Less than a month after proposing to Congress a prospective payment system for Medicare hospital outpatient care, HCFA announced plans to test a similar plan for skilled-nursing facilities.
The federal agency is soliciting 1,900 skilled-nursing facilities in a six-state region to participate in a five-year demonstration project in which Medicare will reimburse nursing homes according to a new payment method known as resource utilization groups, or RUG III.
The RUG III payment system will reimburse nursing facilities according to residents' clinical conditions, as well as the extent of services needed, HCFA said. Nursing facilities currently receive average cost-based reimbursement.
In addition, RUG III also will include a quality monitoring program designed to assess patient care and outcomes, HCFA said.
The six states involved in the project are Kansas, Maine, Mississippi, New York, South Dakota and Texas. All but New York and Texas operate a similar reimbursement system for their Medicaid programs.
While the demonstration project should provide some balance to nursing homes with a broad patient case mix, it isn't designed for subacute-care facilities, said Don Sherwood, a senior technical analyst at HCFA's division of payment systems.
"Subacute-care chains have told us that our (RUG III) rate doesn't go far enough to cover their (complex medical) patient population and overhead," he said.
Meanwhile, David Kylo, a spokesman with the American Health Care Association, a Washington-based nursing home trade group, said the association endorsed the project because the project's ultimate goal is to improve the quality of patient care and access to services in skilled-nursing facilities.