# Medicare Program; Prospective Payment System and Consolidated Billing for Skilled Nursing Facilities; Updates to the Quality Reporting Program and Value-Based Purchasing Program for Federal Fiscal Year 2024 > Briefs, arguments, decisions, and more. URL: https://www.frixlaw.com/law-library/documents/fr%3A2023-07137 ## Record - **Collection:** Federal Register - **Document type:** Proposed Rule - **Published:** April 10, 2023 - **Citation:** 88 FR 21316 ## Text DEPARTMENT OF HEALTH AND HUMAN SERVICES Centers for Medicare & Medicaid Services 42 CFR Parts 411, 413, 488, and 489 [CMS-1779-P] RIN 0938-AV02 Medicare Program; Prospective Payment System and Consolidated Billing for Skilled Nursing Facilities; Updates to the Quality Reporting Program and Value-Based Purchasing Program for Federal Fiscal Year 2024 AGENCY: Centers for Medicare & Medicaid Services (CMS), Department of Health and Human Services (HHS). ACTION: Proposed rule. SUMMARY: This proposed rule would update payment rates, including implementing the second phase of the Patient Driven Payment Model (PDPM) parity adjustment recalibration. This proposed rule also proposes updates to the diagnosis code mappings used under PDPM, the SNF Quality Reporting Program (QRP), and the SNF Value-Based Purchasing (VBP) Program. We are also proposing to eliminate the requirement for facilities to actively waive their right to a hearing in writing, instead treating the failure to submit a timely request for a hearing as a constructive waiver. DATES: To be assured consideration, comments must be received at one of the addresses provided below, by June 5, 2023. ADDRESSES: In commenting, please refer to file code CMS-1779-P. Comments, including mass comment submissions, must be submitted in one of the following three ways (please choose only one of the ways listed): 1. Electronically. You may submit electronic comments on this regulation to http://www.regulations.gov. Follow the “Submit a comment” instructions. 2. By regular mail. You may mail written comments to the following address ONLY: Centers for Medicare & Medicaid Services, Department of Health and Human Services, Attention: CMS-1779-P, P.O. Box 8016, Baltimore, MD 21244-8016. Please allow sufficient time for mailed comments to be received before the close of the comment period. 3. By express or overnight mail. You may send written comments to the following address ONLY: Centers for Medicare & Medicaid Services, Department of Health and Human Services, Attention: CMS-1779-P, Mail Stop C4-26-05, 7500 Security Boulevard, Baltimore, MD 21244-1850. For information on viewing public comments, see the beginning of the SUPPLEMENTARY INFORMATION section. FOR FURTHER INFORMATION CONTACT: PDPM@cms.hhs.gov for issues related to the SNF PPS. Heidi Magladry, (410) 786-6034, for information related to the skilled nursing facility quality reporting program. Alexandre Laberge, (410) 786-8625, for information related to the skilled nursing facility value-based purchasing program. Lorelei Kahn, (443) 803-8643, for information related to the Civil Money Penalties Waiver of Hearing. SUPPLEMENTARY INFORMATION: Inspection of Public Comments: All comments received before the close of the comment period are available for viewing by the public, including any personally identifiable or confidential business information that is included in a comment. We post all comments received before the close of the comment period on the following website as soon as possible after they have been received: http://www.regulations.gov. Follow the search instructions on that website to view public comments. CMS will not post on Regulations.gov public comments that make threats to individuals or institutions or suggest that the individual will take actions to harm the individual. CMS continues to encourage individuals not to submit duplicative comments. We will post acceptable comments from multiple unique commenters even if the content is identical or nearly identical to other comments. Availability of Certain Tables Exclusively Through the Internet on the CMS Website As discussed in the FY 2014 SNF PPS final rule (78 FR 47936), tables setting forth the Wage Index for Urban Areas Based on CBSA Labor Market Areas and the Wage Index Based on CBSA Labor Market Areas for Rural Areas are no longer published in the Federal Register . Instead, these tables are available exclusively through the internet on the CMS website. The wage index tables for this proposed rule can be accessed on the SNF PPS Wage Index home page, at https://www.cms.gov/Medicare/Medicare-Fee-for-Service-Payment/SNFPPS/WageIndex.html. Readers who experience any problems accessing any of these online SNF PPS wage index tables should contact Kia Burwell at (410) 786-7816. To assist readers in referencing sections contained in this document, we are providing the following Table of Contents. Table of Contents I. Executive Summary A. Purpose B. Summary of Major Provisions C. Summary of Cost and Benefits D. Advancing Health Information Exchange II. Background on SNF PPS A. Statutory Basis and Scope B. Initial Transition for the SNF PPS C. Required Annual Rate Updates III. Proposed SNF PPS Rate Setting Methodology and FY 2024 Update A. Federal Base Rates B. SNF Market Basket Update C. Case-Mix Adjustment D. Wage Index Adjustment E. SNF Value-Based Purchasing Program F. Adjusted Rate Computation Example IV. Additional Aspects of the SNF PPS A. SNF Level of Care—Administrative Presumption B. Consolidated Billing C. Payment for SNF-Level Swing-Bed Services D. Revisions to the Regulation Text V. Other SNF PPS Issues A. Technical Updates to PDPM ICD-10 Mappings VI. Skilled Nursing Facility Quality Reporting Program (SNF QRP) A. Background and Statutory Authority B. General Considerations Used for the Selection of Measures for the SNF QRP C. SNF QRP Quality Measure Proposals D. Principles for Selecting and Prioritizing SNF QRP Quality Measures and Concepts Under Consideration for Future Years: Request for Information (RFI) E. Health Equity Update F. Form, Manner, and Timing of Data Submission Under the SNF QRP G. Proposed Policies Regarding Public Display of Measure Data for the SNF QRP VII. Skilled Nursing Facility Value-Based Purchasing Program (SNF VBP) A. Statutory Background B. SNF VBP Program Measures C. SNF VBP Performance Period and Baseline Period Proposals D. SNF VBP Performance Standards E. Proposed Changes to the SNF VBP Performance Scoring Methodology F. Proposed Update to the Extraordinary Circumstances Exception Policy Regulation Text G. Proposal to Update the Validation Process for the SNF VBP Program H. SNF Value-Based Incentive Payments for FY 2024 I. Public Reporting on the Provider Data Catalog Website VIII. Civil Money Penalties: Waiver of Hearing, Automatic Reduction of Penalty Amount IX. Collection of Information Requirements X. Response to Comments XI. Economic Analyses A. Regulatory Impact Analysis B. Regulatory Flexibility Act Analysis C. Unfunded Mandates Reform Act Analysis D. Federalism Analysis E. Regulatory Review Costs I. Executive Summary A. Purpose This proposed rule would update the SNF prospective payment rates for fiscal year (FY) 2024, as required under section 1888(e)(4)(E) of the Social Security Act (the Act). It also responds to section 1888(e)(4)(H) of the Act, which requires the Secretary to provide for publication of certain specified information relating to the payment update (see section II.C. of this proposed rule) in the Federal Register before the August 1 that precedes the start of each FY. In addition, this proposed rule includes proposals for the Skilled Nursing Facility Quality Reporting Program (SNF QRP) for the FY 2025, FY 2026, and FY 2027 program years. This proposed rule would add three new measures to the SNF QRP, remove three measures from the SNF QRP, and modify one measure in the SNF QRP. This proposed rule would also make policy changes to the SNF QRP, and begin public reporting of four measures. In addition, this proposed rule includes an update on our health equity efforts and requests information on principles we would use to select and prioritize SNF QRP quality measures in future years. Finally, this proposed rule includes proposals for the Skilled Nursing Facility Value-Based Purchasing Program (SNF VBP), including adopting new quality measures for the SNF VBP Program, proposing several updates to the Program's scoring methodology, including a Health Equity Adjustment, and proposing new processes to validate SNF VBP data. We are proposing changes to the current long-term care (LTC) facility requirements that would simplify and streamline the current requirements and thereby increase provider flexibility and reduce unnecessary administrative burden, while also allowing facilities to focus on providing healthcare to residents to meet their needs. This proposal was previously proposed and published in the July 18, 2019 Federal Register in the proposed rule entitled, “Medicare and Medicaid Programs; Requirements for Long-Term Care Facilities: Regulatory Provisions to Promote Efficiency, and Transparency” (84 FR 34718). We are re-proposing this proposed revision for a facility to waive its hearing rights and receive a reduction in civil money penalties in an effort to gather additional feedback from interested parties. B. Summary of Major Provisions In accordance with sections 1888(e)(4)(E)(ii)(IV) and (e)(5) of the Act, the Federal rates in this proposed rule would reflect an update to the rates that we published in the SNF PPS final rule for FY 2023 (87 FR 47502, August 3, 2022). In addition, this proposed rule includes a forecast error adjustment for FY 2024 and includes the second phase of the PDPM parity adjustment recalibration. This proposed rule also proposes updates to the diagnosis code mappings used under the PDPM. Beginning with the FY 2025 SNF QRP, we propose to modify the COVID-19 Vaccination Coverage among Healthcare Personnel measure, adopt the Discharge Function Score measure, and remove the (1) Application of Percent of Long-Term Care Hospital Patients with an Admission and Discharge Functional Assessment and a Care Plan That Addresses Function measure, (2) the Application of IRF Functional Outcome Measure: Change in Self-Care Score for Medical Rehabilitation Patients measure, and (3) the Application of IRF Functional Outcome Measure: Change in Mobility Score for Medical Rehabilitation Patients measure. Beginning with the FY 2026 SNF QRP, we propose to adopt the CoreQ: Short Stay Discharge measure and the COVID-19 Vaccine: Percent of Patients/Residents Who Are Up to Date measure. We also propose changes to the SNF QRP data completion thresholds for the Minimum Data Set (MDS) data items beginning with the FY 2026 SNF QRP and to make certain revisions to regulation text at § 413.360. This proposed rule also contains proposals pertaining to the public reporting of the (1) Transfer of Health Information to the Patient-Post-Acute Care measure, (2) the Transfer of Health Information to the Provider-PAC measure, (3) the Discharge Function Score measure, and (4) the COVID-19 Vaccine: Percent of Patients/Residents Who Are Up to Date measure. In addition, we are seeking information on principles for selecting and prioritizing SNF QRP quality measures and concepts and provide an update on our continued efforts to close the health equity gap, including under the SNF QRP. We are proposing several updates for the SNF VBP Program We are proposing to adopt a Health Equity Adjustment that rewards top tier performing SNFs that serve higher proportions of SNF residents with dual eligibility status, effective with the FY 2027 program year and to adopt a variable payback percentage to maintain an estimated payback percentage for all SNFs of no less than 60 percent. We are proposing to adopt four new quality measures to the SNF VBP Program, one taking effect beginning with the FY 2026 program year and three taking effect beginning with the FY 2027 program year. We are also proposing to refine the Skilled Nursing Facility 30-Day Potentially Preventable Readmission (SNFPPR) measure specifications and update the name to the Skilled Nursing Facility Within-Stay Potentially Preventable Readmission (SNF WS PPR) measure effective with the FY 2028 program year. We are proposing to adopt new processes to validate SNF VBP program data. In addition, we are proposing to eliminate the requirement for facilities facing a civil money penalty to actively waive their right to a hearing in writing in order to receive a penalty reduction. We would create, in its place, a constructive waiver process that would operate by default when CMS has not received a timely request for a hearing. The accompanying 35 percent penalty reduction would remain. This proposed revision would result in lower administrative costs for most LTC facilities facing civil money penalties (CMPs), and would streamline and reduce the administrative burden for CMS. This proposal was previously proposed and published in the July 18, 2019 Federal Register . C. Summary of Cost and Benefits Table 1—Cost and Benefits Provision description Total transfers/costs FY 2024 SNF PPS payment rate update The overall economic impact of this proposed rule is an estimated increase of $1.2 billion in aggregate payments to SNFs during FY 2024. FY 2025 SNF QRP changes The overall economic impact of this proposed rule to SNFs is an estimated benefit of $1,037,261 to SNFs during FY 2025. FY 2026 SNF QRP changes The overall economic impact of this proposed rule to SNFs who would be exempt from the proposed CoreQ: Short Stay Discharge measure reporting requirements and the increase in burden from the addition of the Patient/Resident COVID-19 Vaccine measure is an estimated increase in aggregate cost from FY 2025 of $866,772. The overall economic impact of this proposed rule to SNFs who participate in the proposed CoreQ: Short Stay Discharge measure reporting requirements and the increase in burden from the addition of the Patient/Resident COVID-19 Vaccine measure is an estimated increase in aggregate cost from FY 2025 of $61,580,090. FY 2027 SNF QRP changes The overall economic impact of this proposed rule to SNFs who would be exempt from the proposed CoreQ: Short Stay Discharge measure reporting requirements is an estimated increase in aggregate cost from FY 2026 of $88,181. The overall economic impact of this proposed rule to SNFs who participate in the proposed CoreQ: Short Stay Discharge measure reporting requirements is an estimated increase in aggregate cost from FY 2026 of $63,344,417. FY 2024 SNF VBP changes The overall economic impact of the SNF VBP Program is an estimated reduction of $184.85 million in aggregate payments to SNFs during FY 2024. FY 2026 SNF VBP changes The overall economic impact of the SNF VBP Program is an estimated reduction of $196.50 million in aggregate payments to SNFs during FY 2026. FY 2027 SNF VBP changes The overall economic impact of the SNF VBP Program is an estimated reduction of $166.86 million in aggregate payments to SNFs during FY 2027. FY 2028 SNF VBP changes The overall economic impact of the SNF VBP Program is an estimated reduction of $170.98 million in aggregate payments to SNFs during FY 2028. FY 2024 Enforcement Provisions for LTC Facilities Requirements Changes The overall impact of this regulatory change is an estimated administrative cost savings of $2,299,716 to LTC facilities and $772,044 to the Federal Government during FY 2024. D. Advancing Health Information Exchange The Department of Health and Human Services (HHS) has a number of initiatives designed to encourage and support the adoption of interoperable health information technology and to promote nationwide health information exchange to improve health care and patient access to their digital health information. To further interoperability in post-acute care settings, CMS and the Office of the National Coordinator for Health Information Technology (ONC) participate in the Post-Acute Care Interoperability Workgroup (PACIO) to facilitate collaboration with interested parties to develop Health Level Seven International® (HL7) Fast Healthcare Interoperability Resource® (FHIR) standards. These standards could support the exchange and reuse of patient assessment data derived from the post-acute care (PAC) setting assessment tools, such as the minimum data set (MDS), inpatient rehabilitation facility -patient assessment instrument (IRF-PAI), Long-Term Care Hospital (LTCH) continuity assessment record and evaluation (CARE) Data Set (LCDS), outcome and assessment information set (OASIS), and other sources. 