CMS Issues 2018 PPS Proposed Rule

Carl J. Pucci in Finance & Reimbursement

CMS has issued the 2018 FY Proposed Rule for skilled nursing facilities Prospective Payment System (PPS). The following are key highlights of the proposed rule: 

  • Provides a net market basket increase of 1.0 percent, the maximum allowed as a result of the permanent “doc fix” agreement reached last year. The increase is effective 10/1/17, and amounts to approximately $390M.
  • Revises and updates the market basket index base year from FY 2010 to CY 2014
  • Proposes that beginning in FY 2018, SNFs not satisfying reporting requirements for the FY 2018 Quality Reporting Program (QRP) would absorb a 2.0 percent payment penalty
  • Establishes the SNF Value Based Purchasing Program (VBP), which implements a 2% withhold to SNF Part A payments that can be earned back based on re-hospitalization rates and level of improvement. (Performance period starts 1/1/17).

Note: members are urged to review the AHCA summary document below for further details on the proposed rule.

Today, the Centers for Medicare & Medicaid Services (CMS) today issued the proposed rule for the skilled nursing facility (SNF) prospective payment system (PPS) fiscal year (FY) 2018 update.

The proposed rule is generally good news. We received a 1.0 percent increase in our payments starting on October 1, 2017. While that is not a huge increase, it's the most we could have received under current law. In addition, many people believe this would be the year CMS would listen to our critics and make major changes to our payment system. It did not. Instead, CMS is asking for input on possible new systems for the future. 

AHCA has also created a summary document with highlights and a preliminary overview of the payment updates, the SNF value-based purchasing program proposed new components, quality reporting additions, and the advanced notice of proposed rulemaking. A more detailed summary will be shared early next week. Comments, suggestions and questions should be directed to Mike Cheek.

The AHCA Finance Committee is further discussing the rule at its’ meeting tomorrow. NYSHFA will participate and closely monitor developments regarding the rule as it advances to final rule status (normally mid-summer), and update members accordingly.


Carl J. Pucci
Chief Financial Officer
518-462-4800 x36