CMS has issued the proposed rule for the skilled nursing facility (SNF) prospective payment system (PPS) fiscal year (FY) 2017 update.

See the full proposed rule by clicking on the following link:


  • The proposed rule provides for a net market basket increase for SNFs of 2.1 percent beginning October 1, 2016.
  • The 2.1 percent market basket update reflects a full market basket increase of 2.6 percent reduced by 0.5 percentage points, in accordance with the multifactor productivity adjustment required by Section 3401(b) of the Affordable Care Act (ACA). No forecast error was incurred.
  • The market basket 2.1 percent for FY 2017 for the SNF PPS is based on the IHS Global Insight, Inc. (IGI) first quarter 2016 forecast with historical data through fourth quarter 2015. This figure could change when CMS issues the final rule based on more recent IGI data.
  • CMS estimates that the net market basket update would increase Medicare SNF payments by approximately $800 million in FY 2017.
  • The Skilled Nursing Facility VBP Program (SNF VBP) is proposed. Establishment of the program, which implements a 2 percent withhold to SNF Part A payments that can be earned back based on a SNF’s rehospitalization rate and level of improvement, is required by the Protecting Access to Medicare Act of 2014 (PAMA). CMS proposes that the performance period be based on the calendar year starting January 1, 2017.
  • CMS proposes four new measures for the Quality Reporting Program (SNF QRP). They are drug regimen review, average cost per Medicare beneficiary, rehospitalization rate, and discharge to community rate.