1 2 The PACIO Project has focused on HL7 FHIR implementation guides for: functional status, cognitive status and new use cases on advance directives, re-assessment timepoints, and Speech, language, swallowing, cognitive communication and hearing (SPLASCH) pathology. 3 We encourage PAC provider and health IT vendor participation as the efforts advance. 1 HL7 FHIR Release 4. Available at https://www.hl7.org/fhir/. 2 HL7 FHIR. PACIO Functional Status Implementation Guide. Available at https://paciowg.github.io/functional-status-ig/. 3 PACIO Project. Available at http://pacioproject.org/about/. The CMS Data Element Library (DEL) continues to be updated and serves as a resource for PAC assessment data elements and their associated mappings to health IT standards such as Logical Observation Identifiers Names and Codes (LOINC) and Systematized Nomenclature of Medicine Clinical Terms (SNOMED). 4 The DEL furthers CMS' goal of data standardization and interoperability. Standards in the DEL can be referenced on the CMS website and in the ONC Interoperability Standards Advisory (ISA). The 2023 ISA is available at https://www.healthit.gov/sites/isa/files/inline-files/2023%20Reference%20Edition_ISA_508.pdf. 4 Centers for Medicare & Medicaid Services. Newsroom. Fact sheet: CMS Data Element Library Fact Sheet. June 21, 2018. Available at https://www.cms.gov/newsroom/fact-sheets/cms-data-element-library-fact-sheet. We are also working with ONC to advance the United States Core Data for Interoperability (USCDI), a standardized set of health data classes and constituent data elements for nationwide, interoperable health information exchange. 5 We are collaborating with ONC and other Federal agencies to define and prioritize additional data standardization needs and develop consensus on recommendations for future versions of the USCDI. We are also directly collaborating with ONC to build requirements to support data standardization and alignment with requirements for quality measurement. ONC has launched the USCDI+ initiative to support the identification and establishment of domain specific datasets that build on the core USCDI foundation. 6 The USCDI+ quality measurement domain currently being developed aims to support defining additional data specifications for quality measurement that harmonize, where possible, with other Federal agency data needs and inform supplemental standards necessary to support quality measurement, including the needs of programs supporting quality measurement for long-term and post-acute care. 5 USCDI. Available at https://www.healthit.gov/isa/united-states-core-data-interoperability-uscdi. 6 USCDI+. Available at https://www.healthit.gov/topic/interoperability/uscdi-plus. The 21st Century Cures Act (Cures Act) (Public Law 114-255, enacted December 13, 2016) required HHS and ONC to take steps to promote adoption and use of electronic health record (EHR) technology. 7 Specifically, section 4003(b) of the Cures Act required ONC to take steps to advance interoperability through the development of a Trusted Exchange Framework and Common Agreement aimed at establishing full network-to network exchange of health information nationally. On January 18, 2022, ONC announced a significant milestone by releasing the Trusted Exchange Framework 8 and Common Agreement Version 1. 9 The Trusted Exchange Framework is a set of non-binding principles for health information exchange, and the Common Agreement is a contract that advances those principles. The Common Agreement and the Qualified Health Information Network Technical Framework Version 1 (incorporated by reference into the Common Agreement) establish the technical infrastructure model and governing approach for different health information networks and their users to securely share clinical information with each other, all under commonly agreed to terms. The technical and policy architecture of how exchange occurs under the Common Agreement follows a network-of-networks structure, which allows for connections at different levels and is inclusive of many different types of entities at those different levels, such as health information networks, healthcare practices, hospitals, public health agencies, and Individual Access Services (IAS) Providers. 10 On February 13, 2023, HHS marked a new milestone during an event at HHS headquarters, 11 which recognized the first set of applicants accepted for onboarding to the Common Agreement as Qualified Health Information Networks (QHINs). QHINs will be entities that will connect directly to each other to serve as the core for nationwide interoperability. 12 For more information, we refer readers to https://www.healthit.gov/topic/interoperability/trusted-exchange-framework-and-common-agreement. 7 Sections 4001 through 4008 of Public Law 114-255. Available at https://www.govinfo.gov/content/ pkg/PLAW-114publ255/html/PLAW-114publ255.htm. 8 The Trusted Exchange Framework (TEF): Principles for Trusted Exchange (Jan. 2022). Available at https://www.healthit.gov/sites/default/files/page/2022-01/Trusted_Exchange_Framework_0122.pdf. 9 Common Agreement for Nationwide Health Information Interoperability Version 1 (Jan. 2022). Available at https://www.healthit.gov/sites/default/files/page/2022-01/Common_Agreement_for_Nationwide_Health_Information_Interoperability_Version_1.pdf. 10 The Common Agreement defines Individual Access Services (IAS) as “with respect to the Exchange Purposes definition, the services provided utilizing the Connectivity Services, to the extent consistent with Applicable Law, to an Individual with whom the QHIN, Participant, or Subparticipant has a Direct Relationship to satisfy that Individual's ability to access, inspect, or obtain a copy of that Individual's Required Information that is then maintained by or for any QHIN, Participant, or Subparticipant.” The Common Agreement defines “IAS Provider” as: “Each QHIN, Participant, and Subparticipant that offers Individual Access Services.” See Common Agreement for Nationwide Health Information Interoperability Version 1, at 7 (Jan. 2022), https://www.healthit.gov/sites/default/files/page/2022-01/Common_Agreement_for_Nationwide_Health_Information_Interoperability_Version_1.pdf. 11 “Building TEFCA,” Micky Tripathi and Mariann Yeager, Health IT Buzz Blog. February 13, 2023. https://www.healthit.gov/buzz-blog/electronic-health-and-medical-records/interoperability-electronic-health-and-medical-records/building-tefca. 12 The Common Agreement defines a QHIN as “to the extent permitted by applicable SOP(s), a Health Information Network that is a U.S. Entity that has been Designated by the RCE and is a party to the Common Agreement countersigned by the RCE.” See Common Agreement for Nationwide Health Information Interoperability Version 1, at 10 (Jan. 2022), https://www.healthit.gov/sites/default/files/page/2022-01/Common_Agreement_for_Nationwide_Health_Information_Interoperability_Version_1.pdf. We invite providers to learn more about these important developments and how they are likely to affect SNFs. II. Background on SNF PPS A. Statutory Basis and Scope As amended by section 4432 of the Balanced Budget Act of 1997 (BBA 1997) (Pub. L. 105-33, enacted August 5, 1997), section 1888(e) of the Act provides for the implementation of a PPS for SNFs. This methodology uses prospective, case-mix adjusted per diem payment rates applicable to all covered SNF services defined in section 1888(e)(2)(A) of the Act. The SNF PPS is effective for cost reporting periods beginning on or after July 1, 1998, and covers all costs of furnishing covered SNF services (routine, ancillary, and capital-related costs) other than costs associated with approved educational activities and bad debts. Under section 1888(e)(2)(A)(i) of the Act, covered SNF services include post-hospital extended care services for which benefits are provided under Part A, as well as those items and services (other than a small number of excluded services, such as physicians' services) for which payment may otherwise be made under Part B and which are furnished to Medicare beneficiaries who are residents in a SNF during a covered Part A stay. A comprehensive discussion of these provisions appears in the May 12, 1998 interim final rule (63 FR 26252). In addition, a detailed discussion of the legislative history of the SNF PPS is available online at https://www.cms.gov/Medicare/Medicare-Fee-for-Service-Payment/SNFPPS/Downloads/Legislative_History_2018-10-01.pdf. Section 215(a) of the Protecting Access to Medicare Act of 2014 (PAMA) (Pub. L. 113-93, enacted April 1, 2014) added section 1888(g) to the Act requiring the Secretary to specify an all-cause all-condition hospital readmission measure and an all-condition risk-adjusted potentially preventable hospital readmission measure for the SNF setting. Additionally, section 215(b) of PAMA added section 1888(h) to the Act requiring the Secretary to implement a VBP program for SNFs. Finally, section 2(c)(4) of the Improving Medicare Post-Acute Care Transformation (IMPACT) Act of 2014 (Pub. L. 113-185, enacted October 6, 2014) amended section 1888(e)(6) of the Act, which requires the Secretary to implement a QRP for SNFs under which SNFs report data on measures and resident assessment data. Finally, section 111 of the Consolidated Appropriations Act, 2021 (CAA 2021) updated section 1888(h) of the Act, authorizing the Secretary to apply up to nine additional measures to the VBP program for SNFs. B. Initial Transition for the SNF PPS Under sections 1888(e)(1)(A) and (e)(11) of the Act, the SNF PPS included an initial, three-phase transition that blended a facility-specific rate (reflecting the individual facility's historical cost experience) with the Federal case-mix adjusted rate. The transition extended through the facility's first 3 cost reporting periods under the PPS, up to and including the one that began in FY 2001. Thus, the SNF PPS is no longer operating under the transition, as all facilities have been paid at the full Federal rate effective with cost reporting periods beginning in FY 2002. As we now base payments for SNFs entirely on the adjusted Federal per diem rates, we no longer include adjustment factors under the transition related to facility-specific rates for the upcoming FY. C. Required Annual Rate Updates Section 1888(e)(4)(E) of the Act requires the SNF PPS payment rates to be updated annually. The most recent annual update occurred in a final rule that set forth updates to the SNF PPS payment rates for FY 2023 (87 FR 47502, August 3, 2022). Section 1888(e)(4)(H) of the Act specifies that we provide for publication annually in the Federal Register the following: • The unadjusted Federal per diem rates to be applied to days of covered SNF services furnished during the upcoming FY. • The case-mix classification system to be applied for these services during the upcoming FY. • The factors to be applied in making the area wage adjustment for these services. Along with other revisions discussed later in this preamble, this proposal would set out the required annual updates to the per diem payment rates for SNFs for FY 2024. III. Proposed SNF PPS Rate Setting Methodology and FY 2024 Update A. Federal Base Rates Under section 1888(e)(4) of the Act, the SNF PPS uses per diem Federal payment rates based on mean SNF costs in a base year (FY 1995) updated for inflation to the first effective period of the PPS. We developed the Federal payment rates using allowable costs from hospital-based and freestanding SNF cost reports for reporting periods beginning in FY 1995. The data used in developing the Federal rates also incorporated a Part B add-on, which is an estimate of the amounts that, prior to the SNF PPS, would be payable under Part B for covered SNF services furnished to individuals during the course of a covered Part A stay in a SNF. In developing the rates for the initial period, we updated costs to the first effective year of the PPS (the 15-month period beginning July 1, 1998) using a SNF market basket, and then standardized for geographic variations in wages and for the costs of facility differences in case-mix. In compiling the database used to compute the Federal payment rates, we excluded those providers that received new provider exemptions from the routine cost limits, as well as costs related to payments for exceptions to the routine cost limits. Using the formula that the BBA 1997 prescribed, we set the Federal rates at a level equal to the weighted mean of freestanding costs plus 50 percent of the difference between the freestanding mean and weighted mean of all SNF costs (hospital-based and freestanding) combined. We computed and applied separately the payment rates for facilities located in urban and rural areas and adjusted the portion of the Federal rate attributable to wage-related costs by a wage index to reflect geographic variations in wages. B. SNF Market Basket Update 1. SNF Market Basket Section 1888(e)(5)(A) of the Act requires us to establish a SNF market basket that reflects changes over time in the prices of an appropriate mix of goods and services included in covered SNF services. Accordingly, we have developed a SNF market basket that encompasses the most commonly used cost categories for SNF routine services, ancillary services, and capital-related expenses. In the SNF PPS final rule for FY 2018 (82 FR 36548 through 36566), we rebased and revised the SNF market basket, which included updating the base year from FY 2010 to 2014. In the SNF PPS final rule for FY 2022 (86 FR 42444 through 42463), we rebased and revised the SNF market basket, which included updating the base year from 2014 to 2018. The SNF market basket is used to compute the market basket percentage increase that is used to update the SNF Federal rates on an annual basis, as required by section 1888(e)(4)(E)(ii)(IV) of the Act. This market basket percentage increase is adjusted by a forecast error adjustment, if applicable, and then further adjusted by the application of a productivity adjustment as required by section 1888(e)(5)(B)(ii) of the Act and described in section III.B.4. of this proposed rule. As outlined in this proposed rule, we propose a FY 2024 SNF market basket percentage increase of 2.7 percent based on IHS Global Inc.'s (IGI's) fourth quarter 2022 forecast of the 2018-based SNF market basket (before application of the forecast error adjustment and productivity adjustment). We also propose that if more recent data subsequently become available (for example, a more recent estimate of the market basket and/or the productivity adjustment), we would use such data, if appropriate, to determine the FY 2024 SNF market basket percentage increase, labor-related share relative importance, forecast error adjustment, or productivity adjustment in the SNF PPS final rule. 2. Market Basket Update Factor for FY 2024 Section 1888(e)(5)(B) of the Act defines the SNF market basket percentage increase as the percentage change in the SNF market basket from the midpoint of the previous FY to the midpoint of the current FY. For the Federal rates outlined in this proposed rule, we use the percentage change in the SNF market basket to compute the update factor for FY 2024. This factor is based on the FY 2024 percentage increase in the 2018-based SNF market basket reflecting routine, ancillary, and capital-related expenses. Sections 1888(e)(4)(E)(ii)(IV) and (e)(5)(B)(i) of the Act require that the update factor used to establish the FY 2024 unadjusted Federal rates be at a level equal to the SNF market basket percentage increase. Accordingly, we determined the total growth from the average market basket level for the period of October 1, 2022 through September 30, 2023 to the average market basket level for the period of October 1, 2023 through September 30, 2024. This process yields a percentage increase in the 2018-based SNF market basket of 2.7 percent. As further explained in section III.B.3. of this proposed rule, as applicable, we adjust the percentage increase by the forecast error adjustment from the most recently available FY for which there is final data and apply this adjustment whenever the difference between the forecasted and actual percentage increase in the market basket exceeds a 0.5 percentage point threshold in absolute terms. Additionally, section 1888(e)(5)(B)(ii) of the Act requires us to reduce the market basket percentage increase by the productivity adjustment (the 10-year moving average of changes in annual economy-wide private nonfarm business total factor productivity (TFP) for the period ending September 30, 2024) which is estimated to be 0.2 percentage point, as described in section III.B.4. of this proposed rule. We also note that section 1888(e)(6)(A)(i) of the Act provides that, beginning with FY 2018, SNFs that fail to submit data, as applicable, in accordance with sections 1888(e)(6)(B)(i)(II) and (III) of the Act for a fiscal year will receive a 2.0 percentage point reduction to their market basket update for the fiscal year involved, after application of section 1888(e)(5)(B)(ii) of the Act (the productivity adjustment) and section 1888(e)(5)(B)(iii) of the Act (the market basket increase). In addition, section 1888(e)(6)(A)(ii) of the Act states that application of the 2.0 percentage point reduction (after application of section 1888(e)(5)(B)(ii) and (iii) of the Act) may result in the market basket percentage change being less than zero for a fiscal year, and may result in payment rates for a fiscal year being less than such payment rates for the preceding fiscal year. Section 1888(e)(6)(A)(iii) of the Act further specifies that the 2.0 percentage point reduction is applied in a noncumulative manner, so that any reduction made under section 1888(e)(6)(A)(i) of the Act applies only to the fiscal year involved, and that the reduction cannot be taken into account in computing the payment amount for a subsequent fiscal year. 3. Forecast Error Adjustment As discussed in the June 10, 2003 supplemental proposed rule (68 FR 34768) and finalized in the August 4, 2003 final rule (68 FR 46057 through 46059), § 413.337(d)(2) provides for an adjustment to account for market basket forecast error. The initial adjustment for market basket forecast error applied to the update of the FY 2003 rate for FY 2004 and took into account the cumulative forecast error for the period from FY 2000 through FY 2002, resulting in an increase of 3.26 percent to the FY 2004 update. Subsequent adjustments in succeeding FYs take into account the forecast error from the most recently available FY for which there is final data and apply the difference between the forecasted and actual change in the market basket when the difference exceeds a specified threshold. We originally used a 0.25 percentage point threshold for this purpose; however, for the reasons specified in the FY 2008 SNF PPS final rule (72 FR 43425), we adopted a 0.5 percentage point threshold effective for FY 2008 and subsequent FYs. As we stated in the final rule for FY 2004 that first issued the market basket forecast error adjustment (68 FR 46058), the adjustment will reflect both upward and downward adjustments, as appropriate. For FY 2022 (the most recently available FY for which there is final data), the forecasted or estimated increase in the SNF market basket was 2.7 percent, and the actual increase for FY 2022 is 6.3 percent, resulting in the actual increase being 3.6 percentage points higher than the estimated increase. Accordingly, as the difference between the estimated and actual amount of change in the market basket exceeds the 0.5 percentage point threshold, under the policy previously described (comparing the forecasted and actual market basket percentage increase), the FY 2024 market basket percentage increase of 2.7 percent would be adjusted upward to account for the forecast error adjustment of 3.6 percentage points, resulting in a SNF market basket percentage increase of 6.3 percent, which is then reduced by the productivity adjustment of 0.2 percentage point, discussed in section III.B.4. of this proposed rule. This results in a proposed SNF market basket update for FY 2024 of 6.1 percent. Table 2 shows the forecasted and actual market basket increases for FY 2022. Table 2—Difference Between the Actual and Forecasted Market Basket Increases for FY 2022 Index Forecasted FY 2022 increase * Actual FY 2022 increase ** FY 2022 difference SNF 2.7 6.3 3.6 * Published in Federal Register ; based on second quarter 2021 IGI forecast (2018-based SNF market basket). ** Based on the fourth quarter 2022 IGI forecast (2018-based SNF market basket). 4. Productivity Adjustment Section 1888(e)(5)(B)(ii) of the Act, as added by section 3401(b) of the Patient Protection and Affordable Care Act (Affordable Care Act) (Pub. L. 111-148, enacted March 23, 2010) requires that, in FY 2012 and in subsequent FYs, the market basket percentage under the SNF payment system (as described in section 1888(e)(5)(B)(i) of the Act) is to be reduced annually by the productivity adjustment described in section 1886(b)(3)(B)(xi)(II) of the Act. Section 1886(b)(3)(B)(xi)(II) of the Act, in turn, defines the productivity adjustment to be equal to the 10-year moving average of changes in annual economy-wide, private nonfarm business multifactor productivity (MFP) (as projected by the Secretary for the 10-year period ending with the applicable FY, year, cost-reporting period, or other annual period). The U.S. Department of Labor's Bureau of Labor Statistics (BLS) publishes the official measure of productivity for the U.S. We note that previously the productivity measure referenced at section 1886(b)(3)(B)(xi)(II) of the Act was published by BLS as private nonfarm business multifactor productivity. Beginning with the November 18, 2021 release of productivity data, BLS replaced the term MFP with TFP. BLS noted that this is a change in terminology only and will not affect the data or methodology. As a result of the BLS name change, the productivity measure referenced in section 1886(b)(3)(B)(xi)(II) of the Act is now published by BLS as private nonfarm business total factor productivity. We refer readers to the BLS website at www.bls.gov for the BLS historical published TFP data. A complete description of the TFP projection methodology is available on our website at https://www.cms.gov/Research-Statistics-Data-and-Systems/Statistics-Trends-and-Reports/MedicareProgramRatesStats/MarketBasketResearch. In addition, in the FY 2022 SNF final rule (86 FR 42429) we noted that, effective with FY 2022 and forward, we changed the name of this adjustment to refer to it as the “productivity adjustment,” rather than the “MFP adjustment.” Per section 1888(e)(5)(A) of the Act, the Secretary shall establish a SNF market basket that reflects changes over time in the prices of an appropriate mix of goods and services included in covered SNF services. Section 1888(e)(5)(B)(ii) of the Act, added by section 3401(b) of the Affordable Care Act, requires that for FY 2012 and each subsequent FY, after determining the market basket percentage described in section 1888(e)(5)(B)(i) of the Act, the Secretary shall reduce such percentage by the productivity adjustment described in section 1886(b)(3)(B)(xi)(II) of the Act. Section 1888(e)(5)(B)(ii) of the Act further states that the reduction of the market basket percentage by the productivity adjustment may result in the market basket percentage being less than zero for a FY and may result in payment rates under section 1888(e) of the Act being less than such payment rates for the preceding fiscal year. Thus, if the application of the productivity adjustment to the market basket percentage calculated under section 1888(e)(5)(B)(i) of the Act results in a productivity-adjusted market basket percentage that is less than zero, then the annual update to the unadjusted Federal per diem rates under section 1888(e)(4)(E)(ii) of the Act would be negative, and such rates would decrease relative to the prior FY. Based on the data available for this FY 2024 SNF PPS proposed rule, the current proposed productivity adjustment (the 10-year moving average of changes in annual economy-wide private nonfarm business TFP for the period ending September 30, 2024) is projected to be 0.2 percentage point. Consistent with section 1888(e)(5)(B)(i) of the Act and § 413.337(d)(2), and as discussed previously in section III.B.1. of this proposed rule, the proposed market basket percentage for FY 2024 for the SNF PPS is based on IGI's fourth quarter 2022 forecast of the SNF market basket percentage, which is estimated to be 2.7 percent. This market basket percentage is then increased by 3.6 percentage points, due to application of the forecast error adjustment discussed earlier in section III.B.3. of this proposed rule. Finally, as discussed earlier in section III.B.4. of this proposed rule, we are applying a proposed 0.2 percentage point productivity adjustment to the FY 2024 SNF market basket percentage. Therefore, the resulting proposed productivity-adjusted FY 2024 SNF market basket update is equal to 6.1 percent, which reflects a market basket percentage increase of 2.7 percent, plus the 3.6 percentage points forecast error adjustment, and less the 0.2 percentage point to account for the productivity adjustment. Thus, we propose to apply a net SNF market basket update factor of 6.1 percent in our determination of the FY 2024 SNF PPS unadjusted Federal per diem rates. 5. Unadjusted Federal Per Diem Rates for FY 2024 As discussed in the FY 2019 SNF PPS final rule (83 FR 39162), in FY 2020 we implemented a new case-mix classification system to classify SNF patients under the SNF PPS, the PDPM. As discussed in section V.B.1. of that final rule (83 FR 39189), under PDPM, the unadjusted Federal per diem rates are divided into six components, five of which are case-mix adjusted components (Physical Therapy (PT), Occupational Therapy (OT), Speech-Language Pathology (SLP), Nursing, and Non-Therapy Ancillaries (NTA)), and one of which is a non-case-mix component, as existed under the previous RUG-IV model. We propose to use the SNF market basket, adjusted as described previously in sections III.B.1. through III.B.4. of this proposed rule, to adjust each per diem component of the Federal rates forward to reflect the change in the average prices for FY 2024 from the average prices for FY 2023. We also propose to further adjust the rates by a wage index budget neutrality factor, described later in section III.D. of this proposed rule. Further, in the past, we used the revised Office of Management and Budget (OMB) delineations adopted in the FY 2015 SNF PPS final rule (79 FR 45632, 45634), with updates as reflected in OMB Bulletin Nos. 15-01 and 17-01, to identify a facility's urban or rural status for the purpose of determining which set of rate tables would apply to the facility. As discussed in the FY 2021 SNF PPS proposed and final rules, we adopted the revised OMB delineations identified in OMB Bulletin No. 18-04 (available at https://www.whitehouse.gov/wp-content/uploads/2018/09/Bulletin-18-04.pdf ) to identify a facility's urban or rural status effective beginning with FY 2021. Tables 3 and 4 reflect the updated unadjusted Federal rates for FY 2024, prior to adjustment for case-mix. Table 3—FY 2024 Unadjusted Federal Rate Per Diem—URBAN Rate component PT OT SLP Nursing NTA Non-case-mix Per Diem Amount $70.08 $65.23 $26.16 $122.15 $92.16 $109.39 Table 4—FY 2024 Unadjusted Federal Rate Per Diem—RURAL Rate component PT OT SLP Nursing NTA Non-case-mix Per Diem Amount $79.88 $73.36 $32.96 $116.71 $88.05 $111.41 C. Case-Mix Adjustment Under section 1888(e)(4)(G)(i) of the Act, the Federal rate also incorporates an adjustment to account for facility case-mix, using a classification system that accounts for the relative resource utilization of different patient types. The statute specifies that the adjustment is to reflect both a resident classification system that the Secretary establishes to account for the relative resource use of different patient types, as well as resident assessment data and other data that the Secretary considers