CMS to cut skilled-nursing facility pay

The CMS announced in a final rule that it will cut Medicare skilled-nursing facility pay by 11.1%, or $3.87 billion, in fiscal 2012, a move strongly opposed by the SNF industry.

The CMS cut the payments to claw back estimated increased reimbursement in the current fiscal year that resulted from unintended changes in SNF Medicare billing for therapy, which had followed changes in how Medicare paid for therapy. The CMS in the rule said that it has recalibrated its payment structure, enacted through what it calls resource utilization groups, or RUGs, to correct the incentives that led to billing for higher-cost therapies.

CMS also tightened the rules for SNFs in the timing of allocating group therapy, to also reduce future overbilling.

“We are appalled that the (CMS) chose to implement an 11.1% across-the-board rate cut for skilled-nursing facilities in one year,” said a statement from not-for-profit nursing home association LeadingAge. “We believe that any across the board cut is unwarranted and problematic, and one of this magnitude is unprecedented.”

The fiscal 2012 recalibration reduced payments by $4.47 billion or 12.6%, but that change was partially offset by the update of 1.7%, or $600 million, according to the CMS. The update reflects a 2.7% inflation increase and was reduced by 1 percentage point through a productivity adjustment mandated by last year's Patient Protection and Affordable Care Act.