Medicare final rule gets mixed reaction from providers

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Providers gave mixed reviews to last week's release of Medicare's final rule regarding Resource Utilization Groups.

While the American Health Care Association praised the rule as offering stable funding to nursing homes, the American Association of Homes and Services for the Aged blasted the RUGs refinements as "significantly flawed."

"The people served in skilled nursing facilities will be affected in ways they will never know," said AAHA President and CEO Larry Minnix in a statement.
"The new system perversely encourages (the use of intravenous drugs)," he added.

The Centers for Medicare & Medicaid Services has refused to disclose data that would back up its contention that the payment system outlined in the final rule will be more accurate, Minnix said. Also, while CMS touts an increase in payments to facilities for fiscal year 2006, most will experience a loss.

The rule, which was released late last Thursday, will increase payments to nursing homes by $20 million in 2006, according to CMS. It introduces nine new payment categories, increasing the number of categories to 53 from 44. The refinements will also eliminate $1.4 billion worth of temporary add-on payments.