The federal government should integrate increased costs associated with COVID-19 care in the SNF PPS payment structure for the “foreseeable future” to ensure adequate reimbursement, according to the nation’s largest nursing home association.

The American Health Care Association made the recommendation in a comment letter to the Centers for Medicare & Medicaid Services in response to the Skilled Nursing Facility Prospective Payment System proposed rule. The proposal would give nursing homes a 2.3% net Medicare increase for fiscal year 2021 and would take effect Oct. 1, 2020.

AHCA’s Mark Parkinson

In the 40-page letter, AHCA President and CEO Mark Parkinson calls for reweighted market basket updates and permanent implementation of several “extremely helpful” telehealth waivers following the COVID-19 pandemic. 

“For example, the alternative audio-visual technology and 30-day SNF telehealth limit waivers improved access to care for emergent conditions 24/7 and also reduced the resource use and patient stress and infection risk associated with unnecessarily moving patients for specialty appointments which could be conducted with a telehealth visit,” the association wrote. 

The group also asked that federal regulators revise statutory language regarding consolidated billing to allow for more flexibility and requested that the wage index cap be applied per-year and not just for the first year. 

Other recommendations call for more flexibility in the SNF Value-Based Purchasing Program and for CMS to meet with SNF Quality Reporting Program stakeholders to address recent executions and extensions on reporting compliance performance measures that may be impacted by the pandemic. 

SNF financial crisis gets worse

In other related news, the AHCA also detailed how the current public health crisis has “severely exacerbated” the financial crisis facing the nursing home industry.

The organization noted that prior to COVID-19, the average nursing home was operating at a “loss or razor thin profit margin” which was driven mainly by Medicaid’s chronic underfunding of facilities.  

Now, thanks to COVID-19, providers have seen supply costs increase up to 103%, labor costs increased up to 18% on average and occupancy down by nearly 100,000 residents. AHCA added that estimated revenue loss could be up to 23% or $57 billion for providers.