Care Context SPRING 2012
Impact of Payment Reductions on Nursing Facilities
Payment Cuts leading to Nursing Facility layoffs and Cancellation of New Jobs
AS PART OF THe “middle Class Tax Relief and Job Creation Act of 2012” passed in February, Congress cut medicare payments to nursing facilities by reducing reimbursement for so-called medicare “bad debt” – medicare co-payments not made by beneficiaries or state medicaid programs. Facilities have no legal avenue to collect bad debt from state medicaid agencies. This cut comes on the heels of an 11.1 percent reduction to medicare nursing facility payment rates, which was imposed by the Centers for medicare and medicaid Services (CmS) in August 2011.1 In addition, many states have reduced or frozen their medicaid rates for nursing facilities (NFs).2 The results of a recent survey suggest that, in response to the CmS cut, facilities will lay off over 20,000 staff and cancel projects that would have created 20,000 – 25,000 new jobs. Sufficient levels of skilled staffing are essential to providing high quality care and reducing unnecessary readmissions, a systemic medicare cost driver.