SNF pay has gotten worse, MedPAC says

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Efforts to reform Medicare have actually damaged the way nursing home operators are being reimbursed, according to a new report from the Medicare Payment Advisory Commission and the Urban Institute. Report authors call for prompt, drastic changes.

Changes made by the Centers for Medicare & Medicaid Services meant to better coordinate payments and operator costs have had the opposite effect, report authors said.

“Steadily eroded” is how they describe the payment accuracy for therapy and non-therapy ancillary services from 2006 to 2014. Accuracy has been hampered by therapy reimbursements based on volume of services instead of patient need, they explained.

Payments shoot up quicker than operator costs at higher-acuity therapy levels, and this might be incentivizing operators to push patients into the highest-level case-mix groups.

There is now virtually no correlation between nursing payments and non-therapy ancillary (NTA) costs, which these payments are meant to cover, the report asserted. 

A better system would separate NTA and nursing care payments, and base therapy payments on patient need, the authors argued