.