The Centers for Medicare & Medicaid Services late today released a proposed rule updating Medicare fee-for-service payments for the skilled-nursing facility prospective payment system for fiscal year 2016. The rule would increase aggregate payments by 1.4%, or $500 million, in FY 2016 compared to FY 2015, after accounting for inflation and other adjustments required by law. Specifically, the proposed rule includes an initial market-basket update of 2.6%, which is reduced by a productivity cut of 0.6 percentage points and a market-basket forecast error adjustment of 0.6 percentage points. The rule also would amend the requirements that a long-term care facility must meet to qualify as a SNF in the Medicare program or a nursing facility in the Medicaid program, requiring the submission of staffing information based on payroll data. As required by the Protecting Access to Medicare Act of 2014, CMS proposes to adopt an all-cause readmission measure for use in the SNF value-based purchasing program, which will begin in FY 2019. To meet the requirements of the Improving Medicare Post Acute Care Transformation Act of 2014, CMS proposes to establish a SNF Quality Reporting Program, and proposes three initial measures assessing skin integrity, patient falls and functional status. Beginning with FY 2018 payment, SNFs must meet all SNF QRP requirements to avoid a 2 percentage point reduction to their annual payment update factor. The proposed rule will be published in the April 20 Federal Register and comments will be accepted through June 15. AHA staff is reviewing the rule and will provide further analysis.