CMS Pub. 100-22, ch. 3, § 80

(SNFs) That Do Not Submit Required Quality Data

(Rev. 12182, Issued:08-03-23, Effective:01-01-23, Implementation: 09-04-23)

The Improving Medicare Post-Acute Care Transformation Act of 2014 (IMPACT Act) added

section 1899B to the Act that imposed new data reporting requirements for certain PAC

providers, including SNFs, and required that the Secretary implement a SNF quality reporting

program (SNF QRP). Beginning with fiscal year 2018, and each subsequent year, if a SNF

does not submit required quality data, their payment rates for the year are reduced by two (2)

percentage points for that fiscal year.

Penalties for Failure to Report

For fiscal year 2018, and each subsequent year, if a SNF does not submit required quality data, their

payment rates for the year are reduced by 2 percentage points for that fiscal year. Application of the

2% reduction may result in an update that is less than 0.0 for a fiscal year and in payment rates for a

fiscal year being less than such payment rates for the preceding fiscal year. In addition, reporting-based reductions to the Annual Payment Update (APU) will not be cumulative; they will only apply

for the FY involved.

Every year, in late spring/summer, CMS will provide Medicare contractors with a Technical

Direction Letter (TDL) identifying SNFs not meeting the quality data reporting requirements. The

contractor shall notify the SNFs that they have been identified as not complying with the

requirements of submitting quality data and are scheduled to have Medicare payments to their facility

reduced by 2 percentage points. Medicare contractors shall include the model language at the end of

this section in their initial notification letter to the SNFs. The notification letter shall inform the SNF

whether they were identified as not complying with the SNF quality reporting requirements. The

notification letter shall also inform the SNF regarding the process to request a reconsideration of their

payment reduction if they disagree with the determination. The reconsideration process shall be

outlined within the initial notification letter. Contractors shall send the notification letters no later

than 10 business days from the receipt of the TDL.

Immediately after the notification letters are issued, Medicare contractors shall submit to the CMS

contacts noted in the TDL a list of facilities who received a letter. There is a 30-day period from the

date of the notification letter to submit a letter requesting reconsideration and documentation to

support a finding of compliance.

CMS will then review all reconsideration requests received and provide a determination to the

Medicare contractor typically within a period of 2 to 3 months. In its review of the SNF

documentation, CMS will determine whether evidence to support a finding of compliance has been

provided by the SNF. The determination will be made based solely on the documentation provided. If

clear evidence to support a finding of compliance is not present, the 2% reduction will be upheld. If

clear evidence of compliance is present, the reduction will be reversed.

After the reconsideration process has occurred and prior to October 1 of each FY, CMS will provide

the Medicare contractors with a final list of SNFs that failed to comply with the data submission

requirements. The Medicare contractors will then be responsible for notifying each SNF that failed to

comply with the quality data submission requirements that it will receive a two (2) percentage point

reduction in the Annual Payment Update (APU). The Medicare contractors will also update the SNF

provider file based on the appropriate scenarios listed below. Medicare contractors shall include the

model language at the end of this section in the dispute notification letters to the SNFs. Contractors

shall send this second letter only to SNFs that requested reconsideration. Additionally, the Medicare

contractors shall include information regarding the SNFs right to further appeal the 2 percentage

point reduction via the Provider Reimbursement Review Board (PRRB) appeals process. Contractors

shall send these second notification letters no later than 10 business days from the receipt of the

TDL.

If the SNF does not dispute their reduction, the Medicare contractor shall update their provider file

for the SNF. The contractor shall set an indicator in the provider file that triggers Medicare systems

to calculate the 2 percentage point reduction on all claims for the upcoming fiscal year. If CMS

determination upholds the 2 percentage point reduction, the contractor shall update their provider file

in this fashion also.

If the CMS determination reverses the 2 percentage point reduction, the contractor shall not update

their provider file for the SNF and shall notify the SNF that they will receive their full SNF PPS

payment update for the upcoming year.

Model language for initial notification letters:

“This letter is to officially notify you that (Facility Name, CMS Certification Number 000000)

is subject to a reduction in payment for not meeting section Improving Medicare Post-Acute

Care Transformation Act of 2014

(IMPACT Act), Section 1888(e) of the Social Security Act (42 U.S.C. 1395yy(e)) requirement

for SNFs to submit quality data. Therefore, Medicare payments to your facility will be reduced

by two (2) percentage points for [insert upcoming year]; unless you can provide evidence that

this determination is in error. CMS updates the requirements and the quality reporting

measures required for the SNF Quality Reporting Program (QRP) annually through rulemaking.

CMS has determined that this SNF is subject to a 2% reduction in the FY (insert upcoming

year) Annual Payment Update (APU) for failure to meet quality reporting requirements

pursuant to the Impact Act Section 1888(e) because of the following reason(s):

• The SNF failed to submit the required data to the Centers for Disease Control and

Prevention (CDC) National Healthcare Safety Network (NHSN); and/or

• The SNF failed to submit the required quality data that are to be submitted to the CMS

designated data submission system.

If you believe you have been in compliance with the quality data reporting requirement and

have been identified for this payment reduction in error, you must submit an email requesting

reconsideration and provide documentation demonstrating your compliance. You have the

right to request a reconsideration of this decision. If you choose to request a reconsideration of

this decision, you must submit the request no later than 30 days following the receipt of this

letter.

The request must include the following information:

• The SNF CMS Certification Number (CCN);

• The SNF business name;

• The SNF business address;

• The CEO or CEO-designated representative contact information including name,

email address, telephone number, and physical mailing address;

• The CMS identified reason(s) for non-compliance from the non-compliance

notification letter;

• Information supporting the SNF belief that non-compliance is in error, or evidence of

the impact of extraordinary circumstances which prevented timely submission of

data.

The request for reconsideration must be accompanied by supporting documentation

demonstrating compliance. CMS will be unable to review any request that fails to provide the

necessary documentation along with the request for reconsideration. Supporting documentation

may include any or all of the following:

• Email communication;

• Data submission reports from the CMS designated data submission system;

• Data submission reports from the National Healthcare Safety Network (NHSN);

• Proof of previous waiver approval;

• Notification of the CCN activation letter to prove that the CCN was not activated by

the end of the reporting quarter;

• Other documentation that may support the rationale for seeking reconsideration.

Please ensure that NO protected health information (PHI) is included in the

documentation being submitted for review.

Documentation that does not support a finding of compliance is as follows:

• Evidence or admission of error on the part of SNF staff, even if the involved staff

member are no longer employed by the SNF and/or a corrective action plan has been

or will be put in place after the end of the reporting year;

• Evidence or assertion that failure to comply was the fault of a vendor or contractor

that was hired by the SNF to perform reporting functions; and,

• Evidence of delays establishing electronic data interchange connectivity between the

SNF and the Medicare claims processing contractor for the purpose of billing, since

SNF quality reporting data is not dependent on billing.

Your letter and documentation must be submitted via email to CMS for reconsideration, using

the following email address: SNFQRPReconsiderations@cms.hhs.gov.

In its review of the SNF documentation, CMS will determine whether evidence to support a

finding of noncompliance has been provided by the SNF. The determination will be made

based solely on the documentation provided. CMS will not contact the SNF to request

additional information or to clarify incomplete or inconclusive information. For further

questions related to the reconsideration process, please refer to the following CMS SNF

website: https://www.cms.gov/Medicare/Quality-Initiatives-Patient-Assessment-Instruments/SNF-Quality-Reporting/SNF-Quality-Reporting-Reconsideration-and-Exception-

and-Extension.html

A SNF must submit a request for reconsideration and receive a decision on that request before

they can file an appeal with the Provider Reimbursement Review Board (PRRB).”

The Medicare contractor shall update (or not update) the SNF provider file based on the

appropriate scenario listed below:

Upheld

• If the SNF was notified that it was potentially subject to the 2% reduction, and did not request

reconsideration, then the Medicare contractor shall set a quality reporting indicator in the

provider file that triggers Medicare systems to calculate the 2% reduction on all of the SNF’s

claims for the upcoming fiscal year.

• If the SNF was notified that it was potentially subject to the 2% reduction, and requested a

reconsideration, but on reconsideration CMS upheld the decision to apply the 2% reduction, then

the Medicare contractor shall set a quality reporting indicator in the provider file that triggers

Medicare systems to calculate the 2% reduction on all of the SNF’s claims for the upcoming

fiscal year.

Reversed

• If the SNF was notified that it was potentially subject to the 2% reduction, and requested a

reconsideration, and on reconsideration CMS determined that the SNF should not be subject to the

2% reduction (i.e., reversed its decision), then the Medicare contractor shall not update the quality

reporting indicator in the SNF’s provider specific file and shall notify the SNF that they will receive

their full SNF PPS payment update for the upcoming fiscal year.

• If the SNF submitted the necessary SNF Quality Reporting data and was never notified that it might

potentially be subject to the 2% reduction, then the Medicare contractor shall ensure that the

indicator value does not apply the reduction.

Model language for dispute notification letters (SNF provider notification instructions

contained in second TDL):

Upheld:

“Thank you for requesting a reconsideration of the determination made by the Centers for

Medicare & Medicaid Services (CMS) regarding reduction to this SNF’s annual update for

failure to meet the requirements of the SNF Quality Reporting Program (QRP).

CMS reviewed the reconsideration request of this SNF and is upholding the decision to reduce

the Annual Payment Update (APU) for Medicare payments for Fiscal Year (FY) (insert

upcoming year). Our records indicate that this SNF did not provide evidence that it submitted

required quality data during the required timeframes. Therefore, for services provided by this

SNF between October 1, (insert upcoming year) and September 30, (insert upcoming

year), the Annual Payment Update (APU) for Medicare payments for FY (insert upcoming

year) will be reduced by two (2) percentage points.

If your facility wishes to further appeal this determination, the appeals process set forth in 42

CFR Part 405, Subpart R (a Provider Reimbursement Review Board (PRRB) appeal) applies.

Details are available on the CMS.gov PRRB Review Instructions website.

CMS appreciates the opportunity to respond to the reconsideration request for the SNF QRP.

For additional concerns related to the reconsideration process, questions may be submitted to

the following CMS email address: SNFQRPReconsiderations@cms.hhs.gov.”

Reversed:

“Thank you for requesting a reconsideration of the determination made by the Centers for

Medicare & Medicaid Services (CMS) regarding reduction to this SNF’s Annual Payment

Update (APU) for failure to meet the requirements of the SNF Quality Reporting Program

(QRP).

CMS reviewed the reconsideration request and determined that this SNF satisfactorily met the

quality data requirements for the FY (insert upcoming year) payment determination. Therefore,

the two (2) percentage point reduction to the FY (insert upcoming year) Annual Payment

Update (APU) for failure to comply with quality reporting requirements will not be applied.

CMS appreciates the opportunity to respond to this reconsideration request for the SNF QRP.

For additional concerns related to the reconsideration process, questions may be submitted to the

following CMS email address: SNFQRPReconsiderations@cms.hhs.gov.”