Kindred estimates revenue reduction from proposed Medicare Part B therapy rate cuts

[Editor's Note: An earlier version of the story said the proposed rate change would reduce annual revenues by $11 million. That is incorrect. The rate change actually would reduce annual Medicare revenues related to Part B therapy services by $11 million. Also, this rule is different from the so-called concurrent therapy rule, which is set to take effect in October.]

Proposed changes to the Medicare Part B therapy reimbursement rate would reduce Kindred Healthcare Inc.'s annual Medicare revenues related to Part B therapy services by $11 million, the skilled nursing provider said.

The Centers for Medicare & Medicaid Services at the end of June issued a proposed rule for the Medicare Physician Fee Schedule. The rule would reduce Part B therapy payments when multiple procedures are provided to nursing home residents on the same day. The rule would go into effect in January 2011.

Projections from the Centers for Medicare & Medicaid Services indicate that there will be an approximately 10% rate reduction for Medicare Part B payments in 2011, according to Kindred. It is continuing to evaluate what impact this new rule will have on its operations.

In other business news, shares of nursing home provider Skilled Healthcare Group Inc. lost 76% of their value Wednesday after a California court ruled against the company in a class-action lawsuit. The suit, which covered 32,000 patients, charged that Skilled Healthcare violated California's 3.2 nursing hours per patient day requirement. As of press time, the last recorded trade of Skilled Healthcare shares on the New York Stock Exchange had fallen to $1.46, down from Tuesday's close of $6.22.