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CMS FY2022 Final Rule

Excerpts from Federal Register 8/4/2021 for Skilled Nursing Facilities

The Centers for Medicare & Medicaid Services (CMS) FY2022 Final Rule: Excerpts from Federal Register 8/4/2021 

CMS FY2022 PDPM – Effective 10/1/21

  • Under the Patient Driven Payment Model (PDPM), the total rate is calculated as a combination of six different component rates, five of which are case-mix adjusted.

Final wage index tables are available exclusively through the Internet. They can be found on the CMS website at 

  • The budget neutrality factor for FY2022 wage index updates is 1.0006.

  • For Rhode Island-based facilities, the wage index is 1.0262.

  • For FY2022, the market basket index base period was updated from 2014 to 2018. The growth rate of the 2018-based Skilled Nursing Facility (SNF) market basket in the final rule was 2.7%. Each per diem component of the federal rate has been adjusted by this market basket factor. After consideration of a reduction of 0.8% to account for forecast error and 0.7% to account for the productivity adjustment, the overall increase in payment is expected to be 1.2% compared to FY2021.

    • Given the COVID-19 public health emergency, CMS will continue to monitor upcoming data from Medicare cost reports to determine if a more frequent rebasing schedule is necessary.
    • Beginning with FY2018, SNFs that fail to submit data, as applicable, in accordance with sections 1888(e)(6)(B)(i)(II) and (III) of the Social Security Act for a fiscal year will receive a 2.0 percentage point reduction to their market basket update for the fiscal year involved.
  • Overall economic impact of the final rule is an estimated increase of $410 million, in aggregate payments to SNFs during FY2022.

    • The economic impact of the SNF Hospital Value-Based Purchasing (VBP) Program is an estimated reduction of $191.64 million in aggregate payments to SNFs during FY2021.
    • FY2022 SNF Quality Reporting Program (QRP) changes from this final rule are expected to increase costs to SNFs by $6.63 million.
  • The implementation of PDPM resulted in an unintended increase in payment levels, where the original intention was to achieve budget neutrality. CMS is looking to recalibrate the PDPM system in the FY2023 SNF PPS proposed rule.

  • The SNF QRP currently has thirteen measures for the FY 2022 SNF QRP. There are two new QRP measures proposed to be adopted with the FY2023 SNF QRP: The SNF Healthcare-Associated Infections Requiring Hospitalization measure (SNF HAI) and the COVID-19 Vaccination Coverage among Healthcare Personnel (HCP) measure.

    • Monitoring SNF HAI rates would provide information about each facility’s adeptness in infection prevention and management.
    • The HCP measure was identified in response to the current public health crisis.
  • The proposal to suppress the Skilled Nursing Facility 30-Day All-Cause Readmission Measure (SNFRM) for the FY2022 SNF VBP program year has been finalized. Qualifying claims for the period January 1, 2020 to June 30, 2020 are excluded from the calculation of the SNFRM. The new performance period for the FY2022 SNF VBP Program Year is April 1, 2019 to December 31, 2019 and July 1, 2020 to September 30, 2020. It was believed these periods would provide sufficiently reliable data for evaluating SNFs for the FY2022 SNF VBP program and that COVID-19 should not impact the facility positively or negatively.


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