CMS Issues Final Rules for Skilled Nursing and Inpatient Rehabilitation Facilities

August 23, 2024

On July 31, the Centers for Medicare & Medicaid Services (CMS) updated Medicare payment policies for skilled nursing and inpatient rehabilitation facilities. These policies will go into effect on October 1, 2024.

ASHA comments on the proposed rules earlier this year focused on quality reporting and data collection associated with social determinants of health. Many items ASHA supported were included in the final rule.

Skilled Nursing Facility (SNF) Policy Updates

Payment

Payments to SNFs will increase by 4.2% or $1.4 billion in fiscal year 2025.

Quality Reporting Program

CMS updated quality reporting requirements by adding four new items to the Minimum Data Set (MDS) associated with social determinants of health (SDOH):

• One item for living situation
• Two items for food
• One item for utilities.

It also modifies an existing SDOH item associated with transportation.

Changes to Policies for the Imposition of Civil Monetary Penalties for Noncompliance

CMS is expanding its ability to impose financial penalties to provide flexibility in determining the mix and number of penalties in response to situations that put residents' health and safety at risk and, therefore, to encourage facilities to promptly correct and maintain lasting compliance with CMS' health and safety requirements.

Prior to the proposed changes, penalties could only be imposed per day or per instance of noncompliance―depending on the health and safety deficiencies identified. Per-day civil monetary penalties (CMPs) applied until the facility corrected the noncompliance and per-instance CMPs applied to isolated instances. However, per-day and per-instance penalties could not be imposed for deficiencies identified during the same survey, and per-instance penalties could not be imposed concurrently for the same deficiency. In addition, the severity of enforcement sanctions was based on the harm or potential harm to residents caused by noncompliance.
This regulatory limitation prevented CMS and states from imposing CMPs that were more commensurate with the identified noncompliance by restricting the use of multiple penalties for one deficiency. So CMS and states could not fully use CMPs to encourage faster correction and sustained compliance with health and safety requirements.

In this final rule, CMS revised the regulation to expand the type of CMPs that can be imposed to allow for more per-instance and per-day CMPs, as appropriate. The revisions in this rule will permit both types of penalties to be imposed, providing CMS with greater flexibility to impose penalties in a manner that more directly reflects the health and safety impact on residents and incentivizes permanent correction. CMPs are still subject to statutory daily limits and CMS can exercise discretion with regard to a SNF's financial condition in determining the appropriate CMP.

Inpatient Rehabilitation Facility (IRF) Policy Updates

Payment

CMS updated payments to IRFs by 3% in 2025, a spending increase of $280 million.

Quality Reporting Program

As with SNFs, CMS updated quality reporting requirements by adding four new items to the Patient Assessment Instrument (IRF PAI) associated with SDOH:

• One item for living situation
• Two items for food
• One item for utilities.

It also modified an existing SDOH item associated with transportation.

Background

CMS is required to update payment policies for each practice setting on an annual basis. ASHA continues to monitor these policies and comment on them, when appropriate, to ensure ASHA member interests are represented and patients maintain access to care.

Resources

• Get the full SNF [PDF] and IRF [PDF] final rules
• Review ASHA's comments on the SNF [PDF] and IRF [PDF] proposed rules

Questions?

Email ASHA's health care and education policy team at [email protected].