CMS Issues Proposed Rules for SNFs…and IPFs…and IRFs…and Hospices

CMS Issues Proposed Rules for SNFs…and IPFs…and IRFs…and Hospices

It was a busy week for the federal agency that oversees Medicare and Medicaid.

To say that the Centers for Medicare & Medicaid Services (CMS) has had a busy week would probably be a glaring understatement.

The federal agency issued four proposed rules over the span of five days, unveiling draft payment policy and rate updates for skilled nursing facilities (SNFs), inpatient psychiatric facilities (IPFs), inpatient rehabilitation facilities (IRFs), and hospices.

SNF Proposed Rule

The SNF rule also included proposals for the SNF Quality Reporting Program (QRP) and the SNF Value-Based Purchasing (VBP) Program for the 2024 fiscal year (FY) and future years. A key provision, officials said, is that the rule would eliminate the requirement for facilities to actively waive their right to a hearing in writing, and instead treat the failure to submit a timely hearing request as a constructive waiver. 

“These actions support the Administration’s plan to improve safety and quality of care in nursing homes, and CMS remains committed to proposing minimum staffing standards for nursing facilities later this spring,” the agency added in a press release announcing the rule.

CMS estimated that the aggregate impact of the rule would result in a net increase of 3.7 percent, or approximately $1.2 billion, in Medicare Part A payments to SNFs for FY 2024, reflective of a $2 billion increase resulting from the 6.1-percent net market basket update to the payment rates, which is based on a 2.7-percent SNF market basket increase plus a 3.6-percent market basket forecast error adjustment (and less a 0.2-percent productivity adjustment, as well as a -2.3-percent, or approximately $745 million, decrease in the FY 2024 SNF PPS (Prospective Payment System) rates as a result of the second phase of the Patient-Driven Payment Model (PDPM) parity adjustment recalibration).

IPF Proposed Rule

The IPF rule included proposed annual updates to PPF rates, the outlier threshold, the wage index, and associated impact analysis, along with a proposal to rebase and revise the IPF market basket, as well as a proposal to modify regulations to allow hospitals to open and begin billing Medicare for an excluded IPF unit anytime within the cost reporting year – something CMS believes “will help increase access to essential inpatient psychiatric services and available beds.”

Additionally, for the IPF Quality Reporting (IPFQR) Program, CMS is proposing to adopt four new measures, modify one existing measure, remove two existing measures, and adopt and implement a data validation pilot. One of the measures being proposed is a statutorily required “patient experience survey measure.”

CMS estimated that payments to IPFs would increase by 1.9 percent, or $55 million, in FY 2024, relative to IPF payments in FY 2023. CMS is proposing to update the IPF PPS payment rates by 3.0 percent, based on the proposed 2021-based IPF market basket increase of 3.2 percent, less a proposed 0.2-percentage point productivity adjustment.

IRF Proposed Rule

The IRF proposed rule includes annual updates to the PPS rates, the outlier threshold, the case-mix-group relative weights and average length of stay values, the wage index, and associated impact analysis. In addition, the rule includes a proposal to revise and rebase the IRF market basket, as well as a proposal similar to that of the IPF proposal: to modify regulations to allow hospitals to open and begin billing Medicare for an excluded IRF unit anytime within the cost reporting year. 

CMS is also proposing two new and one modified measure proposals for the IRF Quality Reporting Program (QRP), along with three measure removals and is proposing one public reporting policy.

For FY 2024, CMS is proposing to update the IRF PPS payment rates by 3.0 percent based on the proposed IRF market basket update of 3.2 percent, less a proposed 0.2-percentage point productivity adjustment. Officials also said that if more recent data becomes available (for example, a new estimate of the market basket update or productivity adjustment), CMS would use it to determine the FY 2024 market basket update and the productivity adjustment in the final rule. In addition, the proposed rule contains an adjustment to the outlier threshold to maintain outlier payments at 3.0 percent of total payments, resulting in a 0.7-percentage point increase in outlier payments. CMS estimated that overall IRF payments for FY 2024 would increase by 3.7 percent (or $335 million) relative to payments in FY 2023.

Hospice Proposed Rule

Lastly, the hospice rule includes information on utilization trends and solicits comments regarding “information related to the provision of higher levels of hospice care, spending patterns for non-hospice services provided during the election of the hospice benefit, ownership transparency, equipping patients and caregivers with information to inform hospice election decision-making selection, and ways to examine health equity under the hospice benefit.”

The rule also proposes that physicians who order or certify hospice services for Medicare beneficiaries must be enrolled in Medicare or validly opted out as a prerequisite for payment for the hospice period of care in question.

“CMS is looking closely at the hospice industry, as we have increasing concerns about fraud, waste, and abuse in this space,” the agency’s press release read. “While this rule takes initial steps, this is part of a larger effort by CMS to address hospice fraud, waste, and abuse that will continue this year.”

The proposed FY 2024 hospice payment update percentage is 2.8 percent, or an estimated increase of $720 million in payments from FY 2023: a result of a 3.0 percent market basket percentage increase reduced by a 0.2 percentage point productivity adjustment. The hospice payment update includes a statutory aggregate cap that limits overall payments per patient made to a hospice annually; the cap amount is $33,396.55, equal to the FY 2023 cap amount ($32,486.92) updated by the proposed FY 2024 hospice payment update percentage of 2.8 percent.

