Nursing home groups suggest $1 billion Medicare cuts could cost even more

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Nursing home representatives and healthcare groups continued their attacks against a proposed FY 2010 $1.05 billion Medicare reduction  on Tuesday with the release of a report indicating the cuts could carry additional billions of dollars in unintended costs and consequences for both patients and providers.

The American Health Care Association and the Alliance for Quality Nursing Home Care released an economic impact analysis that suggests the proposed Medicare cuts will actually cost more than $3.6 billion in lost business activity and labor income; such cuts also could cost the loss of more than 30,000 healthcare jobs. In addition, the proposed cuts could also make it more difficult for skilled nursing facilities to enact reforms that would help them care for more short-term post-acute care patients, according to Alliance President Alan Rosenbloom. Caring for such post-acute patients helps "deliver the kind of long-term reductions in costs so crucial to effective healthcare reform," he said. The two groups said they plan to release a state-by-state analysis later this week.

The Centers for Medicare & Medicaid Services proposed the 3.3% reduction to SNF payments in fiscal 2010 on May 1 while emphasizing the cuts would be largely offset by a 2.1% market basket increase. According to regulators, providers were paid far more than originally forecast after a 2006 payment adjustment for certain therapy groupings, and these cuts are a simple correction for that oversight. (McKnight's, 5/4) CMS is accepting comments from the public on the proposed rule until June 30.
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