Cumulative cuts spell bad news for SNFs, report finds

Nursing homes are planning to layoff direct caregivers, reduce employee benefits and cancel facility expansion plans as a result of cumulative Medicare and Medicaid cuts, a new survey finds.

Nearly one-third of the nursing homes that responded to a survey conducted by The Alliance for Quality Nursing Home Care and Avalere Health said they planned to cut direct service staff in light of recent reimbursement cuts. Three-quarters of nursing home respondents said they were considering smaller raises or wage freezes, and one fifth said they are delaying or canceling the opening of new or expanded facilities. Last fall, a survey from the group found that up to 40,000 jobs will be lost from the Medicare and Medicaid reimbursement reductions.

Alan G. Rosenbloom, the Alliance's president, said the bad news comes from a 3.3% case-mix adjustment in the FY 2010 rule; a market-basket productivity adjustment beginning in FY 2012 under the Affordable Care Act; the 11.1% reduction to Medicare SNF pay rates; as well as provisions of the Middle-Class Tax Relief and Job Creation Act of 2012, which reduced reimbursements for Medicare “bad debt.”

“Often, nursing facilities have little more than two to three months to prepare for these cuts, and this unpredictability in funding makes it problematic to plan from year to year,” Rosenbloom said in a statement.

Click here to read the spring 2012 Care Context, the policy paper issued Wednesday by the Alliance and Avalere.