The proposed rule for SNFs can be downloaded from the Federal Register at https://www.federalregister.gov/public-inspection/2023-07137/medicare-program-prospective-payment-system-and-consolidated-billing-for-skilled-nursing-facilities. Public comments on these proposals will be accepted until June 5.

The proposed rule for IPFs can be downloaded from the Federal Register at https://www.federalregister.gov/public-inspection/2023-07122/medicare-program-fy-2024-inpatient-psychiatric-facilities-prospective-payment-system—rate-update. Public comments on these proposals will be accepted until June 5.

The proposed rule for IRFs can be downloaded from the Federal Register at https://www.federalregister.gov/public-inspection/2023-06968/medicare-program-inpatient-rehabilitation-facility-prospective-payment-system-for-federal-fiscal. Public comments on these proposals will be accepted until June 2. 

The proposed rule for hospices can be viewed at the Federal Register at https://www.federalregister.gov/public-inspection/2023-06769/medicare-program-fiscal-year-2024-hospice-wage-index-and-payment-rate-update-hospice-conditions-of.

Public comments on these proposals will be accepted until May 30.

Facebook
Twitter
LinkedIn

Mark Spivey

Mark Spivey is a national correspondent for RACmonitor.com, ICD10monitor.com, and Auditor Monitor who has been writing and editing material about the federal oversight of American healthcare for more than a decade.

Related Stories

Leave a Reply

Please log in to your account to comment on this article.

Featured Webcasts

The Cost of Ignoring Risk Adjustment: How HCCs Impact Revenue & Compliance

The Cost of Ignoring Risk Adjustment: How HCCs Impact Revenue & Compliance

Stop revenue leakage and boost hospital performance by mastering risk adjustment and HCCs. This essential webcast with expert Cheryl Ericson, RN, MS, CCDS, CDIP, will reveal how inaccurate patient acuity documentation leads to lost reimbursements through penalties from poor quality scores. Learn the critical differences between HCCs and traditional CCs/MCCs, adapt your CDI workflows, and ensure accurate payments in Medicare Advantage and value-based care models. Perfect for HIM leaders, coders, and CDI professionals.  Don’t miss this chance to protect your hospital’s revenue and reputation!

May 29, 2025
I050825

Mastering ICD-10-CM Coding for Diabetes and it’s Complications: Avoiding Denials & Ensuring Compliance

Struggling with ICD-10-CM coding for diabetes and complications? This expert-led webcast clarifies complex combination codes, documentation gaps, and sequencing rules to reduce denials and ensure compliance. Dr. Angela Comfort will provide actionable strategies to accurately link diabetes to complications, improve provider documentation, and optimize reimbursement—helping coders, CDI specialists, and HIM leaders minimize audit risks and strengthen revenue integrity. Don’t miss this chance to master diabetes coding with real-world case studies, key takeaways, and live Q&A!

May 8, 2025
2025 Coding Clinic Webcast Series

2025 ICD-10-CM/PCS Coding Clinic Update Webcast Series

Uncover critical guidance. HIM coding expert, Kay Piper, RHIA, CDIP, CCS, provides an interactive review on important information in each of the AHA’s 2025 ICD-10-CM/PCS Quarterly Coding Clinics in easy-to-access on-demand webcasts, available shortly after each official publication.

April 14, 2025

Trending News

Featured Webcasts

The Two-Midnight Rule: New Challenges, Proven Strategies

The Two-Midnight Rule: New Challenges, Proven Strategies

RACmonitor is proud to welcome back Dr. Ronald Hirsch, one of his most requested webcasts. In this highly anticipated session, Dr. Hirsch will break down the complex Two Midnight Rule Medicare regulations, translating them into clear, actionable guidance. He’ll walk you through the basics of the rule, offer expert interpretation, and apply the rule to real-world clinical scenarios—so you leave with greater clarity, confidence, and the tools to ensure compliance.

June 19, 2025
Open Door Forum Webcast Series

Open Door Forum Webcast Series

Bring your questions and join the conversation during this open forum series, live every Wednesday at 10 a.m. EST from June 11–July 30. Hosted by Chuck Buck, these fast-paced 30-minute sessions connect you directly with top healthcare experts tackling today’s most urgent compliance and policy issues.

June 11, 2025
Open Door Forum: The Changing Face of Addiction: Coding, Compliance & Care

Open Door Forum: The Changing Face of Addiction: Coding, Compliance & Care

Substance abuse is everywhere. It’s a complicated diagnosis with wide-ranging implications well beyond acute care. The face of addiction continues to change so it’s important to remember not just the addict but the spectrum of extended victims and the other social determinants and legal ramifications. Join John K. Hall, MD, JD, MBA, FCLM, FRCPC, for a critical Q&A on navigating substance abuse in 2025.  Register today and be a part of the conversation!

July 16, 2025

Trending News

Happy National Doctor’s Day! Learn how to get a complimentary webcast on ‘Decoding Social Admissions’ as a token of our heartfelt appreciation! Click here to learn more →

CYBER WEEK IS HERE! Don’t miss your chance to get 20% off now until Dec. 2 with code CYBER24