$1.96 billion nursing homes cut will force hard look at regulation, payment, experts say

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Clifton J. Porter II, AHCA's senior vice president of government relations, is one of many concerned about the cut putting more pressure on operations
Clifton J. Porter II, AHCA's senior vice president of government relations, is one of many concerned about the cut putting more pressure on operations

The federal budget deal struck last week will squeeze nursing homes tighter than ever, advocates said as they began strategizing about how to stem the damage.

The American Health Care Association/National Center for Assisted Living said it will focus on winning more regulatory reductions to help compensate for a 10-year, $1.96 billion cut to skilled nursing that Senate leaders lobbed onto their two-year spending plan.

“The issue for us is, we continue to have deteriorating margins, projected to be south of 1% next year,” Clifton J. Porter II, AHCA's senior vice president of government relations told McKnight's Friday. “When you combine the overall margins with the occupancy rates and then you compound that with a rate reduction, it's a clear problem.”

Porter said the cut will freeze skilled nursing facilities' share of the “market basket” at a 2.4% increase in October. The Congressional Budget Office had previously projected a 2.7% hike, though the final rate won't be set until CMS announces its proposed rules for 2019.

The budget deal, signed by President Trump early Friday, repealed therapy caps for Medicare Part B beneficiaries, retroactive to Jan. 1, and extended extra payments for rural hospitals and increased payment rates to certain Medicare doctors.

Cynthia K. Morton, executive vice president of the National Association for the Support of Long Term Care, said details on retroactive claims should be forthcoming from the Centers for Medicare & Medicaid Services.

While her members are pleased they'll now be able to provide more therapy to patients who need it, Morton is concerned about a “surprise” offset that would reduce payments for therapy assistants by 15%. While that would not start until 2022, NASL plans to push back against the cut, she said.

“In rural areas, therapy assistants provide the necessary therapy subject to state practice acts,” Morton said. “It's an access issue and reducing the payment where we already have an access issue just doesn't make sense.”

In more bad news, the budget deal also added another two years to the 2% Medicare sequestration.

“Our members know from experience that across the board cuts to skilled nursing facilities and home health hurt good providers' ability to continue delivering high-quality care to older Americans,” said Lisa Sanders, spokeswoman for LeadingAge. “Massive cuts create an environment for providers and patients that is simply untenable with our country's desire to move to paying providers based on the value of care.”

The organization plans to keep pushing for the development of payment systems that more fairly compensate providers for the services they provide.

Seeing no clear path to remedy the across-the-board cuts, AHCA's Porter will focus on securing more regulatory relief from the Trump administration as a way of lowering overhead.

He said all the added financial pressures will make caring for a vulnerable population more difficult, a sentiment echoed by Morton.

“While we realize all providers have to give a little, we are concerned about the cuts,” she said. “The operating environment continually has more requirements but the reimbursement is being reduced, and this just doesn't' help providers provide quality services.”