CMS outlines options for skilled-nursing payment updates

In a proposed rule (PDF) published Thursday in the Federal Register, the CMS outlines two options to update the payment rates for skilled-nursing facilities in fiscal 2012.

The first option would provide an increase of 1.5 percentage points, or about $530 million, which the agency calculated by applying the 2012 marketbasket index of 2.7 percentage points and reducing it by 1.2 percentage points “to account for greater operational efficiencies,” as outlined in the Patient Protection and Affordable Care Act.

In the section option, the CMS would adjust for what the agency referred to in a news release (PDF) as “an unexpected spike in nursing home payments during fiscal year 2011.” For this, the CMS would restore overall payments to their intended levels on a prospective basis, which would require reducing payments to skilled-nursing facilities in 2012 by $3.94 billion, or 11.3% lower than payments in 2011.

Meanwhile, the rule also proposes implementing a section of the Affordable Care Act that requires Medicare skilled-nursing facilities and Medicaid nursing facilities to disclose certain information to HHS and other entities about their ownership and organizational structure; suggests a new Medicare-required assessment to be required by these facilities when changes occur in the intensity of therapy; and proposes revising the definition of group therapy as well as requiring allocation of group therapy minutes in assigning the resource utilization groups, version four—known commonly as RUG-IV—payment groups. This year, the CMS implemented RUG-IV, which the agency said is intended to better account for those resources used in the care of medically complex patients and therapy patients.

The CMS will accept comments on the proposed rule until June 27.