Nurs­ing homes cope with deep pay­ment cut

Modern Healthcare - - SPECIAL REPORT -

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.

Other high­lights:

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.

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