Medicare Reimbursements for SNFs Still High Despite Cuts

Medicare reimbursements rates to skilled nursing facilities remain high for 2012 despite widespread outcry in the industry following the announcement of 11.1% reimbursement cuts, according to the Center for Medicare Advocacy, Inc.

The rates in fiscal year 2012 are actually 3.4% higher than the FY 2010 rates. The Federal Register, published Aug. 8, 2011, announced that the highest rates per resident per day would be $737.08 for urban facilities and $754.11 for rural facilities.

Not surprisingly, following announcement of the rate reductions, the three national nursing home trade associations immediately reacted with alarm and argued that jobs would be lost and quality of care for residents would suffer. Alarm notwithstanding, Medicare remains the most highly profitable source of payment for SNF care.


Some background information is useful in understanding the targeted reductions made by CMS for FY 2012. It has long been recognized by CMS, the Medicare Payment Advisory Commission (MedPAC), the General Accounting Office (GAO), and the Office of Inspector General that SNFs have been overpaid by billions of dollars. Even so, CMS is reducing some of the SNF reimbursement rates prospectively only; it is not requiring that any past overpayments be repaid.  Despite continued profitability, even with the announced rate reductions, advocates for residents should take steps to assure that facilities do not compromise quality of care for residents by cutting the staff, food, and supplies that are essential for resident care.

The Center for Medicare Advocacy goes on to explain how Medicare pays skilled nursing facilities and runs through how they have been over-reimbursed in the past. It also details how SNFs “have made enormous profits from Medicare” and says that the quality of care and services to residents did not increase when facilities were overpaid.

View the article here.


Written by Alyssa Gerace