Skilled Nursing Facility PPS Final Rule for FY 2022

AHA Regulatory Advisory
August 26, 2021

Download the Regulatory Advisory PDF

At A Glance

At Issue

On July 29, the Centers for Medicare & Medicaid Services (CMS) issued the fiscal year (FY) 2022 final rule for the skilled nursing facility (SNF) prospective payment system (PPS). Most provisions in the final rule, including the annual payment update, will take effect on Oct. 1. Highlights of the rule are listed under Key Takeaways; a deeper discussion follows this page.

Our Take

We appreciate the relatively streamlined rule, which allows the field to continue to focus on its COVID-19 response, especially in communities currently experiencing surges. We also recognize CMS’ efforts to address the impact of the pandemic through several of its proposals. In particular, we thank CMS for its decision to hold until FY 2023’s rulemaking cycle to propose a budget neutrality recalibration for the FY 2020 implementation of the redesigned SNF PPS case-mix system — the patient-driven payment model (PDPM). Hospital-based SNFs report that the new PDPM framework helped support their fight against COVID-19, which was invaluable in supporting their host hospitals’ pandemic responses. Regarding the two new items adopted for the SNF Quality Reporting Program, AHA agrees that the topics these measures address are important, but the measures themselves are not appropriate for adoption.

What You Can Do

  • Share this advisory with your senior management team to examine the impact these payment changes may have on your organization in FY 2022.
  • As an additional step, you can access the online materials and recording of AHA’s Aug. 10 member call (, during which we discussed this and the other FY 2022 post-acute care final rules.

Further Questions

Please contact Rochelle Archuleta, director of policy, at for questions on payment provisions, and Caitlin Gillooley, senior associate director of policy, at for quality-related questions.

Key Takeaways

The final rule:

  • Increases SNF payments by 1.2% ($410 million) in FY 2022.
  • Makes no material changes to the design of the PDPM case-mix system implemented in FY 2020.
  • Updates the ICD-10 mapping used to classify patients under the PDPM framework.
  • Holds on recalibrating the PDPM “parity adjustment” that is designed to ensure budget neutrality under the new model to assist SNFs in meeting the demands of the COVID-19 pandemic until FY 2023.
  • Implements Part A billing exemption for blood clotting factors and related services and items.
  • Adopts two quality measures: 1) COVID-19 vaccination among health care personnel and 2) healthcare-acquired infections.
  • Suppresses performance for the SNF Value-based Purchasing program and assign uniform payment adjustments to all SNFs.

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