A revamped 'forecast' rescues $770 million

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Bruce Yarwood, AHCA CEO
Bruce Yarwood, AHCA CEO
Providers cheered a decision by the Centers for Medicare & Medicaid Services not to trim $770 million from Medicare Part A payments to nursing homes during the coming fiscal year.

“An outstanding development is what we're calling it,” said Ken Preede, director of government relations for the American Health Care Association. 

CMS said it would not reduce Medicare funding for nursing homes as a way to make up for an unexpected increase in spending related to the expansion of Resource Utilization Groups (RUGs). Instead, the agency said it would put a hold on a proposed recalibration of Medicare SNF payment rates pending further study. CMS also said it would increase the market basket by 3.4%, or $780 million, for fiscal year 2009. It had previously proposed a 3.1% market-basket update for next year.

Congressional pressure on the administration, as well as industry opposition to the cuts, played a role in CMS' reversal of course, Preede said.

The original proposal sought to correct what the government viewed as overutilization of high-acuity Medicare payments. Two years ago, federal officials expanded the Medicare reimbursement system to start paying more for complex cases that also  required therapy. 
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