Industry-backed report warns that cuts could hit $79 billion

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Dan Mendelson, CEO of Avalere Health
Dan Mendelson, CEO of Avalere Health
The Centers for Medicare & Medicaid Services recently unveiled a Medicare plan that trims Medicare payments by 11.1%, beginning Oct. 1. But the real impact will be a $79 billion loss over the next decade, according to an industry-backed study conducted by Avalere Health.

The new funding plan — in addition to $29.4 billion in payment cuts enacted to fund healthcare reform and a $16.8 billion Medicare payment reduction in 2010 — will put a tremendous fiscal strain on operators, Avalere CEO Dan Mendelson said. Medicaid cuts will squeeze nursing homes even further, he added.

“In the long term, there is concurrence among policymakers that SNFs hold the key to better patient management and cost reduction, but in the short term, these pressures on Medicare and Medicaid rates will be exceedingly difficult to manage,” said Mendelson, in a joint conference call with Alan G. Rosenbloom, the president of the Alliance for Quality Nursing Home Care, which funded the study.

Rosenbloom contends that CMS changes to therapy payment methodology crossed the line from over-correction into real Medicare cuts.

CMS announced its SNF prospective payment system final rule in late July. The agency said it fixes an unintended spike in payment levels.