CMS Issues 2014 PPS Final Rule

The Centers for Medicare and Medicaid Services announced on July 31st that Medicare payment rates for skilled nursing facilities in fiscal 2014 will rise by 1.3 percent, or a total of $470 million higher than in fiscal 2013.  The 2014 final rule updates the payment rates used under the prospective payment system for skilled nursing facilities (SNFs) for fiscal year 2014.  In addition, it revises and rebases the SNF market basket, revises and updates the labor related share, and makes certain technical and conforming revisions in the regulations text. This final rule also includes a policy for reporting the SNF market basket forecast error in certain limited circumstances and adds a new item to the Minimum Data Set (MDS), Version 3.0 for reporting the number of distinct therapy days. Finally, this final rule adopts a change to the diagnosis code used to determine which residents will receive the AIDS add-on payment, effective for services provided on or after the October 1, 2014 implementation date for conversion to ICD-10-CM.

The 1.3 percent update is based upon a 2.3 percent market basket increase, reduced by the 0.5 percentage point forecast error correction and further reduced by the 0.5 percentage point MFP (multifactor productivity) adjustment.  Nationally, the update provides SNFs in urban areas with a 1.4% update and rural facilities with a 1.0% increase.

The July 31, 2014 final rule can be downloaded here