Fact Sheets

Fiscal Year (FY) 2022 Skilled Nursing Facility (SNF) Prospective Payment System (PPS) Final Rule (CMS-1746-F)

On July 29, 2021, the Centers for Medicare & Medicaid Services (CMS) issued a final rule updating Medicare payment policies and rates for skilled nursing facilities under the Skilled Nursing Facility (SNF) prospective payment system (PPS) for FY 2022. In addition, the final rule includes several policies that update the SNF Quality Reporting Program (QRP) and the SNF Value-Based Program (VBP) for FY 2022. CMS is publishing this final rule consistent with the legal requirements to update Medicare payment policies for SNFs on an annual basis. This fact sheet discusses the major provisions of the final rule.

FY 2022 Updates to the SNF Payment Rates

CMS estimates that the aggregate impact of the payment policies in this final rule would result in an increase of approximately $410 million in Medicare Part A payments to SNFs in FY 2022. This estimate reflects at $411 million increase from the update to the payment rates of 1.2%, which is based on a 2.7% SNF market basket update, less a 0.8 percentage point forecast error adjustment and a 0.7 percentage point productivity adjustment, and a $1.2 million decrease due to the proposed reduction to the SNF PPS rates to account for the recent blood-clotting factors exclusion (see below). These impact figures do not incorporate the SNF VBP reductions that are estimated to be $184.25 million in FY 2022.

Methodology for Recalibrating the PDPM Parity Adjustment

On October 1, 2019, CMS implemented a new case-mix classification model, called the Patient Driven Payment Model (PDPM). When finalizing PDPM, CMS stated that this new payment model would be implemented in a budget neutral manner, meaning that the transition to this new payment model would not result in an increase or decrease in aggregate SNF spending. Since PDPM implementation, currently available data suggest an unintended increase in payments of approximately 5 % or $1.7 billion in FY 2020. As with past payment model transitions, CMS has conducted the data analysis to recalibrate the parity adjustment used to achieve budget neutrality under PDPM. However, CMS also acknowledges that the COVID-19 public health emergency (PHE) could have affected the data used to perform these analyses. CMS sought comment on a potential methodology for recalibrating the PDPM parity adjustment to account for unintended increases in payments. In this final rule, CMS discusses comments received on the potential methodology for recalibrating the PDPM parity adjustment. 

Rebase and Revise the SNF Market Basket

CMS rebased and revised the SNF market basket to improve payment accuracy under the SNF PPS by using a 2018-based SNF market basket to update the PPS payment rates, instead of the 2014-based SNF market basket.

Section 134 of the Consolidated Appropriations Act, 2021 – New Blood Clotting Factor Exclusion from SNF Consolidated Billing

Section 134 in Division CC of the Consolidated Appropriations Act, 2021requires that certain specified blood clotting factors used for the treatment of patients with hemophilia and other bleeding disorders and items and services related to the furnishing of such factors under section 1842(o)(5)(C) of the Social Security Act (the Act) be excluded from the consolidated billing requirements under the SNF PPS for items and services furnished on or after October 1, 2021.

CMS is finalizing a proportional reduction in the Medicare Part A SNF rates to account for this new exclusion as required by section 1888(e)(4)(G)(iii) of the Act. This methodology will result in an estimated decrease of approximately $1.2 million in aggregate Part A SNF spending to offset the increase in Part B spending that will occur due to these items and services being excluded from SNF consolidated billing.

Changes in PDPM ICD-10 Code Mappings

PDPM utilizes International Classification of Diseases, Version 10 (ICD-10) codes in several ways, including to assign patients to clinical categories used for categorization under several PDPM components, specifically the PT, OT, SLP and NTA components. The ICD-10 code mappings and lists used under PDPM are available on the PDPM Website at

In response to stakeholder feedback and to improve consistency between the ICD-10 code mappings and current ICD-10 guidelines, CMS made several changes to the PDPM ICD-10 code mappings affecting the areas of sickle-cell disease, esophageal conditions, multisystem inflammatory syndrome, neonatal cerebral infarction, vaping-related disorder, and anoxic brain damage.

Skilled Nursing Facility Quality Reporting Program (SNF QRP) update

The SNF QRP is a pay-for-reporting program. SNFs that do not meet reporting requirements may      be subject to a two-percentage point reduction in their annual update. CMS adopted two new measures and updated the specifications for another measure. In addition, CMS made a modification to the public reporting of SNF quality measures. Finally, we sought comments on the two Requests for Information (RFI) described below.

