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The Centers for Medicare and Medicaid Services (CMS) has proposed FY 2008 updates to skilled nursing facility (SNF) prospective payment system (PPS) rates for Part A stays. Total SNF payments will increase by an average of 3.3%. The increase is primarily due to the adoption of a 2004 market basket instead of the one currently used that reflects data from 1997. The market basket measures changes in the prices of goods and services and is a reflection of inflation, technological advancements, as well as wage, salary, and benefits trends. Both the Medicare Payment Advisory Commission and the President's budget recommend a zero percent update in the SNF market basket, but such a freeze would require new legislation.
PPS payments for SNF Part A residents are based on daily rates that cover all services. After Part A benefits are exhausted (usually 100 days), residents are billed for evaluation and treatment sessions and diagnostic tests paid under the Part B Medicare Physician Fee Schedule.
The projected impact of the proposed payment formula affects urban and rural SNFs differently; urban facilities at 3.2% and rural at 3.9%. Based on urban or rural location, the projection for freestanding versus hospital-based SNFs closely follows the overall urban/rural percentage increases.
Comments to CMS on the proposed rules are due June 29, 2007. The complete proposed rule [PDF] appears in the Federal Register, May 4, 2007. For further information, please contact Mark Kander, ASHA's Director of Health Care Regulatory Analysis, at mkander@asha.org or by phone at 800-498-2071, ext. 4139.
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