CMS Proposed Rule Could Reduce Nursing Home Payments by $4 Billion

A proposed rule published Thursday in the Federal Register outlines the Centers for Medicare & Medicaid Services’ (CMS) options to updating payment rates for skilled nursing facilities in fiscal 2012—including a $3.94 billion reduction in payments.

“CMS has offered two possible scenarios in the proposed rule,” said Mark Parkinson, president and CEO of the American Health Care Association and National Center for Assisted Living (AHCA/NCAL), in a statement. “One approach would result in a 1.5% increase in Medicare rates and provide additional relief to a sector facing significant Medicaid cuts. The other would instead reduce overall Medicare rates by 11.3%.

“This proposal would have a debilitating impact on nursing facilities, the economic benefits they bring to communities and the care they provide to millions of older Americans.”

The 1.5% increase would amount to about $530 million, whereas the 11.3% reduction would decrease payments by $3.94 billion compared to 2011. According to a CMS release, this reduction accounts for “an unexpected spike in nursing home payments during fiscal year 2011. For this, the CMS would restore overall payments to their intended levels on a prospective basis.”

“The long-term care sector employs 3.1 million Americans,” Parkinson said. “At such a fragile time, the last thing our country needs is a blow to a vital economic force.”

In addition to discussing the SNF PPS payment rate update for FY 2012, this proposed rule would:

Propose to implement section 6101 of the Affordable Care Act, which requires Medicare SNFs and Medicaid nursing facilities to disclose certain information in a standardized format to HHS and other entities regarding the ownership and organizational structure of their facilities;

Propose to revise the definition of group therapy and to require allocation of group therapy minutes in assigning RUG-IV payment groups;

Propose a new Medicare-required assessment to be completed by SNFs when changes occur in the intensity of therapy. Propose to modify the required schedule for completing the MDS 3.0;

Propose a revision to the policy regarding “line-of-sight” supervision of therapy students.

CMS will accept comments on the proposed rule until June 27.

Read more

Proposed rule: Medicare Program; Prospective Payment System and Consolidated Billing for Skilled Nursing Facilities; Disclosures of Ownership and Additional Disclosable Parties Information (PDF format)

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