Healthcare
FY 2025 Updates to the SNF Payment Rates
CMS is updating SNF payment policies, which would result in a net increase of 4.2%, or approximately $1.4 billion, in Medicare Part A payments to SNFs in FY 2025. The 4.2% increase is calculated based on the SNF market basket percentage increase of 3.0%, plus a 1.7 percentage point forecast error adjustment, less a 0.5 percentage point productivity adjustment. These impact figures do not incorporate the SNF Value-Based Purchasing (VBP) reductions for certain SNFs subject to the net reduction in payments under the SNF VBP; those adjustments are estimated to total $196.5 million in FY 2025.
In addition to the SNF PPS rate update, CMS is rebasing and revising the SNF market basket to reflect a 2022 base year. The rule also finalizes the proposal to update the SNF PPS wage index using the Core-Based Statistical Areas (CBSAs) defined within the new Office of Management and Budget (OMB) Bulletin 23-01 to improve the accuracy of wages and wage-related costs for the area in which the facility is located.
Nebraska Medicaid SNF Rate for Levels of Care 201 and 202
Nebraska Medicaid recently sent updated rate notifications for small increases for Levels of Care 201 and 202 due to a change in the ALF waiver rate that was not accounted for when the rates were originally calculated. They are issuing retro settlements for facilities, which will be an additional payment for patients that were billed with the 201 and 202 codes for the time period January 1, 2024 through current claims paid. The State hopes to have these settlements completed by August 31, 2024. Any new claims will be paid at the correct rate.
Missouri Medicaid SNF Medicaid Rate Rebase
On June 28, 2024 the Governor signed the funding for the rebase to the Missouri SNF Medicaid Rate passed by the legislature in the FY25 Budget. The rebase to SNF Medicaid rates was based on 2022 cost reports. Missouri nursing homes are still many months away from seeing relief from the rebase as the State Plan Amendment must still be submitted to CMS and approved; however, the effective date of this rebase was July 1, 2024. There will be retro payments back to July 1, 2024 for any increase facilities receive to their rates as a result of the rebase.
Iowa Medicaid SNF 85% Occupancy Penalty Returns
Iowa SNF facilities will see the return of the 85% occupancy rule, which was temporarily reduced to 70% for the current rebase cycle. Effective July 1, 2025, provider rates will be calculated using a minimum occupancy of 85%, which is determined by the cost reports submitted by providers for their 2024 fiscal year end. To estimate the impact of this penalty, the per patient day (PPD) cost calculation factors the number of patient days in a facility as 85% of licensed capacity, not the actual number of patient days. This calculation applies to the administrative, environmental and property costs. It does not apply to the support care costs or the direct care costs. All providers should consider whether a reduction in licensed beds is necessary because of the return of the 85% occupancy rule.