CMS Releases FY 2019 SNF PPS Final Rule: PDPM Finalized

CMS Releases FY 2019 SNF PPS Final Rule: PDPM Finalized


Late yesterday afternoon, the Centers for Medicare and Medicaid (CMS) released the Final Rule for FY 2019 SNF Prospective Payment System (SNF PPS), SNF Value-Based Purchasing Program (SNF VBP) and the SNF Quality Reporting Program (SNF QRP). Of significant importance, the Patient-Driven Payment Model was finalized with an implementation date of October 1, 2019.

What You Need To Know

SNF PPS Payment Update

  • Finalized the market basket increase of 2.4%, which results in an estimated increase of $820 million in aggregate payments to SNFs during FY 2019

Patient-Driven Payment Model (PDPM)

  • PDPM will replace the current RUG IV payment model effective October 1, 2019
  • CMS adopted many of the proposed changes under PDPM from the Proposed Rule without modifications, including the following:
    • Case-mix classification for the ST component, Nursing component, and NTA component
    • Variable Per Diem payment adjustments for PT/OT and NTA
    • Revisions to the MDS completion schedule were finalized to include only the 5-day PPS assessment and PPS discharge assessment as required. In addition, new items to report therapy start/end date and therapy minutes on the discharge assessment were finalized
    • Group and Concurrent therapy limits set at a combined 25% of therapy minutes per discipline
    • Interrupted stay policy
  • CMS adopted other proposed changes under PDPM from the Proposed Rule with modifications or clarifications, including the following:
    • Clinical category classification for PT and OT component would be based on ICD-10-CM coding on Section I8000 as well as the use of a sub-item within Item J2000, which would identify relevant surgical procedures
      • In effect, this allows providers the opportunity to report 2 diagnoses’ to most accurately capture clinical complexities for PT and OT CMI.
    • Section GG was finalized as the source to calculate functional scores with modifications to incorporate new responses and items that are set to become effective 10/1/2018 based on the SNF QRP
    • The new Interim Payment Assessment (IPA) would be an optional assessment rather than required
    • SNF Level of Care Criteria (presumption of coverage) was modified to include an additional 6 PT/OT classifiers and 8 SLP classifiers


  • While there are no new quality measures or changes to reporting requirements contained in this final rule, there are additional quality measures set to become effective for FY 2019 and FY 2020 based on prior rulemaking
  • An additional quality measure removal factor “costs associated with measure outweigh the benefit of continued use in the program” was added to the other 7 removal factors


  • The overall economic impact to SNFs based on this program for FY 2019 is a reduction of $211 million in aggregate payments
  • FY 2021 baseline and performance periods were finalized
    • Baseline period is FY 2017 and performance standards (i.e. achievement threshold and benchmarks) have been established
    • Performance period is FY 2019 (October 2018 through September 2019)

PTS is currently reviewing the FY 2019 Final Rule and will be providing education/training to our staff and valued partners. We are looking forward to working collaboratively with our partners for a successful transition to PDPM.

While PDPM is certainly the most significant area addressed in the Final Rule, it is important to not lose focus on both the SNF QRP and SNF VBP. Both of these programs pose financial risk to providers as well as shape public perceptions of the quality of care provided at our SNFs based on public reporting of quality measures and rehospitalizations.

If you have any questions, please contact Matt Nash, Vice President of Strategic Development: