Skilled nursing facilities would get a 3.7% Medicare reimbursement increase in fiscal 2024 under a proposed rule the Centers for Medicare and Medicaid Services published Tuesday.

CMS also pledged that a long-awaited and controversial regulation establishing minimum staffing ratios at nursing homes will debut this spring. President Joe Biden announced that policy, along with other nursing home industry initiatives, during his State of the Union address in 2022, but CMS has yet to take action to implement it. The nursing home industry strongly opposes federal staffing ratios.

The nursing home payments proposal incorporates new market basket data, a projected increase in productivity and the effects of the Patient Driven Payment Model case-mix classification system the agency finalized in 2018.

CMS also is considering adopting new measures for the skilled nursing facility value-based purchasing program, including data on staff turnover, patients’ functional status after discharge, hospitalization rates for long-term nursing home residents and a modified metric for readmissions.

The draft regulation would make changes to the quality reporting program as well, including updated measures for resident and staff COVID-19 vaccination status.

Nursing home trade groups voiced their approval of boosted federal payments.

“We appreciate that CMS has considered the soaring costs nursing home providers are grappling with due to the labor crisis and record inflation in recent years. It is vital that Medicare reflects the increasing costs—including those imposed by government mandates—nursing homes are facing ensure our vulnerable residents can access the care they need. We look forward to submitting comments to CMS on this proposed rule,” said American Health Care Association President and CEO Mark Parkinson in a statement on Tuesday. The AHCA represents more than 14,000 long-term care providers.

Separately, CMS proposed a 1.9% increase in Medicare payments to inpatient psychiatric facilities in fiscal 2024. That draft regulation includes provisions that would assess those providers’ health equity efforts, such as the percentage of patients they screen for social determinants of health. The agency also proposes adopting a patient experience metric. The draft regulation includes similar changes to tracking COVID-19 vaccinations to the nursing home and inpatient rehabilitation provider proposed rules for fiscal 2024.