appropriate. In the FY 2019 final rule (83 FR 39162, August 8, 2018), we finalized a new case-mix classification model, the PDPM, which took effect beginning October 1, 2019. The previous RUG-IV model classified most patients into a therapy payment group and primarily used the volume of therapy services provided to the patient as the basis for payment classification, thus creating an incentive for SNFs to furnish therapy regardless of the individual patient's unique characteristics, goals, or needs. PDPM eliminates this incentive and improves the overall accuracy and appropriateness of SNF payments by classifying patients into payment groups based on specific, data-driven patient characteristics, while simultaneously reducing the administrative burden on SNFs. The PDPM uses clinical data from the MDS to assign case-mix classifiers to each patient that are then used to calculate a per diem payment under the SNF PPS, consistent with the provisions of section 1888(e)(4)(G)(i) of the Act. As discussed in section IV.A. of this proposed rule, the clinical orientation of the case-mix classification system supports the SNF PPS's use of an administrative presumption that considers a beneficiary's initial case-mix classification to assist in making certain SNF level of care determinations. Further, because the MDS is used as a basis for payment, as well as a clinical assessment, we have provided extensive training on proper coding and the timeframes for MDS completion in our Resident Assessment Instrument (RAI) Manual. As we have stated in prior rules, for an MDS to be considered valid for use in determining payment, the MDS assessment should be completed in compliance with the instructions in the RAI Manual in effect at the time the assessment is completed. For payment and quality monitoring purposes, the RAI Manual consists of both the Manual instructions and the interpretive guidance and policy clarifications posted on the appropriate MDS website at https://www.cms.gov/Medicare/Quality-Initiatives-Patient-Assessment-Instruments/NursingHomeQualityInits/MDS30RAIManual.html. Under section 1888(e)(4)(H) of the Act, each update of the payment rates must include the case-mix classification methodology applicable for the upcoming FY. The FY 2024 payment rates set forth in this proposed rule reflect the use of the PDPM case-mix classification system from October 1, 2023, through September 30, 2024. The case-mix adjusted PDPM payment rates for FY 2024 are listed separately for urban and rural SNFs, in Tables 5 and 6 with corresponding case-mix values. Given the differences between the previous RUG-IV model and PDPM in terms of patient classification and billing, it was important that the format of Tables 5 and 6 reflect these differences. More specifically, under both RUG-IV and PDPM, providers use a Health Insurance Prospective Payment System (HIPPS) code on a claim to bill for covered SNF services. Under RUG-IV, the HIPPS code included the three-character RUG-IV group into which the patient classified, as well as a two-character assessment indicator code that represented the assessment used to generate this code. Under PDPM, while providers still use a HIPPS code, the characters in that code represent different things. For example, the first character represents the PT and OT group into which the patient classifies. If the patient is classified into the PT and OT group “TA”, then the first character in the patient's HIPPS code would be an A. Similarly, if the patient is classified into the SLP group “SB”, then the second character in the patient's HIPPS code would be a B. The third character represents the Nursing group into which the patient classifies. The fourth character represents the NTA group into which the patient classifies. Finally, the fifth character represents the assessment used to generate the HIPPS code. Tables 5 and 6 reflect the PDPM's structure. Accordingly, Column 1 of Tables 5 and 6 represents the character in the HIPPS code associated with a given PDPM component. Columns 2 and 3 provide the case-mix index and associated case-mix adjusted component rate, respectively, for the relevant PT group. Columns 4 and 5 provide the case-mix index and associated case-mix adjusted component rate, respectively, for the relevant OT group. Columns 6 and 7 provide the case-mix index and associated case-mix adjusted component rate, respectively, for the relevant SLP group. Column 8 provides the nursing case-mix group (CMG) that is connected with a given PDPM HIPPS character. For example, if the patient qualified for the nursing group CBC1, then the third character in the patient's HIPPS code would be a “P.” Columns 9 and 10 provide the case-mix index and associated case-mix adjusted component rate, respectively, for the relevant nursing group. Finally, columns 11 and 12 provide the case-mix index and associated case-mix adjusted component rate, respectively, for the relevant NTA group. Tables 5 and 6 do not reflect adjustments which may be made to the SNF PPS rates as a result of the SNF VBP Program, discussed in section VII. of this proposed rule, or other adjustments, such as the variable per diem adjustment. Further, in the past, we used the revised OMB delineations adopted in the FY 2015 SNF PPS final rule (79 FR 45632, 45634), with updates as reflected in OMB Bulletin Nos, 15-01 and 17-01, to identify a facility's urban or rural status for the purpose of determining which set of rate tables would apply to the facility. As discussed in the FY 2021 SNF PPS final rule (85 FR 47594), we adopted the revised OMB delineations identified in OMB Bulletin No. 18-04 (available at https://www.whitehouse.gov/wp-content/uploads/2018/09/Bulletin-18-04.pdf ) to identify a facility's urban or rural status effective beginning with FY 2021. In the FY 2023 SNF PPS final rule (87 FR 47502), we finalized a proposal to recalibrate the PDPM parity adjustment over 2 years starting in FY 2023, which means that, for each of the PDPM case-mix adjusted components, we lowered the PDPM parity adjustment factor from 46 percent to 42 percent in FY 2023 and we would further lower the PDPM parity adjustment factor from 42 percent to 38 percent in FY 2024. Following this methodology, which is further described in the FY 2023 SNF PPS final rule (87 FR 47525 through 47534), Tables 5 and 6 incorporate the second phase of the PDPM parity adjustment recalibration. Table 5—PDPM Case-Mix Adjusted Federal Rates and Associated Indexes—URBAN [Including the parity adjustment recalibration] PDPM group PT CMI PT rate OT CMI OT rate SLP CMI SLP rate Nursing CMG Nursing CMI Nursing rate NTA CMI NTA rate A 1.45 $101.62 1.41 $91.97 0.64 $16.74 ES3 3.84 $469.06 3.06 $282.01 B 1.61 112.83 1.54 100.45 1.72 45.00 ES2 2.90 354.24 2.39 220.26 C 1.78 124.74 1.60 104.37 2.52 65.92 ES1 2.77 338.36 1.74 160.36 D 1.81 126.84 1.45 94.58 1.38 36.10 HDE2 2.27 277.28 1.26 116.12 E 1.34 93.91 1.33 86.76 2.21 57.81 HDE1 1.88 229.64 0.91 83.87 F 1.52 106.52 1.51 98.50 2.82 73.77 HBC2 2.12 258.96 0.68 62.67 G 1.58 110.73 1.55 101.11 1.93 50.49 HBC1 1.76 214.98 H 1.10 77.09 1.09 71.10 2.7 70.63 LDE2 1.97 240.64 I 1.07 74.99 1.12 73.06 3.34 87.37 LDE1 1.64 200.33 J 1.34 93.91 1.37 89.37 2.83 74.03 LBC2 1.63 199.10 K 1.44 100.92 1.46 95.24 3.5 91.56 LBC1 1.35 164.90 L 1.03 72.18 1.05 68.49 3.98 104.12 CDE2 1.77 216.21 M 1.20 84.10 1.23 80.23 CDE1 1.53 186.89 N 1.40 98.11 1.42 92.63 CBC2 1.47 179.56 O 1.47 103.02 1.47 95.89 CA2 1.03 125.81 P 1.02 71.48 1.03 67.19 CBC1 1.27 155.13 Q CA1 0.89 108.71 R BAB2 0.98 119.71 S BAB1 0.94 114.82 T PDE2 1.48 180.78 U PDE1 1.39 169.79 V PBC2 1.15 140.47 W PA2 0.67 81.84 X PBC1 1.07 130.70 Y PA1 0.62 75.73 Table 6—PDPM Case-Mix Adjusted Federal Rates and Associated Indexes—RURAL [Including the parity adjustment recalibration] PDPM group PT CMI PT rate OT CMI OT rate SLP CMI SLP rate Nursing CMG Nursing CMI Nursing rate NTA CMI NTA rate A 1.45 $115.83 1.41 $103.44 0.64 $21.09 ES3 3.84 $448.17 3.06 $269.43 B 1.61 128.61 1.54 112.97 1.72 56.69 ES2 2.90 338.46 2.39 210.44 C 1.78 142.19 1.60 117.38 2.52 83.06 ES1 2.77 323.29 1.74 153.21 D 1.81 144.58 1.45 106.37 1.38 45.48 HDE2 2.27 264.93 1.26 110.94 E 1.34 107.04 1.33 97.57 2.21 72.84 HDE1 1.88 219.41 0.91 80.13 F 1.52 121.42 1.51 110.77 2.82 92.95 HBC2 2.12 247.43 0.68 59.87 G 1.58 126.21 1.55 113.71 1.93 63.61 HBC1 1.76 205.41 H 1.10 87.87 1.09 79.96 2.7 88.99 LDE2 1.97 229.92 I 1.07 85.47 1.12 82.16 3.34 110.09 LDE1 1.64 191.40 J 1.34 107.04 1.37 100.50 2.83 93.28 LBC2 1.63 190.24 K 1.44 115.03 1.46 107.11 3.5 115.36 LBC1 1.35 157.56 L 1.03 82.28 1.05 77.03 3.98 131.18 CDE2 1.77 206.58 M 1.20 95.86 1.23 90.23 CDE1 1.53 178.57 N 1.40 111.83 1.42 104.17 CBC2 1.47 171.56 O 1.47 117.42 1.47 107.84 CA2 1.03 120.21 P 1.02 81.48 1.03 75.56 CBC1 1.27 148.22 Q CA1 0.89 103.87 R BAB2 0.98 114.38 S BAB1 0.94 109.71 T PDE2 1.48 172.73 U PDE1 1.39 162.23 V PBC2 1.15 134.22 W PA2 0.67 78.20 X PBC1 1.07 124.88 Y PA1 0.62 72.36 D. Wage Index Adjustment Section 1888(e)(4)(G)(ii) of the Act requires that we adjust the Federal rates to account for differences in area wage levels, using a wage index that the Secretary determines appropriate. Since the inception of the SNF PPS, we have used hospital inpatient wage data in developing a wage index to be applied to SNFs. We propose to continue this practice for FY 2024, as we continue to believe that in the absence of SNF-specific wage data, using the hospital inpatient wage index data is appropriate and reasonable for the SNF PPS. As explained in the update notice for FY 2005 (69 FR 45786), the SNF PPS does not use the hospital area wage index's occupational mix adjustment, as this adjustment serves specifically to define the occupational categories more clearly in a hospital setting; moreover, the collection of the occupational wage data under the inpatient prospective payment system (IPPS) also excludes any wage data related to SNFs. Therefore, we believe that using the updated wage data exclusive of the occupational mix adjustment continues to be appropriate for SNF payments. As in previous years, we would continue to use the pre-reclassified IPPS hospital wage data, without applying the occupational mix, rural floor, or outmigration adjustment, as the basis for the SNF PPS wage index. For FY 2024, the updated wage data are for hospital cost reporting periods beginning on or after October 1, 2019 and before October 1, 2020 (FY 2020 cost report data). We note that section 315 of the Medicare, Medicaid, and SCHIP Benefits Improvement and Protection Act of 2000 (BIPA) (Pub. L. 106-554, enacted December 21, 2000) gave the Secretary the discretion to establish a geographic reclassification procedure specific to SNFs, but only after collecting the data necessary to establish a SNF PPS wage index that is based on wage data from nursing homes. To date, this has proven to be unfeasible due to the volatility of existing SNF wage data and the significant amount of resources that would be required to improve the quality of the data. More specifically, auditing all SNF cost reports, similar to the process used to audit inpatient hospital cost reports for purposes of the IPPS wage index, would place a burden on providers in terms of recordkeeping and completion of the cost report worksheet. Adopting such an approach would require a significant commitment of resources by CMS and the Medicare Administrative Contractors, potentially far in excess of those required under the IPPS, given that there are nearly five times as many SNFs as there are inpatient hospitals. While we continue to believe that the development of such an audit process could improve SNF cost reports in such a manner as to permit us to establish a SNF-specific wage index, we do not believe this undertaking is feasible at this time. In addition, we propose to continue to use the same methodology discussed in the SNF PPS final rule for FY 2008 (72 FR 43423) to address those geographic areas in which there are no hospitals, and thus, no hospital wage index data on which to base the calculation of the FY 2022 SNF PPS wage index. For rural geographic areas that do not have hospitals and, therefore, lack hospital wage data on which to base an area wage adjustment, we propose to continue using the average wage index from all contiguous Core-Based Statistical Areas (CBSAs) as a reasonable proxy. For FY 2024, there are no rural geographic areas that do not have hospitals, and thus, this methodology will not be applied. For rural Puerto Rico, we propose not to apply this methodology due to the distinct economic circumstances there; due to the close proximity of almost all of Puerto Rico's various urban and non-urban areas, this methodology would produce a wage index for rural Puerto Rico that is higher than that in half of its urban areas. Instead, we would continue using the most recent wage index previously available for that area. For urban areas without specific hospital wage index data, we propose to continue using the average wage indexes of all urban areas within the State to serve as a reasonable proxy for the wage index of that urban CBSA. For FY 2024, the only urban area without wage index data available is CBSA 25980, Hinesville-Fort Stewart, GA. In the SNF PPS final rule for FY 2006 (70 FR 45026, August 4, 2005), we adopted the changes discussed in OMB Bulletin No. 03-04 (June 6, 2003), which announced revised definitions for MSAs and the creation of micropolitan statistical areas and combined statistical areas. In adopting the CBSA geographic designations, we provided for a 1-year transition in FY 2006 with a blended wage index for all providers. For FY 2006, the wage index for each provider consisted of a blend of 50 percent of the FY 2006 MSA-based wage index and 50 percent of the FY 2006 CBSA-based wage index (both using FY 2002 hospital data). We referred to the blended wage index as the FY 2006 SNF PPS transition wage index. As discussed in the SNF PPS final rule for FY 2006 (70 FR 45041), after the expiration of this 1-year transition on September 30, 2006, we used the full CBSA-based wage index values. In the FY 2015 SNF PPS final rule (79 FR 45644 through 45646), we finalized changes to the SNF PPS wage index based on the newest OMB delineations, as described in OMB Bulletin No. 13-01, beginning in FY 2015, including a 1-year transition with a blended wage index for FY 2015. OMB Bulletin No. 13-01 established revised delineations for Metropolitan Statistical Areas, Micropolitan Statistical Areas, and Combined Statistical Areas in the United States and Puerto Rico based on the 2010 Census, and provided guidance on the use of the delineations of these statistical areas using standards published in the June 28, 2010 Federal Register (75 FR 37246 through 37252). Subsequently, on July 15, 2015, OMB issued OMB Bulletin No. 15-01, which provided minor updates to and superseded OMB Bulletin No. 13-01 that was issued on February 28, 2013. The attachment