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FY 2022 SNF PPS Proposed Rule Comments: AAPACN Highlights Impact of COVID-19 on SNFs

Jessie McGill, RN, RAC-MT, RAC-MTA

Every spring, the Centers for Medicare & Medicaid Services (CMS) releases the notice of proposed rulemaking (NPRM) for the next fiscal year’s (FY’s) payment policies and rates. This provides an opportunity for stakeholders and providers to respond during the comment period. Each year, the American Association of Post-Acute Care Nursing (AAPACN) collaborates with other long-term care professional associations to submit comments advocating for more than 15,000 members. By mid-August, CMS will release the final rule, which will include its responses to the comments received and final decisions. This year, AAPACN’s comments emphasized three main areas of concern—the Patient-Driven Payment Model (PDPM) parity adjustment, the Skilled Nursing Facility (SNF) Quality Reporting Program (QRP), and the SNF Value-Based Purchasing (VBP) program. The summary below outlines AAPACN’s advocacy efforts in these areas.

PDPM Parity Adjustment


CMS intended the transition between RUG-IV (Resource Utilization Group version IV) – the previous Medicare prospective payment system (PPS) payment model—and PDPM to be budget neutral. However, CMS analysis noted a 5.3% increase in spending when comparing expected total payments for FY 2020 to actual payments. CMS acknowledged that the COVID-19 public health emergency (PHE) may have impacted FY 2020 Medicare claims and attempted to control for it by removing claims with a COVID-19 diagnosis and claims which used the disaster-related (DR) waiver condition code. Yet even when it adjusted for those factors, CMS noted a remaining payment of 5%, or 1.7 billion dollars, more than expected.


CMS proposed a recalibration of the case-mix indexes for all components of PDPM and requested comments on its approach to excluding COVID-19-impacted beneficiaries and the extent to which commenters believe the PHE impacted PDPM case-mix distribution. CMS also invited feedback on the methodology proposed to recalibrate the PDPM parity adjustment and requested comments on delayed or phased implementation if the parity adjustment is finalized.

AAPACN Comments

AAPACN encouraged CMS to consider that the direct and indirect impacts of the COVID-19 PHE, as well as the currently emerging impact of long-COVID, affected the totality of facility operations—not just the claims that included a COVID-19 diagnosis or DR waiver condition code. When analyzing the PDPM parity adjustment and weighing a delay or phased implementation, we encouraged CMS to postpone the implementation and consider the concerns we addressed in our letter. To ensure that PDPM implementation is appropriately analyzed, we urged that it should be compared to data that has not been disproportionately affected by the COVID-19 PHE and other temporary policies that would not have affected a typical fiscal year. Furthermore, we encouraged CMS, if it does conclude a parity adjustment is warranted, to consider applying no more than a 1% adjustment per year until the parity adjustment has been phased in.

In our comments, AAPACN detailed numerous direct and indirect impacts the COVID-19 PHE had on SNFs. Facilities rose to challenges such as developing isolation units; confronting intensive monitoring, testing, and reporting requirements; procuring personal protective equipment (PPE); social distancing; and leading teams through illness, anxiety, and burnout. We explained some of the ways our communities had been forced to change, such as implementing telehealth access and strictly restricting visitors. Both lockdowns and cancellations of elective surgeries dramatically altered typical admission flows. And, though the entirety of long-COVID effects are still not fully understood, we believe it is likely that they will emerge predominantly in SNFs, just as COVID-19 did. These direct and indirect impacts extend well beyond the subset of claims CMS has excluded from its analysis of PDPM parity.

In addition, we expressed concern that the methodology CMS used to eliminate COVID-impacted beneficiaries may not have fully captured all affected patients. We respectfully asked CMS to clarify if it had considered in its methodology the coding guidance that was issued prior to the development of the U07.1 “COVID-19” code, which only became effective April 1, 2020:

  • J12.89, “Other viral pneumonia;” B34.2 “Coronavirus infection unspecified;” or coding the primary symptom first (acute bronchitis, acute respiratory distress, etc.).
  • Early in the pandemic, providers were instructed to not use the B97.29 code until the CDC had confirmed the test as positive .
  • Early in the pandemic, testing supplies were limited, testing results were significantly delayed, and, while pending test results, beneficiaries may have been coded as “suspected or exposed to COVID-19.”

