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CMS Issues FY 2023 SNF Final Payment Rule_AHCA Response Statement

On July 29, 2022, the Centers for Medicare & Medicaid Services (CMS) issued a final rule that updates Medicare payment policies and rates for skilled nursing facilities under the Skilled Nursing Facility Prospective Payment System (SNF PPS) for fiscal year (FY) 2023. In addition, the final rule includes updates for the SNF Quality Reporting Program (QRP) and the SNF Value-Based Purchasing (VBP) Program for FY 2023 and future years. CMS is publishing this final rule consistent with the legal requirements to update Medicare payment policies for nursing homes on an annual basis. This fact sheet discusses the major provisions of the final rule.

FY 2023 Updates to the SNF Payment Rates

CMS estimates that the aggregate impact of the payment policies in this final rule would result in an increase of 2.7%, or approximately $904 million, in Medicare Part A payments to SNFs in FY 2023 compared to FY 2022. This estimate reflects a $1.7 billion increase resulting from the 5.1% update to the payment rates, which is based on a 3.9% SNF market basket increase plus a 1.5 percentage point market basket forecast error adjustment and less a 0.3 percentage point productivity adjustment (as required by law), as well as a negative 2.3% (or $780 million decrease) in the FY 2023 SNF PPS rates as a result of the recalibrated parity adjustment, which is being phased in over two years. These impact figures do not incorporate the SNF VBP reductions for certain SNFs. These reductions are estimated to be $186 million in FY 2023.

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AHCA Statement on Skilled Nursing Facility Prospective Payment System Final Rule

The American Health Care Association (AHCA), representing more than 14,000 nursing homes and other long-term care facilities across the country that provide care to approximately five million people each year, released a statement today in response to the Skilled Nursing Facility Prospective Payment System (SNF PPS) fiscal year 2023 final rule released by the Centers for Medicare and Medicaid Services (CMS)—including the parity adjustment of the Medicare Patient Driven Payment Model (PDPM). 

AHCA President and CEO Mark Parkinson commented:

“We applaud CMS for today’s action that will increase the market basket and provide a two-year phase-in of the PDPM parity adjustment. These are essential for long term and post-acute care providers during this unprecedented workforce shortage and economic crisis. Thousands of providers, lawmakers, and stakeholders shared how a swift cut to Medicare would be detrimental to our nursing home residents and staff, and we are grateful that CMS listened and made the necessary changes. We greatly appreciate an overall increase to the Medicare program this coming fiscal year to help stabilize the profession and ensure our vulnerable residents have access to necessary, quality care.

“Meanwhile, we hope to address the historic labor crisis in nursing homes by working collaboratively with the Administration and other stakeholders. It is imperative that policymakers develop a comprehensive and supportive solution to help us recruit and retain more long-term caregivers.”