On May 1, 2009, CMS released its proposed skilled nursing facility (SNF) PPS rule for FY 2010, which would reduce Medicare SNF PPS payments by $390 million, or 1.2%, compared to FY 2009 levels. CMS is again proposing a controversial provision considered but not adopted for FY 2009 that would recalibrate case mix weights to compensate for increased expenditures resulting from refinements made in 2006. The recalibration would reduce overall SNF PPS payments by 3.3% ($1.050 billion) in FY 2010. This decrease would be partially offset by a 2.1% market basket update (a $660 million increase), resulting in the 1.2% negative update. In the rule, CMS also proposes establishing a new RUG-IV case-mix classification model for FY 2011 reflecting updated staff time measurement data from CMS’s Staff Time and Resource Intensity Verification (STRIVE) project and using the updated Minimum Data Set (MDS) 3.0 resident assessment instrument. CMS also requests public comments on: a possible requirement for quarterly reporting of nursing home staffing data; a possible new rate component to account for the use of non-therapy ancillaries; and quality monitoring for rural swing-bed hospitals. The official version of the rule is scheduled to be published on May 12, 2009. CMS will accept comments on the rule until June 30, 2009.

** 5/11/09 update: The official Federal Register version is posted here.