to OMB Bulletin No. 15-01 provided detailed information on the update to statistical areas since February 28, 2013. The updates provided in OMB Bulletin No. 15-01 were based on the application of the 2010 Standards for Delineating Metropolitan and Micropolitan Statistical Areas to Census Bureau population estimates for July 1, 2012 and July 1, 2013 and were adopted under the SNF PPS in the FY 2017 SNF PPS final rule (81 FR 51983, August 5, 2016). In addition, on August 15, 2017, OMB issued Bulletin No. 17-01 which announced a new urban CBSA, Twin Falls, Idaho (CBSA 46300) which was adopted in the SNF PPS final rule for FY 2019 (83 FR 39173, August 8, 2018). As discussed in the FY 2021 SNF PPS final rule (85 FR 47594), we adopted the revised OMB delineations identified in OMB Bulletin No. 18-04 (available at https://www.whitehouse.gov/wp-content/uploads/2018/09/Bulletin-18-04.pdf ) beginning October 1, 2020, including a 1-year transition for FY 2021 under which we applied a 5 percent cap on any decrease in a hospital's wage index compared to its wage index for the prior fiscal year (FY 2020). The updated OMB delineations more accurately reflect the contemporary urban and rural nature of areas across the country, and the use of such delineations allows us to determine more accurately the appropriate wage index and rate tables to apply under the SNF PPS. In the FY 2023 SNF PPS final rule (87 FR 47521 through 47525), we finalized a policy to apply a permanent 5 percent cap on any decreases to a provider's wage index from its wage index in the prior year, regardless of the circumstances causing the decline. Additionally, we finalized a policy that a new SNF would be paid the wage index for the area in which it is geographically located for its first full or partial FY with no cap applied because a new SNF would not have a wage index in the prior FY. We amended the SNF PPS regulations at 42 CFR 413.337(b)(4)(ii) to reflect this permanent cap on wage index decreases. A full discussion of the adoption of this policy is found in the FY 2023 SNF PPS final rule. As we previously stated in the FY 2008 SNF PPS proposed and final rules (72 FR 25538 through 25539, and 72 FR 43423), this and all subsequent SNF PPS rules and notices are considered to incorporate any updates and revisions set forth in the most recent OMB bulletin that applies to the hospital wage data used to determine the current SNF PPS wage index. OMB issued further revised CBSA delineations in OMB Bulletin No. 20-01, on March 6, 2020 (available on the web at https://www.whitehouse.gov/wp-content/uploads/2020/03/Bulletin-20-01.pdf ). However, we determined that the changes in OMB Bulletin No. 20-01 do not impact the CBSA-based labor market area delineations adopted in FY 2021. Therefore, CMS did not propose to adopt the revised OMB delineations identified in OMB Bulletin No. 20 01 for FY 2022 or 2023, and for these reasons CMS is likewise not making such a proposal for FY 2024.The wage index applicable to FY 2024 is set forth in Tables A and B available on the CMS website at http://www.cms.gov/Medicare/Medicare-Fee-for-Service-Payment/SNFPPS/WageIndex.html. Once calculated, we would apply the wage index adjustment to the labor-related portion of the Federal rate. Each year, we calculate a labor-related share, based on the relative importance of labor-related cost categories (that is, those cost categories that are labor-intensive and vary with the local labor market) in the input price index. In the SNF PPS final rule for FY 2022 (86 FR 42437), we finalized a proposal to revise the labor-related share to reflect the relative importance of the 2018-based SNF market basket cost weights for the following cost categories: Wages and Salaries; Employee Benefits; Professional Fees: Labor-Related; Administrative and Facilities Support services; Installation, Maintenance, and Repair Services; All Other: Labor-Related Services; and a proportion of Capital-Related expenses. The methodology for calculating the labor-related portion beginning in FY 2022 is discussed in detail in the FY 2022 SNF PPS final rule (86 FR 42461 through 42463). We calculate the labor-related relative importance from the SNF market basket, and it approximates the labor-related portion of the total costs after taking into account historical and projected price changes between the base year and FY 2024. The price proxies that move the different cost categories in the market basket do not necessarily change at the same rate, and the relative importance captures these changes. Accordingly, the relative importance figure more closely reflects the cost share weights for FY 2024 than the base year weights from the SNF market basket. We calculate the labor-related relative importance for FY 2024 in four steps. First, we compute the FY 2024 price index level for the total market basket and each cost category of the market basket. Second, we calculate a ratio for each cost category by dividing the FY 2024 price index level for that cost category by the total market basket price index level. Third, we determine the FY 2024 relative importance for each cost category by multiplying this ratio by the base year (2018) weight. Finally, we add the FY 2024 relative importance for each of the labor-related cost categories (Wages and Salaries; Employee Benefits; Professional Fees: Labor-Related; Administrative and Facilities Support Services; Installation, Maintenance, and Repair Services; All Other: Labor-Related Services; and a portion of Capital-Related expenses) to produce the FY 2024 labor-related relative importance. Table 7 summarizes the proposed labor-related share for FY 2024, based on IGI's fourth quarter 2022 forecast of the 2018-based SNF market basket, compared to the labor-related share that was used for the FY 2023 SNF PPS final rule. Table 7—Labor-Related Share, FY 2023 and FY 2024 Relative importance, labor-related share, FY 2023 22:2 forecast 1 Proposed relative importance, labor-related share, FY 2024 22:4 forecast 2 Wages and salaries 51.9 52.2 Employee benefits 9.5 9.5 Professional fees: Labor-related 3.5 3.4 Administrative & facilities support services 0.6 0.6 Installation, maintenance & repair services 0.4 0.4 All other: Labor-related services 2.0 2.0 Capital-related (.391) 2.9 2.9 Total 70.8 71.0 1 Published in the Federal Register ; Based on the second quarter 2022 IHS Global Inc. forecast of the 2018-based SNF market basket. 2 Based on the fourth quarter 2022 IHS Global Inc. forecast of the 2018-based SNF market basket. To calculate the labor portion of the case-mix adjusted per diem rate, we would multiply the total case-mix adjusted per diem rate, which is the sum of all five case-mix adjusted components into which a patient classifies, and the non-case-mix component rate, by the FY 2024 labor-related share percentage provided in Table 7. The remaining portion of the rate would be the non-labor portion. Under the previous RUG-IV model, we included tables which provided the case-mix adjusted RUG-IV rates, by RUG-IV group, broken out by total rate, labor portion and non-labor portion, such as Table 9 of the FY 2019 SNF PPS final rule (83 FR 39175). However, as we discussed in the FY 2020 final rule (84 FR 38738), under PDPM, as the total rate is calculated as a combination of six different component rates, five of which are case-mix adjusted, and given the sheer volume of possible combinations of these five case-mix adjusted components, it is not feasible to provide tables similar to those that existed in the prior rulemaking. Therefore, to aid interested parties in understanding the effect of the wage index on the calculation of the SNF per diem rate, we have included a hypothetical rate calculation in Table 9. Section 1888(e)(4)(G)(ii) of the Act also requires that we apply this wage index in a manner that does not result in aggregate payments under the SNF PPS that are greater or less than would otherwise be made if the wage adjustment had not been made. For FY 2024 (Federal rates effective October 1, 2023), we apply an adjustment to fulfill the budget neutrality requirement. We meet this requirement by multiplying each of the components of the unadjusted Federal rates by a budget neutrality factor, equal to the ratio of the weighted average wage adjustment factor for FY 2023 to the weighted average wage adjustment factor for FY 2024. For this calculation, we would use the same FY 2022 claims utilization data for both the numerator and denominator of this ratio. We define the wage adjustment factor used in this calculation as the labor portion of the rate component multiplied by the wage index plus the non-labor portion of the rate component. The proposed budget neutrality factor for FY 2024 is 0.9998. We note that if more recent data become available (for example, revised wage data), we would use such data, as appropriate, to determine the wage index budget neutrality factor in the SNF PPS final rule. We invite public comment on the proposed SNF wage adjustment for FY 2024. E. SNF Value-Based Purchasing Program Beginning with payment for services furnished on October 1, 2018, section 1888(h) of the Act requires the Secretary to reduce the adjusted Federal per diem rate determined under section 1888(e)(4)(G) of the Act otherwise applicable to a SNF for services furnished during a fiscal year by 2 percent, and to adjust the resulting rate for a SNF by the value-based incentive payment amount earned by the SNF based on the SNF's performance score for that fiscal year under the SNF VBP Program. To implement these requirements, we finalized in the FY 2019 SNF PPS final rule the addition of § 413.337(f) to our regulations (83 FR 39178). Please see section VII. of this proposed rule for further discussion of our proposed updates to the SNF VBP Program. F. Adjusted Rate Computation Example Tables 8 through 10 provide examples generally illustrating payment calculations during FY 2024 under PDPM for a hypothetical 30-day SNF stay, involving the hypothetical SNF XYZ, located in Frederick, MD (Urban CBSA 23224), for a hypothetical patient who is classified into such groups that the patient's HIPPS code is NHNC1. Table 8 shows the adjustments made to the Federal per diem rates (prior to application of any adjustments under the SNF VBP Program as discussed previously and taking into account the second phase of the parity adjustment recalibration discussed in section III.C. of this proposed rule) to compute the provider's case-mix adjusted per diem rate for FY 2024, based on the patient's PDPM classification, as well as how the variable per diem (VPD) adjustment factor affects calculation of the per diem rate for a given day of the stay. Table 9 shows the adjustments made to the case-mix adjusted per diem rate from Table 8 to account for the provider's wage index. The wage index used in this example is based on the FY 2024 SNF PPS wage index that appears in Table A available on the CMS website at http://www.cms.gov/Medicare/Medicare-Fee-for-Service-Payment/SNFPPS/WageIndex.html. Finally, Table 10 provides the case-mix and wage index adjusted per-diem rate for this patient for each day of the 30-day stay, as well as the total payment for this stay. Table 10 also includes the VPD adjustment factors for each day of the patient's stay, to clarify why the patient's per diem rate changes for certain days of the stay. As illustrated in Table 10, SNF XYZ's total PPS payment for this particular patient's stay would equal $21,677.34. Table 8—PDPM Case-Mix Adjusted Rate Computation Example Per diem rate calculation Component Component group Component rate VPD adjustment factor VPD adj. rate PT N $98.11 1.00 $98.11 OT N 92.63 1.00 92.63 SLP H 70.63 1.00 70.63 Nursing N 179.56 1.00 179.56 NTA C 160.36 3.00 481.08 Non-Case-Mix 109.39 109.39 Total PDPM Case-Mix Adj. Per Diem 1,031.40 Table 9—Wage Index Adjusted Rate Computation Example PDPM wage index adjustment calculation HIPPS code PDPM case-mix adjusted per diem Labor portion Wage index Wage index adjusted rate Non-labor portion Total case mix and wage index adj. rate NHNC1 $1,031.40 $732.29 0.9648 $706.51 $299.11 $1,005.62 Table 10—Adjusted Rate Computation Example Day of stay NTA VPD adjustment factor PT/OT VPD adjustment factor Case mix and wage index adjusted per diem rate 1 3.0 1.0 $1,005.62 2 3.0 1.0 1,005.62 3 3.0 1.0 1,005.62 4 1.0 1.0 692.92 5 1.0 1.0 692.92 6 1.0 1.0 692.92 7 1.0 1.0 692.92 8 1.0 1.0 692.92 9 1.0 1.0 692.92 10 1.0 1.0 692.92 11 1.0 1.0 692.92 12 1.0 1.0 692.92 13 1.0 1.0 692.92 14 1.0 1.0 692.92 15 1.0 1.0 692.92 16 1.0 1.0 692.92 17 1.0 1.0 692.92 18 1.0 1.0 692.92 19 1.0 1.0 692.92 20 1.0 1.0 692.92 21 1.0 0.98 689.20 22 1.0 0.98 689.20 23 1.0 0.98 689.20 24 1.0 0.98 689.20 25 1.0 0.98 689.20 26 1.0 0.98 689.20 27 1.0 0.98 689.20 28 1.0 0.96 685.48 29 1.0 0.96 685.48 30 1.0 0.96 685.48 Total Payment 21,677.34 IV. Additional Aspects of the SNF PPS A. SNF Level of Care—Administrative Presumption The establishment of the SNF PPS did not change Medicare's fundamental requirements for SNF coverage. However, because the case-mix classification is based, in part, on the beneficiary's need for skilled nursing care and therapy, we have attempted, where possible, to coordinate claims review procedures with the existing resident assessment process and case-mix classification system discussed in section III.C. of this proposed rule. This approach includes an administrative presumption that utilizes a beneficiary's correct assignment, at the outset of the SNF stay, of one of the case-mix classifiers designated for this purpose to assist in making certain SNF level of care determinations. In accordance with § 413.345, we include in each update of the Federal payment rates in the Federal Register a discussion of the resident classification system that provides the basis for case-mix adjustment. We also designate those specific classifiers under the case-mix classification system that represent the required SNF level of care, as provided in 42 CFR 409.30. This designation reflects an administrative presumption that those beneficiaries who are correctly assigned one of the designated case-mix classifiers on the initial Medicare assessment are automatically classified as meeting the SNF level of care definition up to and including the assessment reference date (ARD) for that assessment. A beneficiary who does not qualify for the presumption is not automatically classified as either meeting or not meeting the level of care definition, but instead receives an individual determination on this point using the existing administrative criteria. This presumption recognizes the strong likelihood that those beneficiaries who are correctly assigned one of the designated case-mix classifiers during the immediate post-hospital period would require a covered level of care, which would be less likely for other beneficiaries. In the July 30, 1999 final rule (64 FR 41670), we indicated