Future looks brighter without $770 million Medicare cut

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Talk about a (positive) reversal of fortune. This week, the Centers for Medicare & Medicaid Services shifted course and decided not to impose a $770 million reduction in Part A Medicare payments to skilled nursing facilities next year. It also tacked on a market-basket increase, increasing reimbursements by $780 million.

How things change. Things looked much bleaker in May when CMS notified the industry it would trim payments to make up for an accounting error related to the addition of Resource Utilization Groups. It also had said it would only give nursing homes a 3.1% increase ($710 million) for the Medicare market basket.

So, what happened between then and now? Did CMS come to its senses? I'd like to believe so, as CMS demonstrated considerable discretion in its latest move. It even noted in a press release that it has to evaluate the data before recalibrating payment categories.

Still, I think pressure from Congress and the nursing-home lobby had more to do with the agency's change of heart. Almost half of the Senate and more than 100 members of the House told CMS that they disapproved of the Medicare cuts.

Congress came through at another critical moment as well. Last month at this time, as you may recall, nursing homes were sweating through the expiration of a therapy caps exceptions process. A bill extending the exceptions process passed, in part, as a result of a covert operation involving the transport of an ailing Sen. Ted Kennedy (D-MA) to the Senate floor.

That was a close one.

This was a less suspenseful but just as thrilling development. The industry has dodged two bullets in the past month. Hopefully, the fireworks have ended for the summer.

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Daily Editors' Notes

McKnight's Daily Editors' Notes features commentary on the latest in long-term care news and issues. Entries are written by Editorial Director John O'Connor, Editor James M. Berklan, Senior Editor Elizabeth Newman and Staff Writer Marty Stempniak.