CMS Waivers and Raises


The federal government granted several waivers designed to free up hospital beds and provide uninterrupted care to seniors during the pandemic. CMS suspended improper payment-related activities between March and August 2020. It’s unclear yet how much audit activity and improper payment findings were curtailed over the last calendar year. The agency also adjusted how it will measure improper payments rates. Facilities must still report per the Payment Integrity Information Act of 2019.

Waiver 1135 exempts Medicare Part A nursing home stays from the normal three-day hospitalization requirement for coverage. Waiver 1135 creates confusion. The blanket waiver requires nursing homes to document that COVID-19 was prevalent in their community; explain how a resident’s condition might have precipitated an acute stay in non-COVID times; and provide records supporting medical necessity for any Part A stays that extend beyond 100 days.


CMS recently observed that PDPM’s first year-plus did not exactly work out as the agency had planned. PDPM was intended to more closely link reimbursement to resident need. It was intended to be budget neutral. A long-predicted decline in therapy provision was quick and significant, with a 30% drop from 91 minutes per day in fiscal 2019 to 62 minutes per day in the immediate wake of the PDPM transition.

However, the new model caused spending to skyrocket. Spending increased by $1.7 billion, or 5%. Therefore, CMS revealed that it’s amending PDPM’s parity adjustment after the increased spending.

“The goal of PDPM was for CMS to reimburse facilities based on the clinical needs of patients and SNFs improved their documentation to capture the care being provided,” advocate Deb Emerson said

The federal government is mulling several options to recalibrate the Medicare payment structure for skilled nursing facilities as it seeks to achieve its intended goal of budget neutrality. Excess payments need to stop.

“[W]e have observed significant differences between expected SNF PPS payments and case-mix utilization, based on historical data, and the actual SNF PPS payments and case-mix utilization under the PDPM, based on FY 2020 data,” CMS observed.


Meanwhile, CMS reported that hospices and skilled nursing facilities will get a raise in 2022. The agency plans to increase hospice payments by 2.3%, or $530 million, in 2022. Nursing homes would receive a 1.3% net Medicare increase for fiscal year 2022. This is a $444 million raise in Medicare Part A payments for skilled nursing facilities.

According to a CMS fact sheet, CMS also plans to update the labor shares for continuous home care, route home care, inpatient respite care, and general inpatient care. Hopefully, the additional money will go to increasing staffing to safe levels.