May 2009
CMS Proposes Major Changes to Medicare
Rates
On May 1, 2009, CMS issued a proposal that would change
Medicare payment rates for skilled nursing facilities (SNFs),
beginning October 1, 2009. Among other things the proposal
calls for a recalibration of the case-mix adjustment used to
establish each of the 53 different payment rates. As a
result, payments to SNFs would be reduced nationally by
about $1.05 billion.
Offsetting a portion of the $1.05
billion reduction associated with the recalibration, CMS
would apply a market basket adjustment factor of 2.1%. The
factor is estimated to increase payments to SNFs by about
$660 million.
Consequently, aggregate payments to SNFs during fiscal year 2010 would decrease by approximately
$390 million ($660 million - $1.05 billion).
Actual rates to individual facilities
would vary because individual SNF payment rates are
influenced by geographic wage indices. While the wage index
factors for Connecticut would remain similar to the prior
year, the effect of the recalibration would cause most rates
to decrease.
The proposal also includes several
other provisions. Starting in FY11, CMS has proposed to
implement the RUG-IV system, which would include 66
different payment rates. CMS has indicated that the change
would be budget neutral.
In addition, effective with the
introduction of the RUG-IV system, CMS proposes to restrict
billing for concurrent therapy. Under the current system,
there is no restriction on the time that can be billed for
each individual in a concurrent therapy session. CMS wants
to eliminate this perceived incentive and encourage
individual therapy. Thus, the proposal calls for the
allocation of concurrent therapy minutes based on the
time spent with each individual patient. The restriction
could potentially assign patients to different
rehabilitation RUG categories, which in turn may lower
payment rates.
Proposed FY10 Connecticut SNF Medicare
rates may be found
here.
Providers should feel free to contact
James E. Traester, LLC, CPA with questions. Mr. Traester can be
reached at 203-932-2931.
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