As disapproval about the 2025 skilled nursing Medicare pay rate increase continued to rise Thursday, long-term care providers and their advisors began devising coping strategies for some of the less flashy aspects of the SNF PPS final rule issued a day earlier.

Operators will need to get ready for additional medical record audits related to skilled nursing’s Quality Reporting Program and Value-Based Purchasing measure validation, said Joel VanEaton, Master Teacher and Executive Vice President of PAC Regulatory Affairs and Education for Blue River Rehab. 

Specifically, CMS is finalizing the adoption of a validation process that starts with the 2027 SNF QRP that is similar to the process CMS has adopted for the SNF Value-Based Purchasing Program in the FY 2024 SNF PPS final rule. 

Approximately 1,500 SNFs will be randomly selected to share a very limited set of medical records for validation, CMS announced in the final rule.

CMS also has finalized that if a SNF does not submit the requested number of medical records within 45 days of the initial request, its annual market basket percentage update will be reduced by 2 percentage points.

“This has teeth,” VanEaton said.

The reduction would be applied to the payment update two fiscal years after the fiscal year for which the validation contractor requested records, he explained. If a request was not fulfilled or FY 2027 records, for example, the 2 percentage point reduction would be made for the FYI 2029 SNF QRP.

He also joined those saying the 4.2% Part A pay increase will not move the needle much.

“The rate increase barely covers sequestration and VBP adjustments for most providers,” he said. “If you are non-compliant with SNF QRP reporting requirements, you are out of luck for a rate increase this year.”

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He also advised providers to pay close attention to how their fiscal 2025 wage index shifts. The labor-related portion of the rate rose again, meaning a larger portion of the rate will be affected by the wage index.

In addition, he noted that providers need to be aware of an “apples to oranges” comparison when it comes to value-based pay calculations, which will use both older RUG/STRIVE and newer PDPM markers. 

“Look to CMS to offer an explanation” about what will be affected for VBP incentive multiplier calculations for fiscal 2026, he said.

 Providers should start to prepare for the changes to SNF QRP, as well as the onslaught of new SNF VBP measures coming their way, advised Maureen McCarthy, president and CEO of Celtic Consulting. 

“We have found that many providers do not fully understand how both the SNF QRP and SNF VBP programs function,” she noted. 

Social meatier

For therapy teams, the “most exciting” parts of the rule are the increased focus on social determinants of health, said Renee Kinder,  Executive Vice President of Clinical Services for Broad River Rehab.

Changes to the SNF QRP and SNF VBP Program will help better identify home living conditions and enhance the accuracy and transparency of data reporting, she noted.

“This will allow for rehab professionals to provide a more holistic approach to care and more appropriately progress patients across the care continuum,” she said. It should lead to better development of skills to help a patient move around home better, attain better nutrition and avoid transportation glitches that could affect therapy or follow-up appointments, for example.

Stakeholders holistically continued to marvel at what they believe is an unrealistically low pay boost, despite its $1.4 billion price tag.

“Providers are going to need every bit of the 4.2% payment update,” said Cynthia Morton, executive vice president of ADVION. “… It really does not deal with providers’ real world problems, including resources to find and retain staff to meet the [federal staffing] mandate, the administrative burden in responding to the requirements of accepting Medicare Advantage patients, upgrading information technology in order to meet requirements of ACOs and other upstream partners, and to guard against increasing cyber threats,” as well as modernizing physical plants.

“The increases in payment for various services is not remarkable when you look at the other economic factors that all care delivery platforms are dealing with,” added Leah Klusch, executive director of The Alliance Training Center. “It seems like CMS doesn’t understand that SNFs are part of the general economy. It’s totally insensitive.”

She also said that expanding civil monetary penalties powers created a “slippery slope.”

“Poor performing buildings are not always buildings that are reckless,” the 50-plus-year long-term care veteran said. “If you’re talking about increasing the amount and frequency of punitive [civil monetary penalties], that is not going to improve care. That is not going to stabilize the facility.”

She also stressed that if the CMP funding taken from providers is going to increase — as CMS acknowledged would likely happen when it first issued the proposed rule — then there have to be more assurances that the penalty money gets funneled back into programs to help providers, as the program was designed to do.

“If they’re going to be more aggressive with CMPs, then that money needs to go back into the industry to improve care or provide more educational programs. Or to develop skills for new caregiving models,” Klusch said. “We have a lot of new caregiving models out there developed by multiple sources.”

CMS leaders talk … but not about SNF PPS

CMS leaders, including Administrator Chiquita Brooks-LaSure, did not address any part of the pay rule on their third Leadership National Call Thursday. Dora Hughes, MD, acting CMS Chief Medical Officer and Acting Director of the Center for Clinical Standards and Quality, briefly touched on two LTC-adjacent issues. 

She said concerns have been raised by some LTC advocates about the number of HIV/AIDs patients who are living past age 65 who may need to transition into skilled nursing facilities or nursing homes. She didn’t expand on that but said that a proposal announced in July 2023 to cover Preexposure Prophylaxis treatments – known as  PrEP – under Medicare B  would help expand access to those medications. The drugs, which are designed to bring viral loads down to undetectable levels and are available in oral and injectable forms, are currently covered under Part D. 

The number of HIV/AIDs patients living to age 65 has increased 143% since the mid-1990s, she said, adding that the proposal would also cover up to seven counseling sessions per year as well as additional screenings for HIV and Hepatitis B. 

Hughes also referenced the CMS proposal to replace the COVID-19 reporting standards for LTC facilities that sunset in December 2024 with a new standard that will address a broader range of acute respiratory illnesses. Regulators’ belief is that continued data collection will help monitor rates of illnesses or outbreaks early on so they can be better contained, she noted.