Market basket increase for 2011 'more than adequate,' MedPAC says

Salaries increase for DONs, administrators

The proposed fiscal year 2011 market basket update of 1.7% for skilled nursing facilities is "more than adequate," the Medicare Payment Advisory Commission (MedPAC) said in a letter to the Centers for Medicare & Medicaid Services.

MedPAC, which has routinely called for no market basket update at all, commented on other payment issues in the letter. It said CMS should establish a separate payment component to handle certain cases involving non-therapy ancillary services. Payments for these services (such as drugs, respiratory care or lab studies) are tied to nursing time, even though their costs vary more than nursing costs, MedPAC said. As an example, if two patients receive the same amount of nursing care, but one is taking an expensive drug, a nursing home will be reimbursed at the same rate for each patient.

MedPAC also said payments for individual, concurrent and group therapy services should reflect the cost of those services. This will prevent providers from furnishing one type of therapy based on a higher reimbursement rate, according to MedPAC. Greater consideration of group therapy services in the new case-mix system could help correct this concern, MedPAC said. The new case-mix system does not change the fee-for-service nature of the nursing home prospective payment system, potentially giving providers a financial incentive to furnish those services, MedPAC wrote. The letter was issued as a comment on a CMS proposed rule concerning skilled nursing payments.