SNFs could see 50% payment reduction for Pre-Existing Condition Insurance Plan claims

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House Majority Leader Eric Cantor (R-VA)
House Majority Leader Eric Cantor (R-VA)

The federal government's Pre-Existing Condition Insurance Plan will reduce its payments to skilled nursing facilities by 50% as of June 15, according to the Centers for Medicare & Medicaid Services.

The PCIP program was created as part of the Affordable Care Act in 2010. It was designed as a stop-gap program for people with pre-existing conditions, so that they could get healthcare coverage before the ACA takes full effect in 2014. At that time, most insurers will no longer be able to deny coverage or charge high premiums due to pre-existing conditions.

The program has provided health insurance to more than 135,000 people who had been uninsured and had pre-existing conditions, CMS said. That means the payment change will impact relatively few SNF residents, but the interim final rule says SNF and rehab facilities will receive less for services that are provided to individuals covered by this plan. 

The program received a budget of $5 billion in ACA funding, and CMS fears it will run out of money prior to 2014 given the current rate of pay-outs. Free-standing skilled nursing facilities and rehabilitation facilities will be paid at 50% of billed charges, according to the interim final rule.

These changes affect 23 states and the District of Columbia, where the PCIP program is run through the federal government. PCIP stopped accepting applicants in February 2013.

Last month, House Majority Leader Eric Cantor (R-VA) introduced a bill to shift $3.5 billion from a different ACA program into the PCIP. He met stiff opposition from members of his own party, who said the measure would strengthen “Obamacare.”

The PCIP payment cuts will take effect June 15, but providers can comment on the rule through July 22. The interim rule will be published May 22 in the Federal Register. Click here to view the full document.

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