Nursing facilities facing sizable Medicare pay cuts

The Centers for Medicare & Medicaid Services (CMS) has issued a final 2012 rule for the skilled nursing facilities (SNF) and inpatient rehabilitation facility (IRF) prospective payment systems.

The SNF final rule includes includes a 12.6 percent payment cut associated with recalibrating the case-mix levels. That will be offset to some extent with a 2.7 percent market basket increase, although total payments are expected to be decreased by as much as $3.87 billion, including a 1 percent payment cut mandated by the Patient Protection and Affordable Care Act.

New rules will also be implemented that will more closely link therapies to appropriate payment levels.

Regarding IRF, the rule will include a market basket update of 2.9 percent, and a 1 percent patient cut mandated by healthcare reform. Altogether, payments are expected to increase by $150 million.

In addition to those changes, CMS is permitting a 2.5 percent wage increase for hospice workers in fiscal 2012.

The new rules for all of the sectors will go into effect on Oct. 1.

For more
- read the final rule (.pdf)
- download the Medicare SNF PPS calculator (.xls)