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SNF PPS Payment Model Research

Analysis of Medicare Part A SNF PPS Payment Model

In an effort to establish a comprehensive approach to Medicare Part A SNF payment reform, we are expanding the scope of the SNF Therapy Payment Research project.  Although we always intended to ensure that any revisions to therapy payment would consider an integrated approach with the remaining payment methodology, we now plan to examine potential improvements and refinements to the overall SNF PPS payment system. This expansion will allow for improving the ability for Medicare to pay adequately and appropriately for all services provided during a Medicare Part A SNF stay.  


Since 1998, Medicare has paid for services provided by skilled nursing facilities (SNFs) under the Medicare Part A benefit on a per diem basis through the skilled nursing facility prospective payment system (SNF PPS). Currently, therapy payments under the SNF PPS are based primarily on the amount of therapy provided to a patient, regardless of the specific patient characteristics and care needs. CMS has contracted with Acumen, LLC to identify potential alternatives to the existing methodology used to pay for services under the SNF PPS. Below, we will post information about this project as it progresses.
In the first phase of the project, the contractor reviewed past research studies and policy issues related to SNF PPS therapy payment and options for improving or replacing the current system of paying for SNF therapy services. The following report summarizes the analysis and findings from this first phase of the project:

SNF Therapy Payment Models – Base Year Final Summary Report, April 2014

In the second phase of the project, which is now in process, the contractor is using the findings from this Base Year Final Summary Report as a guide to identify potential models suitable for further analysis.  We have considered stakeholder comments and concerns as we continue to investigate alternative therapy payment approaches and plan to solicit additional feedback on this aspect of our SNF payment research.  As noted above, we are expanding the scope of this project during this phase to include ideas for revising the overall SNF PPS and plan to include additional and separate opportunities to obtain stakeholder input on non-therapy related refinement possibilities.  

As the contractor begins the process of further narrowing the scope of therapy payment models in this second phase of the project, as well as considering potential improvements to the nursing component and overall SNF PPS payment structure, we welcome your comments and feedback. Comments on the SNF PPS payment methodology may be submitted anytime to: