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CMS' Skilled Nursing Facilities' Final Rule Causes Concerns

MacKenzie Kimball, for HealthLeaders Media, August 3, 2009

CMS released the final rule for fiscal year 2010 payment updates to skilled nursing facilities (SNF) on Friday, leaving many industry leaders concerned about the future of long-term care.

A major component of the final rule is the recalibration of the case-mix indexes (CMI), which will reduce Medicare payments to SNFs by $1.05 billion, or 3.3 percent. The CMI recalibration will correct a FY 2006 projection error, which resulted in an unexpected increase in Medicare payments, and will better align reimbursement with the resources used to care for a resident.

Fortunately, this significant cut in Medicare payments will be partially offset by the SNF market basket update for FY 2010, which will result in a $690 million, or 2.2 percent, increase. Thanks to the market basket update, the total reduction in Medicare payment to SNFs in FY 2010 will be $360 million, or 1.1 percent lower than FY 2009 payments.

"Although the payment cuts included in the proposed rule are significant and come at a time when many SNFs are already struggling with tight budgets, CMS believes that the cuts should not affect the quality of care provided," says Diane Brown, a regulatory specialist and Boot Camp instructor at HCPro.

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