CMS’ Decision to Slash $3.87 Billion of Skilled Nursing Payments Has Dire Implications

The Centers for Medicare and Medicaid Services decision to lower payments for skilled nursing by 11.1% in fiscal year 2012 will dangerously destabilize health facilities, place patients at risk, and put tens of thousands of health jobs in immediate jeopardy said the Alliance for Quality Nursing Home Care (AQNHC).

“The SNF sector has contributed heavily to advancing health care reform and deficit reduction, and is confronted by multiple ongoing threats to funding stability,” said Alan G. Rosenbloom, President of the Alliance in a statement. “The ill-considered nature of the Rule and its dire implications to seniors, providers and jobs are significant, immediate and dangerous.”

Overall, the reduction results in a net reduction of $3.87 billion for the year and were necessary to correct for an unintended spike in payment levels and to better align Medicare payments with costs said CMS. AQNHC believes the correction has gone well beyond what the industry and a bipartisan group of House and Senate leaders suggested.


“Lawmakers will now be placed in the unfortunate position of having to deal with an increased threat to local seniors’ access to care as a result of this egregious regulatory action,” Rosenbloom said. “Never in the history of the Medicare program has either CMS or Congress implemented such a large correction in one year.”

The American Health Care Association (AHCA) voiced their concern as well, saying the cuts will threaten its ability to provide quality care to America’s seniors.

“The CMS rule makes reductions beyond what is necessary for budget neutrality,” said Governor Mark Parkinson, President & CEO of AHCA.  ”Coupled with changes in group therapy definitions, this drastic reduction will be especially challenging for skilled nursing facilities to manage.”