Hospital's nursing home should receive lower reimbursement, court rules

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A federal court in Louisiana recently agreed with the Centers for Medicare & Medicaid Services that a skilled nursing center on the floor of a hospital did not qualify as a subprovider for the hospital. As a result, it was not entitled to a higher payment rate.

The skilled nursing wing of Community Care LLC is a "separate provider," according to the ruling by the U.S. District Court for the Eastern District of Louisiana. Community Care argued that, as a facility including both a hospital and the skilled nursing services, it was required to submit only one cost report for both. Community Care began caring for Medicare beneficiaries in April 1999 when it added a SNF floor to its hospital.

Because it is not a subprovider, the skilled nursing wing was entitled to the prospective payment system, the court ruled. Community Care argued that a cost based payment methodology for the services rendered in the skilled nursing facility should have been used. The amount at issue was $335,465.