Sabra Health Care REIT CEO and Chairman Rick Matros predicted Thursday that the Centers for Medicare & Medicaid Services will take a temperate approach if it hits skilled nursing operators with a reimbursement cut to recalibrate the Patient Driven Payment Model’s parity adjustment.

The agency is currently taking comments on possible PDPM adjustments after an in-house analysis found aggregate SNF spending under the new model unintentionally increased payments by $1.7 billion, or 5%. The agency is specifically seeking feedback from providers on whether it should delay or phase in an adjustment once an appropriate methodology for recalibrating the parity adjustment is determined.

Matros said during a first-quarter earnings call that, looking at the data, it’s “clear” the payment increase was driven by the pandemic and the rise in higher-need residents at nursing homes.

Rick Matros
Rick Matros

“We all saw acuity rising almost from Day 1,” he said. “We knew that number was going to continue to grow over the course of the pandemic.”

He added CMS’ comments on the proposal have been “very conciliatory,” which indicates the agency wants to see the industry recover from the pandemic. He predicted CMS will likely decide to phase in any reimbursement over the next several years. 

“They’re pretty temperate in their comments,” Matros said. “In fact, [they were] more conciliatory in a proposed rule than I’ve ever seen in my career. Is it possible that something happens this October? Maybe. I don’t think it’s going to be major.

“They really have made a point of indicating that they don’t want to do anything to disrupt the recovery of the industry,” he added. “Yes, I was surprised [about the recalibration announcement], but their approach is quite temperate.” 

The real estate investment trust also reported that average occupancy for its top skilled nursing operators rose 431 basis points between December and April.

For additional coverage from the call, check out our sister site McKnight’s Senior Living.