Fiscal Year (FY) 2023 Skilled Nursing Facility Prospective Payment System Proposed Rule (CMS 1765-P)

On April 11, 2022, the Centers for Medicare & Medicaid Services (CMS) issued a proposed rule that would update 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 proposed rule includes proposals for the SNF Quality Reporting Program (QRP) and the SNF Value-Based Program (VBP) for FY 2023 and future years. CMS is publishing this proposed 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 proposed rule.

CMS estimates that the aggregate impact of the payment policies in this proposed rule would result in a decrease of approximately $320 million in Medicare Part A payments to SNFs in FY 2023 compared to FY 2022. This estimate reflects a $1.4 billion increase from the 3.9% update to the payment rates, which is based on a 2.8% SNF market basket update plus a 1.5 percentage point market basket forecast error adjustment and less a 0.4 percentage point productivity adjustment, as well as a negative 4.6% or $1.7 billion decrease in the SNF PPS rates as a result of the proposed recalibrated parity adjustment. These impact figures do not incorporate the SNF VBP reductions for certain SNFs that are estimated to be $186 million in FY 2023.