MedPAC votes to lower the boom on skilled nursing providers

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Automatic 2% Medicare cuts begin
Automatic 2% Medicare cuts begin

The Medicare Payment Advisory Commission voted Wednesday to recommend that the way skilled nursing providers are paid by the government be drastically overhauled within two years. MedPAC commissioners also voted to recommend that they receive no Medicare inflationary pay increase during the next fiscal year.

MedPAC commissioners — as they had proposed in December amid provider protests — officially voted to recommend that:

* Congress eliminate the next fiscal year's market basket update and direct the Secretary of the Department of Health and Human Services to revise the prospective payment system for skilled nursing facilities in fiscal 2013. In addition, commissioners said rebasing should begin in fiscal 2014, with an initial reduction of 4%, and subsequent reductions over an appropriate transition period until Medicare's payments are "better aligned with providers' costs."

* Congress also should direct HHS to cut payments to skilled nursing facilities with relatively high risk-adjusted rehospitalization rates for their Medicare-covered skilled nursing facility stays.

Skilled nursing lobbyists had slammed the group in December for floating the proposals that were approved Wednesday. Providers were reserved in their reaction to the vote.

American Health Care Association president Mark Parkinson said in a statement that he was encouraged by the commission's “discussion of future rehospitalization policy.” He also restated his group's stand against rebasing pay rates.

“We do not support rebasing … Congress can and should seriously consider the multiple changes that have already been made in the payment process in recent years,” he said, referring to recent government take-backs and reductions in funding.

MedPAC-approved recommendations on Wednesday also included a 1% increase for inpatient and outpatient hospital services and 0.5% increase for hospice services.

MedPAC is an advisory body to Congress that issues formal recommendations twice yearly. In recent years, Congress has routinely ignored MedPAC recommendations to freeze or cut long-term care providers' reimbursement rates, but those recommendations were not as sweeping as those approved Wednesday. Congress will formally receive MedPAC's current recommendations in March.