Nurses who don't pay taxes or student loans could trigger penalties for SNFs, expert says

Reversing earlier plans, the Centers for Medicare & Medicaid Services will not trim $770 million in Medicare Part A payments to nursing homes in the next fiscal year. This development comes as welcome news to long-term care providers, who had rallied against the planned cuts.

The government also revealed late yesterday that it would increase the market basket by 3.4% this coming year—a $780 million rise over the current fiscal year. Both actions kick in Oct. 1.

“The announcement is a huge success for America’s nursing homes and the millions of people they serve,” said Larry Minnix, president and CEO of the American Association of Homes and Services for the Aging, in a statement. “This decision illustrates CMS’ commitment to target public dollars towards needed patient care.”

In May, CMS said it planned to cut 3.3%, or $770 million, from Medicare Part A in skilled-nursing facilities because of the unexpected costs accrued as a result of adding new Resource Utilization Groups (RUGs) in 2006. At that time, regulators also said the market basket for next year would total 3.1%, or $710 million.

Since CMS issued its proposal, nursing homes have decried the planned reductions. They argued that facilities should not have to pay for a forecasting error made by CMS. In making its latest decision, CMS said it will hold off on proposing a recalibration of Medicare SNF payment rates pending further study. Thursday’s move helped skirt a major loss for Medicare Part A recipients, providers said.

“The bottom-line news from today’s announcement is that Medicare beneficiaries are deservedly the big winners, and will continue to benefit from ready access to the high quality, post-acute care they need and deserve,” said Bruce Yarwood, president of the American Health Care Association, in published comments.

Agreed Alan Rosenbloom, president of the Alliance for Quality Nursing Home Care: “From a policy standpoint, this is an outstanding development in terms of both meeting seniors’ changing health care needs, and doing so in a manner that uses Medicare funds efficiently.”

Both leaders praised members of Congress, which brought significant pressure to bear on the administration. As of this week, nearly half of all senators and 100 representatives had expressed their objections to the Medicare funding cuts.

Also Thursday, CMS said it would lower the so-called 75% Rule pertaining to therapy in inpatient rehabilitation facilities to a new, permanent 60% threshold. This means that 60% of IRF patients will be required to have certain conditions for these healthcare facilities to receive higher Medicare funding. Nursing homes unsuccessfully lobbied to keep the threshold at 75%.