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CMS Announces Payment Rate Cuts for Skilled Nursing Facilities

Les Masterson, for HealthLeaders Media, August 3, 2009

CMS announced adjustments to fiscal year 2010 payment rates Friday that the agency said will help "better reflect the cost of caring for Medicare beneficiaries in nursing homes."

The final rule calls for Medicare payments to skilled nursing facilities to drop by $360 million, or 1.1% lower than payments for 2009. CMS said the adjustment is a way to "rebalance an earlier adjustment to the case-mix indexes (CMIs) and better align Medicare payments with costs."

"CMS is committed to providing high quality care to those in skilled nursing facilities and to paying those facilities properly for that care," said Acting CMS Administrator Charlene Frizzera. "The adjustments to the payment rates for next year reflect that policy."

In addition to recalibrating and updating the skilled nursing facility PPS payment rates for FY 2010, CMS noted that this final rule:

  • Establishes a revised case-mix classification methodology (RUG-IV) and implementation schedule for FY 2011, reflecting updated staff time measurement data derived from the recently completed Staff Time and Resource Intensity Verification (STRIVE) project;
  • Includes information on the transition to the Minimum Data Set, Version 3.0 (MDS 3.0) redesigned nursing home resident assessment instrument, including an implementation schedule; and
  • Discusses comments CMS received on a possible new rate component to account for the use of non-therapy ancillaries (as recommended by MedPAC), and on a possible new requirement for the quarterly reporting of nursing home staffing data.

Check back to HealthLeaders Media later today for more information on this development.


Les Masterson is an editor for HealthLeaders Media.

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