In late June, the U.S. Department of Health and Human Services Office of Inspector General released a report stating that approximately 42% of Medicare beneficiaries in nursing homes were diagnosed with COVID-19 or likely COVID-19 in 2020. This is a devastating number and is likely low because it does not include Medicaid beneficiaries or other non-Medicare patients.
The report confirms what we already knew: that COVID dealt an overwhelming blow to nursing homes and our patients there. To make matters worse, our sector of nursing homes and ancillary services now faces additional reimbursement reductions.
Provider relief funds exclude ancillary service providers
Last week, the Health Resources and Services Administration (HRSA) extended the reporting deadlines for nursing homes to report to HRSA their use of the Provider Relief Funds. These funds have been a lifeline to nursing facilities, allowing them to pay for staff salaries, PPE, COVID-19 testing and all of the other higher costs they have borne because of COVID.
While that relief is warranted and highly appreciated, the ancillary service providers — providers that contract directly with nursing facilities to provide services to patients — have had little to no access to the Provider Relief Funds. These are frontline providers and the exclusion has cut off needed funding for those providing rehab therapy and diagnostics, including patient lab services and portable x-rays to nursing home patients.
Reimbursement reductions for skilled nursing sector
Bearing higher costs to provide the same services in a very difficult environment is bad enough, but now our sector faces reimbursement reductions imposed on both Part A and Part B services. The Centers for Medicare & Medicaid Services (CMS) has indicated in the recently released Skilled Nursing Facility Proposed Rule that, during fiscal year 2020, it spent 5% more than expected, and it wanted to take it back.
What this means is that, from October 1, 2019, when the Payment Driven Payment Model (PDPM) began, and all throughout 2020 until September 30, 2020, CMS spent more on PDPM reimbursement than it did on Resource Utilization Groups (RUGs) reimbursement the previous year. Because the statute says that the change from RUGs to the new PDPM reimbursement system is budget-neutral, CMS cannot spend more than it did the previous year.
In the proposed rule, CMS asks for public comment on when to begin taking the money back and how quickly. CMS did propose a 1.3% increase under Part A to begin October 1, 2021, but much of this will be eaten up by the Skilled Nursing Facility Value-Based Purchasing across-the-board 2% reduction and resulting performance payment.
Reimbursement reductions for Part B services are much more widespread. Soon, CMS will release its Physician Fee Schedule for Calendar Year 2022, which will contain its proposals to continue 8–10% cuts to physician and nurse practitioner visits in the nursing facility, rehabilitation services, portable x-ray services and other services provided to dually eligible and Medicare Part B patients.
Our coalition successfully engaged Congress to reduce the looming cuts down to about 3% for 2021, but the 8–10% cuts could be back in place for 2022. Don’t forget that all Medicare providers already lose 2% of any reimbursement in a practice called “sequestration.” This also goes back into place in January 2022, along with a 15% cut to rehabilitation services when delivered by a therapy assistant.
A challenging year made more challenging by rampant cuts
No doubt this has been the most difficult year ever for nursing homes and ancillary services — especially for our staff, our patients and their families. Our sector needs help with reform so that the problems that COVID highlighted can be put behind us.
The American Health Care Association and LeadingAge have released a great joint legislative proposal. Unfortunately, policymakers seem to be continuing down a path of death by a thousand cuts to the services we provide every day to our patients and residents. The impact? These cuts will not help us make good changes and will only restrict or stop access to services.
Ask Congress to protect long-term care services
To preserve services to our patients and residents, we need support in two key areas. We need Congress to provide ancillary services in long-term care, with access to the Provider Relief Fund, and to stop or delay the Part B reimbursement cuts that are running rampant through our entire sector. Please contact your elected officials to ask them to take action on these critical issues.
Cynthia Morton is the executive vice president for the National Association for the Support of Long Term Care.
The opinions expressed in McKnight’s Long-Term Care News guest submissions are the author’s and are not necessarily those of McKnight’s Long-Term Care News or its editors.