Medicare reimbursement cuts would be unfair, harmful: SNF reps
Representatives for skilled-nursing facilities say the industry couldn’t handle the kind of Medicare reimbursement cuts proposed in a report issued by HHS’ inspector general’s office.
The inspector general’s 14-page report made public July 11 urges the CMS’ admin- a CMS news release.
Officials for LeadingAge, an association that represents not-for-profit nursing homes, argue that an industrywide cut of 11.3% would be unfair, given some skillednursing facilities did not participate in the kind of billing changes that produced the extra reimbursement. the agency would provide a reimbursement increase of 1.5 percentage points, or about $530 million, which the agency calculated by applying the 2012 marketbasket index of 2.7 percentage points and reducing it by 1.2 percentage points “to account for greater operational efficiencies,” as outlined in the Patient Protection and Affordable Care Act.
In the second option, the CMS would adjust for the agency’s unexpected spike in nursing-home payments during fiscal 2011 with the 11.3% cut, which would require reducing payments to skilled-nursing facilities in fiscal 2012 by $3.94 billion.
The CMS’ changes that led to the shift in billing were intended to make reimbursement more reflective of the cost of care. Expecting payments to remain level, instead the CMS saw reimbursement climb 16% to $14.8 billion in the first six months of fiscal 2011 from $12.7 billion in the last six months of fiscal 2010.
Most of the $2.1 billion increase— $1.8 billion—came from changes to therapy payments within Resource Utilization Groups, which Medicare uses to pay skillednursing facilities for therapy.
Providers shifted billing into higher-paying RUGs and out of lower-paying RUGs as a result of the new billing choices, according to the report. The choices gave nursing homes a financial incentive to choose group therapy, which is similar therapy offered to two to four patients, over two other types, concurrent therapy, which is when two patients with differing care needs get therapy at the same time, and individual therapy. The CMS has a fix for that and should implement it right away, Phillips said.
The inspector general’s report also found some problems regarding the time frame for when a skilled-nursing facility can calculate which RUG a patient belongs in and recommends that skilled-nursing facilities recalculate a beneficiary’s RUG whenever his or her level of therapy changes substantially.
The report notes that the inspector general intends to conduct a full skilled-nursing facility billing review at the end of the current fiscal year, which concludes Sept. 30. “However, based on the data in this report, CMS should take immediate action,” using its pending skilled-nursing facility final rule to do so, according to the report.