CMS finalizes 4.2% payment update for SNFs and revises nursing home enforcement authority in FY 2025

The Centers for Medicare & Medicaid Services July 31 issued a final rule for fiscal year 2025 for the skilled nursing facility prospective payment system, which will increase aggregate Medicare spending by 4.2% or $1.4 billion compared to FY 2024. This reflects a 3% market basket update, a 1.7 percentage-point increase to counter the agency’s market basket error in FY 2023, and a 0.5 percentage point cut for productivity. CMS also revised its regulations regarding its nursing home enforcement authority to allow the agency to impose additional financial penalties on facilities where health and safety deficiencies are identified.

While CMS did not propose to adopt or remove any quality measures from the SNF Quality Reporting Program, the agency finalized its proposal to adopt and modify certain patient assessment items related to health-related social needs; SNFs will be required to collect and report specific data elements related to living situation, food and utilities beginning with the FY 2027 SNF QRP. CMS also finalized its proposal to adopt a data validation process for the SNF QRP beginning the same year.

CMS also finalized a number of operational updates to the SNF Value-based Purchasing program, including policies regarding measure removal and review and corrections. The agency also makes an update to the case mix methodology used to calculate the Total Nurse Staffing measure.

AHA members will receive a Special Bulletin with more details.