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Skilled Nursing and Post-Acute Providers Have A Proposed New Payment System


The newly proposed Department of Health and Human Services (HHS) budget was recently announced for skilled and post-acute nursing providers. According to major trade groups, the changes for skilled nursing providers are not seen as positive.
Payments for post-acute care providers would be changed, establishing a unified payment system based on the needs of patients, rather than where they receive care, starting in fiscal year 2024.

According to the HHS, “The first year of implementation is required to be budget-neutral relative to estimated payments that would otherwise have been paid in FY 2024 absent this change.”

Payment rates under the new system would be set prospectively on an annual basis with episode grouping and pricing based on the average cost for providing post-acute care services for a diagnosis. The changes are expected to save $80.2 billion over the next decade, according to HHS.

For fiscal 2019 to 2023, all primary post-acute care settings — including skilled nursing facilities, home health agencies, inpatient rehabilitation facilities, and long-term care hospitals — will receive a lower annual Medicare payment update. However, exactly how much lower is not clear at this time.

The announcement suggests support to Medicaid and Medicare, but details to back up that claim are not present. The budget proposes Medicaid per capita caps and block grants and cuts to Medicare, which can have negative consequences for beneficiaries and providers and threaten important community supports funded under the Older Americans Act.


The plan to lower the frequency of surveys for top performing skilled nursing communities is one aspect of the budget proposal that could be good news for providers.

According to the HHS, the proposal gives the Secretary authority to make adjustments statutorily for required survey frequencies for top-performing skilled nursing facilities and reinvest resources to strengthen oversight and quality improvement for poor performing facilities.

The proposed measure has no impact on overall spending in the budget.

We'll keep you posted as new information emerges.


In the meantime, if you have questions or would like us to assist in your organization's compliance with clinical and financial systems review, MDS reviews, MDS education, RCS-1, survey readiness, QAPI or requirements of participation, please contact us:


Nancy Hublar, RAC-CT ( or 502-992-3528) 
Jennifer Scott, BSN, RN, PLNC, CDP ( or 502-992-2567) 
Landon Hackett, CPA, MSA ( or 317-713-7929)


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