I recently spent a relaxing week’s vacation at the beach.  I’m not a, “sit on the beach and worship the sun” kind of guy.  I’m of Irish descent and, unfortunately, my fair skin is sun averse. I should buy stock in Banana Boat.

Nevertheless, the sound of the crashing surf is like a deep massage for the mind, watching the sun rise over the crest of the Earth, flying my seven-foot wingspan kite in the ocean breeze, and good low-country seafood are all things I really enjoy. 

I am also intrigued by the beachwear tourist shops that seem to draw the masses in for the T-shirt “bargains.”  The limitless beach trinkets that line the shelves, like shark teeth, never seem to go unsold. (By the way, what on earth does anyone need shark teeth for?)

Toothy rules

Anyway, that got me thinking about the recently released FY 2025 SNF PPS Final Rule. Shark teeth notwithstanding, this rule has some MDS teeth of its own and providers will do well to stay clear of its potential bite.

Not surprisingly, most of what CMS proposed in the April rule has been finalized. In the last two rulemaking cycles, CMS has spent most of its time addressing the Skilled Nursing Facility Quality Reporting Program (SNF QRP) and the Skilled Nursing Facility Value Based Purchasing program (SNF VBP).

In the FY 2025 final rule, CMS is adopting a similar validation process for the SNF QRP that CMS has adopted for the SNF VBP program in the FY 2024 SNF PPS final rule beginning with the FY 2027 SNF QRP. 

In this policy, CMS will require that a validation contractor select, on an annual basis, up to 1,500 SNFs that submit at least one MDS record in the fiscal year two years prior to the applicable FY SNF QRP.

SNFs that are selected to participate in the SNF QRP validation for a program year would be the same SNFs that are randomly selected to participate in the SNF VBP validation process for the corresponding SNF VBP program year.

CMS will require that the validation contractor request up to 10 medical records from each of the selected SNFs. The selected SNFs will be required to submit the medical records within 45 days of the date of the request (as documented on the request).

To decrease the burden for the selected SNF, the validation contractor will request that the SNFs submit the same medical records, at the same time, that are required from the same SNFs for purposes of the SNF VBP validation.

CMS has finalized that if a SNF does not submit the requested number of medical records within 45 days of the initial request, it would reduce the SNF’s otherwise applicable annual market basket percentage update by 2%, which would be applied to the payment update two fiscal years after the fiscal year for which the validation contractor requested records.

For example, if the validation contractor requested records for FY 2025, and the SNF did not submit them within 45 days of the initial request, it would reduce the SNF’s otherwise applicable annual market basket percentage update by two percentage points for the FY 2027 SNF QRP.

Bite-proof standards

With this rule, CMS added a third tooth that has the potential to affect the Annual Payment Update (APU) by 2%. Some criteria:

1. Reporting 100% of the MDS data necessary to calculate the SNF QRP quality measures and Standardized Patient Assessment Data Elements, on at least 90% of MDS assessments submitted to IQIES.

2. 100% of the data necessary for NHSN QRP measure vaccine reporting.

3. Responding to a SNF QRP Audit within 45 days of the initial request.

If any of these criteria is not met, the facility will lose 2% of the APU. 

Note that CMS also intends to finalize in future rulemaking the process by which it would evaluate the submitted medical records against the MDS to determine the accuracy of the MDS data that the SNF reported and that CMS used to calculate the measure results. Do I see a fourth tooth on the horizon?

Let’s talk teeth 

The FY 2025 final rule Market Basket update will increase SNF PPS rates by 4.2%. Non-compliance with the SNF QRP reporting requirements in CY 2023 would reduce that to 2.2%, and the validation rule has still to begin.

Furthermore, in addition to wage index adjustments, there are two additional adjustments that are made to a facility specific rate, Sequestration (2%), and Value Based Purchasing (2%). 

Getting bitten by these teeth can be painful. Even with a neutral wage index, it would be devastating to a facility’s bottom line if all three were fully applied to the FY 2025 rate.

Shark warnings

Providers need to pay attention to the fact that CMS has indicated that SNFs selected for a validation audit will be notified via a letter sent through the Internet Quality Improvement and Evaluation System (iQIES).

If the validation contractor has not received the medical records within 30 days of the date of the request, the validation contractor would send the SNF a reminder in writing to inform the SNF that it must submit the requested medical records within 45 days of the date of the initial request. 

CMS has also stated that it will notify SNFs that the medical records were received via a letter sent through iQIES or via email. 

In addition, CMS noted that it will issue notices of noncompliance to SNFs via a letter distributed through at least one of the following notification methods: the Non-Compliance Notification folders within the Internet Quality Improvement and Evaluation System (iQIES), the United States Postal Service (USPS); or via an e-mail from the SNF’s Medicare Administrative Contractor.

Remember this!

Reminder! Don’t get bitten by missing any of these notifications. Someone in your facility will need to be paying attention. IQIES is a relatively new platform for these types of notifications, and there are probably only a few in your facility who have access. The USPS is also notoriously inconsistent. 

Don’t forget to check the mail. FY 2027 will be here before you know it! Put a process in place now for compliance with this new requirement, something to remember that it’s coming, a warning if you will. 

Sometimes, I can be blind to the obvious. It’s a flaw of mine. I’m trying to improve, really I am.

Maybe those beachwear tourist shop shark teeth can be useful after all. The next time you’re at the beach, buy a few for you and your team. Keep one in your pocket. 

Who knows, it may just be the tooth that keeps you from getting bitten. 

Joel VanEaton, BSN, RN, RAC-CT, RAC-CTA, is a master teacher and the executive vice president of PAC Regulatory Affairs and Education at Broad River Rehabilitation. For further inquiries, he may be contacted here.

The opinions expressed in McKnight’s Long-Term Care News guest submissions are the author’s and are not necessarily those of McKnight’s Long-Term Care News or its editors.

Have a column idea? See our submission guidelines here.