Skilled Nursing Facility PPS


Feedback on Scope of Practice

The Centers for Medicare & Medicaid Services (CMS) is seeking additional input and recommendations regarding elimination of specific Medicare regulations that require more stringent supervision than existing state scope of practice laws, or that limit health professionals from practicing at the top of their license.

We are seeking additional feedback in response to part of the President’s Executive Order (EO) #13890 on Protecting and Improving Medicare for Our Nation’s Seniors.  The EO specifically directs HHS to propose a number of reforms to the Medicare program, including ones that eliminate supervision and licensure requirements of the Medicare program that are more stringent than other applicable federal or state laws. These burdensome requirements ultimately limit healthcare professionals, including Physician Assistants (PAs) and Advanced Practice Registered Nurses (APRNs), from practicing at the top of their professional license.

In response to suggestions we have already received regarding supervision, scope of practice, and licensure requirements, CMS has made a number of regulatory changes in several payment rules, including the CY 2020 Physician Fee Schedule, Home Health, and Outpatient Prospective Payment System final rules. These changes include, but are not limited to: redefining physician supervision for services furnished by PAs, allowing therapist assistants to perform maintenance therapy under the Medicare home health benefit and reducing the minimum level of physician supervision required for all hospital outpatient therapeutic services.

We are proud of the work accomplished, and now we need your help in identifying additional Medicare regulations which contain more restrictive supervision requirements than existing state scope of practice laws, or which limit health professionals from practicing at the top of their license.  If you submitted comments on these topics to our 2019 Request for Information on Reducing Administrative Burden to Put Patients over Paperwork, thank you!  We are reviewing those submissions.

We welcome any additional recommendations.  Please send your recommendations to  with the phrase “Scope of Practice” in the subject line by January 17, 2020. 

We also continue to welcome your input on ways in which we can reduce unnecessary burden, increase efficiencies and improve the beneficiary experience, and request that input on such topics only be sent to this email address with the phrase “Scope of Practice” in the subject line if they relate to the specific areas in regulation which restrict non-physician providers from practicing to the full extent of their education and training.

CMS-1718-F: 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 2020 is on public display at the Office of Federal Register and will be published on August 7, 2019. The related wage index file is available on the Wage Index webpage.




Section 4432(a) of the Balanced Budget Act (BBA) of 1997 modified how payment is made for Medicare skilled nursing facility (SNF) services. Effective with cost reporting periods beginning on or after July 1, 1998, SNFs are no longer paid on a reasonable cost basis or through low volume prospectively determined rates, but rather on the basis of a prospective payment system (PPS). The PPS payment rates are adjusted for case mix and geographic variation in wages and cover all costs of furnishing covered SNF services (routine, ancillary, and capital-related costs).

Implementing instructions relating to coverage and physician certification/recertification are forthcoming and are not included in these sections.

The Balanced Budget Act of 1997 mandates the implementation of a per diem prospective payment system (PPS) for skilled nursing facilities (SNFs) covering all costs (routine, ancillary and capital) related to the services furnished to beneficiaries under Part A of the Medicare program. Major elements of the system include:

  • Rates: Federal rates are set using allowable costs from FY 1995 cost reports. The rates also include an estimate of the cost of services which, prior to July 1, 1998, had been paid under Part B but furnished to SNF residents during a Part A covered stay. FY 1995 costs are updated to FY 1998 by a SNF market basket minus 1 percentage point for each of fiscal years 1996, 1997 and 1998. Providers which received new provider exemptions in FY 1995 are excluded from the data base. Routine cost limit exceptions payments are also excluded. The data is aggregated nationally by urban and rural area to determine standardized federal per diem rates to which case mix and wage adjustments apply.
  • Case Mix Adjustment: Payments under the SNF PPS are case-mix adjusted in order to reflect the relative resource intensity that would typically be associated with a given patient’s clinical condition, as identified through the resident assessment process. The SNF PPS also includes an administrative presumption whereby a beneficiary who is correctly assigned one of the designated, more intensive case-mix classifiers on the initial 5-day, Medicare-required assessment is 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 is not assigned one of the designated case-mix classifiers is not automatically classified as either meeting or not meeting the definition, but instead receives an individual level of care determination using the existing administrative criteria.)
    • For services furnished prior to October 1, 2019, CMS has designated for this purpose all groups encompassed by the following categories under the Resource Utilization Groups, version IV (RUG-IV) model: Rehabilitation plus Extensive Services; Ultra High Rehabilitation; Very High Rehabilitation; High Rehabilitation; Medium Rehabilitation; Low Rehabilitation; Extensive Services; Special Care High; Special Care Low; and Clinically Complex.
    • For services furnished on or after October 1, 2019, CMS designates for this purpose the following classifiers under the Patient Driven Payment Model (PDPM): Those nursing groups encompassed by the Extensive Services, Special Care High, Special Care Low, and Clinically Complex nursing categories; PT and OT groups TA, TB, TC, TD, TE, TF, TG, TJ, TK, TN, and TO; SLP groups SC, SE, SF, SH, SI, SJ, SK, and SL; and the NTA component’s uppermost (12+) comorbidity group.
  • Geographic Adjustment: The labor portion of the federal rates is adjusted for geographic variation in wages using the hospital wage index.
  • Annual Updates: Payment rates are increased each Federal fiscal year using a SNF market basket index (PDF).
  • Transition: A three-year transition that blends a facility-specific payment rate with the federal case mix adjusted rate is used. The facility-specific rate includes allowable costs (from FY 1995 cost reports) including exceptions payments. Payments associated with 'new provider' exemptions are included but limited to 150 percent of the routine cost limit. It also includes an add-on for related Part B costs similar to the federal rate.
  • Effective Date: The PPS system is effective for cost reporting periods beginning on or after July 1, 1998.
  • For further information on the prospective payment system and its full legislative history, please refer to the document entitled "Skilled Nursing Facility (SNF) Prospective Payment System (PPS) Legislative History," available via the Downloads list below.


For a one-stop resource web page focused on the informational needs and interests of Medicare Fee-for-Service (FFS) skilled nursing facilities go to the SNF Center.

Page Last Modified:
12/26/2019 08:00 PM