The Centers for Medicare & Medicaid Services (CMS) is finalizing three Medicare payment rules that further advance efforts to strengthen the Medicare program. Their goal is to better align payments for inpatient psychiatric facilities, skilled nursing facilities, and hospices.

Inpatient Psychiatric Facilities

CMS is finalizing a 2.2 percent payment rate update and finalizing its proposal to adopt revised Office of Management and Budget statistical area delineations resulting in wage index values being more representative of the actual costs of labor in a given area. This will allow advanced practice providers to operate within the scope of practice allowed by state law by documenting progress notes in the medical record of patients.

Skilled Nursing Facilities

Updates include routine technical rate-setting updates to payment rates, as well as finalizes adoption of the most recent statistical area delineations and applies a 5 percent cap on wage index decreases from FY 2020 to FY 2021. CMS projects aggregate payments to Skileld Nursing Facilities will increase by $750 million, or 2.2 percent, for FY 2021 compared to FY 2020.


Hospice payment rates are updated by the market basket percentage increase of 2.4 percent ($540 million). Hospices that fail to meet quality reporting requirements receive a 2 percentage point reduction to the annual market basket percentage increase for the year. The hospice payment system includes a statutory aggregate cap. The aggregate cap limits the overall payments made to a hospice annually.