Closing the Health Equity Gap – RFI

Consistent with Executive Order 13985 on Advancing Racial Equity and Support for Underserved Communities Through the Federal Government, CMS is committed to addressing the significant and persistent inequities in health outcomes in the United States through improving data collection to better measure and analyze disparities across programs and policies. CMS is working   to make health care quality more transparent to consumers and providers, enabling them to make better choices as well as promoting provider accountability around health equity. Our ongoing commitment to closing the health equity gap in SNFs has been demonstrated by the adoption of standardized patient assessment data elements, which include several social    determinants of health (SDOH) that were finalized in the FY 2020 SNF PPS final rule.

CMS sought feedback in this RFI on ways to attain health equity for all patients through policy solutions. We received a number of comments and will take all concerns, comments, and suggestions into consideration as we continue to work to address and develop policies on this important topic. CMS plans to provide additional stratified quality measure information to providers related to race and ethnicity. The provision of stratified measure results would allow SNFs and other post-acute care providers to understand how they are performing with respect to certain patient risk groups, to support these providers in their efforts to ensure equity.

Fast Healthcare Interoperability Resources (FHIR) in Support of Digital Quality Measurement in Post-Acute Care Quality Reporting Programs – RFI

CMS is working to further the mission to improve the quality of healthcare for beneficiaries through measurement, transparency and public reporting of data. The SNF QRP and CMS’s other quality programs are foundational for contributing to improvements in healthcare, enhancing patient outcomes, and informing consumer choice. CMS believes that advancing our work with use of the FHIR standard offers the potential for supporting quality improvements and reporting, which will improve care for our beneficiaries. CMS sought feedback on our future plans to define digital quality measures (dQMs) for the SNF QRP. CMS also sought feedback on the potential use of FHIR for dQMs within the SNF QRP, aligning where possible with other quality programs.

We received a number of comments and will actively consider all input as we develop future regulatory proposals or future subregulatory policy guidance.

Skilled Nursing Facility (SNF) Healthcare-Associated Infections (HAI) Requiring Hospitalization Measure

CMS adopted a new claims-based measure, SNF HAI, to the SNF QRP, beginning with the FY 2023 SNF QRP. Typically, HAIs result from inadequate patient management following a medical intervention, such as surgery or device implementation, or poor adherence to protocol and antibiotic stewardship guidelines. Several provider characteristics are also related to HAIs including staffing levels (for example, high turnover, low staff-to-resident ratios), facility structure characteristics (for example, national chain membership, high occupancy rates), and   adoption or lack thereof of infection surveillance and prevention policies.

The SNF HAI measure uses Medicare fee-for-service (FFS) claims data to estimate the rate of HAIs that are acquired during SNF care and result in hospitalization. Some of the HAIs identified in this measure include sepsis, urinary tract infection, and pneumonia. The goal of the measure is to be able to assess those SNFs that have notably higher rates of HAIs that are acquired during SNF care and result in hospitalization, when compared to their peers and to the national average HAI rate. Implementation of the SNF HAI measure provides information about a facility’s adeptness in infection prevention and management and encourages improved quality of care.

COVID-19 Vaccination Coverage among Healthcare Personnel (HCP) Measure

CMS adopted the COVID-19 Vaccination Coverage among Healthcare Personnel (HCP) Measure beginning with the FY 2023 SNF QRP. This measure will require SNFs to report on COVID-19 HCP vaccination of their staff in order to assess whether SNFs are taking steps to limit the spread of COVID-19 among their HCP, reduce the risk of transmission within their facilities, and        help sustain the ability of SNFs to continue serving their communities throughout the COVID-19 PHE and beyond. SNFs must report the vaccination data through the Centers for Disease Control and Prevention (CDC) National Healthcare Safety Network beginning October 1, 2021.

Transfer of Health (TOH) Information to the Patient-PAC Quality Measure

CMS updated the denominator for the Transfer of Health (TOH) Information to the Patient-Post Acute Care (PAC) quality measure. In the past, the measure denominators for both the

TOH Information to the Patient-PAC and the TOH Information to the Provider-PAC measures include patients discharged home under the care of an organized home health service organization or hospice. In order to avoid counting the patient in both TOH measures, CMS is removing patients discharged home under the care of an organized home health service organization or hospice from the definition of the denominator for the TOH Information to the Patient–PAC measure.

