Skilled nursing groups slam MedPAC recommendations to revise payment system

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Financial outlook is grim for not-for-profits, analyst says
Financial outlook is grim for not-for-profits, analyst says

Leading provider groups are sharply critical of a Medicare advisory committee's recommendation that the Centers for Medicare & Medicaid Services should massively overhaul the skilled nursing facility reimbursement system and rates.

Greg Crist, vice president of public affairs at the American Health Care Association and National Center for Assisted Living, expressed heavy disappointed with the Medicare Payment Advisory Commission's (MedPAC) conclusion that SNFs are collecting far too much from CMS.

“To examine only Medicare margins misses a more accurate, complete picture our providers face. Sixty-four percent of our residents depend on Medicaid for their care,” Crist said in a statement to McKnight's on Monday. “When this program is considered in the overall reimbursement equation, skilled nursing margins are skating on a razor's edge of operating costs.”

SNFs can expect average margins of 14.6% in 2012, according to MedPAC documents filed for its semi-annual hearing held Thursday. Based on this, commissioners said, Congress should recommend that CMS rebase the prospective payment system starting in 2014. There should be an initial pay reduction of 4%, followed by more cutbacks over a transition period, MedPAC added.

The panel urged CMS to reduce payments for SNFs with relatively high risk-adjusted hospitalization rates for their Medicare-covered SNF days. MedPAC also recommended that Congress eliminate the SNF market basket — or cost of living — update.

MedPAC members are scheduled to meet again in January, at which time they will either finalize or modify their recommendations. They will ultimately deliver a final report with recommendations to Congress in March. MedPAC is purely an advisory body to lawmakers, who can, and often have in the past, ignored its recommendations.

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