We also encouraged CMS to consider how other temporary policy changes may have impacted the analysis of the PDPM parity adjustment:

  • The definition of group therapy changed for Medicare Part A. CMS noted a significant increase in the utilization of group and concurrent therapy with the implementation of PDPM. AAPACN shared with CMS its view that group therapy data is not comparable between FY 2019 and FY 2020. The increase in the number of participants allowed in group therapy significantly expanded opportunities for Medicare beneficiaries to participate in group therapy.
  • The requirement of the transitional Interim Payment Assessment (IPA) was not a permanent factor. For the payment model transition from RUG-IV to PDPM, CMS required the completion of a transitional IPA assessment, with an assessment reference date (ARD) between October 1 and 7, 2019, and applied the variable per diem adjustment with the 3.0 multiplier applied to the non-therapy ancillary rate for the first three days of October for all Medicare beneficiaries transitioning. AAPACN observed to CMS that the transitional IPA was completed solely for the purpose of transitioning and did not represent normal claim activity. We requested that CMS remove all transitional IPA claims from the analysis of the PDPM parity adjustment.
  • Appropriate auditing of claims for FY 2020 has not yet occurred. Due to the postponed medical reviews, claims submitted during FY 2020 have not undergone any type of audits to validate appropriateness of billing and use of waivers. We encouraged CMS to consider reanalyzing this data after an appropriate portion of FY 2020 claims have been reviewed.
  • The cost of care for beneficiaries was often higher than what was represented on the MDS during the PHE. Many SNF providers were not equipped with PPE and did not have an environment suited for a global pandemic. Significant time and resources were devoted to procuring PPE, converting wings or spaces to serve as COVID-19 isolation units, and developing dedicated rooms for transitioning new admissions. Due to the great number of residents impacted by the pandemic, these SNFs were not configured to offer single room isolation for residents with COVID-19 during outbreaks, yet they endured the costs and resources required to isolate an active infectious disease. However, since CMS did not update the definition of isolation or allow for any exceptions during the COVID-19 PHE, many of these services could not be coded on the MDS and, therefore, were not reimbursed. The inability to capture isolation for these beneficiaries resulted in nursing and non-therapy ancillary case-mix indexes that did not adequately cover the cost of care received during their stays.



The SNF QRP requires SNFs to submit the data required to calculate the MDS-based SNF QRP measures. Failure to submit 100% of the data on at least 80% of the MDS assessments results in a 2% reduction to the facility’s annual payment update (APU). The current statute permits the Secretary of Health and Human Services (HHS) to remove, suspend, or add quality measures, resource use, or other measures, as long as they are published in a notice with a comment period and are standardized and interoperable to allow for the exchange of information across other post-acute care (PAC) providers.


CMS proposed the addition of two measures: (1) SNF Healthcare-Associated Infections (HAI) Requiring Hospitalizations and (2) COVID-19 Vaccination Coverage Among Healthcare Personnel (HCP). CMS also proposed changing the denominator of the Transfer of Health (TOH) Information to the Patient measure to exclude residents discharged home under the care of an organized home health service or hospice.

AAPACN Comments

Regarding the SNF HAI measure, AAPACN expressed concern that CMS proposed to use FY 2019 data for the first program year (FY 2023). We expressed that this claims-based data had been gathered prior to the requirements for an infection preventionist and would therefore misrepresent current infection control practices and policies. We conveyed that due to the known delay in the ability to collect and publicly report claims-based data, we do not believe this data would provide consumers current data and would be too outdated for providers to use for process improvement. We offered to work with CMS to develop an alternative measure that may provide more real-time data.

Regarding the COVID-19 Vaccination Coverage Among HCP, AAPACN voiced to CMS that we understand the importance of this data, but do not believe it is appropriate for a SNF QRP measure due to the possibility of duplicative penalties noted within the interim final rule with comment period (IFC), CMS-3414-IFC. This finalized rule requires more stringent weekly reporting, issues the F884 survey tag for any missed week of reporting, and applies civil monetary penalties for non-compliance with reporting. AAPACN shared its view that finalizing this SNF QRP measure may impose additional financial penalties, in the form of the reduction to the Medicare APU, for missing data that would have already received a monetary penalty.

Additionally, vaccine data would be publicly reported via the IFC. This reporting would provide more timely data than the proposed four rolling quarters of data with the SNF QRP measure, which may quickly become outdated due to staff turnover. We encouraged CMS to postpone public reporting of any COVID-19 vaccination data until at least one vaccination has received full FDA approval.

