Analysis: Medicare sequester cuts would reduce SNF payments by $9 billion over 10 years

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Skilled nursing providers and inpatient rehab facilities offer clashing views on Medicare payments
Skilled nursing providers and inpatient rehab facilities offer clashing views on Medicare payments

Skilled nursing facilities in the most populous states will be the hardest hit if Congress enacts the 2% across-the-board cut in Medicare payments to providers, two new analyses predict.

The 2% sequestration cuts, which would take effect Jan. 1, 2013, would reduce Medicare payments to skilled nursing facilities by a total of $782.5 million in the first year. They would total $9 billion over 10 years, according to an analysis released Monday by Avalere Health and the Alliance for Quality Nursing Home Care.

The states that would bear the brunt of the payment cuts are: California ($75.9 million); Florida ($66 million); Texas ($51 million); New York ($47 million); Illinois ($46.2 million); New Jersey ($37.5 million); Ohio ($37.3 million); Pennsylvania ($36.9 million); Michigan ($30.2 million); Massachusetts ($28.4 million); Indiana ($25.1 million); North Carolina ($22.5 million); Maryland ($18.4 million); Virginia ($18 million) and Tennessee ($17.6 million).

The Avalere analysis provides the specificity that the Office of Management and Budget's report — released Friday — lacks, according to the Alliance. Click here for the full Avalere analysis. The 2%-cut is the result of the Budget Control Act of 2011, which calls for automatic government spending reductions should ongoing budget negotiations end up in a Congressional stalemate.

Meanwhile, a separate analysis released last week found that providers in eight states most affected by the sequester cut include California, Florida, Illinois, Michigan, New York, Ohio, Pennsylvania and Texas. Collectively, all healthcare providers would see reductions in Medicare fee-for-service payments totaling $20 billion over 10 years, according to a University of Minnesota study. Click here for a county-by-county breakdown.

Also on Monday, the American Health Care Association announced Monday that it is launching a beltway advertising blitz, including TV commercials, to counter the proposed cuts. Click here for more information on AHCA's campaign.

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