Tag Archives: skilled nursing facility

Why are U.S. nursing homes at high risk for COVID-19 contraction?

Emerging data from around the world suggest that nursing home residents are at exceptionally high risk for contracting COVID-19, with some areas reporting that close to half of regional deaths are either in nursing homes or in hospitals after admission from a nursing home. Less than 0.5% of Americans live in nursing homes, but the remarkable concentration of risk in such facilities may have profound implications on how we handle the pandemic.

In this article, Milliman’s Bruce Pyenson and Harvard’s David Grabowksi discuss why nursing homes have been hit so hard by COVID-19 and what can be done to fight the disease in these facilities.

How could the proposed “Pathways to Success” rule affect evaluation and management services in skilled nursing facilities?

In August, the Centers for Medicare and Medicaid Services (CMS) released a sweeping proposed rule that, if enacted, will significantly change the Medicare Shared Savings Program (MSSP).

Under the proposed rule, CMS will change how it determines whether evaluation and management (E&M) services were furnished in a skilled nursing facility (SNF), as opposed to a custodial (non-skilled) nursing facility setting, for purposes of beneficiary assignment to an accountable care organization (ACO). The change will cause minimal impact to physicians who do not primarily practice in a nursing facility setting, but there will be important effects for physicians who do:

• Most nursing facility-based physicians will see a material change in the number of assigned beneficiaries, with roughly one-third seeing an increase or decrease of at least 25%. Office-based physicians will see minimal impacts to the number of beneficiaries assigned to them as a result of this rule change.
• ACOs with nursing facility-based physicians will no longer need to focus attention on how to adjust their place of service coding practices to improve their MSSP performances.
• Nursing facility-based physicians who are in ACOs that have chosen retrospective assignment will be less penalized by the regional cost adjustment to their benchmarks under the proposed rule. However, the penalty will continue to be far greater than if the ACO were to choose prospective assignment.

In this paper, Milliman’s Anders Larson and Jill Herbold discuss the current and proposed rules related to E&M services in nursing facilities and then present an analysis of their findings.

A comparison of nursing home usage in states with and without Medicaid Managed LTSS

As states consider implementing managed long-term services and supports (MLTSS) programs and as managed care organizations consider participating in them, it is important to understand what level of savings from managed care may be achievable. This paper by Milliman’s Nick JohnsonAndrew Keeley, and Ali Khan examines Minimum Data Set frequency reports and U.S. Census Bureau American Community Survey population data to compare nursing home usage in states with MLTSS to states without MLTSS.

CMS final rule for skilled nursing facilities and value-based care: Is your organization ready?

On July 31, 2018, the Centers for Medicare and Medicaid Services (CMS) released a final rule that outlined the 2019 fiscal year payment updates and quality program changes for skilled nursing facilities (SNFs). This rule continues the drive for change from fee-for-service to value-based reimbursement and reduces the burden on providers consistent with the Patients Over Paperwork and Meaningful Measures initiatives. Below are the three changes introduced by the final rule and how each change affects SNFs. CMS estimates that the new rule will result in an additional $820 million in Medicare reimbursements to SNFs for the 2019 fiscal year due to the 2.4% increase in payment rates.

Changes to the case-mix classification system

The final rule creates a new Patient-Driven Payment Model (PDPM) for reimbursement that will replace the Resource Utilization Group, Version IV case-mix reimbursement model. This new model focuses on treatment of the whole patient rather than on volume of services. This will decrease paperwork and reduce the overall complexity compared to the old model.

The new PDPM goes into effect for fiscal year 2020, which begins on October 1, 2019, and focuses on clinically relevant factors to determine payment using diagnosis codes. The new model will encourage more contact between healthcare professionals and patients.

PDPM decreases the number of payment group combinations by 80%. It essentially focuses on payments based on the complexity of the patient needs and condition, instead of the volume of hours needed to provide care. Finally, CMS suggests that the new model will reduce the amount of documentation for patient assessments and significantly reduce reporting burdens, saving providers approximately $2 billion over 10 years.

To succeed with this new reimbursement model, SNFs will have to assess the types of patients they treat and may have to adjust treatment plans, including the level of care during stays, and realign their operations accordingly. SNFs will also have to assess their documentation procedures and ensure that patient characteristics and needs are accurately captured.

SNF Quality Reporting Program (QRP)

Also in the final rule, CMS removed measures that were not consistent with the Meaningful Measures initiative. The updated measure set focuses on making care safer, strengthening personal and family engagement, promoting coordination of care, promoting effective prevention and treatment, and making care affordable. There were no new measures suggested or initiated.

SNFs can also educate and engage healthcare professionals and review the new documentation formats for each quality measure. The success in meeting a measure is dependent on the engagement of staff and providers, so that the appropriate coding and documentation meet the quality measure specifications. SNFs can also begin looking at appropriate analytical data, which can help with specific performance needs.

SNF Value-Based Purchasing (VBP) program

The SNF VBP program will begin on October 1, 2018, and will add a positive or negative incentive payment for services rendered by facilities based on the result of their readmission measures. This final rule will reward providers that takes steps to limit 30-day readmissions of their patients to hospitals. SNFs can begin preparations for the VBP program by reviewing their financial, operational, and clinical policies and procedures.


There are several steps that SNFs need to begin to implement now to be ready for the October 1, 2018, implementation of the Value-Based Purchasing program. SNFs are an important part of many Value-Based Purchasing programs and are now being incentivized to provide quality of care to patients. They will be rewarded for looking at the needs of the patient instead of how much time a therapist or caregiver spends with a patient. This new program will allow patients and caregivers to pick facilities that cater to their personal needs for care or rehabilitation.

Measuring performance of skilled nursing facilities

The skilled nursing facility (SNF) industry is an important area for Medicare accountable care organizations (ACOs), Medicare Advantage health plans, and other Medicare programs. How can these organizations appropriately benchmark performance to provide efficient healthcare and reduce spending for SNF services?

Milliman’s Jill Herbold and Anders Larson offer some perspective in their report “Performance of skilled nursing facilities for the Medicare population.” The report highlights several utilization and expenditure metrics for measuring SNF performance. It also explores SNF performance levels across the United States and provides a quantitative assessment of the opportunities to reduce spending for SNF services.