that we would announce any changes to the guidelines for Medicare level of care determinations related to modifications in the case-mix classification structure. The FY 2018 final rule (82 FR 36544) further specified that we would henceforth disseminate the standard description of the administrative presumption's designated groups via the SNF PPS website at https://www.cms.gov/Medicare/Medicare-Fee-for-Service-Payment/SNFPPS/index.html (where such designations appear in the paragraph entitled “Case Mix Adjustment”), and would publish such designations in rulemaking only to the extent that we actually intend to propose changes in them. Under that approach, the set of case-mix classifiers designated for this purpose under PDPM was finalized in the FY 2019 SNF PPS final rule (83 FR 39253) and is posted on the SNF PPS website ( https://www.cms.gov/Medicare/Medicare-Fee-for-Service-Payment/SNFPPS/index.html ), in the paragraph entitled “Case Mix Adjustment.” However, we note that this administrative presumption policy does not supersede the SNF's responsibility to ensure that its decisions relating to level of care are appropriate and timely, including a review to confirm that any services prompting the assignment of one of the designated case-mix classifiers (which, in turn, serves to trigger the administrative presumption) are themselves medically necessary. As we explained in the FY 2000 SNF PPS final rule (64 FR 41667), the administrative presumption is itself rebuttable in those individual cases in which the services actually received by the resident do not meet the basic statutory criterion of being reasonable and necessary to diagnose or treat a beneficiary's condition (according to section 1862(a)(1) of the Act). Accordingly, the presumption would not apply, for example, in those situations where the sole classifier that triggers the presumption is itself assigned through the receipt of services that are subsequently determined to be not reasonable and necessary. Moreover, we want to stress the importance of careful monitoring for changes in each patient's condition to determine the continuing need for Part A SNF benefits after the ARD of the initial Medicare assessment. B. Consolidated Billing Sections 1842(b)(6)(E) and 1862(a)(18) of the Act (as added by section 4432(b) of the BBA 1997) require a SNF to submit consolidated Medicare bills to its Medicare Administrative Contractor (MAC) for almost all of the services that its residents receive during the course of a covered Part A stay. In addition, section 1862(a)(18) of the Act places the responsibility with the SNF for billing Medicare for physical therapy, occupational therapy, and speech-language pathology services that the resident receives during a noncovered stay. Section 1888(e)(2)(A) of the Act excludes a small list of services from the consolidated billing provision (primarily those services furnished by physicians and certain other types of practitioners), which remain separately billable under Part B when furnished to a SNF's Part A resident. These excluded service categories are discussed in greater detail in section V.B.2. of the May 12, 1998 interim final rule (63 FR 26295 through 26297). Effective with services furnished on or after January 1, 2024, section 4121(a)(4) of the Consolidated Appropriations Act, 2023 (CAA 2023) added marriage and family therapists and mental health counselors to the list of practitioners at section 1888(e)(2)(A)(ii) of the Act whose services are excluded from the consolidated billing provision. We note that there are no rate adjustments required to the per diem to offset these exclusions, as payments for services made under section 1888(e)(2)(A)(ii) of the Act are not specified under the requirement at section 1888(e)(4)(G)(iii) of the Act as services for which the Secretary must “provide for an appropriate proportional reduction . . . equal to the aggregate increase in payments attributable to the exclusion”. See section IV.D. of this proposed rule for a discussion of the proposed regulatory updates implementing this change. A detailed discussion of the legislative history of the consolidated billing provision is available on the SNF PPS website at https://www.cms.gov/Medicare/Medicare-Fee-for-Service-Payment/SNFPPS/Downloads/Legislative_History_2018-10-01.pdf. In particular, section 103 of the Medicare, Medicaid, and SCHIP Balanced Budget Refinement Act of 1999 (BBRA 1999) (Pub. L. 106-113, enacted November 29, 1999) amended section 1888(e)(2)(A)(iii) of the Act by further excluding a number of individual high-cost, low probability services, identified by HCPCS codes, within several broader categories (chemotherapy items, chemotherapy administration services, radioisotope services, and customized prosthetic devices) that otherwise remained subject to the provision. We discuss this BBRA 1999 amendment in greater detail in the SNF PPS proposed and final rules for FY 2001 (65 FR 19231 through 19232, April 10, 2000, and 65 FR 46790 through 46795, July 31, 2000), as well as in Program Memorandum AB-00-18 (Change Request #1070), issued March 2000, which is available online at www.cms.gov/transmittals/downloads/ab001860.pdf. As explained in the FY 2001 proposed rule (65 FR 19232), the amendments enacted in section 103 of the BBRA 1999 not only identified for exclusion from this provision a number of particular service codes within four specified categories (that is, chemotherapy items, chemotherapy administration services, radioisotope services, and customized prosthetic devices), but also gave the Secretary the authority to designate additional, individual services for exclusion within each of these four specified service categories. In the proposed rule for FY 2001, we also noted that the BBRA 1999 Conference report (H.R. Conf. Rep. No. 106-479 at 854 (1999)) characterizes the individual services that this legislation targets for exclusion as high-cost, low probability events that could have devastating financial impacts because their costs far exceed the payment SNFs receive under the PPS. According to the conferees, section 103(a) of the BBRA 1999 is an attempt to exclude from the PPS certain services and costly items that are provided infrequently in SNFs. By contrast, the amendments enacted in section 103 of the BBRA 1999 do not designate for exclusion any of the remaining services within those four categories (thus, leaving all of those services subject to SNF consolidated billing), because they are relatively inexpensive and are furnished routinely in SNFs. As we further explained in the final rule for FY 2001 (65 FR 46790), and as is consistent with our longstanding policy, any additional service codes that we might designate for exclusion under our discretionary authority must meet the same statutory criteria used in identifying the original codes excluded from consolidated billing under section 103(a) of the BBRA 1999: they must fall within one of the four service categories specified in the BBRA 1999; and they also must meet the same standards of high cost and low probability in the SNF setting, as discussed in the BBRA 1999 Conference report. Accordingly, we characterized this statutory authority to identify additional service codes for exclusion as essentially affording the flexibility to revise the list of excluded codes in response to changes of major significance that may occur over time (for example, the development of new medical technologies or other advances in the state of medical practice) (65 FR 46791). Effective with items and services furnished on or after October 1, 2021, section 134 in Division CC of the CAA 2021 established an additional category of excluded codes in section 1888(e)(2)(A)(iii)(VI) of the Act, for certain blood clotting factors for the treatment of patients with hemophilia and other bleeding disorders along with items and services related to the furnishing of such factors under section 1842(o)(5)(C) of the Act. Like the provisions enacted in the BBRA 1999, section 1888(e)(2)(A)(iii)(VI) of the Act gives the Secretary the authority to designate additional items and services for exclusion within the category of items and services related to blood clotting factors, as described in that section. Finally, as noted previously in this proposed rule, section 4121(a)(4) CAA 2023 amended section 1888(e)(2)(A)(ii) of the Act to exclude marriage and family therapist services and mental health counselor services from consolidated billing effective January 1, 2024. In this proposed rule, we specifically invite public comments identifying HCPCS codes in any of these five service categories (chemotherapy items, chemotherapy administration services, radioisotope services, customized prosthetic devices, and blood clotting factors) representing recent medical advances that might meet our criteria for exclusion from SNF consolidated billing. We may consider excluding a particular service if it meets our criteria for exclusion as specified previously. We request that commenters identify in their comments the specific HCPCS code that is associated with the service in question, as well as their rationale for requesting that the identified HCPCS code(s) be excluded. We note that the original BBRA amendment and the CAA 2021 identified a set of excluded items and services by means of specifying individual HCPCS codes within the designated categories that were in effect as of a particular date (in the case of the BBRA 1999, July 1, 1999, and in the case of the CAA 2021, July 1, 2020), as subsequently modified by the Secretary. In addition, as noted in this section of the preamble, the statute (sections 1888(e)(2)(A)(iii)(II) through (VI) of the Act) gives the Secretary authority to identify additional items and services for exclusion within the five specified categories of items and services described in the statute, which are also designated by HCPCS code. Designating the excluded services in this manner makes it possible for us to utilize program issuances as the vehicle for accomplishing routine updates to the excluded codes to reflect any minor revisions that might subsequently occur in the coding system itself, such as the assignment of a different code number to a service already designated as excluded, or the creation of a new code for a type of service that falls within one of the established exclusion categories and meets our criteria for exclusion. Accordingly, in the event that we identify through the current rulemaking cycle any new services that would actually represent a substantive change in the scope of the exclusions from SNF consolidated billing, we would identify these additional excluded services by means of the HCPCS codes that are in effect as of a specific date (in this case, October 1, 2023). By making any new exclusions in this manner, we could similarly accomplish routine future updates of these additional codes through the issuance of program instructions. The latest list of excluded codes can be found on the SNF Consolidated Billing website at https://www.cms.gov/Medicare/Billing/SNFConsolidatedBilling. C. Payment for SNF-Level Swing-Bed Services Section 1883 of the Act permits certain small, rural hospitals to enter into a Medicare swing-bed agreement, under which the hospital can use its beds to provide either acute- or SNF-level care, as needed. For critical access hospitals (CAHs), Part A pays on a reasonable cost basis for SNF-level services furnished under a swing-bed agreement. However, in accordance with section 1888(e)(7) of the Act, SNF-level services furnished by non-CAH rural hospitals are paid under the SNF PPS, effective with cost reporting periods beginning on or after July 1, 2002. As explained in the FY 2002 final rule (66 FR 39562), this effective date is consistent with the statutory provision to integrate swing-bed rural hospitals into the SNF PPS by the end of the transition period, June 30, 2002. Accordingly, all non-CAH swing-bed rural hospitals have now come under the SNF PPS. Therefore, all rates and wage indexes outlined in earlier sections of this proposed rule for the SNF PPS also apply to all non-CAH swing-bed rural hospitals. As finalized in the FY 2010 SNF PPS final rule (74 FR 40356 through 40357), effective October 1, 2010, non-CAH swing-bed rural hospitals are required to complete an MDS 3.0 swing-bed assessment which is limited to the required demographic, payment, and quality items. As discussed in the FY 2019 SNF PPS final rule (83 FR 39235), revisions were made to the swing bed assessment to support implementation of PDPM, effective October 1, 2019. A discussion of the assessment schedule and the MDS effective beginning FY 2020 appears in the FY 2019 SNF PPS final rule (83 FR 39229 through 39237). The latest changes in the MDS for swing-bed rural hospitals appear on the SNF PPS website at https://www.cms.gov/Medicare/Medicare-Fee-for-Service-Payment/SNFPPS/index.html. D. Revisions to the Regulation Text We propose to make the following revisions in the regulation text. To reflect the recently-enacted exclusion of marriage and family therapist services and mental health counselor services from SNF consolidated billing at section 1888(e)(2)(A)(ii) of the Act (as discussed in section IV.B of this proposed rule), we propose to redesignate current § 411.15(p)(2)(vi) through (xviii) as §§ 411.15(p)(2)(viii) through (xx), respectively. In addition, we propose to redesignate § 489.20(s)(6) through (18) as § 489.20(s)(8) through (20), respectively. We also propose to add new regulation text at §§ 411.15(p)(2)(vi) and (vii) and 489.20(s)(6) and (7). Specifically, proposed new §§ 411.15(p)(2)(vi) and 489.20(s)(6) would reflect the exclusion of services performed by a marriage and family therapist, as defined in section 1861(lll)(2) of the Act. Proposed new §§ 411.15(p)(2)(vii) and 489.20(s)(7) would reflect the exclusion of services performed by a mental health counselor, as defined in section 1861(lll)(4) of the Act. V. Other SNF PPS Issues A. Technical Updates to PDPM ICD-10 Mappings 1. Background In the FY 2019 SNF PPS final rule (83 FR 39162), we finalized the implementation of the Patient Driven Payment Model (PDPM), effective October 1, 2019. The PDPM utilizes the International Classification of Diseases, 10th Revision, Clinical Modification (ICD-10-CM, hereafter referred to as ICD-10) codes in several ways, including using the patient's primary diagnosis to assign patients to clinical categories under several PDPM components, specifically the PT, OT, SLP and NTA components. While other ICD-10 codes may be reported as secondary diagnoses and designated as additional comorbidities, the PDPM does not use secondary diagnoses to assign patients to clinical categories. The ICD-10 code to clinical category mapping used under PDPM (hereafter referred to as PDPM ICD-10 code mapping) are available on the CMS website at https://www.cms.gov/Medicare/Medicare-Fee-for-Service-Payment/SNFPPS/PDPM. In