Fiscal Year (FY) 2023 Skilled Nursing Facility Prospective Payment System Final Rule (CMS 1765-F)
On July 29, 2022, the Centers for Medicare & Medicaid Services (CMS) issued a final rule that updates Medicare payment policies and rates for skilled nursing facilities under the Skilled Nursing Facility Prospective Payment System (SNF PPS) for fiscal year (FY) 2023. In addition, the final rule includes updates for the SNF Quality Reporting Program (QRP) and the SNF Value-Based Purchasing (VBP) Program for FY 2023 and future years. CMS is publishing this final rule consistent with the legal requirements to update Medicare payment policies for nursing homes on an annual basis. This fact sheet discusses the major provisions of the final rule.
FY 2023 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 2.7%, or approximately $904 million, in Medicare Part A payments to SNFs in FY 2023 compared to FY 2022. This estimate reflects a $1.7 billion increase resulting from the 5.1% update to the payment rates, which is based on a 3.9% SNF market basket increase plus a 1.5 percentage point market basket forecast error adjustment and less a 0.3 percentage point productivity adjustment (as required by law), as well as a negative 2.3% (or $780 million decrease) in the FY 2023 SNF PPS rates as a result of the recalibrated parity adjustment, which is being phased in over two years. These impact figures do not incorporate the SNF VBP reductions for certain SNFs. These reductions are estimated to be $186 million in FY 2023.