Public Reporting of Quality Measures with Fewer than Standard Numbers of Quarters Due to COVID-19 PHE Exemptions

In March 2020, due to the COVID-19 PHE, CMS granted an exception to the SNF QRP reporting requirements from Q1 2020 (January 1, 2020–March 31, 2020), and Q2 2020 (April 1, 2020–June 30, 2020). CMS also stated that it would not publicly report any SNF QRP data that might be greatly impacted in terms of measure reportability and reliability by the exceptions from Q1 and Q2 of 2020, and the absence of useable data these exceptions created. This exception affected the standard    number of quarters that CMS currently uses to display SNF QRP data. CMS updated the number of quarters used for public reporting to account for this exception.

Skilled Nursing Facility Value-Based Purchasing (SNF VBP) Program

The SNF VBP Program rewards SNFs with incentive payments based on the quality of care they provide to Medicare beneficiaries, as measured by performance on a single measure of hospital readmissions. All SNFs paid under Medicare’s SNF PPS are included in the SNF VBP Program.

Section 111 of the Consolidated Appropriations Act of 2021 provides the Secretary authority to apply additional measures determined appropriate by the Secretary to the SNF VBP Program for payments for services furnished on or after October 1, 2023. 

Measure Suppression and Special Scoring Policies for the SNF VBP Program

CMS will suppress the Skilled Nursing Facility 30-Day All-Cause Readmission Measure (SNFRM) for the FY 2022 SNF VBP Program Year because circumstances caused by the PHE for COVID-19 have significantly affected the measure and the ability to make fair, national comparisons of SNFs’ performance scores. As part of a special scoring policy for FY 2022, CMS will assign a performance score of zero to all participating SNFs, irrespective of how they perform using the previously finalized scoring methodology, to mitigate the effect that PHE-impacted measure results would otherwise have on SNF performance scores and incentive payment multipliers. CMS will reduce the otherwise applicable federal per diem rate for each SNF by two percent and award SNFs 60% of that withhold, resulting in a 1.2% payback percentage to those SNFs. Finally, SNFs that qualify for the low-volume adjustment will continue to receive 100 percent of that 2 percent withhold.

The special scoring policy will maintain compliance with the previously finalized payback percentage policy (per statute, the SNF VBP Program must withhold 2% of SNF Medicare Part A FFS payment and redistribute 50–70% of the withhold to SNFs in the form of incentive payments). CMS finalized a 60% payback percentage in prior rulemaking.

The finalized measure suppression and special scoring policies for the FY 2022 Program year do not remove the accountability of SNFs and nursing facilities (hereafter referred to as long-term care facilities [LTCFs]) to provide high quality care and ensure patient safety, including protecting the well-being of clinical staff who provide care in these congregated settings. LTCFs must continue to adhere to evidence-based infection control practices and CMS’s Requirements for Participation for LTCFs at 42 CFR 483 Subpart B. Compliance with CMS’s requirements is critical as nursing home residents are more susceptible to severe infection from COVID-19 due to their age, underlying health conditions, and congregated setting. CMS continues to work with its federal partners such as the Centers for Disease Control and Prevention in supporting the nation’s COVID-19 response across LTCFs, such as providing surveillance data to strengthen local and national surveillance, monitor trends in infection rates, and provide actionable goals toward infection prevention efforts. Finally, CMS and its partners, including state governments, have helped LTCFs secure personal protective equipment and expanded access to COVID-19 testing supplies and vaccines, among other initiatives to ensure patient safety and improve quality of care across more than 15,000 LTCFs.

Expanded SNF VBP Program

The Consolidated Appropriations Act, 2021 included a provision allowing the Secretary to expand the SNF VBP program and apply up to an additional nine measures with respect to payments beginning in FY 2024, which may include measures of functional status, patient safety, care coordination, or patient experience.

In expanding the SNF VBP measure set, CMS is considering measures that are already required for LTCFs, which include both SNFs and nursing facilities (NFs), to collect and report under other initiatives such as Nursing Home Compare. Approximately 94 % of LTCFs are dually certified as both a SNF and NF, and the vast majority of LTCF residents are also Medicare beneficiaries. The expanded SNF VBP measure set will assess the quality of care that LTCFs provide to all LTCF residents, regardless of payer, as it will best represent the quality of care provided to all Medicare beneficiaries in the facility. CMS sought stakeholder input on the measures listed in the proposed rule or any others that we should consider, including measures to assess residents’ views of their health care and measures assessing staff turnover and will take these comments into account in developing an expanded SNF VBP measure set.

The final rule (CMS-1746-F) can be downloaded from the Federal Register at: