Summary of The Proposed PPS Final Rule

Every April a Proposed PPS Final Rule is put forth by CMS. The proposed rule this year (2020) would update the SNF prospective payment rates for fiscal year (FY)2021 as required under the Social Security Act.

CMS recognizes that the entire healthcare system is focused on responding to the COVID-19 public health emergency. As a result, this year’s Proposed Final Rule is more manageable when compared to previous years. The proposed rule includes:

  • Proposals required by statute and that affect Medicare payment to SNFs,
  • Proposals that reduce provider burden and may help providers during the pandemic response
  • Changes to the ICD-10 code mappings that would be effective beginning in FY 2021.

Major Provisions of the Proposed Rule

  • Strengthening Medicare - CMS projects aggregate payments to SNFs will increase by $784 million, or 2.3 percent, for FY 2021 compared to FY 2020. This estimated increase is attributable to a 2.7 percent market basket increase factor with a 0.4 percentage point reduction for multifactor productivity adjustment.
  • Changes in SNF PPS Wage Index - CMS proposed to adopt revised geographic delineations provided by the Office of Management and Budget, which are used to identify a provider's status as an urban or rural facility and to calculate the wage index and apply a five percent cap to wage index decreases.
  • Updates to PDPM Clinical Diagnosis Mappings - CMS considers recommendations from stakeholders on changes to the ICD-10 code mappings used under the PDPM.  In this proposed rule, we are proposing changes to the ICD-10 code mappings that would be effective beginning in FY 2021, in response to these stakeholder recommendations.
  • SNF Value-Based Purchasing (VBP) Program - CMS is proposing to align the SNF VBP Program regulation text with previously finalized policies, to apply the 30-day Phase One Review and Correction deadline to the baseline period quality measure quarterly report, and to establish performance periods and performance standards for upcoming program years. CMS is not proposing to make any changes to the measures, SNF VBP scoring policies, or payment policies.

The Proposed Final Rule does not include any updates for changes to the Quality Reporting Program this year. As expected, CMS will also delay any changes to the Minimum Data Set (MDS) this year. The proposed rule will be open for comment until June 9, 2020. This rule will not be passed into law until after the public comments period, therefore is still subject to change. CMS typically publishes the official Final Rule after it is passed into law in July.

Other Resources


Proposed Final rule can be found at:


Proposed wage index file CMS-1737-P Wage Index Tables for FY 2021 - Proposed (ZIP) From