the FY 2020 SNF PPS final rule (84 FR 38750), we outlined the process by which we maintain and update the PDPM ICD-10 code mapping, as well as the SNF Grouper software and other such products related to patient classification and billing, to ensure that they reflect the most up to date codes. Beginning with the updates for FY 2020, we apply nonsubstantive changes to the PDPM ICD-10 code mapping through a subregulatory process consisting of posting the updated PDPM ICD-10 code mapping on the CMS website at https://www.cms.gov/Medicare/Medicare-Fee-for-Service-Payment/SNFPPS/PDPM. Such nonsubstantive changes are limited to those specific changes that are necessary to maintain consistency with the most current PDPM ICD-10 code mapping. On the other hand, substantive changes that go beyond the intention of maintaining consistency with the most current PDPM ICD-10 code mapping, such as changes to the assignment of a code to a clinical category or comorbidity list, will be proposed through notice and comment rulemaking because they are changes that affect policy. We note that, in the case of any diagnoses that are either currently mapped to Return to Provider or that we are proposing to classify into this category, this is not intended to reflect any judgment on the importance of recognizing and treating these conditions. Rather, we believe that there are more specific or appropriate diagnoses that would better serve as the primary diagnosis for a Part-A covered SNF stay. 2. Proposed Clinical Category Changes for New ICD-10 Codes for FY 2023 Each year, we review the clinical category assigned to new ICD-10 diagnosis codes and propose changing the assignment to another clinical category if warranted. This year, we are proposing changing the clinical category assignment for the following five new ICD-10 codes that were effective on October 1, 2022: • D75.84 Other platelet-activating anti-platelet factor 4 (PF4) disorders is mapped to the clinical category of Return to Provider. Patients with anti-PF4 disorders have blood clotting disorders. Examples of disorders to be classified with D75.84 are spontaneous heparin-induced thrombocytopenia (without heparin exposure), thrombosis with thrombocytopenia syndrome, and vaccine-induced thrombotic thrombocytopenia. Due to the similarity of this code to other anti-PF4 disorders, we propose to change the assignment to Medical Management. • F43.81 Prolonged grief disorder and F43.89 Other reactions to severe stress are mapped to the clinical category of Medical Management. However, while we believe that SNFs serve an important role in providing services to those beneficiaries suffering from mental illness, the SNF setting is not the setting that would be most beneficial to treat a patient for whom these diagnoses are coded as the patient's primary diagnosis. For this reason, we propose changing the clinical category of both codes to Return to Provider. We would encourage providers to continue reporting these codes as secondary diagnoses, to ensure that we are able to identify these patients and that they are receiving appropriate care. • G90.A Postural orthostatic tachycardia syndrome (POTS) is mapped to the clinical category of Acute Neurologic. POTS is a type of orthostatic intolerance that causes the heart to beat faster than normal when transitioning from sitting or lying down to standing up, causing changes in blood pressure, increase in heart rate, and lightheadedness. The treatment for POTS involves hydration, physical therapy, and vasoconstrictor medications, which are also treatments for codes such as E86.0 Dehydration and E86.1 Hypovolemia that are mapped to the Medical Management category. Since the medical interventions are similar, we propose changing the assignment for POTS to Medical Management. • K76.82 Hepatic encephalopathy is mapped to the clinical category of Return to Provider. Hepatic encephalopathy is a condition resulting from severe liver disease, where toxins build up in the blood that can affect brain function and lead to a change in medical status. Prior to the development of this code, multiple codes were used to characterize this condition such as K76.6 Portal hypertension, K76.7 Hepatorenal syndrome, and K76.89 Other unspecified diseases of liver, which are mapped to the Medical Management category. Since these codes describe similar liver conditions, we propose to change the assignment to Medical Management. We invite comments on the proposed substantive changes to the PDPM ICD-10 code mapping discussed in this section, as well as comments on additional substantive and nonsubstantive changes that commenters believe are necessary. 3. Proposed Clinical Category Changes for Unspecified Substance Use Disorder Codes Effective with stays beginning on and after October 1, 2022, ICD-10 diagnosis codes F10.90 Alcohol use, unspecified, uncomplicated, F10.91 Alcohol use, unspecified, in remission, F11.91 Opioid use, unspecified, in remission, F12.91 Cannabis use, unspecified, in remission, F13.91 Sedative, hypnotic or anxiolytic use, unspecified, in remission, and F14.91 Cocaine use, unspecified, in remission went into effect and were mapped to the clinical category of Medical Management. We reviewed these 6 unspecified substance use disorder (SUD) codes and propose changing the assignment from Medical Management to Return to Provider because the codes are not specific as to if they refer to abuse or dependence, and there are other specific codes available for each of these conditions that would be more appropriate as a primary diagnosis for a SNF stay. For example, diagnosis code F10.90 Alcohol use, unspecified, uncomplicated is not specific as to whether the patient has alcohol abuse or alcohol dependence. There are more specific codes that could be used instead, such as F10.10 Alcohol abuse, uncomplicated or F10.20 Alcohol dependence, uncomplicated, that may serve as the primary diagnosis for a SNF stay and are appropriately mapped to the clinical category of Medical Management. Moreover, we believe that increased accuracy of coding primary diagnoses aligns with CMS' broader efforts to ensure better quality of care. Therefore, we reviewed all 458 ICD-10 SUD codes from code categories F10 to F19 and propose reassigning 162 additional unspecified SUD codes to Return to Provider from Medical Management because the codes are not specific as to if they refer to abuse or dependence. We would note that this policy change would not affect a large number of SNF stays. Our data from FY 2021 show that the 162 unspecified SUD codes were used as primary diagnoses for only 323 SNF stays (0.02 percent) and as secondary diagnoses for 9,537 SNF stays (0.54 percent). The purpose of enacting this policy is to continue an ongoing effort to refine the PDPM ICD-10 code mapping each year to ensure more accurate coding of primary diagnoses. We would encourage providers to continue reporting these codes as secondary diagnoses, to ensure that we are able to identify these patients and that they are receiving appropriate care. Table 1, Proposed Clinical Category Changes for Unspecified Substance Use Disorder Codes, which lists all 168 codes included in this proposal, is available on the CMS website at https://www.cms.gov/Medicare/Medicare-Fee-for-Service-Payment/SNFPPS/PDPM. We invite comments on the proposed substantive changes to the PDPM ICD-10 code mapping discussed in this section, as well as comments on additional substantive and nonsubstantive changes that commenters believe are necessary. 3. Proposed Clinical Category Changes for Certain Subcategory Fracture Codes Each year, we invite comments on additional substantive and nonsubstantive changes that commenters believe are necessary to the PDPM ICD-10 code mapping. In the FY 2023 final rule (87 FR 47524), we described how one commenter recommended that CMS consider revising the PDPM ICD-10 code mapping to reclassify certain subcategory S42.2—humeral fracture codes. The commenter highlighted that certain encounter codes for humeral fractures, such as those ending in the 7th character of A for an initial encounter for fracture, are permitted the option to be mapped to a surgical clinical category, denoted on the PDPM ICD-10 code mapping as May be Eligible for One of the Two Orthopedic Surgery Categories (that is, major joint replacement or spinal surgery, or orthopedic surgery) if the resident had a major procedure during the prior inpatient stay that impacts the SNF care plan. However, the commenter noted that other encounter codes within the same code family, such as those ending in the 7th character of D for subsequent encounter for fracture with routine healing, are mapped to the Non-Surgical Orthopedic/Musculoskeletal without the surgical option. The commenter requested that we review all subcategory S42.2—fracture codes to ensure that the appropriate surgical clinical category could be selected for joint aftercare. Since then, the commenter has also contacted CMS with a similar suggestion for M84.552D Pathological fracture in neoplastic disease, left femur, subsequent encounter for fracture with routine healing. We have since reviewed the suggested code subcategories to determine the most efficient manner for addressing this discrepancy. We propose adding the surgical option that allows 45 subcategory S42.2—codes for displaced fractures to be eligible for one of two orthopedic surgery categories. However, we note that this proposal does not extend to subcategory S42.2—codes for nondisplaced fractures, which typically do not require surgery. We also propose adding the surgical option to subcategory 46 M84.5—codes for pathological fractures to certain major weight-bearing bones to be eligible for one of two orthopedic surgery categories. Table 2, Proposed Clinical Category Changes for S42.2 and M84.5 Fracture Codes, which lists all 91 codes included in this proposal, is available on the CMS website at https://www.cms.gov/Medicare/Medicare-Fee-for-Service-Payment/SNFPPS/PDPM. We invite comments on the proposed substantive changes to the PDPM ICD-10 code mapping discussed in this section, as well as comments on additional substantive and nonsubstantive changes that commenters believe are necessary. 4. Proposed Clinical Category Changes for Unacceptable Principal Diagnosis Codes In the FY 2023 final rule (87 FR 47525) we described how several commenters referred to instances when SNF claims were denied for including a primary diagnosis code that is listed on the PDPM ICD-10 code mapping as a valid code, but that is not accepted by some Medicare Administrative Contractors (MACs) that use the Hospital Inpatient Prospective Payment System (IPPS) Medicare Code Editor (MCE) lists when evaluating the primary diagnosis codes listed on SNF claims. In the IPPS, a patient's diagnosis is entered into the Medicare claims processing systems and subjected to a series of automated screens called the MCE. The MCE lists are designed to identify cases that require further review before classification into an MS-DRG. We note that all codes on the MCE lists are able to be reported; however, a code edit may be triggered that the MAC may either choose to bypass or return to the provider to resubmit. Updates to the MCE lists are proposed on an annual basis and discussed through IPPS rulemaking when new codes or policies involving existing codes are introduced. Commenters recommended that CMS seek to align the PDPM ICD-10 code mapping with the MCE in treating diagnoses that are Return to Provider, specifically referring to the Unacceptable Principal Diagnosis edit code list in the Definition of Medicare Code Edits, which is available on the CMS website at https://www.cms.gov/medicare/medicare-fee-for-service-payment/acuteinpatientpps/ms-drg-classifications-and-software. The Unacceptable Principal Diagnosis edit code list contains selected codes that describe a circumstance that influences an individual's health status but not a current illness or injury, or codes that are not specific manifestations but may be due to an underlying cause, and which are considered unacceptable as a principal diagnosis. We have identified 95 codes from the MCE Unacceptable Principal Diagnosis edit code list that are mapped to a valid clinical category on the PDPM ICD-10 code mapping, and that were coded as primary diagnoses for 14,808 SNF stays (0.84 percent) in FY 2021. Table 3, Proposed Clinical Category Changes for Unacceptable Principal Diagnosis Codes, which lists all 95 codes included in this proposal, is available on the CMS website at https://www.cms.gov/Medicare/Medicare-Fee-for-Service-Payment/SNFPPS/PDPM. As stated previously in this section of this proposed rule, we note that reporting these codes as a primary diagnosis for a SNF stay may trigger an edit that the MAC may either choose to bypass or return to the provider to resubmit, and therefore not all of these 14,808 stays were denied by the MACs. After clinical review, we concur that these 95 codes listed in Table 3 on the CMS website should be assigned to Return to Provider. For the diagnosis codes listed in Table 3 on the CMS website that are from the category B95 to B97 range and contain the suffix “as the cause of diseases classified elsewhere”, the ICD-10 coding convention for such etiology and manifestation codes, where certain conditions have both an underlying etiology and multiple body system manifestations due to the underlying etiology, dictates that the underlying condition should be sequenced first, followed by the manifestation. The ICD-10 coding guidelines also state that codes from subcategory G92.0— Immune effector cell-associated neurotoxicity syndrome, subcategory R40.2— Coma scale, and subcategory S06.A— Traumatic brain injury should only be reported as secondary diagnoses, as there are more specific codes that should be sequenced first. Additionally, the ICD-10 coding guidelines state that diagnosis codes in categories Z90 and Z98 are status codes, indicating that a patient is either a carrier of a disease or has the sequelae or residual of a past disease or condition, and are not reasons for a patient to be admitted to a SNF. Lastly, our clinicians determined that diagnosis code Z43.9 Encounter for attention to unspecified artificial opening should be assigned to the clinical category Return to Provider because there are more specific codes that identify the site for the artificial opening. Therefore, we propose to reassign the 95 codes listed in Table 3 on the CMS website from the current default clinical category on the PDPM ICD-10 code mapping to Return to Provider. We also propose to make future updates to align the PDPM ICD-10 code mapping with the MCE Unacceptable Principal Diagnosis edit code list on a subregulatory basis going forward. Moreover, we are soliciting comment on aligning with the MCE Manifestation codes not allowed as principal diagnosis edit code list, which