Q: The Centers for Medicare & Medicaid Services recently proposed either an 11.3% reduction or a 1.5% increase for SNFs next year. How unusual is it for CMS to propose this either/or option?

A: The regulation is unusual in that it articulates two divergent paths. One is an existential payment cut that is unlikely to happen in reality. It’s more likely a small reduction will be put into place and that any cut would be phased in over a period of time.

Q: There’s been a lot of discussion of how providers may have put too many people into ultra-high rehab groups. What do you think?

A: It’s hard to tell given the limited data right now. There’s a fair amount of analytic work that needs to be done.

Q: What would it mean for a provider to put an 11.3% cut into reality?

A: The thing to remember is that this is a business where the expenses are primarily labor. The building expenses are nominal; the capital equipment is nominal. It means reducing their labor and that’s not what anyone would want to do.

Q:  What are we going to see with group and concurrent therapy?

A: CMS does not like paying multiple times for one service. I think that this is going to be the guiding principle for group therapy. It’s a little early to know what the likely or best fix is.