Kindred Healthcare, Louisville, Ky., estimates that recent therapy reimbursement cuts and payment changes instituted by the CMS for skilled-nursing facilities will cost the company $95 million to $110 million in annual revenue.
Kindred predicts big revenue hit
The CMS instituted the changes for fiscal 2012 in response to excessive reimbursement to SNFs in the current fiscal year ending Sept. 30. The move has SNF operators scrambling to deal with lessened revenue.
In the company's second-quarter earnings announcement, Kindred officials said that they have not given up hope that the cuts will be phased in over time instead of coming all in one year. "We recognize that CMS has a responsibility to achieve budget neutrality under the new (therapy group) reimbursement system,” Kindred President and CEO Paul Diaz said. “But the same rush to implementation that led to the current overpayments will now likely lead to an overcorrection that will negatively impact the interests of patients, residents, staff and job creation. We will continue to work with policymakers to reconsider a phase-in of the parity adjustment and the impact of the rehabilitation therapy and assessment process changes.”
The estimate includes a hit of $85 million to $95 million in Kindred's nursing-home business and $10 million to $15 million in its rehabilitation therapy business. Kindred had previously pegged the cost at $30 million to $40 million.
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