Providers unhappy over MedPAC recommendation on nursing home payment reductions

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A top long-term care group took umbrage with an advisory committee's recommendation to reduce Medicare reimbursements to low-performing nursing homes.

In its report to Congress, the Medicare Payment Advisory Commission (MedPAC) recommended Thursday that Congress should eliminate skilled nursing facilities' market basket update and rebase prospective payment system for 2013. It should do this, according to the report, by enacting an initial 4% reduction in Medicare SNF payments starting in 2014, with subsequent reductions over a transition period.

Additionally, MedPAC advised Congress to reduce payments to SNFs with high rehospitalization rates.

“A SNF rehospitalization policy would better align hospitals' and SNFs' incentives to reduce avoidable rehospitalizations, encourage providers in both sectors to work together to better manage transitions between them, and represent a step toward payments for larger bundles of services,” the report states.

American Health Care Association President and CEO Mark Parkinson says that while he agrees that preventing reshospitalizations can reduce Medicare costs, he differs on how those efforts should be carried out.

“AHCA proposes incentives to drive change, while MedPAC recommends penalties for providers with higher rates of hospital readmissions,” Parkinson said.

Click here to read the full report.