Long-term care hospital operators benefit from CMS payment reduction phase-in

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Two major long-term care hospital operators saw their stocks rise upon news that planned payment cuts will be phased in over time.

The Centers for Medicare & Medicaid Services said Tuesday that a planned 3.75% cut in payments to long-term care hospitals will be spread over three years, which gives operators a 1.9% increase in fiscal 2013. Long-term care hospital payments will increase by approximately $100 million, CMS said.

Kindred stock jumped from $8.30 on Tuesday to a $9.86 close on Wednesday. Skilled Healthcare Group Inc. stock also rose, closing at $7.49 Wednesday.

CMS will accept comments until June 25 and is expected to issue a final rule on fiscal 2013 payments on Aug. 1.

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