$65 billion in Medicare cuts to rock U.S. nursing homes over 10 years, analysis shows

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Dan Mendelson, CEO of Avalere Health
Dan Mendelson, CEO of Avalere Health

American nursing homes are staring down a cumulative Medicare funding reduction worth $65 billion over the next 10 years, a first of it's kind 50-state analysis finds.

“Sequestration and the reduction in reimbursement for bad debt, scheduled to take effect next year, are the latest in a series of legislative and regulatory cuts in Medicare payments to SNFs that will, we estimate, reduce those payments by a total of approximately $4 billion a year,” said Dan Mendelson, CEO of Avalere Health, which conducted the analysis.

Sponsored by the Alliance for Quality Nursing Home Care, the analysis factored in several Congressional budget actions and regulatory changes undertaken by the Centers for Medicare & Medicaid Services since 2009.

Report authors say the recently announced 1.8% Medicare payment increase to skilled nursing facilities will essentially be negated by the Medicare cuts associated with the “bad debt” provision in the Middle Class Tax Relief and Job Creation Act of 2012 and the $782 million sequester cut.

States that will sustain the biggest Medicare reductions are projected to be: Florida ($370 million), California ($350 million), Texas ($240 million), Illinois ($240 million), New York ($220 million), Pennsylvania ($200 million), Ohio ($200 million), New Jersey ($190 million), Michigan ($140 million) and Indiana ($140 million).

Click here for more on the analysis.