Lastly, we noted to CMS our support of the proposed change to the denominator of the TOH Information to the Patient measure. CMS is weighing whether to exclude residents discharged home under the care of an organized home health service or hospice.



The SNF VBP program, which was required by the 2014 Protecting Access to Medicare Act (PAMA), rewards SNFs with incentive payments based on the quality of care provided to Medicare beneficiaries. While originally designed to be based on one readmission measure, the 2021 Consolidated Appropriations Act allowed the Secretary of HHS to apply additional measures for services furnished on or after October 1, 2023. The SNF VBP program is funded by withholding 2% of SNF PPS payments and redistributing 50-70% back to SNFs as incentive payments. CMS previously finalized redistributing 60% of the withholdings.


CMS proposed to publicly report the SNF VBP FY 2022 readmission measure rates and add caveats to note the limitations of the data due to the PHE for COVID-19. It also developed Measure Suppression Factors to guide the determination of whether to suppress the SNF readmission measure for one or more program years that overlap with the PHE for COVID-19.

CMS also proposed to suppress the use of SNF readmission measure data for purposes of scoring and payment adjustments. This proposal would change the scoring methodology to assign all SNFs a performance score of zero in the FY 2022 program year—providing all participating SNFs an identical performance score, as well as an identical incentive payment multiplier. This would result in a 1.2% payback to all participating SNFs. The one exception would be that low-volume SNFs would receive the full 2% payback. CMS estimates that this would increase the payback percentage to 62.9%.

In addition, CMS proposed several measures to be considered for future SNF VBP program use. The list of considered measures included a subset of SNF QRP measures, MDS 3.0 measures reported on Care Compare, and new measures proposed in the NPRM. The proposed new measures included for consideration were two patient-reported measures and one based on payroll-based journal (PBJ) data.

AAPACN Comments

AAPACN expressed to CMS that we do not agree with publicly reporting the SNF VBP readmission data for FY 2020. While we appreciate the attempt CMS made to apply suppression factors to adjust the data, we do not agree that the full impact of the COVID-19 PHE on the SNFs can be accounted for with the proposed suppression factors. We do not believe that the suppressed data will achieve accurate results appropriate for public reporting. Our comments encouraged CMS to consider fully suppressing this data and communicating to the public that, due to the PHE, data for FY 2020 is unavailable.

Regarding CMS’s proposal to suppress the use of SNF readmission measure data for purposes of scoring and payment adjustments, we asked CMS to consider awarding 70% back to the SNFs to help reduce the burden of the suppressed measure. With the proposed suppression, participating facilities would be faced with a 0.8% reduction in Medicare payment due to CMS awarding only 1.2% back to facilities. Increasing the award to the full 70% would help award more Medicare payments back to the SNFs with the suppressed measure.

We also responded to CMS’s request for comments on potential future measures for the SNF VBP program. We expressed concern that some of the measures collect data from only Medicare Part A beneficiaries, while other measures will collect data from all payer types. We asked for clarification on how this may impact providers with low-volume Medicare beneficiaries and whether this program will be extended to nursing facilities. Since it currently is used solely to measure the quality of care for Medicare beneficiaries, we believe that any expansion to other purposes warrants further clarification.

Additionally, for the patient-reported data, AAPACN’s comments encouraged CMS to exclude Managed Care and Medicare Advantage Plan beneficiaries from this measure. We shared our concern that beneficiaries may be unsatisfied with how their stay was managed by their Managed Care or Medicare Advantage Plan and reflect this negatively towards the SNF on a patient-reported outcome survey.

Lastly, we voiced our concern with including PBJ staffing data as a SNF VBP measure. AAPACN’s comments asked CMS to consider the vast differences in staffing requirements in different states. Staffing data is already publicly reported on Care Compare, posted in the facility, and audited by state surveyors.

Final thoughts

Our comments letter reflects extensive effort researching the proposed rule, collaborating with long-term care experts, listening to AAPACN members, and working with other associations. It is our goal to serve and advocate on behalf of our members as their professional association. We would like to thank our members and expert advisory panel members for their input and personal experiences that helped shape our comments to CMS. Stay tuned as AAPACN awaits the impact of our comments on the final rule, which is expected by mid-August.

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