The nation’s largest provider organization will ask the Centers for Medicare & Medicaid Services to reduce the pain of planned Medicare reimbursement cuts by spreading the reductions over three fiscal years rather than one, McKnight’s has learned.
On Monday, CMS announced plans to adjust nursing home Medicare payment rates downward by 4.6% in the next fiscal year to account for unintentional overpayments in the transition to the Patient Driven Payment Model. That $1.7 billion decrease will translate to a net $320 million annual decrease after accounting for a market basket increase and other factors, officials explained in releasing the proposed SNF PPS rule for fiscal 2023.
The American Health Care Association sees spreading the PDPM cuts over three years as a more humane way for operators to deal with the government’s overpayments, especially as many facilities are struggling with pandemic-related drops in occupancy, staffing challenges and higher operating costs.
“Many nursing homes already face imminent closure,” said Mark Parkinson, president and CEO of the American Health Care Association.
A year ago, CMS surprised providers when it released its proposed fiscal 2022 payment rule. It asked for input on how to incorporate possible payment changes (“delayed or phased in over time to provide payment stability”). New reimbursements under PDPM had allegedly been 5% above intended levels. PDPM, which was supposed to be budget neutral compared to the previous payment system, had apparently floated $1.7 billion more than intended into provider payments, officials said.
Stakeholders deluged officials with objections during the official comment period, chiefly arguing that pandemic conditions had truly pumped up legitimate costs. The agency said last July that it had been persuaded to not cut PDPM rates for fiscal 2022 (which started Oct. 1, 2021). Many providers then believed that CMS was seriously considering making graduated payment corrections whenever they came.
“In light of … comments, as well as the importance of addressing any existing overpayments under the SNF PPS, we intend to utilize these comments to refine the data we have collected in developing a proposed methodology that will be included in the FY 2023 SNF PPS Proposed Rule,” CMS explained at the time.
But following a one-year delay, the vision of a gradual phase-in was shattered Monday with the release of the proposed 2023 payment rule.
“To do this during a pandemic is actually heartless. We were comfortable with them spreading it out and thought that would be the case,” Rick Matros, president and CEO of Sabra Health Care REIT, told McKnight’s Monday.
He, Parkinson and others, however, will now attempt to lead another lobbying charge like the one that postponed PDPM “takeback” changes last year. Comments on this month’s proposed rule are due to CMS by June 10.
