CMS Finalizes Dramatic Overhaul of SNF PPS Effective October 1, 2019

August 3, 2018

After nearly two years of rulemaking and engaging stakeholders, the Centers for Medicare & Medicaid Services (CMS) released the final rule [PDF] that confirms a fundamental shift in payment for services provided in skilled nursing facilities (SNFs). The patient driven payment model (PDPM) will base payment on patient characteristics, such as diagnosis and comorbidities, rather than the type and intensity of services provided, such as speech-language pathology services. The new system will go into effect on October 1, 2019, to allow the industry time to complete the requisite education and modifications necessary to comply with the PDPM. With the exception of the PDPM, all provisions of this final rule are effective October 1, 2018. A fact sheet on the final rule is also available.

CMS developed the PDPM to address the perceived misaligned incentives of the existing prospective payment systems based on concerns that SNFs were providing therapy to maximize reimbursement rather than to meet patients’ needs. Following are some highlights related to speech-language pathology services.

Speech-Language Pathology Case-Mix Groups

According to CMS research, in addition to the patient’s primary diagnosis (e.g., acute neurologic condition) the need for speech-language pathology services is typically related to the following and warrant additional payments

  • a swallowing disorder; 
  • a mechanically altered diet;
  • a comorbidity related to speech-language disorders; and/or 
  • cognitive impairment.

Various combinations of these characteristics form 12 different speech-language pathology case-mix groups with varying reimbursement levels. For example, a patient with an acute neurologic condition, a swallowing disorder, a mechanically altered diet, a comorbidity related to a speech-language disorder, and a cognitive impairment would qualify for a higher reimbursement than a patient with only an acute neurologic condition and a swallowing disorder. The SNF would receive payment for speech-language pathology services reflective of those services provided to meet the needs of each patient.

Per Diem Payments

CMS finalized a policy that would provide a variable per diem payment for physical and occupational therapy. According to CMS data, these therapies tend to be provided intensely in the early stages of the episode and reduce in intensity or frequency in the latter part of the episode. Speech-language pathology services are provided fairly constant over the course of the episode; therefore, the per diem payment remains consistent and is not adjusted in the same manner as physical and occupational therapy. 

Group and Concurrent Therapy Restrictions

CMS also finalized a policy restricting the use of group and concurrent therapy combined to 25% per patient per episode by discipline (i.e., physical therapy, occupational therapy, speech-language pathology). In addition, it modifies the resident assessment schedule to only require the Minimum Data Set (MDS) assessment at admission, discharge, and when the patient’s condition changes through the optional interim payment assessment (IPA). The optional nature of the IPA is a change from the proposed rule that would have required the use of the IPA under certain circumstances. CMS will include Section O on the discharge MDS to track therapy to ensure SNFs provide such services and avoid stinting on care; a recommendation ASHA fully supports. 

The annual payment update for fiscal year (FY) 2018 is estimated to be an increase of $670 million compared to FY 2017. CMS also updated the measures required for the SNF quality reporting program (QRP).


Please contact Sarah Warren, MA, ASHA’s director for health care policy for Medicare, at

ASHA Corporate Partners