CMS issued its fiscal year 2027 final payment rules for skilled nursing facilities and inpatient psychiatric facilities July 29.
The rules update Medicare payment rates and revise quality reporting, value-based purchasing and patient assessment policies.
Twelve things to know:
1. CMS finalized a 2.4% increase to skilled nursing facility prospective payment system rates for fiscal year 2027. The update reflects a 3.3% market basket increase, reduced by a 0.9 percentage point productivity adjustment. The rate update is expected to increase aggregate Medicare payments to SNFs by about $882.74 million.
2. Value-based purchasing adjustments for certain SNFs are expected to reduce 2027 payments by about $204 million. The reduction is separate from CMS’ estimated payment rate increase.
3. CMS will require SNFs to submit minimum data set information for all residents receiving covered skilled care, regardless of payer. The agency said the policy will align the SNF program with other post-acute care settings and CMS programs that collect information on all patients regardless of payer.
4. CMS will remove two COVID-19 vaccination measures from the SNF Quality Reporting Program beginning with the fiscal 2028 program: the COVID-19 Vaccination Coverage Among Healthcare Personnel measure and the COVID-19 Vaccine: Percent of Patients/Residents Who Are Up to Date measure.
5. Beginning with the fiscal 2029 quality reporting program, CMS will shorten the data submission window from 4.5 months to about 45 days. The agency said the change could reduce the delay between data submission and public reporting by up to three months.
6. CMS finalized performance standards for the fiscal year 2029 and 2030 SNF Value-Based Purchasing Program years. The agency will also revise the snapshot date for two measures using Minimum Data Set assessment information to align with the program’s new submission deadlines.
7. CMS sought feedback on potential changes to the Patient Driven Payment Model, including ways to address observed case-mix upcoding. The agency did not finalize payment model changes but said it will consider the comments in potential future rulemaking.
Click here to access the 185-page final rule.
Inpatient psychiatric facilities
8. CMS finalized a 2.3% increase to inpatient psychiatric facility prospective payment system rates for fiscal year 2027. The update reflects a 3.2% market basket increase, reduced by a 0.9 percentage point productivity adjustment.
9. The agency estimates total Medicare payments to inpatient psychiatric facilities will increase by $60 million compared with fiscal 2026. CMS will also update the outlier threshold so estimated outlier payments remain at 2% of total inpatient psychiatric facility payments.
10. CMS will remove two measures from the Inpatient Psychiatric Facility Quality Reporting Program beginning with the calendar year 2026 reporting period and fiscal year 2028 payment determination. The measures address alcohol-use intervention and tobacco-use treatment at discharge.
11. CMS is also implementing a standardized inpatient psychiatric facility patient assessment instrument. Facilities may submit information through CMS’ free Patient Assessment Reporting Interoperability Tool or through application programming interfaces based on the Fast Healthcare Interoperability Resources standard. CMS said the program will be its first statutory quality reporting program to use the standard for patient assessment data submissions.
12. Beginning in fiscal 2028, CMS will cap an individual facility’s outlier payments at 20% of its total inpatient psychiatric facility prospective payment system payments for the year. Facilities with fewer than 50 stays annually will be exempt. CMS delayed the policy’s implementation until Oct. 1, 2027, to further evaluate cost factors raised by commenters.
Click here to access the 204-page final rule.
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