Nursing Homes Object To MedPAC's Draft Recommendations To Freeze SNF Pay

Nursing homes are protesting draft recommendations, approved by Congress' Medicare payment advisors Friday (Jan. 13), that would eliminate the market basket update for nursing homes, which the industry says would cut pay at least by 4 percent, would revise the nursing home pay system for 2013 and would begin rebasing pay in 2014, with an initial reduction of 4 percent and subsequent reductions. But the industry is somewhat supportive of the advisors' call to reduce pay for skilled nursing facilities with relatively high risk-adjusted rehospitalization rates for Medicare-covered stays.

The Alliance for Quality Nursing Home Care offered “qualified support” for that policy, contingent upon further discussions. The American Health Care Association said it opposes rebasing but was encouraged by the rehospitalization policy, on which AHCA has been working with the Medicare Payment Advisory Commission for a year.

MedPAC also voted on draft recommendations to increase dialysis pay rates 1 percent in 2013 and to freeze pay for inpatient rehabilitation and long-term care hospitals. For the prescription drug benefit (Part D), commissioners voted to recommend modifying copayments for seniors with incomes 135 percent of poverty to encourage beneficiaries to use more generics. Draft recommendations on outpatient dialysis facilities call for a 1 percent pay rate increase.

Nursing homes said they could not sustain the pay freeze in the draft recommendations as they are already operating on “razor-thin” margins after recently being hit with an 11.1 percent Medicare pay cut. Nursing homes are facing $127 billion in Medicare funding cuts in the next 10 years, according to the Alliance. The industry also is facing pay cuts from state Medicaid programs, and the Alliance criticized MedPAC for not considering what is happening to Medicaid payments in the commission's work on Medicare.

“With long term and post acute care providers across the nation beset by a barrage of federal and state budget cuts already jeopardizing seniors’ care, and causing front line care job losses, we are alarmed by MedPAC’s recommendation of no market basket increase for FY 2013,” Alliance President Alan Rosenbloom said in a prepared statement. “When combined with the Affordable Care Act requirement that CMS reduce annual market basket increases by a productivity adjustment, MedPAC’s recommended freeze effectively translates into a cut from current payment levels, not merely a failure to increase payments to account for cost increases.”

Commissioners also voted for controversial hospital payments, and they did not vote on physician pay recommendations because their recommendations for revamping the Sustainable Growth Rate formula from past October still stand, MedPAC Chair Glenn Hackbarth said.

The recommendations were drafted for inclusion in MedPAC's annual report due to Congress in March.

-John Wilkerson