MedPAC proposes pay bump for hospitals, cut for SNFs

The Medicare Payment Advisory Commission has made a draft recommendation that includes a modest bump in payments to hospitals while also suggesting cuts to nursing homes.

The recommendations include a 3.2 percent increase in hospital inpatient and prospective payment rates for 2015, as well as flattening the payment differences between hospital outpatient departments and physician offices for identical procedures, Becker's Hospital Review reported.

However, MedPAC has also proposed a 4 percent cut in payments to skilled nursing facilities (SNFs) in 2016, a stance that has drawn the ire of the nursing home sector, McKnight's Long-Term Care News reported.

Such a cut would come on top of a 4 percent cut that went into effect in the current fiscal year.

"The skilled nursing profession welcomes new payment models, but cuts to the market basket will only thwart providers' ability to prepare and invest in these reforms," Mark Parkinson, chief executive officer of the American Health Care Association/National Center for Assisted Living, told Long-Term Care News.

SNFs have come under pressure from federal payers in recent years amid allegations that they provide uneven care. A report from the Office of the Inspector General of the U.S. Department of Health and Human Services released earlier this year concluded that the Medicare program may have spent millions of dollars on subpar care, spurring calls from some quarters to reduce the payments they receive.

MedPAC also made a recommendation to level the payment rates between SNFs and rehabiliation hospitals for certain therapies. That raised the ire of the American Hospital Association, which raised a strong objection.

"IRFs are required to admit only patients who require hospital-level services, and payments should reflect the cost of providing that level of care," Linda E. Fishman, AHA senior vice president, public policy analysis and development, wrote in a recent letter to MedPAC, reported Long Term News. "SNF rates are wholly inadequate for IRF-level care."

To learn more:
- read the McKnight's Long-Term Care News article
- here's the Becker's Hospital Review article

Related Articles:
OIG: Medicare spent billions on subpar nursing home care
Nursing facilities facing sizable Medicare pay cuts
CMS proposes changes to skilled nursing PPS
Stronger relationships with SNFs cut down readmission rates
MedPAC reaffirms calls for hospital pay bump, SGR repeal

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