contains diagnosis codes that are the manifestation of an underlying disease, not the disease itself, and therefore should not be used as a principal diagnosis, and the Questionable admission codes edit code list, which contains diagnoses codes that are not usually sufficient justification for admission to an acute care hospital. While these MCE lists were not mentioned by commenters, we believe that some MACs may be applying these edit lists to SNF claims and this could cause continued differences between the PDPM ICD-10 code mapping and the IPPS MCE. If finalized, we also propose to make future updates to align the PDPM ICD-10 code mapping with the MCE Manifestation codes not allowed as principal diagnosis edit code list and the Questionable admission codes edit code list on a subregulatory basis going forward. We invite comments on the proposed substantive changes to the PDPM ICD-10 code mapping discussed in this section, as well as comments on additional substantive and nonsubstantive changes that commenters believe are necessary. VI. Skilled Nursing Facility Quality Reporting Program (SNF QRP) A. Background and Statutory Authority The Skilled Nursing Facility Quality Reporting Program (SNF QRP) is authorized by section 1888(e)(6) of the Act, and it applies to freestanding SNFs, SNFs affiliated with acute care facilities, and all non-critical access hospital (CAH) swing-bed rural hospitals. Section 1888(e)(6)(A)(i) of the Act requires the Secretary to reduce by 2 percentage points the annual market basket percentage increase described in section 1888(e)(5)(B)(i) of the Act applicable to a SNF for a fiscal year (FY), after application of section 1888(e)(5)(B)(ii) of the Act (the productivity adjustment) and section 1888(e)(5)(B)(iii) of the Act, in the case of a SNF that does not submit data in accordance with sections 1888(e)(6)(B)(i)(II) and (III) of the Act for that FY. Section 1890A of the Act requires that the Secretary establish and follow a pre-rulemaking process, in coordination with the consensus-based entity (CBE) with a contract under section 1890(a) of the Act, to solicit input from certain groups regarding the selection of quality and efficiency measures for the SNF QRP. We have codified our program requirements in our regulations at 42 CFR part 413. In this proposed rule, we are proposing to adopt three new measures, remove three existing measures, and modify one existing measure. Second, we are seeking information on principles we could use to select and prioritize SNF QRP quality measures in future years. Third, we are providing an update on our health equity efforts. Fourth, we are proposing several administrative changes, including a change to the SNF QRP data completion thresholds and a data submission method for the proposed CoreQ: Short Stay Discharge questionnaire. Finally, we are proposing to begin public reporting of four measures. These proposals are further specified below. B. General Considerations Used for the Selection of Measures for the SNF QRP For a detailed discussion of the considerations we use for the selection of SNF QRP quality, resource use, or other measures, we refer readers to the FY 2016 SNF (PPS) final rule (80 FR 46429 through 46431). 1. Quality Measures Currently Adopted for the FY 2024 SNF QRP The SNF QRP currently has 16 measures for the FY 2024 program year, which are listed in Table 11. For a discussion of the factors used to evaluate whether a measure should be removed from the SNF QRP, we refer readers to § 413.360(b)(2). Table 11—Quality Measures Currently Adopted for the FY 2024 SNF QRP Short name Measure name & data source Resident Assessment Instrument Minimum Data Set (Assessment-Based) Pressure Ulcer/Injury Changes in Skin Integrity Post-Acute Care: Pressure Ulcer/Injury. Application of Falls Application of Percent of Residents Experiencing One or More Falls with Major Injury (Long Stay). Application of Functional Assessment/Care Plan Application of Percent of Long-Term Care Hospital (LTCH) Patients with an Admission and Discharge Functional Assessment and a Care Plan That Addresses Function. Change in Mobility Score Application of IRF Functional Outcome Measure: Change in Mobility Score for Medical Rehabilitation Patients. Discharge Mobility Score Application of IRF Functional Outcome Measure: Discharge Mobility Score for Medical Rehabilitation Patients. Change in Self-Care Score Application of the IRF Functional Outcome Measure: Change in Self-Care Score for Medical Rehabilitation Patients. Discharge Self-Care Score Application of IRF Functional Outcome Measure: Discharge Self-Care Score for Medical Rehabilitation Patients. DRR Drug Regimen Review Conducted With Follow-Up for Identified Issues-Post Acute Care (PAC) Skilled Nursing Facility (SNF) Quality Reporting Program (QRP). TOH-Provider * Transfer of Health (TOH) Information to the Provider Post-Acute Care (PAC). TOH-Patient * Transfer of Health (TOH) Information to the Patient Post-Acute Care (PAC). Claims-Based MSPB SNF Medicare Spending Per Beneficiary (MSPB)—Post Acute Care (PAC) Skilled Nursing Facility (SNF) Quality Reporting Program (QRP). DTC Discharge to Community (DTC)—Post Acute Care (PAC) Skilled Nursing Facility (SNF) Quality Reporting Program (QRP). PPR Potentially Preventable 30-Day Post-Discharge Readmission Measure for Skilled Nursing Facility (SNF) Quality Reporting Program (QRP). SNF HAI SNF Healthcare-Associated Infections (HAI) Requiring Hospitalization. NHSN HCP COVID-19 Vaccine COVID-19 Vaccination Coverage among Healthcare Personnel (HCP). HCP Influenza Vaccine Influenza Vaccination Coverage among Healthcare Personnel (HCP). * In response to the public health emergency (PHE) for the Coronavirus Disease 2019 (COVID-19), we released an Interim Final Rule (85 FR 27595 through 27597) which delayed the compliance date for collection and reporting of the Transfer of Health (TOH) Information measures for at least 2 full fiscal years after the end of the PHE. The compliance date for the collection and reporting of the Transfer of Health Information measures was revised to October 1, 2023 in the FY 2023 SNF PPS final rule (87 FR 47547 through 47551). C. SNF QRP Quality Measure Proposals In this proposed rule, we include SNF QRP proposals for the FY 2025, FY 2026, and FY 2027 program years. This proposed rule would add new measures to the SNF QRP as well as remove measures from the SNF QRP. Beginning with the FY 2025 SNF QRP, we are proposing to (1) modify the COVID-19 Vaccination Coverage among Healthcare Personnel (HCP) measure, (2) adopt the Discharge Function Score measure, 13 which we are specifying under section 1888(e)(6)(B)(i) of the Act, and (3) remove three current measures: (i) the Application of Percent of Long-Term Care Hospital (LTCH) Patients with an Admission and Discharge Functional Assessment and a Care Plan That Addresses Function measure, (ii) the Application of IRF Functional Outcome Measure: Change in Self-Care Score for Medical Rehabilitation Patients measure, and (iii) the Application of IRF Functional Outcome Measure: Change in Mobility Score for Medical Rehabilitation Patients measure. 13 This measure was submitted to the Measures Under Consideration (MUC) List as the Cross-Setting Discharge Function Score. Subsequent to the MAP Workgroup meetings, the measure developer modified the name. Discharge Function Score for Skilled Nursing Facilities (SNFs) Technical Report. https://www.cms.gov/files/document/snf-discharge-function-score-technical-report-february-2023.pdf. We are proposing to adopt two new measures beginning with the FY 2026 SNF QRP: (i) the CoreQ: Short Stay Discharge measure which we are specifying under section 1899B(d)(1) of the Act, and (ii) the COVID-19 Vaccine: Percent of Patients/Residents Who Are Up to Date measure, which we are specifying under section 1899B(d)(1) of the Act. 1. SNF QRP Quality Measure Proposals Beginning With the FY 2025 SNF QRP a. Proposed Modification of the COVID-19 Vaccination Coverage Among Healthcare Personnel (HCP) Measure Beginning With the FY 2025 SNF QRP (1) Background On January 31, 2020, the Secretary declared a public health emergency (PHE) for the United States in response to the global outbreak of SARS-CoV-2, a novel (new) coronavirus that causes a disease named “coronavirus disease 2019” (COVID-19). 14 Subsequently, in the FY 2022 SNF PPS final rule (86 FR 42480 through 42489), we adopted the COVID-19 Vaccination Coverage among Healthcare Personnel (HCP) (HCP COVID-19 Vaccine) measure for the SNF QRP. The HCP COVID-19 Vaccine measure requires each SNF to submit data on the percentage of HCP eligible to work in the SNF for at least one day during the reporting period, excluding persons with contraindications to FDA-authorized or -approved COVID-19 Vaccines, who have received a complete vaccination course against SARS-CoV-2. Since that time, COVID-19 has continued to spread domestically and around the world with more than 102.7 million cases and 1.1 million deaths in the United States as of February 13, 2023. 15 In recognition of the ongoing significance and complexity of COVID-19, the Secretary has renewed the PHE on April 21, 2020, July 23, 2020, October 2, 2020, January 7, 2021, April 15, 2021, July 19, 2021, October 15, 2021, January 14, 2022, April 12, 2022, July 15, 2022, October 13, 2022, January 11, 2023, and February 9, 2023. 16 The Department of Health and Human Services (HHS) announced plans to let the PHE expire on May 11, 2023 and stated that the public health response to COVID-19 remains a public health priority with a whole of government approach to combating the virus, including through vaccination efforts. 17 14 U.S. Department of Health and Human Services, Office of the Assistant Secretary for Preparedness and Response. Determination that a Public Health Emergency Exists. January 31, 2020. https://www.phe.gov/emergency/news/healthactions/phe/Pages/2019-nCoV.aspx. 15 Centers for Disease Control and Prevention. COVID Data Tracker. February 13, 2023. https://covid.cdc.gov/covid-data-tracker/#datatracker-home. 16 U.S. Department of Health and Human Services, Office of the Assistant Secretary for Preparedness and Response. Renewal of Determination that a Public Health Emergency Exists. February 9, 2023. https://aspr.hhs.gov/legal/PHE/Pages/COVID19-9Feb2023.aspx. 17 U.S. Department of Health and Human Services. Fact Sheet: COVID-19 Public Health Emergency Transition Roadmap. February 9, 2023. https://www.hhs.gov/about/news/2023/02/09/fact-sheet-covid-19-public-health-emergency-transition-roadmap.html. In the FY 2022 SNF PPS final rule (86 FR 42480 through 42489) and in the Revised Guidance for Staff Vaccination Requirements, 18 we stated that vaccination is a critical part of the nation's strategy to effectively counter the spread of COVID-19. We continue to believe it is important to incentivize and track HCP vaccination in SNFs through quality measurement in order to protect HCP, residents, and caregivers, and to help sustain the ability of SNFs to continue serving their communities throughout the PHE and beyond. At the time we issued the FY 2022 SNF PPS final rule, the Food and Drug Administration (FDA) had issued emergency use authorizations (EUAs) for COVID-19 vaccines manufactured by Pfizer-BioNTech, 19 Moderna, 20 and Janssen. 21 The Pfizer-BioNTech vaccine was authorized for ages 12 and older and the Moderna and Janssen vaccines for ages 18 and older. Shortly following the publication of the final rule, on August 23, 2021, the FDA issued an approval for the Pfizer-BioNTech vaccine, marketed as Comirnaty. 22 The FDA issued approval for the Moderna vaccine, marketed as Spikevax, on January 31, 2022 23 and an EUA for the Novavax vaccine, on July 13, 2022. 24 The FDA also issued EUAs for single booster doses of the then authorized COVID-19 vaccines. As of November 19, 2021 25 26 27 a single booster dose of each COVID-19 vaccine was authorized for all eligible individuals 18 years of age and older. EUAs were subsequently issued for a second booster dose of the Pfizer-BioNTech and Moderna vaccines in certain populations in March 2022. 28 FDA first authorized the use of a booster dose of bivalent or “updated” COVID-19 vaccines from Pfizer-BioNTech and Moderna in August 2022. 29 18 Centers for Medicare & Medicaid Services. Revised Guidance for Staff Vaccination Requirements QSO-23-02-ALL. October 26, 2022. https://www.cms.gov/files/document/qs0-23-02-all.pdf. 19 Food and Drug Administration. FDA Takes Key Action in Fight Against COVID-19 By Issuing Emergency Use Authorization for First COVID-19 Vaccine. December 11, 2020. https://www.fda.gov/news-events/press-announcements/fda-takes-key-action-fight-against-covid-19-issuing-emergency-use-authorization-first-covid-19. 20 Food and Drug Administration. FDA Takes Additional Action in Fight Against COVID-19 By Issuing Emergency Use Authorization for Second COVID-19 Vaccine. December 18, 2020. https://www.fda.gov/news-events/press-announcements/fda-takes-additional-action-fight-against-covid-19-issuing-emergency-use-authorization-second-covid. 21 Food and Drug Administration. FDA Issues Emergency Use Authorization for Third COVID-19 Vaccine. February 27, 2021. https://www.fda.gov/news-events/press-announcements/fda-issues-emergency-use-authorization-third-covid-19-vaccine. 22 Food and Drug Administration. FDA Approves First COVID-19 Vaccine. August 23, 2021. https://www.fda.gov/news-events/press-announcements/fda-approves-first-covid-19-vaccine. 23 Food and Drug Administration. Coronavirus (COVID-19) Update: FDA Takes Key Action by Approving Second COVID-19 Vaccine. January 31, 2022. https://www.fda.gov/news-events/press-announcements/coronavirus-covid-19-update-fda-takes-key-action-approving-second-covid-19-vaccine. 24 Food and Drug Administration. Coronavirus (COVID-19) Update: FDA Authorizes Emergency Use of Novavax COVID-19 Vaccine, Adjuvanted. July 13, 2022. https://www.fda.gov/news-events/press-announcements/coronavirus-covid-19-update-fda-authorizes-emergency-use-novavax-covid-19-vaccine-adjuvanted. 25 Food and Drug Administration. FDA Authorizes Booster Dose of Pfizer-BioNTech COVID-19 Vaccine for Certain Populations. September 22, 2021. https://www.fda.gov/news-events/press-announcements/fda-authorizes-booster-dose-pfizer-biontech-covid-19-vaccine-certain-populations. 26 Food and Drug Administration. Coronavirus (COVID-19) Update: FDA Takes Additional Actions on the Use of a Booster Dose for COVID-19 Vaccines. October 20, 2021. https://www.fda.gov/news-events/press-announcements/coronavirus-covid-19-update-fda-takes-additional-actions-use-booster-dose-covid-19-vaccines. 27 Food and Drug Administration. Coronavirus (COVID-19) Update: FDA Expands Eligibil [Text truncated at 120,000 characters. The full text is on the page linked above.] --- Source: Frix Law Library, https://www.frixlaw.com/law-library/documents/fr%3A2023-07137. Public record. Not legal advice.