Provider group: Cut Medicare pay rate by 3.0%, save 100,000 jobs

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Gov. Mark Parkinson
Gov. Mark Parkinson

The leader of the nation's largest nursing home association has suggested the federal government cut Medicare reimbursement rates by 3.0% in fiscal 2012, not a threatened 11.3%. Such a move, along with more possible phased-in cuts, could take more than 100,000 caregiving jobs out of harm's way, he said.

Gov. Mark Parkinson, president and CEO of the American Health Care Association, responded Monday to the Centers for Medicare & Medicaid Services' proposed rule, which could cut certain Medicare reimbursements to skilled nursing facility operators by more than one-tenth. In a letter to CMS Administrator Donald Berwick, Parkinson said the rule would amount to a $4.47 billion cut to skilled nursing facilities. Parkinson also said such a reduction could put more than 100,000 jobs at risk, “reduce wage and salaries by about $5 billion, cut state and federal tax revenues by $1.6 billion, and decrease Gross Domestic Product (GDP) by about $12.5 billion.”

“A reduction of $4.47 billion, coupled with additional Resource Utilization Group (RUG) system changes estimated in the billions and increased costs in the hundreds of millions of dollars, are of great concern,” Parkinson wrote. “Implementing these adjustments all at once could threaten the financial stability and viability of the SNF sector, and therefore, its ability to continue to provide quality care.”

Parkinson also acknowledged in the letter that skilled nursing facilities “were likely overpaid in FY 2011 due to the implementation of MDS 3.0 and RUG reforms [in October 2010].” A solution, he said, would be for CMS to reduce reimbursement rates by 3%, plus deny any market basket increase. Then, in fiscal 2013 and subsequent years, CMS could further reduce rates by up to 3%, until budget neutrality would be reached, he said.

“We accept that we cannot calculate an exact amount of the over payment,” Parkinson wrote to Berwick. “To prevent an over correction, AHCA proposes a measured response to protect the sector, our residents and the economy.”

In addition, on Tuesday AHCA disclosed a letter that was sent by 152 members of Congress to Berwick, asking for a delay in Medicare reimbursement cuts to long-term care providers in order to get more accurate data on which to make decisions. “CMS has based this option on data obtained from only one fiscal quarter, which we believe is unprecedented,” the lawmakers wrote on Friday. “Given the limited timeframe, we are concerned that the agency's proposed option is not based upon accurate data.”