SNF Regulations Are Proposed For FY2015

May 13, 2014

The Centers for Medicare & Medicaid Services (CMS) has released proposed regulations for skilled nursing facilities (SNFs) to be effective October 1, 2014. The proposal included an announcement that two consulting firms were contracted to identify potential alternatives to the existing methodology used to pay for therapy services received by Part A residents. The report recommends further investigation into two models: a resident characteristic model, which bases payment on medical, functional, and cognitive status, and a model that is similar to the current prospective payment model.

In the proposed regulations, CMS referred to a recently released report regarding two utilization trends.

  • Over the past 3 years, the percentage of residents classified into Ultra-High Rehabilitation Utilization Groups (RUGs) has increased greatly, to 50% of billed service days (Ultra-High is at least 720 therapy minutes per week).
  • The amount of therapy rendered in each rehabilitation group, in particular the two highest therapy RUG classifications, is often just enough to qualify for that group. This finding is consistent with some ASHA member reports that managers interpret RUG minimum therapy minutes as maximum minutes.

The proposed rule provides for a 2% inflationary update and aligns electronic health record incentives and payment adjustments across the care continuum.


Since 1998, the SNF prospective payment system has been in place for Part A residents. Therapy minutes per week have been the basis for determining the Medicare per diem payment in combination with the Minimum Data Set (MDS) comprehensive initial assessment. There are five RUG levels, ranging from 45 to 720 therapy minutes, and additional levels that define "extensive" non-rehabilitation needs. CMS has refined this payment system several times in recent years, but in this proposed rule acknowledges that a major change in the methodology is needed.

CMS Resources

ASHA Resources

For additional information, please see ASHA's Medicare Guidance for SLP Services in Skilled Nursing Facilities (SNFs). For questions, please contact

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