Nursing homes cope with deep payment cut
Skilled-nursing facilities are hit with a major Medicare reimbursement change. SNFS and their advocates fight hard in an unsuccessful attempt to stop the CMS’ decision to cut reimbursement 11% beginning Oct. 1 and claw back overpayments from previous years regarding therapy. SNFS are caught off-guard by the move, arguing that the cut should be spread out over years.
“Our members are reeling from this unexpected” move by the CMS, says Dr. Cheryl Phillips, senior vice president of advocacy for Leadingage, Washington, which represents not-for-profit nursing homes. Share prices for selected publicly traded SNF providers fall sharply during the year, in part because of the cut.
Two large post-acute providers, HCR Manorcare, Toledo, Ohio, and Genesis Healthcare, Kennett Square, Pa., close on deals to sell their real estate assets to real estate investment trusts. In April, HCR Manorcare sells substantially all of its real estate assets to HCP for $6.1 billion, and HCP exercises an option to buy 9.9% of the company for $95 million. Earlier that month, Health Care REIT, Toledo, Ohio, completes its $2.4 billion purchase of substantially all the real estate assets of Genesis.
Kindred Healthcare, Louisville, Ky., purchases Rehabcare Group, St. Louis, for $1.3 billion, creating a company that at the time operates 224 nursing and rehabilitation centers, 121 long-term acute-care hospitals and 118 inpatient rehabilitation facilities. Officials for the two companies say after announcing the deal that it positions Kindred to benefit from Medicare’s move toward bundled payments and accommodate a population of patients whose needs are growing more intense and complex.