Unless Modified, Pending CMS Medicare Rule Would Undercut Ability of SNFs to Care for Higher Acuity Patients

Wednesday, April 30, 2008 General News
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WASHINGTON, April 29 In addition to expressing ongoing concern about possible cuts to Medicare-financed nursing home care on Capitol Hill in the weeks ahead, the nation's two leading long term care organizations today warned that a key component of a pending Medicare rule to be published by the Centers for Medicare and Medicaid Services (CMS) will slash nursing home funding by $4.7 billion over five-years. This regulatory cut, leaders of the American Health Care Association (AHCA) and the Alliance for Quality Nursing Home Care say, would significantly hinder skilled nursing facilities' (SNFs) ability to care for the higher acuity patient population actually intended by CMS policy - and which is currently saving Medicare dollars on behalf of U.S. taxpayers.

"Beyond our ongoing concern about threats to Medicare-financed nursing home funding on Capitol Hill in the weeks ahead, our profession is concerned about the imminent CMS regulatory proposal that will cut SNF payments by $4.7 billion over five years," said Bruce Yarwood, President and CEO of AHCA. "The policy we are currently following improves our ability to care for a higher acuity patient population, and saves Medicare dollars. The proposed CMS change, which will bring about substantial payment reductions, is bad policy, contrary to common-sense, and requires a reasoned reversal."

Alan Rosenbloom, President of the Alliance, stated, "Regulatory-driven budget cuts like those incorporated into the CMS rule would inhibit skilled nursing facilities' ability to continue caring for increased numbers of high-acuity patients, and undermine our ongoing efforts to invest in and build the necessary clinical infrastructure to ensure care quality is maximized. This component of the pending rule will unquestionably place at risk our long-standing goals of increased efficiency and effectiveness - which benefits nursing home patients, our caregiver workforce, and taxpayers alike. "

The Administration's FY 2009 budget includes a regulatory proposal to cut Medicare skilled nursing facility (SNF) payments to account for a "forecasting error" made by the Centers for Medicare and Medicaid Services (CMS) in 2005. To correct for the error, CMS has confirmed that it will soon issue a regulatory proposal cutting a total of $720 million in SNF funding in FY 2009 and $4.7 billion over the next five years.

In proposing these regulatory cuts, Yarwood and Rosenbloom continued, CMS fails to factor in pro-patient, pro-taxpayer changes in Administration-initiated Medicare policies that are successfully moving large numbers of high acuity patients into SNFs - patients who otherwise would have been cared for in higher-cost settings. These policies saved Medicare $709 million in 2006 alone, according to Avalere Health, LLC.

Independent studies indeed confirm SNFs provide post-acute rehabilitation to dramatically more patients than in the past - and at a significant savings to the Medicare program. A recent United Hospital Fund report, for example, found that the number of patients in New York State staying in a nursing home for less than two months more than tripled from 1996 to 2005. In addition to this rise in short-stay patients, the study further concluded that, "between 1996 and 2005, both long-term residents and short-term patients have become more disabled, and more of them are cognitively impaired."

Yarwood and Rosenbloom said the UHF report exemplifies the increased role that SNFs play in this arena - not just in New York State, but nationwide. "This growing positive trend has been driven, in large measure, by intelligent and sound Medicare policy modifications designed to move patients to the lowest cost, most appropriate setting," observed Rosenbloom.

"As the nature of the nursing home patient population continues to change and evolve, it is incumbent

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