Medicare payment reduction will cost SNFs $79 billion in funding, Avalere finds

The recently announced 11.1 percent reduction in Medicare payments to skilled nursing facilities, which takes effect October 1, will cost the sector $79 Billion over 10 years, according to a new analysis by Avalere Health LLC.

The Centers for Medicare & Medicaid Services announced the reduction in its final rule on the Prospective Payment System for FY2012. The reduction in funding came on the heels of reports that providers have been paid more than $2 billion above federal projections since a new payment system took effect late last year.

Alan G. Rosenbloom, president of the Alliance for Quality Nursing Home Care, which financed the Avalere study, said CMS went “above and beyond a payment correction.”

“Any additional cuts will not only threaten economic growth and needed healthcare jobs, but also hurt our ability to admit, treat and return to home a rapidly increasing number of patients requiring intensive post-acute rehabilitation, and care for multiple chronic illnesses,” Rosenbloom continued in his statement.

The Avalere analysis projects that the following 10 states will experience the greatest reduction in Medicare revenue in 2012:

State Medicare revenue lost

Calif. $484,303,976

Fla. $447,766,072

Texas $349,013,543

N.Y. $321,184,165

Ill. $296,873,006

Ohio $275,018,696

N.J. $253,211,200

Penn. $237,175,084

Mass. $189,355,659

Mich. $185,593,655

National $5,291,980,651