Cuts to SNF reimbursement causes scramble
Nursing home operators are pressing reset on their plans for this year and next after the CMS’s decision to cut Medicare skilled-nursing facility reimbursement by a total of $3.9 billion in the fiscal year starting Oct. 1.
Though the CMS in April had presented the 11.1% cut in reimbursement as one of two options it could take with the final rule released July 29, the industry now must scramble to prepare for the drop in revenue and fight to prevent any more reduced federal payments (Aug. 1, p. 4).
Among the industry’s concerns are further potential cuts to Medicare coming from Congress as well as continued financial pres- sure on the Medicaid program, said Greg Crist, a spokesman for the American Health Care Association, Washington, a nursing home association.
But the more immediate concern is the loss of close to $4 billion in Medicare revenue plus the loss of future reimbursement as a result of the CMS’ recalibration of its payment structure designed to prevent further overpayments. In addition, some publicly traded SNF companies have to deal with the repercussion of a huge hit to their share prices.
“Our members are reeling from this unexpected” move by the CMS, said Dr. Cheryl Phillips, senior vice president of advocacy for LeadingAge, Washington, which represents not-for-profit nursing homes.
The CMS reduced reimbursement for fiscal 2012 to claw back estimated excess billing by SNFs in the current fiscal year ending Sept. 30. That excess billing resulted from previous changes the CMS had made in how SNFs were reimbursed for Medicare therapy (July 25, p. 14). In addition to the reimbursement cut, the CMS tried to eliminate the financial incentives that led to the overpayments in the first place, changing how it reimbursed for group therapy and adding requirements for calculating estimates for how much therapy is required.
Phillips and Crist say it’s too early to determine what the exact effects will be for their members, but the response by some public companies as well as the market’s