In response to the Centers for Medicare and Medicaid Services’ (CMS) proposed rule regarding new potential updates to the payments and care delivery for Skilled Nursing Facilities (SNFs) beginning October 1, 2014, Kindred Healthcare submitted formal comments and reactions prior to the June 30 deadline.

Advocating for Reform
While the proposed rule didn’t propose specific reforms to the SNF payment system for therapy services, it requested feedback to the recently released Acumen report entitled “SNF Therapy Payment Models Base Year Final Summary Report.” CMS contracted with Acumen, LLC and Brookings Institution to identify potential alternatives to the existing methodology used to pay for therapy services received under the SNF PPS. The Acumen report reflects the first phase of the research project.

Within our formal comments, we articulated that we believe that the Medicare payment system for patients receiving nursing and rehabilitation services in SNFs falls short in accurately reimbursing and incentivizing the appropriate level and intensity of services needed to achieve recovery and return home. In recognizing such, we took the CMS comment period to discuss an approach which would improve the SNF payment system in a manner that preserves access to medically necessary services for Medicare patients, better aligns clinical need with services delivered, develops adequate controls and safeguards to ensure appropriate therapy utilization and provides short-term stability for providers.

In its formal comments, Kindred supported an incremental – two-step – approach to implementing some interim changes to refine the payment for the rehabilitation Resource Utilization Groups (RUGs) using data currently available on patient characteristics and to gradually collect the necessary data elements to build a pathway to a comprehensive SNF value-based payment in the future.

The comments stated that:
“Such initial payment refinements would also support appropriate utilization of SNF services by more closely aligning reimbursement to patient’s clinical complexity and encourage providers to care for higher acuity patients by better aligning costs and payments. Such an interim change would also enable providers to better target resources toward higher acuity patients which will have the most difficulty transitioning to other settings of care and provide legislative and regulatory stability to the SNF payment system. Another benefit of such an approach would improve staffing efficiency through better understanding of patient acuity, more predictable assessment schedule, and clinically appropriate use of group and concurrent therapy with defined limitations.”

Next Steps
Over the next several weeks, CMS staff will consider the formal comments submitted by a broad-range of stakeholders as they prepare a final SNF payment rule. The final rule will be released on, or around, August 1 and will go into effect on October 1, 2015.

We will provide further updates after the final rule is issued to share CMS’ responses to stakeholder comments.


By Kindred Hospital Rehabilitation Services