CMS Releases FY 2021 Proposed Rule: SNF’s In-Line for 2.3% Payment Increase

The Centers for Medicare and Medicaid Services (CMS) are legally required to update the Medicare payment rates and quality programs on an annual basis. Each April, CMS publishes a proposed rule for the upcoming fiscal year and opens a comment period for stakeholders to review and provide comments before CMS releases the final rule.

On April 10th CMS issued proposed rule (CMS-1737-P) for FY 2021. CMS recognizes that the healthcare industry is focused on the COVID-19 public health emergency, and as such, this proposed rule contains statutorily required payment updates as well as proposals that reduce provider burden which may help in their COVID-19 response. 

Key elements of the proposed rule include:

  • A net market basket increase of 2.3% resulting in an increase of $784 million in Medicare payments for SNF providers
    > Please refer to the table below for Unadjusted Federal Per Diem
    Rates by PDPM Component
  • Proposal to adopt the revised Office of Management and Budget (OMB) statistical area delineations with a 5% cap on wage index decreases from FY 2020 to FY 2021
  • Updates to the ICD-10 code mappings with additional codes/diagnosis now qualifying for “May be Eligible for Non-Orthopedic Surgery Category” or “May be Eligible for One of the Two Orthopedic Surgery Categories”
    > Additional substantive changes to clinical category as well as NTA
    mappings are also proposed that impact only a few diagnosis/ICD-10
  • CMS acknowledged it continues to monitor the impact of PDPM on patient outcomes and program payments but stated it would be premature to release any information or make changes to case-mix weights with the limited data available
    > CMS did state they may consider adjustments to case-mix weights in
    future rulemaking in order to maintain budget neutrality
  • Proposals related to the Skilled Nursing Facility Value Based Purchasing Program (SNF VBP)
    > Apply a 30-day Phase One Review and Correction Deadline to the
    baseline period
    > Estimated FY 2023 SNF VBP Program Performance Standards
    > > Achievement Threshold: 0.79025 (readmission rate of 21.0%)
    > > Benchmark: 0.82917 (readmission rate of 17.1%)
  • No changes to the Skilled Nursing Facility Quality Reporting Program (SNF QRP) were proposed

Preferred Therapy Solutions continues to provide its partners with vital information that may impact rehabilitation management, reimbursement policies, and clinical programs, supported with compliance and regulatory requirements that are necessary for a thorough understanding of practices and procedures. If you have any questions, please contact Matt Nash, Vice President of Strategic Development at