Snf Payment Rate Increase: What It Means For Your Facility's Reimbursement

By Author: Charlie Robinson
Total Articles: 2
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Skilled Nursing Facilities (SNFs) play a crucial role in the post-acute patient treatment of elderly patients alongside individuals with complex medical conditions. The payment rates for Medicare, which funds SNF services, undergo regular changes to maintain coverage of increased costs resulting from inflation, labor costs, and healthcare spending components.
For fiscal year (FY) 2024, the Centers for Medicare & Medicaid Services (CMS) announced a 4.0% SNF Medicare Part A payment rate boost worth an estimated $1.4 billion as additional facility payments. The revenue increase acts as a valuable addition to SNFs, yet its benefits will differ based on patient populations along with current payment amounts and operational efficiency.

It is crucial for SNF administrators and healthcare providers to understand the implications of an increase in payment rate in order to maximize facility operations, improve patient care, and promote financial stability. Let us consider the effect of the SNF payment rate increase on your facility's reimbursement.

Impact of SNF Payment Rate Increase

• Increased Revenue
...
... An increased Medicare payment rate means SNFs directly access increased financial resources. Because SNFs are paid per diem per patient who is covered by Medicare, the increased payment rate will mean more money without a need to boost admissions of patients. This added income can cover increasing costs of healthcare services, wages of the staff, and facilities.
For instance, if an SNF were once reimbursed $600 per patient daily and saw a 4% rate increase, the new rate would be $624. Each day that 50 Medicare patients receive treatment corresponds to an annual sum of $438,000 based on a daily increase of $1,200.

• Potential for Quality Improvement
SNF's financial growth allows facilities to make greater investments in healthcare services provided to patients. Through staff training investments, facilities can achieve higher patient care results and lower employee turnover rates. Updating electronic health records systems and patient monitoring equipment through improved efficiency leads to better patient care quality. Facilities enhancements in rehabilitation options alongside updated patient accommodation spaces improve patient care quality. Studies on more financially stable facilities have discovered reduced patient readmissions and higher patient satisfaction ratings, which emphasizes the need to invest in quality improvement.

• Patient Mix Impact
The monetary gain from a rate increase payment relies on admitting the type of patients into an SNF. Medicare's Patient-Driven Payment Model (PDPM) groups patients based on their clinical requirements and not by the number of minutes of therapy given. The SNFs with admissions that involve more intensive patients, i.e., patients with ventilator or specialty nursing needs, would have a greater rise in payment.
Conversely, SNFs with more short-stay, lower-acuity patients may experience a reduced financial effect. Accurate patient assessment and coding are essential to achieving maximum reimbursements under PDPM.

• Market Basket Adjustment
The payments that CMS makes to SNFs are adjusted based on the market basket index, which follows changes in operating facility costs, including medical supplies and labor expenses. The payment rate index for Medicare adjusts using three elements: medical supplies, employee costs, and operating costs, such as maintenance expenses and utility payments for facilities.
As the costs of labor increase, Medicare increases payment rates to enable facilities to sustain operations without compromising care quality. Nonetheless, SNFs must continue to be vigilant in managing costs to guarantee financial stability even during changing economic times.

• Patient-Driven Payment Model (PDPM)
Released in 2019, PDPM superseded the earlier Resource Utilization Group (RUG-IV) system, moving from therapy-based reimbursement to patient care. In PDPM, Medicare takes into account five case-mix items: physical therapy (PT), occupational therapy (OT), speech-language pathology (SLP), nursing services, and non-therapy ancillary (NTA) services.
As PDPM payments are tied to patients' conditions, not therapy hours, SNFs should have precise coding and clinical documentation in place to reflect proper reimbursement levels. With the rise in SNF payment rates under PDPM comes the imperative of maximizing billing tactics.

How to Prepare for an SNF Payment Rate Increase?

In order to reap the full benefit of increased Medicare reimbursement rates, SNFs should follow these steps:

• Reviewing the existing patient mix is also important in gauging the clinical acuity of the patient population.
• Being able to identify opportunities for admitting higher acuity patients with specialized needs may enhance revenue.
• Cost structures are reviewed to identify areas where cost-effectiveness could be enhanced, e.g., bargaining for improved supplier and vendor contracts or through technology-based solutions to maximize workforce allocation.
• Reinvestment planning is necessary in order to reinvest extra revenue in staff incentives, facility renovations, and specialized care initiatives.
• Also, learning from CMS updates through industry webinars, training programs, and consulting with third-party billing and compliance specialists keeps facilities up to speed on best practices.

Conclusion
The SNF payment rate increase requires proper financial planning and billing accuracy to maximize potential benefits despite its promise of better revenue and care quality. Using accurate coding and compliance with PDPM standards of documentation, 24/7 Medical Billing Services can help SNFs with complexity related to Medicare reimbursements. In fact, it will reduce the risk of denial and delays on claims with correct billing and management of claims and provide instant analytics for the best management of revenue cycles. Through the association with 24/7 Medical Billing Services, SNFs are able to focus on delivering exceptional patient care, thereby fostering financial stability and expansion. As a Top Outsourcing SNF Billing Services Provider Company, we ensure streamlined revenue cycle management and optimized reimbursements. Get in touch now to maximize the reimbursement performance with SNF billing solutions.

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