CMS: Nursing home costs slow

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The Centers for Medicare & Medicaid reported that Medicare spending on nursing homes has slowed compared to other services. It also lowered its cost projections for the new prescription drug benefit.

Spending on nursing homes rose 4% while spending on home health services increased by 10%, CMS announced in a fact sheet released Tuesday. Medicare spending increases also occurred in physician services (by 10%) and outpatient hospital services (by 11%), CMS noted.

Meanwhile, the agency said spending on the prescription drug benefit is projected to be $110 billion lower than reported in the mid-session budget review one year ago. The reasons? Drug plans have realized more savings from "aggressive" price negotiations with drugmakers, low-cost coverage for generic drugs and less costly name-brand drugs, and other factors, according to CMS. Payments the states had to make to cover drug coverage under Part D (so-called "clawback payments") also were lower than earlier projected, CMS said.