MedPAC renews call for long-term care payment cuts, draws fire from providers

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The Medicare Payment Advisory Commission has recommended a 4% reduction in skilled nursing facility payments in 2016, prompting an outcry from providers.

MedPAC in the past has calculated long-term care margins to be much higher than providers say they are. However, at a meeting Thursday, the group put the overall 2012 LTC margin at 1.8%. The recommended reimbursement reductions cannot be reconciled with margins that are so low, and such cuts would threaten resident care and the implementation of healthcare reform, said critics at the American Health Care Association/National Center for Assisted Living, the nation's largest provider organization.

“The skilled nursing profession welcomes new payment models, but cuts to the market basket will only thwart providers' ability to prepare and invest in these reforms,” said Mark Parkinson, CEO and president of AHCA/NCAL.

In January 2012, MedPAC called for a 4% reduction to take effect in fiscal year 2014, with subsequent cuts to follow. The group, which provides Medicare policy guidance to Congress, formalized that recommendation in March.

As with all MedPAC recommendations to cut LTC provider payments in recent years, lawmakers essentially chose to ignore them last year. Instead, they made gentler adjustments.

MedPAC commissioners also recently said that post-acute payment reform could begin by narrowing the difference between therapy reimbursements for skilled nursing facilities and inpatient rehabilitation facilities. An American Hospital Association executive blasted this proposal in a Dec. 11 letter to MedPAC Chairman Glenn M. Hackbarth.

“IRFs are required to admit only patients who require hospital-level services, and payments should reflect the cost of providing that level of care,” wrote Linda E. Fishman, AHA senior vice president, public policy analysis and development. “SNF rates are wholly inadequate for IRF-level care.”

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