Plan shake-up

Cuts to SNF re­im­burse­ment causes scram­ble

Modern Healthcare - - The Week In Healthcare - Paul Barr

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

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